MISTRAS Group, Inc. (MG: NYSE), a leading "one source"
multinational provider of integrated technology-enabled asset
protection solutions, reported financial results for its fourth
quarter and year ended December 31, 2022.
Highlights of the Fourth Quarter
2022*
- Revenue of $168.2 million, met
the mid-point of management’s most recent guidance
- Gross profit of $50.9 million,
with gross profit margin of 30.3%, a 130 basis points
increase
- Income from Operations of $5.8
million, a 151.9% increase
- Net Income of $2.8 million or
$0.09 per diluted share, both up significantly
Highlights of the Full Year
2022*
- Revenue of $687.4 million, up
1.5%, yet a 3.7% organic increase excluding the impact of
unfavorable foreign currency exchange**
- Gross profit of $198.2
million, up 0.5% with gross profit margin of 28.8%
- Income from Operations of
$19.8 million, a 9.0% increase
- Net Income of $6.5 million or
$0.21 per diluted share, up 68.4% and 61.5%,
respectively
* All comparisons are
consolidated and versus the equivalent prior year period, unless
otherwise noted.** Foreign currency exchange impact is calculated
by converting current period financial results in local currency,
using the prior period exchange rates, and comparing this amount to
the current period financial results in local currency using the
current period exchange rate.
For the fourth quarter of 2022 consolidated revenue
was 168.2 million, a 1.7% decline, yet an 0.8% increase excluding
the impact of unfavorable foreign currency exchange of $4.4
million. Fourth quarter 2022 gross profit increased 2.7% as
compared to the year ago period, primarily due to lower employee
benefit expenses and an improved sales mix in the current year.
Selling, general and administrative expenses in the fourth quarter
of 2022 were $42.3 million, down from $42.8 million in the fourth
quarter of 2021, reflecting the continued emphasis on cost
discipline.
For the full year, revenue of $687.4 increased 1.5%
as reported, yet an increase of 3.7% excluding the impact of
unfavorable foreign currency exchange of $15.2 million.
Revenue growth reflects continued recovery in the Company’s primary
end markets, with as reported Oil and Gas revenue up 5.7% and
Aerospace and Defense revenue up 17.8%. For the full year 2022,
gross profit increased $1.0 million, with gross profit margin of
28.8% compared to 29.1% in the prior year. On a full year basis in
2022, selling, general and administrative expenses were up just
3.3%, despite the prior year benefiting from temporary COVID-19
cost reductions. Income from operations was $19.8 million for the
full year 2022, compared to $18.2 million in 2021. Net income was
$6.5 million for the full year 2022, compared to net income of $3.9
million in 2021. Adjusted EBITDA was $58.2 million for 2022
compared to $63.0 million for full year 2021.
Chief Executive Officer Dennis Bertolotti
commented, “As a result of a solid fourth quarter, we met our most
recent top-line and exceeded our bottom-line guidance for the year.
We continued to organically grow revenue despite the adverse impact
of foreign currency exchange, while significantly improving
profitability. Upstream, midstream and downstream revenue were all
up in 2022, driven by continued improvement at our customers and
strong demand for our services. Aerospace and Defense revenue was
also up for the year, led by strength in commercial aerospace,
offset by project delays in defense revenue during the fourth
quarter. Gross margin improved to over 30% for the second
consecutive quarter, in part due to pricing actions taken earlier
in the year, helping to offset the wage inflation that we have been
absorbing, in addition to lower employee benefit expenses. With
these customer pricing actions now in place, we expect some
tailwinds to both recurring revenue and gross margin for 2023. In
the fourth quarter of 2022, we were able to leverage our gross
profit margin expansion into a 152% increase in operating income,
through continued cost discipline, with selling, general and
administrative expenses down from the year ago quarter despite the
impact of inflationary costs. Our financial strength was also
significantly improved over the prior year, with net debt reduced
to $170.8 million from $178.5 million at the end of last year. Over
the past four years, gross debt has decreased by almost $100
million and our leverage ratio is the lowest level it has been
since immediately prior to the Onstream acquisition in December of
2018. Additionally, our bank refinancing completed in August 2022
added incremental capacity to our total available credit while also
providing more favorable credit terms and further improving our
financial flexibility.”
Mr. Bertolotti additionally commented on the
Company’s progress noting, “I am proud of our organization, which
has once again overcome economic challenges to generate profitable
growth in 2022. We remain focused on our objective to return our
results to pre-pandemic levels through growth in our core markets,
expansion into adjacent markets, and the introduction of new
technologies to capitalize on emerging opportunities in the markets
we serve. We have kicked off our operational review with
AlixPartners, which we will refer to as Project Phoenix. This
review is designed to accelerate profitable growth and meaningful
adjusted EBITDA improvement opportunities while also identifying
steps to achieve sustained cost savings. We are laser‐focused on
taking steps to position us for success to drive shareholder value.
