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Mistras Group, Inc. Announces Fiscal 2013 Results

Mistras Group, Inc. Logo

PRINCETON JUNCTION, N.J., Aug. 7, 2013 (GLOBE NEWSWIRE) -- Mistras Group, Inc. (NYSE:MG), a leading "one source" global provider of technology-enabled asset protection solutions, today reported fiscal 2013 fourth quarter and full year results. Results for the full year of fiscal 2013 include revenue of $529.3 million, and net income of $11.6 million, or $0.40 per share. The fourth quarter results include revenue of $144.5 million and a net loss of $4.5 million, or ($0.16) per share. Both the fourth quarter and full year were impacted by a $9.9 million goodwill impairment charge discussed below.

Summary financial highlights for the fiscal 2013 fourth quarter and full year:

  • Adjusted EBITDA of $16.5 million in the fourth quarter and $68.3 million for the full year.
  • Adjusted Diluted Earnings Per Share of $0.16 in the fourth quarter and $0.70 for the full year, which excludes the impact of the goodwill impairment charge and acquisition related expense, net.
  • 21% revenue growth in fiscal 2013, including 6% organic growth for the Services segment.
  • Net Cash Provided by Operating Activities of $43.5 million for the fiscal year, a 39% increase over the prior year.
  • During the quarter, the Company recognized a goodwill impairment charge related to its operations in Brazil totaling approximately $9.9 million, which reduced EPS by approximately $0.34 per share in the fourth quarter and full year.

Outlook and Guidance for Fiscal 2014

Consistent with the guidance communicated during its June 26, 2013 conference call, the Company expects 2014 revenues to be in the range of $570 million to $600 million and Adjusted EBITDA to be in the range of $74 million to $80 million. The Company does not provide quarterly guidance, but expects to update its annual guidance at least quarterly.

Sotirios Vahaviolos, Mistras Chairman and Chief Executive Officer stated "The difficult economic environments in Europe and Brazil, as well as a tight market in the U.S. resulted in a disappointing finish for fiscal 2013. However, despite the weaker fourth quarter, we still had good profitable results for the year. We are encouraged by the 6% organic growth of our Services business under an adverse competitive U.S. marketplace in fiscal 2013, which, combined with the award of new evergreen contracts in Europe, positions us for a good start and strong finish for fiscal 2014."

Conference Call

In connection with this release, Mistras will hold a conference call on Thursday, August 8, 2013 at 9:00 a.m. (Eastern). The call will be broadcast over the Web and can be accessed on Mistras' Website, www.mistrasgroup.com. Individuals in the U.S. wishing to participate in the conference call by phone may call 1-866-515-2909 and use confirmation code 76981828 when prompted. The International dial-in number is 1-617-399-5123.

About Mistras Group, Inc.

Mistras offers one of the broadest "one source" services and technology-enabled asset protection solution portfolios in the industry used to evaluate the structural integrity of energy, industrial and public infrastructure. Mission critical services and solutions are delivered globally and provide customers with the ability to extend the useful life of their assets, improve productivity and profitability, comply with government safety and environmental regulations and enhance risk management operational decisions.

Mistras uniquely combines its industry leading products and technologies - 24/7 on-line monitoring of critical assets; mechanical integrity ("MI") and non-destructive testing ("NDT") services; and its proprietary world class data warehousing and analysis software - to provide comprehensive and competitive products, systems and services solutions from a single source provider.

For more information, please visit the company's website at www.mistrasgroup.com.

Forward-Looking and Cautionary Statements

Certain 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 Annual Report on Form 10-K for fiscal year 2012 filed with the Securities and Exchange Commission on August 14, 2012, 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 Measures

The terms "Adjusted EBITDA" and "Adjusted Diluted Earnings Per Share" used in this release are financial measurements not calculated in accordance with generally accepted accounting principles in the U.S. ("GAAP"). Reconciliations of Adjusted EBITDA and Adjusted Diluted Earnings Per Share to financial measurements under GAAP are set forth in a table attached to this press release. In addition, the Company has also included in the tables for non-GAAP measurements the non-GAAP measurement "Adjusted Net Income" reconciling this measurement to a financial measurement under GAAP. The Company believes that investors and other users of the financial statements benefit from the presentation of Adjusted EBITDA, Adjusted Net Income and Adjusted Diluted Earnings Per Share because they provide additional metrics to compare the Company's operating performance on a consistent basis and measure underlying trends and results of the Company's business.

