Quarterly Revenue Growth of 7.8% driven by increases in all industries
Significant Quarterly Gross Profit and Gross Profit Margin Growth across all segments
Further Reductions in Quarterly Selling, General and Administrative expenses
Quarterly Net Income of
Highlights of the Second Quarter 2024*
- Revenue of
$189.8 million , a 7.8% increase - Gross profit increased 12.9% to
$56.1 million , with gross profit margin of 29.6%, a 140 basis point expansion
- Net income of
$6.4 million and Earnings Per Diluted Share of$0.20 - Adjusted EBITDA up 44.6% to
$22.1 million
Highlights of the First Half 2024*
- Revenue of
$374.2 million , a 8.8% increase - Gross profit increased 11.9% to
$107.2 million , with gross profit margin of 28.6%, an 80 basis point expansion
- Net income of
$7.4 million and Earnings Per Diluted Share of$0.23 - Adjusted EBITDA up 48.8% to
$38.3 million
* All comparisons are consolidated and versus the equivalent prior year period, unless otherwise noted. Please see the reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures and additional information about the non-GAAP measures set forth in tables attached to this press release.
For the second quarter of 2024, consolidated revenue was
Second quarter 2024 gross profit increased 12.9% to
SG&A in the second quarter of 2024 was
The Company reported net income of
Adjusted EBITDA was
Performance by certain segments during the second quarter was as follows:
International segment second quarter 2024 revenue was
Cash Flow and Balance Sheet
The Company’s net cash provided by operating activities was
The Company’s gross debt was
2024 Outlook
The Company reaffirms the 2024 full year guidance previously provided, that being:
- Full year Revenue between
$725 and$750 million - Adjusted EBITDA between
$84 and$89 million * - Free cash flow between
$34 and$38 million
* Note that the Company’s original Adjusted EBITDA outlook for 2024 anticipated an incremental year over year Gross Profit benefit of
Conference Call
In connection with this release, MISTRAS will hold a conference call on
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/BI05aef0d9604542e897138e5abb38ad5a.
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
Backed by an innovative, data-driven asset protection portfolio, proprietary technologies, strong commitment to Environmental, Social, and Governance (ESG) initiatives, and a decades-long legacy of industry leadership, MISTRAS leads clients in the oil and gas, aerospace and defense, renewable and nonrenewable power, civil infrastructure, and manufacturing industries towards achieving operational and environmental 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; building real-time monitoring equipment to enable safe travel across bridges; and helping to propel sustainability, 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 field and in-line 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 and the environment, visit https://www.mistrasgroup.com/.
MEDIA CONTACT:
Group Vice-President of
+1 (609) 716-4000 | marcom@mistrasgroup.com
Forward-Looking and Cautionary Statements
Certain statements contained in this press release are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, but are not limited to, our 2024 outlook, guidance, costs savings and other benefits we expect to realize from our previously announced Project Phoenix initiatives and additional operational and strategic actions that we expect or seek to take in furtherance of our strategies and activities to enhance our financial results and future growth. Such forward-looking statements relate to MISTRAS' financial results and estimates, products and services, business model, Project Phoenix initiatives, operational and strategic initiatives to improve operating leverage, 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 2023 Annual Report on Form 10-K filed on
Use of Non-GAAP Financial Measures
In addition to financial information prepared in accordance with generally accepted accounting principles in the
Condensed Consolidated Balance Sheets (in thousands, except share and per share data) | ||||||||
ASSETS | (unaudited) | |||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 17,177 | $ | 17,646 | ||||