We will provide updates on the status of this project throughout
2023 as they become available.”
Mr. Bertolotti further continued, “Our core markets
have shown a resiliency, and we are seeing a surge in demand for
our more recently launched state-of-the-art data solutions
offerings. I am pleased to announce that we have surpassed our goal
of installing 100 patented Sensoria™ Wind Blade Monitoring systems
in 2022, having installed systems on over 130 wind turbines this
year. This significant milestone demonstrates our commitment to
providing exceptional value to our renewable energy customers, by
enhancing their uptime and safety. Moreover, our data solutions
offerings which serve our core markets have experienced strong
demand with the MISTRAS Digital field execution platform and
OneSuite asset protection software ecosystem leading the charge.
Customers who have adopted both applications are now embracing our
revolutionary technology as a bundled solution at an
ever-increasing number of sites. We are excited to offer our
clients yet another solution that maximizes their asset protection
and operational efficiency and further supports our brand promise
of: One Source for Asset Protection Solutions. Having implemented
OneSuite at over 160 customer sites and issued licenses to more
than 1,200 individual subscriptions, the adoption of OneSuite and
its suite of 90 integrated applications - now combined with MISTRAS
Digital - is setting a new standard in the industry. We are
confident that our recent accomplishments signify substantial
progress towards achieving our vision of becoming the go-to
integrated-solution partner.”
Performance by certain segments during the fourth
quarter was as follows:
Services segment fourth quarter
revenues were $138.1 million, down 2.2% from $141.1 million in the
prior year quarter and down 1.2% excluding the impact of
unfavorable foreign currency exchange. For the fourth quarter,
gross profit was $40.7 million, compared to $38.8 million in the
prior year. Gross profit margin was 29.5% for the fourth quarter of
2022, a 200 basis point improvement from 27.5% in the fourth
quarter of the prior year. This increase was primarily due to lower
employee benefit expenses and improved sales mix.
International segment fourth
quarter revenues were $29.0 million, up 1.5% from $28.5 million in
the prior year quarter and up 12.3% excluding the impact of
unfavorable foreign currency exchange. The increase was due to
timing of projects and continued recovery in the Aerospace
business. International segment fourth quarter gross profit margin
was 28.5%, compared to 28.0% in the prior year.
The Company generated $26.4 million of net cash
from operating activities in 2022, compared with $42.3 million in
2021, with the decline primarily due to an increase in working
capital, most notably an increase in days sales outstanding
(“DSO”). The Company is focused on reducing DSO during
fiscal 2023. Free cash flow was $13.0 million for the year ended
December 31, 2022, compared with $23.0 million for the year ended
December 31, 2021. Free cash flow in the current year was reduced
by a $4.5 million payment related to the CARES Act employer payroll
tax deferral and a $2.4 million legal settlement payment, both of
which had been accrued in previous years.
The Company’s net debt (total debt less cash and
cash equivalents) was $170.8 million as of December 31, 2022,
compared to $178.5 million as of December 31, 2021. Gross debt
decreased by $11.3 million during the twelve months ended December
31, 2022, from $202.6 million at the end of 2021 to $191.3 million
as of December 31, 2022. The Company’s leverage ratio at December
31, 2022 was the lowest it has been since prior to the Onstream
acquisition in December of 2018. The Company’s bank defined
consolidated debt leverage ratio was just under 3.5 times as of the
twelve-month period ended December 31, 2022.
Outlook for 2023The Company is
providing its preliminary full year guidance for 2023. Based on
current market conditions, the Company anticipates 2023 full year
revenue between $710 to $740 million and adjusted EBITDA between
$70 to $75 million. The Company additionally expects to generate
Free Cash Flow between $30 to $33 million. The Company is
optimistic about its current level of activity, given stable energy
markets, improving commercial aerospace demand, and a rapidly
developing Data Solutions offering.
Conference Call In connection with
this release, MISTRAS will hold a conference call on March 9, 2023,
at 9:00 a.m. (Eastern). To listen to the live webcast of the
conference call, visit the Investor Relations section of MISTRAS
Group’s website at www.mistrasgroup.com.
Note there is a new process to participate in the
live question and answer session. Individuals wishing to
participate may preregister at:
https://register.vevent.com/register/BI1780b91802aa42619006d0a2f8719dab.
Upon registering, a dial-in number and unique PIN
will be provided to join the conference call. Following the
conference call, an archived webcast of the event will be available
for one year by visiting the Investor Relations section of MISTRAS
Group’s website.
About MISTRAS Group, Inc. - One Source for
Asset Protection Solutions®MISTRAS Group, Inc. (NYSE: MG)
is a leading "one source" multinational provider of integrated
technology-enabled asset protection solutions, helping to maximize
the safety and operational uptime for civilization’s most critical
industrial and civil assets.
