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| 8-K - FORM 8-K - Mistras Group, Inc. | d518459d8k.htm |
Exhibit 99.1
Mistras Group Delivers Solid Third Quarter Results
Revenue Increased by 28%, including 10% organic growth in the Services segment.
PRINCETON JUNCTION, N.J., April 8, 2013 (GLOBE NEWSWIRE) — Mistras Group, Inc. (NYSE:MG), a leading “one source” global provider of technology-enabled asset protection solutions, today reported financial results for its fiscal third quarter ending February 28, 2013. Revenue for the third quarter was $133.7 million and net income was $2.8 million, or $0.09 per diluted share. Revenue for the nine months ended February 28, 2013 was $384.8 million and net income was $16.2 million, or $0.56 per diluted share.
Summary financial highlights for the Fiscal 2013 third quarter and nine month period:
| • | Revenue growth of 28% in the quarter was led by acquisition growth of 23% and organic growth of 6%. Revenue in the first nine months grew by 24% led by acquisition growth of 20% and organic growth of 5%. |
| • | The Services segment delivered 10% organic growth in the quarter, while International segment revenues more than doubled. |
| • | Adjusted Diluted Earnings Per Share* was $0.07 and $0.54 in the third quarter and nine month period, respectively. Adjusted Diluted Earnings Per Share excludes a $0.02 benefit in both the quarter and the nine month period resulting from the reversal of certain acquisition-related contingent liabilities. |
| • | Adjusted EBITDA* was $12.5 million in the third quarter and $51.8 million in the nine month period. |
| • | During the first nine months of fiscal 2013, Net Cash Provided by Operating Activities was $27.5 million, an increase of 31%. |
| • | Third quarter results include approximately $1.1 million in higher employee medical claims, an increase of 41% over the prior year. |
Chairman and Chief Executive Officer, Dr. Sotirios J. Vahaviolos stated: “The Company’s revenue growth momentum continued in the third quarter and the organic growth rate of our Services segment was a big factor in that momentum. In a traditionally soft third quarter, our International segment continued to improve, however, our results were impacted by project mix in our Services segment and lower product sales in our Products and Systems segment.”
Dr. Vahaviolos continued, “I am very pleased with the tempo of our business in the third quarter and also with the broad-based opportunities we see developing for our business over the next year and beyond.”
Outlook and Guidance for Fiscal 2013
The Company’s outlook is for continued double digit growth in revenue and Adjusted EBITDA*. The Company is confident in its long-term prospects, but in light of the current business and economic environment, the Company now estimates its fiscal 2013 Adjusted EBITDA* to be in the range of $75 million to $80 million, and revenues to be in the high end of its previous guidance of $525 million to $535 million.
Earnings Conference Call
In connection with this earnings release, Mistras will hold its quarterly conference call on Tuesday, April 9th 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 1-800-299-9630 and use confirmation code 54831776 when prompted. The International dial-in number is 1-617-786-2904.
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 or contact Frank Joyce, Chief Financial Officer at 609-716-4103.
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.
Unaudited Consolidated Balance Sheets
(in thousands, except share and per share data)
| February 28, 2013 | May 31, 2012 | |||||||
| ASSETS |
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| Current Assets |
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| Cash and cash equivalents |
$ | 8,903 | $ | 8,410 | ||||
| Accounts receivable, net |
108,686 | 104,515 | ||||||
| Inventories, net |
12,126 | 12,492 | ||||||
| Deferred income taxes |
1,891 | 1,885 | ||||||
| Prepaid expenses and other current assets |
12,763 | 6,321 | ||||||
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| Total current assets |
144,369 | 133,623 | ||||||
| Property, plant and equipment, net |
69,846 | 63,527 | ||||||
| Intangible assets, net |
56,428 | 34,469 | ||||||
| Goodwill |
125,532 | 96,819 | ||||||
| Other assets |
739 | 1,378 | ||||||
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| Total assets |
$ | 396,914 | $ | 329,816 | ||||
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| LIABILITIES, PREFERRED STOCK AND EQUITY |
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| Current Liabilities |
