PRINCETON JUNCTION, N.J., Jan. 8, 2014 (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 second quarter and first half of fiscal 2014, which ended November 30, 2013. During the second quarter, the Company had revenue of $156.8 million, an increase of 13.8% over the prior year period. Net income for the second quarter was $9.3 million, or $0.32 per diluted share compared with net income of $9.2 million or $0.32 per diluted share in the prior year period. Adjusted EBITDA* was $22.6 million in the quarter compared with $23.9 million in the prior year period. During the first half of fiscal 2014, the Company had revenue of $292.6 million, an increase of 16.5% over the prior year period. Net income for the first half was $14.9 million, or $0.51 per diluted share, compared with net income of $13.4 million or $0.46 per diluted share in the prior year period. Adjusted EBITDA* was $38.6 million in the first half compared with $39.3 million in the prior year period. Included in results for the second quarter and first half of fiscal 2014 were favorable pre-tax net acquisition-related adjustments of $0.4 million and $2.5 million, respectively, which favorably impacted earnings per diluted share by $0.01 in the second quarter and $0.06 in the first half. Financial Highlights: Revenues Gross Profit Operating Cash Flow Sotirios Vahaviolos, Mistras Chairman and Chief Executive Officer stated, "We achieved strong results in the second quarter and first half of fiscal 2014 compared with robust prior year results. Mistras was awarded several new contracts, and was chosen by a key customer to be their exclusive provider for a large multi-year contract at one of their largest facilities in the United States. The Company's second quarter results included increased costs to secure these contracts and to continue building its capabilities to support future growth, especially in Canada." "We remain optimistic about the continued health of the market especially within the North American oil & gas industry for the next several years, driven by consumer demand for energy, combined with our customers' needs to improve safety and comply with the ever growing environmental regulations. We are also very pleased with our recent contract wins and the feedback and receptivity from our customers toward our employees and our company's value based service offerings." Dr. Vahaviolos added, "Unlike last year at this time, we are looking forward to a robust spring turnaround season which will accelerate the growth we experienced in the first half of our fiscal year. This improved environment, coupled with our recent market share gains, improving international results and strategic acquisitions, has led us to increase our guidance for fiscal 2014 results while meeting our organic growth goals." Outlook and Guidance for Fiscal 2014 The Company is increasing its previously issued guidance for fiscal 2014 revenues and Adjusted EBITDA*. Previously the Company expected revenue to be in the range of from $570 million to $600 million, and Adjusted EBITDA* to be in the range of $74 million to $80 million. The Company now expects that its revenue will be in the range of $590 million to $615 million, and Adjusted EBITDA* will be in a range of from $77 million to $83 million. Conference Call In connection with this release, Mistras will hold a conference call on Thursday, January 9, 2014 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 1-866-314-5232 and use confirmation code 33910996 when prompted. The International dial-in number is 1-617-213-8052. 