Mistras Group, Inc. and Subsidiaries
Unaudited Consolidated Balance Sheets
(in thousands, except share and per share data)
May 31,
2013 2012
ASSETS
Current Assets
Cash and cash equivalents $ 7,802 $ 8,410
Accounts receivable, net 108,554 104,515
Inventories 12,504 12,492
Deferred income taxes 2,621 1,885
Prepaid expenses and other current assets 8,156 6,321
Total current assets 139,637 133,623
Property, plant and equipment, net 68,419 63,527
Intangible assets, net 52,428 34,469
Other assets 906 1,378
Goodwill 115,270 96,819
Total assets $ 376,660 $ 329,816
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 8,490 $ 11,944
Accrued expenses and other current liabilities 47,839 39,334
Current portion of long-term debt 7,418 5,971
Current portion of capital lease obligations 6,766 5,951
Income taxes payable 1,703 1,119
Total current liabilities 72,216 64,319
Long-term debt, net of current portion 52,849 34,258
Obligations under capital leases, net of current portion 10,923 13,094
Deferred income taxes 11,614 4,901
Other long-term liabilities 18,778 19,996
Total liabilities 166,380 136,568
Commitments and contingencies
Equity
Preferred stock, 10,000,000 shares authorized -- --
Common stock, $0.01 par value, 200,000,000 shares authorized, 28,210,862 and 28,025,507 shares issued and outstanding as of May 31, 2013 and May 31, 2012, respectively 282 280
Additional paid-in capital 195,241 188,443
Retained earnings 18,982 7,336
Accumulated other comprehensive loss (4,452) (3,047)
Total Mistras Group, Inc. stockholders' equity 210,053 193,012
Noncontrolling interests 227 236
Total equity 210,280 193,248
Total liabilities and equity $ 376,660 $ 329,816
Mistras Group, Inc. and Subsidiaries
Unaudited Consolidated Statements of Operations
(in thousands, except per share data)
Three months ended Years ended
May 31, 2013 May 31, 2012 May 31, 2013 May 31, 2012
Revenues:
Services $ 135,802 $ 112,938 $ 487,268 $ 394,035
Products and systems 8,703 14,152 42,014 42,840
Total revenues 144,505 127,090 529,282 436,875
Cost of revenues:
Cost of services 98,000 77,406 346,769 271,676
Cost of products and systems sold 3,254 7,846 16,276 19,940
Depreciation related to services 4,398 4,290 16,963 14,929
Depreciation related to products and systems 310 77 903 640
Total cost of revenues 105,962 89,619 380,911 307,185
Gross profit 38,543 37,471 148,371 129,690
Selling, general and administrative expenses 27,729 23,533 101,792 83,098
Research and engineering 646 290 2,447 2,059
Depreciation and amortization 2,246 1,668 8,781 6,455
Acquisition-related expense, net (1,135) 971 (2,141) 1,980
Goodwill impairment 9,938 -- 9,938 --
Income (loss) from operations (881) 11,009 27,554 36,098
Other expenses
Interest expense 830 1,011 3,288 3,132
Gain on extinguishment of long-term debt -- (784) -- (671)
Income (loss) before provision for income taxes (1,711) 10,782 24,266 33,637
Provision for income taxes 2,878 3,619 12,627 12,291
Net income (loss) (4,589) 7,163 11,639 21,346
Net (income) loss attributable to noncontrolling interests, net of taxes 40 (31) 7 7
Net income (loss) attributable to Mistras Group, Inc. $ (4,549) $ 7,132 $ 11,646 $ 21,353