Backed by an innovative, data-driven asset
protection portfolio, proprietary technologies, and decades-long
legacy of industry leadership, MISTRAS leads clients in the oil and
gas, aerospace and defense, power generation, civil infrastructure,
and manufacturing industries towards achieving and maintaining
operational excellence. By supporting these organizations that help
fuel our vehicles and power our society; inspecting components that
are trusted for commercial, defense, and space craft; and building
real-time monitoring equipment to enable safe travel across
bridges, MISTRAS helps the world at large.
MISTRAS enhances value for its clients by
integrating asset protection throughout supply chains and
centralizing integrity data through a suite of Industrial
IoT-connected digital software and monitoring solutions. The
company’s core capabilities also include non-destructive testing
(“NDT”) field inspections enhanced by advanced robotics, laboratory
quality control and assurance testing, sensing technologies and NDT
equipment, asset and mechanical integrity engineering services, and
light mechanical maintenance and access services.
For more information about how MISTRAS helps
protect civilization’s critical infrastructure, visit
www.mistrasgroup.com or contact Nestor S. Makarigakis, Group Vice
President of Marketing at marcom@mistrasgroup.com.
Forward-Looking and Cautionary
StatementsCertain statements made in this press release
are "forward-looking statements" about MISTRAS' financial results
and estimates, products and services, business model, strategy,
growth opportunities, profitability and competitive position, and
other matters. These forward-looking statements generally use words
such as "future," "possible," "potential," "targeted,"
"anticipate," "believe," "estimate," "expect," "intend," "plan,"
"predict," "project," "will," "may," "should," "could," "would" and
other similar words and phrases. Such statements are not guarantees
of future performance or results, and will not necessarily be
accurate indications of the times at, or by which, such performance
or results will be achieved, if at all. These statements are
subject to risks and uncertainties that could cause actual
performance or results to differ materially from those expressed in
these statements. A list, description and discussion of these and
other risks and uncertainties can be found in the "Risk Factors"
section of the Company's 2021 Annual Report on Form 10-K dated
March 14, 2022, as updated by our reports on Form 10-Q and Form
8-K. The forward-looking statements are made as of the date hereof,
and MISTRAS undertakes no obligation to update such statements as a
result of new information, future events or otherwise.
Use of Non-GAAP MeasuresIn
addition to financial information prepared in accordance with
generally accepted accounting principles in the U.S. (GAAP), this
press release also contains adjusted financial measures that we
believe provide investors and management with supplemental
information relating to operating performance and trends that
facilitate comparisons between periods and with respect to
projected information. The term “Adjusted EBITDA” used in this
release is a financial measurement not calculated in accordance
with GAAP and is defined as net income attributable to MISTRAS
Group, Inc. plus: interest expense, provision for income taxes,
depreciation and amortization, share-based compensation expense and
certain acquisition related costs (including transaction due
diligence costs and adjustments to the fair value of contingent
consideration), foreign exchange (gain) loss, non-cash impairment
charges and, if applicable, certain additional special items which
are noted. A reconciliation of Adjusted EBITDA to a financial
measurement under GAAP is set forth in a table attached to this
press release. The Company also uses the term “net debt”, a
non-GAAP measurement defined as the sum of the current and
long-term portions of long-term debt, less cash and cash
equivalents and the term “free cash flow”, a non-GAAP measurement
the Company defines as cash provided by operating activities less
capital expenditures (which is classified as an investing
activity). A reconciliation of these non-GAAP financial
measurements to GAAP are also set forth in tables attached to this
press release. In the tables attached is also a table
reconciling “Segment and Total Company Income (Loss) from
Operations (GAAP) to Income (Loss) before Special Items
(non-GAAP)”, “Net Income (Loss) (GAAP)” to "Net Income (Loss)
Excluding Special Items (non-GAAP)”, and “Diluted EPS (GAAP)” to
“Diluted EPS Excluding Special Items (non-GAAP)” which reconciles
the non-GAAP amount to a GAAP measurement.