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| Current portion of long-term debt |
$ | 7,730 | $ | 5,971 | ||||
| Current portion of capital lease obligations |
6,714 | 5,951 | ||||||
| Accounts payable |
8,298 | 11,944 | ||||||
| Accrued expenses and other current liabilities |
43,411 | 39,334 | ||||||
| Income taxes payable |
1,997 | 1,119 | ||||||
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| Total current liabilities |
68,150 | 64,319 | ||||||
| Long-term debt, net of current portion |
65,210 | 34,258 | ||||||
| Obligations under capital leases, net of current portion |
11,859 | 13,094 | ||||||
| Deferred income taxes |
14,582 | 4,901 | ||||||
| Other long-term liabilities |
21,447 | 19,996 | ||||||
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| Total liabilities |
181,248 | 136,568 | ||||||
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| Commitments and contingencies |
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| Preferred stock, 10,000,000 shares authorized |
— | — | ||||||
| Equity |
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| Common stock, $0.01 par value, 200,000,000 shares authorized, 28,194,980 and 28,025,507 shares issued and outstanding as of February 28, 2013 and May 31, 2012, respectively |
282 | 280 | ||||||
| Additional paid-in capital |
193,512 | 188,443 | ||||||
| Retained earnings |
23,531 | 7,336 | ||||||
| Accumulated other comprehensive loss |
(1,928 | ) | (3,047 | ) | ||||
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| Total Mistras Group, Inc. stockholders’ equity |
215,397 | 193,012 | ||||||
| Noncontrolling interest |
269 | 236 | ||||||
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| Total equity |
215,666 | 193,248 | ||||||
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| Total liabilities, preferred stock and equity |
$ | 396,914 | $ | 329,816 | ||||
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Mistras Group, Inc.
Unaudited Consolidated Statements of Operations
(in thousands, except per share data)
| Three months ended | Nine months ended | |||||||||||||||
| February 28, 2013 | February 29, 2012 | February 28, 2013 | February 29, 2012 | |||||||||||||
| Revenues: |
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| Services |
$ | 124,510 | $ | 94,253 | $ | 351,466 | $ | 281,097 | ||||||||
| Products |
9,151 | 9,865 | 33,311 | 28,688 | ||||||||||||
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| Total revenues |
133,661 | 104,118 | 384,777 | 309,785 | ||||||||||||
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| Cost of revenues: |
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| Cost of services |
91,209 | 66,336 | 248,769 | 194,270 | ||||||||||||
| Cost of products sold |
3,527 | 4,238 | 13,022 | 12,094 | ||||||||||||
| Depreciation related to services |
4,465 | 3,760 | 12,565 | 10,639 | ||||||||||||
| Depreciation related to products |
254 | 200 | 593 | 563 | ||||||||||||
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| Total cost of revenues |
99,455 | 74,534 | 274,949 | 217,566 | ||||||||||||
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| Gross profit |
34,206 | 29,584 | 109,828 | 92,219 | ||||||||||||
| Selling, general and administrative expenses |
27,209 | 20,806 | 74,063 | 59,565 | ||||||||||||
| Research and engineering |
754 | 578 | 1,801 | 1,769 | ||||||||||||
| Depreciation and amortization |
2,473 | 1,805 | 6,535 | 4,787 | ||||||||||||
| Acquisition-related expense, net |
(1,212 | ) | 973 | (1,006 | ) | 1,009 | ||||||||||
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| Income from operations |
4,982 | 5,422 | 28,435 | 25,089 | ||||||||||||
| Other expenses |
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| Interest expense |
882 | 690 | 2,458 | 2,121 | ||||||||||||
| Loss on extinguishment of long-term debt |
— | 113 | — | 113 | ||||||||||||
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| Income before provision for income taxes |
4,100 | 4,619 | 25,977 | 22,855 | ||||||||||||
| Provision for income taxes |
1,349 | 1,548 | 9,749 | 8,672 | ||||||||||||
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| Net income |
2,751 | 3,071 | 16,228 | 14,183 | ||||||||||||
| Net (income) loss attributable to noncontrolling interests, net of taxes |
— | (34 | ) | (33 | ) | 38 | ||||||||||
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| Net income attributable to Mistras Group, Inc. |
$ | 2,751 | $ | 3,037 | $ | 16,195 | $ | 14,221 | ||||||||
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| Earnings per common share: |
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| Basic |
