PRINCETON JUNCTION, N.J., Oct. 7, 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 first quarter of fiscal year 2015, which ended August 31, 2014. During the first quarter of fiscal year 2015, the Company's revenues increased 23% over the prior year's first quarter, reaching $166.6 million. Net income for the first quarter was $1.7 million, or $0.06 per diluted share, compared with the prior year first quarter's net income of $5.6 million and $0.19 per diluted share. Excluding acquisition-related items, net income in the first quarter of fiscal year 2015 was $1.1 million or $0.04 per diluted share, compared with the prior year first quarter's net income of $4.3 million and $0.14 per diluted share. Adjusted EBITDA was $13.1 million in the first quarter of fiscal year 2015, compared with $15.8 million in the prior year's first quarter. The Company achieved robust year-on-year revenue growth in excess of 20% for the second consecutive quarter. Revenue growth from both acquisitions (+13%) and organic sources (+9%) continued to be strong. Nearly all of this growth occurred in the Company's Services segment, which experienced year-on-year growth of over 27%. The Company's gross profit margins declined to 25.2% from the prior year's 28.9%. As with the Company's revenue growth, this change was also driven primarily by the Services segment, which saw gross profit margins decline by 350 basis points from the prior year's 27.9%. Primary factors causing this decline from a relatively tough gross margin comparison to the prior year first quarter included the Company's continued investment to develop and grow its business in the Canadian oil sands region, a market-driven increase in U.S. labor costs which preceded customer pricing actions, and an adverse sales mix in both the U.S. and in some international countries. Key Financial Metrics: Revenues Gross Profit Operating Cash Flow Sotirios Vahaviolos, Chairman and Chief Executive Officer stated, "We are encouraged by our continued strong revenue growth in our Services segment, a very positive reflection of the health of our industry now and for the foreseeable future. Our organic growth was driven by year-over-year growth in Alaska and by increased inspection requirements at several new and existing customers. Our reduced profit margins compared with prior year reflected the impact of important choices we made to continue to invest, establish and expand our capabilities to serve the Canadian oil sands region, and to maintain service levels and business terms with key customers despite rising labor costs. We are working with our customers to adjust pricing to reflect market conditions. At the same time we are encouraged by our ongoing business development efforts in Canada and continue to expect that we will see an improvement that will benefit our second half results." Dr. Vahaviolos continued, "We are delighted with our acquisition of NACHER Corporation, a leading provider of comprehensive turnkey maintenance and inspection services that introduces Mistras Group to the vast offshore market.With the addition of NACHER, we are now in the unique position of extending to our integrated energy customers, the benefits of a single source solutions provider for their downstream, midstream and now upstream operations." Outlook and Guidance for Fiscal 2015 The Company expects that NACHER will add approximately $25 million to its revenues during fiscal year 2015, which increases total revenues expected for fiscal year 2015 to a range of from $705 million to $730 million, representing growth of 13% to 17% over prior year. The Company is maintaining its expected range of Adjusted EBITDA of $78 million to $84 million, representing an increase of from 11% to 20%, with most of the increase occurring in the second half of its fiscal year. The Company expects that the EBITDA generated by the NACHER acquisition will offset the shortfall experienced in the first quarter. Conference Call In connection with this release, Mistras will hold a conference call on Wednesday, October 8, 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 1-877-415-3179 and use confirmation code 85011578 when prompted. The International dial-in number is 1-857-244-7322. About Mistras Group, Inc. Mistras is a leading "one source" global provider of technology-enabled asset protection solutions used to evaluate the structural integrity of critical energy, industrial and public infrastructure. Mission critical services and solutions are delivered globally and provide customers with asset life extension, improved productivity and profitability, compliance with government safety and environmental regulations, and enhanced 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 (DT) services; process and fixed asset engineering and consulting services; and its world class enterprise inspection data management and analysis software (PCMS™) 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 2014 filed with the Securities and Exchange Commission on August 8, 2014, 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) (unaudited) August 31, 2014 May 31, 2014 ASSETS Current Assets Cash and cash equivalents $ 12,496 $ 10,020 Accounts receivable, net 142,643 137,824 Inventories 11,537 11,376 Deferred income taxes 3,844 3,283 Prepaid expenses and other current assets 13,126 12,626 Total current assets 183,646 175,129 Property, plant and equipment, net 85,322 77,811 Intangible assets, net 68,606 57,875 Goodwill 170,887 130,516 Deferred income taxes 1,324 1,344 Other assets 1,469 1,297 Total assets $ 511,254 $ 443,972 LIABILITIES AND EQUITY Current Liabilities Accounts payable $ 14,852 $ 14,978 Accrued expenses and other current liabilities 56,059 54,650 Current portion of