Mistras Group, Inc. and
SubsidiariesUnaudited Consolidated Balance
Sheets(in thousands, except share and per
share data)
|
December 31, |
|
|
2022 |
|
|
|
2021 |
|
ASSETS |
|
|
|
Current Assets |
|
|
|
Cash and cash equivalents |
$ |
20,488 |
|
|
$ |
24,110 |
|
Accounts receivable, net |
|
123,657 |
|
|
|
109,511 |
|
Inventories |
|
13,556 |
|
|
|
12,686 |
|
Prepaid expenses and other current assets |
|
10,181 |
|
|
|
15,031 |
|
Total current assets |
|
167,882 |
|
|
|
161,338 |
|
Property, plant and equipment, net |
|
77,561 |
|
|
|
86,578 |
|
Intangible assets, net |
|
49,015 |
|
|
|
59,381 |
|
Goodwill |
|
199,635 |
|
|
|
205,439 |
|
Deferred income taxes |
|
779 |
|
|
|
2,174 |
|
Other assets |
|
40,032 |
|
|
|
47,285 |
|
Total Assets |
$ |
534,904 |
|
|
$ |
562,195 |
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current Liabilities |
|
|
|
Accounts payable |
$ |
12,532 |
|
|
$ |
12,870 |
|
Accrued expenses and other current liabilities |
|
77,844 |
|
|
|
83,863 |
|
Current portion of long-term debt |
|
7,425 |
|
|
|
20,162 |
|
Current portion of finance lease obligations |
|
4,201 |
|
|
|
3,765 |
|
Income taxes payable |
|
1,726 |
|
|
|
755 |
|
Total current liabilities |
|
103,728 |
|
|
|
121,415 |
|
Long-term debt, net of current portion |
|
183,826 |
|
|
|
182,403 |
|
Obligations under finance leases, net of current portion |
|
10,045 |
|
|
|
9,752 |
|
Deferred income taxes |
|
6,283 |
|
|
|
8,385 |
|
Other long-term liabilities |
|
32,273 |
|
|
|
39,328 |
|
Total Liabilities |
$ |
336,155 |
|
|
$ |
361,283 |
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
Equity |
|
|
|
Preferred stock, 10,000,000 shares authorized |
|
— |
|
|
|
— |
|
Common stock, $0.01 par value, 200,000,000 shares authorized,
29,895,487 and 29,546,263 shares issued |
|
298 |
|
|
|
295 |
|
Additional paid-in capital |
|
243,031 |
|
|
|
238,687 |
|
Accumulated Deficit |
|
(11,489 |
) |
|
|
(17,988 |
) |
Accumulated other comprehensive loss |
|
(33,390 |
) |
|
|
(20,311 |
) |
Total Mistras Group, Inc. stockholders’ equity |
|
198,450 |
|
|
|
200,683 |
|
Non-controlling interests |
|
299 |
|
|
|
229 |
|
Total Equity |
|
198,749 |
|
|
|
200,912 |
|
Total Liabilities and Equity |
$ |
534,904 |
|
|
$ |
562,195 |
|
Mistras Group, Inc. and
SubsidiariesUnaudited Consolidated Statements of
Income (Loss) (in thousands, except per share data)
|
For the quarter ended December
31, |
|
For the year endedDecember
31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
Revenue |
$ |
168,218 |
|
|
$ |
171,163 |
|
|
$ |
687,373 |
|
|
$ |
677,131 |
Cost of revenue |
|
111,720 |
|
|
|
115,233 |
|
|
|
466,567 |
|
|
|
457,013 |
Depreciation |
|
5,559 |
|
|
|
6,336 |
|
|
|
22,633 |
|
|
|
22,971 |
Gross profit |
|
50,939 |
|
|
|
49,594 |
|
|
|
198,173 |
|
|
|
197,147 |
Selling, general and administrative expenses |
|
42,298 |
|
|
|
42,755 |
|
|
|
166,595 |
|
|
|
161,334 |
Bad debt provision for troubled customers, net of recoveries |
|
(247 |
) |
|
|
— |
|
|
|
42 |
|
|
|
— |
Legal settlement and litigation charges (benefit), net |
|
— |
|
|
|
1,012 |
|
|
|
(994 |
) |
|
|
2,042 |
Research and engineering |
|
471 |
|
|
|
576 |
|
|
|
1,994 |
|
|
|
2,518 |
Depreciation and amortization |
|
2,603 |
|
|
|
2,880 |
|
|
|
10,661 |
|
|
|
11,950 |
Acquisition-related expense, net |
|
12 |
|
|
|
65 |
|
|
|
76 |
|
|
|
1,133 |
Income from operations |
|
5,802 |
|
|
|
2,306 |
|
|
|
19,799 |
|
|
|
18,170 |
Interest expense |
|