$ | 0.10 | $ | 0.11 | $ | 0.58 | $ | 0.51 | ||||||||
| Diluted |
$ | 0.09 | $ | 0.11 | $ | 0.56 | $ | 0.50 | ||||||||
| Weighted average common shares outstanding: |
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| Basic |
28,175 | 27,921 | 28,121 | 27,794 | ||||||||||||
| Diluted |
29,101 | 28,829 | 29,078 | 28,563 | ||||||||||||
Mistras Group, Inc. and Subsidiaries
Unaudited Operating Data by Segment
(in thousands)
| Three months ended | Nine months ended | |||||||||||||||
| February 28, 2013 | February 29, 2012 | February 28, 2013 | February 29, 2012 | |||||||||||||
| Revenues |
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| Services |
$ | 90,537 | $ | 80,895 | $ | 278,147 | $ | 253,493 | ||||||||
| International |
37,516 | 17,164 | 88,722 | 38,794 | ||||||||||||
| Products and Systems |
7,645 | 9,824 | 25,618 | 26,429 | ||||||||||||
| Corporate and eliminations |
(2,037 | ) | (3,765 | ) | (7,710 | ) | (8,931 | ) | ||||||||
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| $ | 133,661 | $ | 104,118 | $ | 384,777 | $ | 309,785 | |||||||||
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| Three months ended | Nine months ended | |||||||||||||||
| February 28, 2013 | February 29, 2012 | February 28, 2013 | February 29, 2012 | |||||||||||||
| Gross profit |
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| Services |
$ | 20,496 | $ | 20,640 | $ | 72,128 | $ | 68,001 | ||||||||
| International |
9,851 | 4,586 | 24,231 | 12,263 | ||||||||||||
| Products and System |
3,790 | 4,938 | 13,010 | 12,952 | ||||||||||||
| Corporate and eliminations |
69 | (580 | ) | 459 | (997 | ) | ||||||||||
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| $ | 34,206 | $ | 29,584 | $ | 109,828 | $ | 92,219 | |||||||||
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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 | Nine months ended | |||||||||||||||
| February 28, 2013 | February 29, 2012 | February 28, 2013 | February 29, 2012 | |||||||||||||
| EBITDA and Adjusted EBITDA data |
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| Net income attributable to Mistras Group, Inc. |
$ | 2,751 | $ | 3,037 | $ | 16,195 | $ | 14,221 | ||||||||
| Interest expense |
882 | 690 | 2,458 | 2,121 | ||||||||||||
| Provision for income taxes |
1,349 | 1,548 | 9,749 | 8,672 | ||||||||||||
| Depreciation and amortization |
7,192 | 5,765 | 19,693 | 15,989 | ||||||||||||
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| EBITDA |
12,174 | 11,040 | 48,095 | 41,003 | ||||||||||||
| Stock compensation expense |
1,544 | 1,244 | 4,749 | 3,791 | ||||||||||||
| Acquisition-related expense, net |
(1,212 | ) | 973 | (1,006 | ) | 1,009 | ||||||||||
| Loss on extinguishment of debt |
— | 113 | — | 113 | ||||||||||||
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| Adjusted EBITDA |
$ | 12,506 | $ | 13,370 | $ | 51,838 | $ | 45,916 | ||||||||
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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 | Nine months ended | |||||||||||||||
| February 28, 2013 | February 29, 2012 | February 28, 2013 | February 29, 2012 | |||||||||||||
| Adjusted net income |
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| Net income attributable to Mistras Group, Inc. (GAAP) |
$ | 2,751 | $ | 3,037 | $ | 16,195 | $ | 14,221 | ||||||||
| Acquisition-related expense, net ($1.2 million benefit and $1.0 million expense, pre-tax, for the three months ended February 28, 2013 and February 28, 2012, respectively and $1.0 million benefit and $1.0 million expense, pretax, for the nine months ended February 28, 2013 and February 29, 2012, respectively) |
(813 | ) | 647 | (628 | ) | 626 | ||||||||||
| Loss on extinguishment of long-term debt ($0.1 million, pre-tax, for each of the three and nine months ended February 29, 2012) |
— | 75 | — | 70 | ||||||||||||
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| Adjusted net income (Non-GAAP) |
$ | 1,938 | $ | 3,759 | $ | 15,567 | $ | 14,917 | ||||||||
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| Adjusted diluted earnings per share |
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| Diluted earnings per common share (GAAP) |
$ | 0.09 | $ | 0.11 | $ | 0.56 | $ | 0.50 | ||||||||
| Acquisition-related expense/Loss on extinguishment of long-term debt |
(0.02 | ) | 0.02 | (0.02 | ) | 0.02 | ||||||||||
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| Adjusted diluted earnings per share (Non-GAAP) |
$ | 0.07 | $ | 0.13 | $ | 0.54 | $ | 0.52 | ||||||||
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