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; destructive testing 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 2013 filed with the Securities and Exchange Commission on August 14, 2013, 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 term "Adjusted EBITDA" used in this release is a financial measurement not calculated in accordance with generally accepted accounting principles in the U.S. ("US GAAP"). A Reconciliation of Adjusted EBITDA to a financial measurement under US GAAP is set forth in a table attached to this press release. In addition, the Company has also included in the attached tables non-GAAP measurements "EBITDA", "Segment and Total Company Income from Operations before Acquisition-Related Expense (Benefit), net", "Net Income Excluding Acquisition-related Items" and "Diluted EPS Excluding Acquisition-related Items," reconciling these measurements to financial measurements under US GAAP. The Company believes that investors and other users of the financial statements benefit from the presentation of these non-GAAP measurements 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 Condensed Consolidated Balance Sheets (in thousands, except share and per share data) November 30, 2013 May 31, 2013 ASSETS Current Assets Cash and cash equivalents $ 16,240 $ 7,802 Accounts receivable, net 122,418 108,554 Inventories 12,828 12,504 Deferred income taxes 2,647 2,621 Prepaid expenses and other current assets 10,940 8,156 Total current assets 165,073 139,637 Property, plant and equipment, net 70,517 68,419 Deposit for business combination 11,000 -- Intangible assets, net 49,282 51,992 Goodwill 118,679 115,270 Other assets 1,315 1,342 Total assets $ 415,866 $ 376,660 LIABILITIES AND EQUITY Current Liabilities Accounts payable $ 11,273 $ 8,490 Accrued expenses and other current liabilities 46,967 47,839 Current portion of long-term debt 7,899 7,418 Current portion of capital lease obligations 6,760 6,766 Income taxes payable 1,198 1,703 Total current liabilities 74,097 72,216 Long-term debt, net of current portion 70,799 52,849 Obligations under capital leases, net of current portion 10,728 10,923 Deferred income taxes 12,629 11,614 Other long-term liabilities 17,760 18,778 Total liabilities 186,013 166,380 Commitments and contingencies Equity Preferred stock, 10,000,000 shares authorized -- -- Common stock, $0.01 par value, 200,000,000 shares authorized, 28,382,851 and 28,210,862 shares issued and outstanding as of November 30, 2013 and May 31, 2013, respectively 283 282 Additional paid-in capital 197,462 195,241 Retained earnings 33,880 18,982 Accumulated other comprehensive loss (2,020) (4,452) Total Mistras Group, Inc. stockholders' equity 229,605 210,053 Noncontrolling interests 248 227 Total equity 229,853 210,280 Total liabilities and equity $ 415,866 $ 376,660 Mistras Group, Inc. and Subsidiaries Condensed Consolidated Statements of Income (in thousands, except per share data) Three months ended November 30, Six months ended November 30, 2013 2012 2013 2012 Revenues: Services $ 143,139 $ 127,731 $ 271,481 $ 226,956 Products and systems 13,616 9,998 21,112 24,160 Total revenues 156,755 137,729 292,593 251,116 Cost of revenues: Cost of services 98,860 87,044 187,484 157,560 Cost of products and systems sold 5,634 4,485 9,263 9,495 Depreciation related to services 4,026 4,124 8,076 8,100 Depreciation related to products and systems 258 171 516 339 Total cost of revenues 108,778 95,824 205,339 175,494 Gross profit 47,977 41,905 87,254 75,622 Selling, general and administrative expenses 29,849 23,362 58,548 46,854 Research and engineering 786 530 1,429 1,047 Depreciation and amortization 2,501 2,167 4,958 4,062 Acquisition-related expense, net (411) 99 (2,508) 206 Income from operations 15,252 15,747 24,827 23,453 Interest expense 772 816 1,517 1,576 Income before provision for income taxes 14,480 14,931 23,310 21,877 Provision for income taxes 5,196 5,745 8,391 8,400 Net income 9,284 9,186 14,919 13,477 Less: net income attributable to noncontrolling interests, net of taxes (27) (23) (21) (33) Net income attributable to Mistras Group, Inc. $ 9,257 $ 9,163 $ 14,898 $ 13,444 Earnings per common share Basic $ 0.33 $ 0.33 $ 0.53 $ 0.48 Diluted $ 0.32 $ 0.32 $ 0.51 $ 0.46 Weighted average common shares outstanding: Basic 28,378 28,144 28,309 28,094 Diluted 29,102 29,008 29,147 29,036 Mistras Group, Inc. and Subsidiaries Unaudited Operating Data by Segment (in thousands) Three months ended November 30, Six months ended November 30, 2013 2012 2013 2012 Revenues Services $ 108,862 $ 105,213 $ 204,672 $ 187,610 International 43,209 26,777 80,968 51,206 Products and Systems 8,604 8,439 15,189 17,973 