3,713 |
|
|
|
2,187 |
|
|
|
10,505 |
|
|
|
10,882 |
Income before provision (benefit) for income
taxes |
|
2,089 |
|
|
|
119 |
|
|
|
9,294 |
|
|
|
7,288 |
Provision (benefit) for income taxes |
|
(774 |
) |
|
|
208 |
|
|
|
2,720 |
|
|
|
3,395 |
Net income (loss) |
|
2,863 |
|
|
|
(89 |
) |
|
|
6,574 |
|
|
|
3,893 |
Less: net income (loss) attributable to noncontrolling interests,
net of taxes |
|
21 |
|
|
|
5 |
|
|
|
75 |
|
|
|
33 |
Net income (loss) attributable to Mistras
Group, Inc. |
$ |
2,842 |
|
|
$ |
(94 |
) |
|
$ |
6,499 |
|
|
$ |
3,860 |
Earnings per common share |
|
|
|
|
|
|
|
Basic |
$ |
0.09 |
|
|
$ |
0.00 |
|
|
$ |
0.22 |
|
|
$ |
0.13 |
Diluted |
$ |
0.09 |
|
|
$ |
0.00 |
|
|
$ |
0.21 |
|
|
$ |
0.13 |
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
29,983 |
|
|
|
29,637 |
|
|
|
29,901 |
|
|
|
29,572 |
Diluted |
|
30,258 |
|
|
|
30,138 |
|
|
|
30,229 |
|
|
|
30,130 |
Mistras Group, Inc. and
SubsidiariesUnaudited Operating Data by
Segment(in thousands)
|
For the quarter ended December
31, |
|
For the year ended December
31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenue |
|
|
|
|
|
|
|
Services |
$ |
138,085 |
|
|
$ |
141,136 |
|
|
$ |
573,336 |
|
|
$ |
555,387 |
|
International |
|
28,984 |
|
|
|
28,546 |
|
|
|
112,425 |
|
|
|
117,245 |
|
Products and Systems |
|
4,061 |
|
|
|
4,332 |
|
|
|
12,727 |
|
|
|
13,831 |
|
Corporate and eliminations |
|
(2,912 |
) |
|
|
(2,851 |
) |
|
|
(11,115 |
) |
|
|
(9,332 |
) |
|
$ |
168,218 |
|
|
$ |
171,163 |
|
|
$ |
687,373 |
|
|
$ |
677,131 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the quarter ended December
31, |
|
For the year ended December
31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Gross profit |
|
|
|
|
|
|
|
Services |
$ |
40,701 |
|
|
$ |
38,797 |
|
|
$ |
159,049 |
|
|
$ |
155,384 |
|
International |
|
8,267 |
|
|
|
8,004 |
|
|
|
33,591 |
|
|
|
34,282 |
|
Products and Systems |
|
1,976 |
|
|
|
2,346 |
|
|
|
5,490 |
|
|
|
7,001 |
|
Corporate and eliminations |
|
(5 |
) |
|
|
447 |
|
|
|
43 |
|
|
|
480 |
|
|
$ |
50,939 |
|
|
$ |
49,594 |
|
|
$ |
198,173 |
|
|
$ |
197,147 |
|
Mistras Group, Inc. and
SubsidiariesUnaudited Revenues by
Category(in thousands)
Revenue by industry was as follows:
Three Months Ended December 31, 2022 |
Services |
|
International |
|
Products |
|
Corp/Elim |
|
Total |
Oil & Gas |
$ |
86,474 |
|
$ |
8,636 |
|
$ |
123 |
|
$ |
— |
|
|
$ |
95,233 |
Aerospace & Defense |
|
12,369 |
|
|
4,308 |
|
|
68 |
|
|
— |
|
|
|
16,745 |
Industrials |
|
9,668 |
|
|
5,835 |
|
|
812 |
|
|
— |
|
|
|
16,315 |
Power Generation and Transmission |
|
8,619 |
|
|
1,799 |
|
|
624 |
|
|
— |
|
|
|
11,042 |
Other Process Industries |
|
8,561 |
|
|
3,716 |
|
|
5 |
|
|
— |
|
|
|
12,282 |
Infrastructure, Research & Engineering |
|
4,658 |
|
|
1,930 |
|
|
1,505 |
|
|
— |
|
|
|
8,093 |
Petrochemical |
|
5,304 |
|
|
123 |
|
|
— |
|
|
— |
|
|
|
5,427 |
Other |
|
2,432 |
|
|
2,637 |
|
|
924 |
|
|
(2,912 |
) |
|
|
3,081 |
Total |
$ |
138,085 |
|
$ |
28,984 |
|
$ |
4,061 |
|
$ |
(2,912 |
) |
|
$ |
168,218 |
Three Months Ended December 31, 2021 |
Services |
|
International |
|
Products |
|
Corp/Elim |
|
Total |
Oil & Gas |
$ |
82,296 |
|
$ |
9,215 |
|
$ |
170 |
|
|
$ |
— |
|
|
$ |
91,681 |
Aerospace & Defense |
|
14,274 |
|
|
4,172 |
|
|
121 |
|
|
|
— |
|
|
|
18,567 |
Industrials |
|
11,252 |
|
|
6,264 |
|
|
761 |
|
|
|
— |
|
|
|
18,277 |
Power Generation and Transmission |
|
12,947 |
|
|
2,151 |
|
|