Earnings (net loss) per common share:
Basic $ (0.16) $ 0.25 $ 0.41 $ 0.77
Diluted $ (0.16) $ 0.25 $ 0.40 $ 0.74
Weighted average common shares outstanding:
Basic 28,202 27,972 28,141 27,839
Diluted 28,202 28,935 29,106 28,685
Mistras Group, Inc. and Subsidiaries
Unaudited Operating Data by Segment
(in thousands)
Three months ended May 31, Year ended May 31,
2013 2012 2013 2012
Revenues
Services $ 102,704 $ 96,300 $ 380,851 $ 349,793
International 38,118 20,672 126,840 59,466
Products and Systems 7,683 13,654 33,301 40,083
Corporate and eliminations (4,000) (3,536) (11,710) (12,467)
$ 144,505 $ 127,090 $ 529,282 $ 436,875
Three months ended May 31, Year ended May 31,
2013 2012 2013 2012
Gross profit
Services $ 26,779 $ 26,412 $ 98,907 $ 94,413
International 8,088 6,843 32,319 19,106
Products and Systems 3,937 5,626 16,947 18,578
Corporate and eliminations (261) (1,410) 198 (2,407)
$ 38,543 $ 37,471 $ 148,371 $ 129,690
Mistras Group, Inc. and Subsidiaries
Unaudited Reconciliation of Net Income Attributable to Mistras Group, Inc. to EBITDA and Adjusted EBITDA
(in thousands)
Three months ended May 31, Year ended May 31,
2013 2012 2013 2012
EBITDA and Adjusted EBITDA data
Net income (loss) attributable to Mistras Group, Inc. (GAAP) $ (4,549) $ 7,132 $ 11,646 $ 21,353
Interest expense 830 1,011 3,288 3,132
Provision for income taxes 2,878 3,619 12,627 12,291
Depreciation and amortization 6,954 6,035 26,647 22,024
EBITDA (non-GAAP) 6,113 17,797 54,208 58,800
Stock compensation expense 1,536 1,306 6,285 5,097
Acquisition-related expense, net (1,135) 971 (2,141) 1,980
Goodwill impairment 9,938 -- 9,938 --
Gain on extinguishment of debt -- (784) -- (671)
Adjusted EBITDA (non-GAAP) $ 16,452 $ 19,290 $ 68,290 $ 65,206
Mistras Group, Inc. and Subsidiaries
Unaudited Reconciliation of Net Income Attributable to Mistras Group, Inc. (GAAP) to Adjusted Net Income and Adjusted Diluted Earnings Per Share (Non-GAAP)
(in thousands, except per share data)
Three months ended May 31, Year ended May 31,
2013 2012 2013 2012
Adjusted Net Income
Net income (loss) attributable to Mistras Group, Inc. (GAAP) $ (4,549) $ 7,132 $ 11,646 $ 21,353
Acquisition-related expense, net ($1.1 million benefit and $1.0 million expense, pre-tax, for the three months ended May 31, 2013 and 2012, respectively and $2.1 million benefit and $2.0 million expense, pretax, for the year ended May 31, 2013 and 2012, respectively) (738) 645 (1,351) 1,257
Goodwill impairment 9,938 -- 9,938 --
Gain on extinguishment of long-term debt ($0.8 million and $0.7 million, pre-tax for the three months and year ended May 31, 2012, respectively) -- (521) -- (426)
Adjusted Net Income (non-GAAP) $ 4,651 $ 7,256 $ 20,233 $ 22,184
Adjusted Diluted Earnings Per Share
Diluted earnings (loss) per common share (GAAP) $ (0.16) $ 0.25 $ 0.40 $ 0.74
Acquisition-related expense (0.03) 0.02 (0.04) 0.04
Goodwill impairment 0.35 -- 0.34 --
Gain on extinguishment of long-term debt -- (0.02) -- (0.01)
Adjusted Diluted Earnings Per Share (non-GAAP) $ 0.16 $ 0.25 $ 0.70 $ 0.77

CONTACT: Nestor S. Makarigakis, Manager of Marketing Communications marcom@mistrasgroup.com 1(609)716-4000

Source:MISTRAS Group, Inc.