Corporate and eliminations (3,920) (2,700) (8,236) (5,673) $ 156,755 $ 137,729 $ 292,593 $ 251,116 Three months ended November 30, Six months ended November 30, 2013 2012 2013 2012 Gross profit Services $ 30,918 $ 30,692 $ 57,665 $ 51,632 International 13,293 7,299 23,413 14,380 Products and Systems 3,718 3,975 6,102 9,220 Corporate and eliminations 48 (61) 74 390 $ 47,977 $ 41,905 $ 87,254 $ 75,622 Mistras Group, Inc. and Subsidiaries Unaudited Reconciliation of Segment and Total Company Income (Loss) from Operations before Acquisition-Related Expense (Benefit), net (non-GAAP) to Segment and Total Company Income (Loss) from Operations (GAAP) (in thousands) Three months ended November 30, Six months ended November 30, 2013 2012 2013 2012 Services: Income from operations before acquisition-related expense, net (non-GAAP) $ 14,387 $ 16,284 $ 25,402 $ 23,260 Acquisition-related expense (benefit), net (13) 483 156 693 Income from operations (GAAP) 14,400 15,801 25,246 22,567 International: Income from operations before acquisition-related expense, net (non-GAAP) $ 3,992 $ 1,343 $ 5,337 $ 3,052 Acquisition-related expense (benefit), net (3,301) 63 (3,771) 181 Income from operations (GAAP) 7,293 1,280 9,108 2,871 Products and Systems: Income from operations before acquisition-related expense, net (non-GAAP) $ 450 $ 1,088 $ 25 $ 3,479 Acquisition-related (benefit), net (19) (615) (1,035) (1,304) Income from operations (GAAP) 469 1,703 1,060 4,783 Corporate and Eliminations: Income from operations before acquisition-related (benefit), net (non-GAAP) $ (3,988) $ (2,869) $ (8,445) $ (6,132) Acquisition-related expense, net 2,922 168 2,142 636 (Loss) from operations (GAAP) (6,910) (3,037) (10,587) (6,768) Total Company Income from operations before acquisition-related expense, net (non-GAAP) $ 14,841 $ 15,846 $ 22,319 $ 23,659 Acquisition-related expense (benefit), net (411) 99 (2,508) 206 Income from operations (GAAP) 15,252 15,747 24,827 23,453 Mistras Group, Inc. and Subsidiaries Unaudited Reconciliation of
Net Income to EBITDA and Adjusted EBITDA(in thousands) Three months ended November 30, Six months ended November 30, 2013 2012 2013 2012 Net Income $ 9,284 $ 9,186 $ 14,919 $ 13,477 Less: net income attributable to noncontrolling interests, net of taxes (27) (23) (21) (33) Net income attributable to Mistras Group, Inc. $ 9,257 $ 9,163 $ 14,898 $ 13,444 Interest expense 772 816 1,517 1,576 Provision for income taxes 5,196 5,745 8,391 8,400 Depreciation and amortization 6,785 6,462 13,550 12,501 EBITDA $ 22,010 $ 22,186 $ 38,356 $ 35,921 Share-based compensation expense 1,040 1,572 2,747 3,206 Acquisition-related expense, net (411) 99 (2,508) 206 Adjusted EBITDA $ 22,639 $ 23,857 $ 38,595 $ 39,333 Mistras Group, Inc. and Subsidiaries Unaudited Reconciliation of Net Income (GAAP) and Diluted Earnings Per Share (GAAP) to Net Income Excluding Acquisition-related Items (non-GAAP) and Diluted EPS Excluding Acquisition-related Items (non-GAAP) (in thousands except per share data) Three months ended November 30, Six months ended November 30, 2013 2012 2013 2012 Net income (GAAP) $ 9,284 $ 9,186 $ 14,919 $ 13,477 Acquisition-related expense (benefit), net of tax (382) 229 (1,755) 288 Net Income Excluding Acquisition-related Items (non-GAAP) $ 8,902 $ 9,415 $ 13,164 $ 13,765 Diluted earnings per common share (GAAP) $ 0.32 $ 0.32 $ 0.51 $ 0.46 Acquisition-related expense (benefit), net (0.01) 0.01 (0.06) 0.01 Diluted EPS Excluding Acquisition-related Items (non-GAAP) $ 0.31 $ 0.33 $ 0.45 $ 0.47 Note: Acquisition-related expense (benefit), net of tax, includes income tax expense of $29 thousand and $130 thousand for the three months ended November 30, 2013 and 2012, respectively and $753 thousand and $82 thousand for the six months ended November 30, 2013 and 2012, respectively. The aforementioned tax expenses are reflective of non-deductible and non-taxable tax differences related to acquisitions of common stock. CONTACT: Nestor S. Makarigakis
Group Director of Marketing Communications
marcom@mistrasgroup.com
1(609)716-4000





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