604 |
|
|
|
— |
|
|
|
15,702 |
Other Process Industries |
|
11,711 |
|
|
3,019 |
|
|
(12 |
) |
|
|
— |
|
|
|
14,718 |
Infrastructure, Research & Engineering |
|
1,330 |
|
|
2,019 |
|
|
1,208 |
|
|
|
— |
|
|
|
4,557 |
Petrochemical |
|
3,003 |
|
|
36 |
|
|
— |
|
|
|
— |
|
|
|
3,039 |
Other |
|
4,323 |
|
|
1,670 |
|
|
1,480 |
|
|
|
(2,851 |
) |
|
|
4,622 |
Total |
$ |
141,136 |
|
$ |
28,546 |
|
$ |
4,332 |
|
|
$ |
(2,851 |
) |
|
$ |
171,163 |
Year ended December 31, 2022 |
Services |
|
International |
|
Products |
|
Corp/Elim |
|
Total |
Oil & Gas |
|
356,763 |
|
|
30,654 |
|
|
335 |
|
|
— |
|
|
|
387,752 |
Aerospace & Defense |
|
61,475 |
|
|
18,763 |
|
|
314 |
|
|
— |
|
|
|
80,552 |
Industrials |
|
38,197 |
|
|
23,703 |
|
|
2,083 |
|
|
— |
|
|
|
63,983 |
Power Generation and Transmission |
|
31,197 |
|
|
8,304 |
|
|
2,603 |
|
|
— |
|
|
|
42,104 |
Other Process Industries |
|
40,778 |
|
|
14,021 |
|
|
28 |
|
|
— |
|
|
|
54,827 |
Infrastructure, Research & Engineering |
|
15,283 |
|
|
7,946 |
|
|
3,994 |
|
|
— |
|
|
|
27,223 |
Petrochemical |
|
15,360 |
|
|
536 |
|
|
— |
|
|
— |
|
|
|
15,896 |
Other |
$ |
14,283 |
|
$ |
8,498 |
|
$ |
3,370 |
|
$ |
(11,115 |
) |
|
$ |
15,036 |
Total |
$ |
573,336 |
|
$ |
112,425 |
|
$ |
12,727 |
|
$ |
(11,115 |
) |
|
$ |
687,373 |
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2021 |
Services |
|
International |
|
Products |
|
Corp/Elim |
|
Total |
Oil & Gas |
|
330,880 |
|
|
35,232 |
|
|
808 |
|
|
— |
|
|
|
366,920 |
Aerospace & Defense |
|
51,593 |
|
|
16,513 |
|
|
286 |
|
|
— |
|
|
|
68,392 |
Industrials |
|
41,873 |
|
|
24,000 |
|
|
1,842 |
|
|
— |
|
|
|
67,715 |
Power Generation and Transmission |
|
39,966 |
|
|
9,927 |
|
|
2,853 |
|
|
— |
|
|
|
52,746 |
Other Process Industries |
|
38,742 |
|
|
12,593 |
|
|
64 |
|
|
— |
|
|
|
51,399 |
Infrastructure, Research & Engineering |
|
16,809 |
|
|
11,496 |
|
|
3,985 |
|
|
— |
|
|
|
32,290 |
Petrochemical |
|
19,378 |
|
|
227 |
|
|
— |
|
|
— |
|
|
|
19,605 |
Other |
|
16,146 |
|
|
7,257 |
|
|
3,993 |
|
|
(9,332 |
) |
|
|
18,064 |
Total |
$ |
555,387 |
|
$ |
117,245 |
|
$ |
13,831 |
|
$ |
(9,332 |
) |
|
$ |
677,131 |
Revenue by Oil & Gas Sub-category was as
follows:
|
Three months ended December 31, |
|
Year ended December 31, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
Oil and Gas Revenue by sub-category |
|
|
|
|
|
|
|
Upstream |
|
35,154 |
|
|
32,692 |
|
|
152,590 |
|
|
135,615 |
Midstream |
|
24,363 |
|
|
27,060 |
|
|
111,144 |
|
|
109,527 |
Downstream |
|
35,716 |
|
|
31,929 |
|
|
124,018 |
|
|
121,778 |
Total |
$ |
95,233 |
|
$ |
91,681 |
|
$ |
387,752 |
|
$ |
366,920 |
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation
ofSegment and Total Company Income (Loss) from
Operations (GAAP) to Income (Loss) from Operations before
Special Items (non-GAAP)(in thousands)
|
For the quarter ended December
31, |
|
For the year
ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Services: |
|
|
|
|
|
|
|
Income from operations (GAAP) |
$ |
14,301 |
|
|
$ |
9,467 |
|
|
$ |
49,616 |
|
|
$ |
48,458 |
|
Bad debt provision for troubled customers, net of recoveries |
|
(247 |
) |
|
|
— |
|
|
|
42 |
|
|
|
— |
|
Reorganization and other costs |
|
59 |
|
|
|
32 |
|
|
|
99 |
|
|
|
129 |
|
Legal settlement and insurance (recoveries) charges, net |
|
— |
|
|
|
— |
|
|
|
(841 |
) |
|
|
1,650 |
|
Acquisition-related expense, net |
|
— |
|
|
|
94 |
|
|
|
45 |
|
|
|
1,128 |
|