long-term debt 22,536 8,058 Current portion of capital lease obligations 7,120 7,251 Income taxes payable 1,588 1,854 Total current liabilities 102,155 86,791 Long-term debt, net of current portion 113,571 68,590 Obligations under capital leases, net of current portion 13,550 13,664 Deferred income taxes 22,306 15,521 Other long-term liabilities 16,148 17,014 Total liabilities 267,730 201,580 Commitments and contingencies Equity Preferred stock, 10,000,000 shares authorized -- -- Common stock, $0.01 par value, 200,000,000 shares authorized 286 284 Additional paid-in capital 203,195 201,831 Retained earnings 43,166 41,500 Accumulated other comprehensive loss (3,416) (1,511) Total Mistras Group, Inc. stockholders' equity 243,231 242,104 Noncontrolling interests 293 288 Total equity 243,524 242,392 Total liabilities and equity $ 511,254 $ 443,972 Mistras Group, Inc. and Subsidiaries Unaudited Condensed Consolidated Statements of Income (in thousands, except per share data) Three months ended August 31, 2014 2013 Revenues: Services $ 159,309 $ 128,342 Products and systems 7,264 7,496 Total revenues 166,573 135,838 Cost of revenues: Cost of services 116,254 88,624 Cost of products and systems sold 3,468 3,629 Depreciation related to services 4,582 4,050 Depreciation related to products and systems 275 258 Total cost of revenues 124,579 96,561 Gross profit 41,994 39,277 Selling, general and administrative expenses 35,220 28,699 Research and engineering 649 643 Depreciation and amortization 3,422 2,457 Acquisition-related expense, net (961) (2,097) Income from operations 3,664 9,575 Interest expense 905 745 Income before provision for income taxes 2,759 8,830 Provision for income taxes 1,088 3,195 Net income 1,671 5,635 Less: net income attributable to noncontrolling interests, net of taxes (5) 6 Net income attributable to Mistras Group, Inc. $ 1,666 $ 5,641 Earnings per common share Basic $ 0.06 $ 0.20 Diluted $ 0.06 $ 0.19 Weighted average common shares outstanding: Basic 28,477 28,241 Diluted 29,552 29,109 Mistras Group, Inc. and Subsidiaries Unaudited Operating Data by Segment (in thousands) Three months ended August 31, 2014 2013 Revenues Services $ 121,932 $ 95,810 International 40,038 37,759 Products and Systems 6,567 6,585 Corporate and eliminations (1,964) (4,316) $ 166,573 $ 135,838 Three months ended August 31, 2014 2013 Gross profit Services $ 29,771 $ 26,747 International 9,468 10,120 Products and Systems 2,664 2,384 Corporate and eliminations 91 26 $ 41,994 $ 39,277 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 August 31, 2014 2013 Services: Income from operations before acquisition-related expense, net (non-GAAP) $ 9,141 $ 11,015 Acquisition-related expense, net 261 169 Income from operations (GAAP) 8,880 10,846 International: Income from operations before acquisition-related expense (benefit), net (non-GAAP) $ (588) $ 1,345 Acquisition-related expense (benefit), net 111 (470) (Loss) Income from operations (GAAP) (699) 1,815 Products and Systems: Income from operations before acquisition-related (benefit) net (non-GAAP) $ (433) $ (425) Acquisition-related (benefit), net -- (1,016) (Loss) Income from operations (GAAP) (433) 591 Corporate and Eliminations: Income from operations before acquisition-related (benefit), net (non-GAAP) $ (5,417) $ (4,457) Acquisition-related (benefit) net (1,333) (780) (Loss) from operations (GAAP) (4,084) (3,677) Total Company Income from operations before acquisition-related (benefit) net (non-GAAP) $ 2,703 $ 7,478 Acquisition-related (benefit), net (961) (2,097) Income from operations (GAAP) 3,664 9,575 Mistras Group, Inc. and Subsidiaries Unaudited Summary of Net Cash Flows (in thousands) Three months ended August 31, 2014 2013 Net cash provided by (used in): Operating Activities $ 14,515 $ 11,538 Investing Activities (40,645) (2,516) Financing Activities 30,489 (10,069) Effect of exchange rate changes on cash (1,883) 178 Net change in cash and cash equivalents $ 2,476 $ (869) Mistras Group, Inc. and Subsidiaries Unaudited Reconciliation of
Net Income to EBITDA and Adjusted EBITDA(in thousands) Three months ended August 31, 2014 2013 Net Income $ 1,671 $ 5,635 Less: net income attributable to noncontrolling interests, net of taxes (5) 6 Net income attributable to Mistras Group, Inc. $ 1,666 $ 5,641 Interest expense 905 745 Provision for income taxes 1,088 3,195 Depreciation and amortization 8,279 6,765 EBITDA $ 11,938 $ 16,346 Share-based compensation expense 2,167 1,544 Acquisition-related expense, net (961) (2,097) Adjusted EBITDA $ 13,144 $ 15,793 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 August 31, 2014 2013 Net income (GAAP) $ 1,671 $ 5,635 Acquisition-related (benefit), net of tax (611) (1,373) Net Income Excluding Acquisition-related Items (non-GAAP) $ 1,060 $ 4,262 Diluted earnings per common share (GAAP) $ 0.06 $ 0.19 Acquisition-related (benefit), net (0.02) $ (0.05) Diluted EPS Excluding Acquisition-related Items (non-GAAP) $ 0.04 $ 0.14 Note: Acquisition-related (benefit), net of tax, includes income tax expense of $350 thousand and $724 thousand for the three months ended August 31, 2014 and 2013. The aforementioned tax expenses are reflective of non-deductible and non-taxable tax differences related to acquisitions of common stock. CONTACT: Media Contact:
Nestor S. Makarigakis
Group Director of Marketing Communications
marcom@mistrasgroup.com
1(609)716-4000
Country Websites
Business Websites
Popular Searches Branch Locator Oil & Gas Field Inspections Sensoria™ Wind Blade Monitoring Pipelines MISTRAS Digital® Traditional Non-Destructive Testing (NDT) Careers Events Center ART Crawler Aerospace & Defense Investors Environmental, Social & Governance (ESG) Initiatives Equipment Consulting Training