Income before special items (unaudited, non-GAAP) |
$ |
14,113 |
|
|
$ |
9,593 |
|
|
$ |
48,961 |
|
|
$ |
51,365 |
|
|
|
|
|
|
|
|
|
International: |
|
|
|
|
|
|
|
Income (loss) from operations (GAAP) |
$ |
888 |
|
|
$ |
(319 |
) |
|
$ |
3,566 |
|
|
$ |
1,839 |
|
Reorganization and other costs |
|
71 |
|
|
|
300 |
|
|
|
(43 |
) |
|
|
424 |
|
Legal settlement and insurance (recoveries) charges, net |
|
— |
|
|
|
737 |
|
|
|
— |
|
|
|
737 |
|
Income before special items (unaudited, non-GAAP) |
$ |
959 |
|
|
$ |
718 |
|
|
$ |
3,523 |
|
|
$ |
3,000 |
|
|
|
|
|
|
|
|
|
Products and Systems: |
|
|
|
|
|
|
|
Income (loss) from operations (GAAP) |
$ |
342 |
|
|
$ |
536 |
|
|
$ |
(992 |
) |
|
$ |
(117 |
) |
Reorganization and other costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
27 |
|
Income (loss) before special items (unaudited, non-GAAP) |
$ |
342 |
|
|
$ |
536 |
|
|
$ |
(992 |
) |
|
$ |
(90 |
) |
|
|
|
|
|
|
|
|
Corporate and Eliminations: |
|
|
|
|
|
|
|
Loss from operations (GAAP) |
$ |
(9,729 |
) |
|
$ |
(7,378 |
) |
|
$ |
(32,391 |
) |
|
$ |
(32,010 |
) |
Legal settlement and insurance (recoveries) charges, net |
|
— |
|
|
|
275 |
|
|
|
(153 |
) |
|
|
(345 |
) |
Loss on debt modification |
|
— |
|
|
|
— |
|
|
|
693 |
|
|
|
278 |
|
Reorganization and other costs |
|
— |
|
|
|
93 |
|
|
|
139 |
|
|
|
93 |
|
Acquisition-related expense, net |
|
12 |
|
|
|
(29 |
) |
|
|
31 |
|
|
|
5 |
|
Loss before special items (unaudited, non-GAAP) |
$ |
(9,717 |
) |
|
$ |
(7,039 |
) |
|
$ |
(31,681 |
) |
|
$ |
(31,979 |
) |
|
|
|
|
|
|
|
|
Total Company |
|
|
|
|
|
|
|
Income from operations (GAAP) |
$ |
5,802 |
|
|
$ |
2,306 |
|
|
$ |
19,799 |
|
|
$ |
18,170 |
|
Bad debt provision for troubled customers, net of recoveries |
|
(247 |
) |
|
|
— |
|
|
|
42 |
|
|
|
— |
|
Reorganization and other costs |
|
130 |
|
|
|
425 |
|
|
|
195 |
|
|
|
673 |
|
Legal settlement and insurance (recoveries) charges, net |
|
— |
|
|
|
1,012 |
|
|
|
(994 |
) |
|
|
2,042 |
|
Loss on debt modification |
|
— |
|
|
|
— |
|
|
|
693 |
|
|
|
278 |
|
Acquisition-related expense, net |
|
12 |
|
|
|
65 |
|
|
|
76 |
|
|
|
1,133 |
|
Income before special items (unaudited, non-GAAP) |
$ |
5,697 |
|
|
$ |
3,808 |
|
|
$ |
19,811 |
|
|
$ |
22,296 |
|
Mistras Group, Inc. and
SubsidiariesUnaudited Summary Cash Flow
Information(in thousands)
|
For the quarter endedDecember
31, |
|
For the year endedDecember
31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net cash provided by (used in): |
|
|
|
|
|
|
|
Operating activities |
$ |
15,875 |
|
|
$ |
19,792 |
|
|
$ |
26,406 |
|
|
$ |
42,261 |
|
Investing activities |
|
(3,361 |
) |
|
|
(3,057 |
) |
|
|
(12,238 |
) |
|
|
(18,551 |
) |
Financing activities |
|
(11,570 |
) |
|
|
(14,379 |
) |
|
|
(16,323 |
) |
|
|
(23,245 |
) |
Effect of exchange rate changes on cash |
|
1,460 |
|
|
|
(843 |
) |
|
|
(1,467 |
) |
|
|
(2,115 |
) |
Net change in cash and cash equivalents |
$ |
2,404 |
|
|
$ |
1,513 |
|
|
$ |
(3,622 |
) |
|
$ |
(1,650 |
) |
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation of
Net Cash Provided by Operating Activities (GAAP) to Free
Cash Flow (non-GAAP)(in thousands)
|
For the quarter endedDecember
31, |
|
For the year endedDecember
31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
(GAAP) |
$ |
15,875 |
|
|
$ |
19,792 |
|
|
$ |
26,406 |
|
|
$ |
42,261 |
|
Less: |
|
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
(3,541 |
) |
|
|
(3,031 |
) |
|
|
(12,591 |
) |
|
|
(18,161 |
) |
Purchases of intangible assets |
|
(245 |
) |
|
|
(228 |
) |
|
|
(825 |
) |
|
|
(1,115 |
) |
Free cash flow (non-GAAP) |
$ |
12,089 |
|
|
$ |
16,533 |
|
|
$ |
12,990 |
|
|
$ |
22,985 |
|
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation of
Gross Debt (GAAP) to Net Debt (non-GAAP)(in
thousands)
|
|
For the year
endedDecember 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
Current portion of long-term debt |
|
$ |
7,425 |
|
|
$ |
20,162 |
|
Long-term debt, net of current portion |
|
|
183,826 |
|
|
|
182,403 |
|
Total Gross Debt (GAAP) |
|
|
191,251 |
|
|
|
202,565 |
|
Less: Cash and cash equivalents |
|
|
(20,488 |
) |
|
|
(24,110 |
) |
Total Net Debt (non-GAAP) |
|
$ |
170,763 |
|
|
$ |
178,455 |
|
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation of
Net Income (Loss) (GAAP) to Adjusted EBITDA
(non-GAAP)(in thousands)
|
For the quarter ended December
31, |
|
For the year
endedDecember 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
Net income (loss) |
$ |
2,863 |
|
|
$ |
(89 |
) |
|
$ |
6,574 |
|
|
$ |
3,893 |
Less: Net income attributable to noncontrolling interests, net of
taxes |
|
21 |
|
|
|
5 |
|
|
|
75 |
|
|
|
33 |
Net income (loss) attributable to Mistras
Group, Inc. |
$ |
2,842 |
|
|
$ |
(94 |
) |
|
$ |
6,499 |
|
|
$ |
3,860 |
Interest expense |
|
3,713 |
|
|
|
2,187 |
|
|
|
10,505 |
|
|
|
10,882 |
Provision (benefit) for income taxes |
|
(774 |
) |
|
|
208 |
|
|
|
2,720 |
|
|
|
3,395 |
Depreciation and amortization |
|
8,162 |
|
|
|
9,216 |
|
|
|
33,294 |
|
|
|
34,921 |
Share-based compensation expense |
|
1,169 |
|
|
|
1,505 |
|
|
|
5,335 |
|
|
|
5,421 |
Reorganization and other related costs, net |
|
130 |
|
|
|
425 |
|
|
|
195 |
|
|
|
673 |
Legal settlement and insurance recoveries, net |
|
— |
|
|
|
1,012 |
|
|
|
(994 |
) |
|
|
2,042 |
Acquisition-related expense, net |
|
12 |
|
|
|
65 |
|
|
|
76 |
|
|
|
1,133 |
Loss on debt modification |
|
— |
|
|
|
— |
|
|
|
693 |
|
|
|
278 |
Bad debt provision for troubled customers, net of recoveries |
|
(247 |
) |
|
|
— |
|
|
|
42 |
|
|
|
— |
Foreign exchange (gain) loss |
|
709 |
|
|
|
27 |
|
|
|
(215 |
) |
|
|
371 |
Adjusted EBITDA |
$ |
15,716 |
|
|
$ |
14,551 |
|
|
$ |
58,150 |
|
|
$ |
62,976 |
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation
ofNet Income (Loss) (GAAP) and Diluted EPS (GAAP)
to Net Income Excluding Special Items (non-GAAP)
and Diluted EPS Excluding Special Items
(non-GAAP)(tabular dollars in thousands, except per share
data)
|
For the quarter ended December 31, |
|
For the year ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net income (loss) attributable to Mistras Group, Inc.
(GAAP) |
$ |
2,842 |
|
|
$ |
(94 |
) |
|
$ |
6,499 |
|
|
$ |
3,860 |
|
Special items |
|
(105 |
) |
|
|
1,502 |
|
|
|
12 |
|
|
|
4,126 |
|
Tax impact on special items |
|
25 |
|
|
|
(301 |
) |
|
|
(17 |
) |
|
|
(917 |
) |
Special items, net of tax |
$ |
(80 |
) |
|
$ |
1,201 |
|
|
$ |
(5 |
) |
|
$ |
3,209 |
|
Net income attributable to Mistras Group, Inc. Excluding
Special Items (non-GAAP) |
$ |
2,762 |
|
|
$ |
1,107 |
|
|
$ |
6,494 |
|
|
$ |
7,069 |
|
|
|
|
|
|
|
|
|
Diluted EPS (GAAP) |
$ |
0.09 |
|
|
$ |
0.00 |
|
|
$ |
0.21 |
|
|
$ |
0.13 |
|
Special items, net of tax |
|
0.00 |
|
|
|
0.04 |
|
|
|
0.00 |
|
|
|
0.10 |
|
Diluted EPS Excluding Special Items
(non-GAAP) |
$ |
0.09 |
|
|
$ |
0.04 |
|
|
$ |
0.21 |
|
|
$ |
0.23 |
|
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