Accounts receivable, net | 149,958 | 132,847 | ||||||
Inventories | 14,944 | 15,283 | ||||||
Prepaid expenses and other current assets | 11,384 | 14,580 | ||||||
Total current assets | 193,463 | 180,356 | ||||||
Property, plant and equipment, net | 78,785 | 80,972 | ||||||
Intangible assets, net | 41,712 | 43,994 | ||||||
184,988 | 187,354 | |||||||
Deferred income taxes | 3,657 | 2,316 | ||||||
Other assets | 45,542 | 39,784 | ||||||
Total assets | $ | 548,147 | $ | 534,776 | ||||
LIABILITIES AND EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 13,759 | $ | 17,032 | ||||
Accrued expenses and other current liabilities | 85,727 | 84,331 | ||||||
Current portion of long-term debt | 10,021 | 8,900 | ||||||
Current portion of finance lease obligations | 4,645 | 5,159 | ||||||
Income taxes payable | 394 | 1,101 | ||||||
Total current liabilities | 114,546 | 116,523 | ||||||
Long-term debt, net of current portion | 189,692 | 181,499 | ||||||
Obligations under finance leases, net of current portion | 10,864 | 11,261 | ||||||
Deferred income taxes | 2,571 | 2,552 | ||||||
Other long-term liabilities | 37,000 | 32,438 | ||||||
Total liabilities | 354,673 | 344,273 | ||||||
Equity | ||||||||
Preferred stock, 10,000,000 shares authorized | — | — | ||||||
Common stock, | 385 | 305 | ||||||
Additional paid-in capital | 248,524 | 247,165 | ||||||
Accumulated deficit | (21,578 | ) | (28,942 | ) | ||||
Accumulated other comprehensive loss | (34,181 | ) | (28,336 | ) | ||||
193,150 | 190,192 | |||||||
Non-controlling interests | 324 | 311 | ||||||
Total equity | 193,474 | 190,503 | ||||||
Total liabilities and equity | $ | 548,147 | $ | 534,776 | ||||
Unaudited Condensed Consolidated Statements of Income (Loss) (in thousands, except per share data) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Revenue | $ | 189,773 | $ | 176,030 | $ | 374,215 | $ | 344,046 | |||||||
Cost of revenue | 127,760 | 120,442 | 255,179 | 236,493 | |||||||||||
Depreciation | 5,897 | 5,866 | 11,831 | 11,754 | |||||||||||
Gross profit | 56,116 | 49,722 | 107,205 | 95,799 | |||||||||||
Selling, general and administrative expenses | 40,957 | 41,484 | 82,144 | 84,305 | |||||||||||
Reorganization and other costs | 518 | 1,240 | 2,075 | 3,316 | |||||||||||
Legal settlement and insurance recoveries, net | 60 | 150 | 60 | 150 | |||||||||||
Research and engineering | 231 | 511 | 575 | 991 | |||||||||||
Depreciation and amortization | 2,391 | 2,443 | 4,839 | 4,969 | |||||||||||
Acquisition-related expense, net | — | 1 | 1 | 3 | |||||||||||
Income from operations | 11,959 | 3,893 | 17,511 | 2,065 | |||||||||||
Interest expense | 4,413 | 3,858 | 8,842 | 7,927 | |||||||||||
Income (loss) before provision (benefit) for income taxes | 7,546 | 35 | 8,669 | (5,862 | ) | ||||||||||
Provision (benefit) for income taxes | 1,173 | (341 | ) | 1,292 | (1,260 | ) | |||||||||
Net Income (Loss) | 6,373 | 376 | 7,377 | (4,602 | ) | ||||||||||
Less: net income attributable to noncontrolling interests, net of taxes | 4 | 39 | 13 | 47 | |||||||||||
Net Income (Loss) attributable to | $ | 6,369 | $ | 337 | $ | 7,364 | $ | (4,649 | ) | ||||||
Earnings (loss) per common share: | |||||||||||||||
Basic | $ | 0.21 | $ | 0.01 | $ | 0.24 | $ | (0.15 | ) | ||||||
Diluted | $ | 0.20 | $ | 0.01 | $ | 0.23 | $ | (0.15 | ) | ||||||
Weighted-average common shares outstanding: | |||||||||||||||
Basic | 30,979 | 30,368 | 30,842 | 30,214 | |||||||||||
Diluted | 31,293 | 30,660 | 31,358 | 30,214 | |||||||||||
Unaudited Operating Data by Segment (in thousands) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Revenues | |||||||||||||||
$ | 156,394 | $ | 145,550 | $ | 306,743 | $ | 282,482 | ||||||||
International | 34,264 | 30,277 | 67,311 | 59,684 | |||||||||||
Products and Systems | 3,373 | 3,329 | 6,583 | 7,068 | |||||||||||
Corporate and eliminations | (4,258 | ) | (3,126 | ) | (6,422 | ) | (5,188 | ) | |||||||
$ | 189,773 | $ | 176,030 | $ | 374,215 | $ | 344,046 | ||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Gross profit | |||||||||||||||
$ | 44,336 | $ | 39,679 | $ | 84,326 | $ | 76,316 | ||||||||
International | 10,072 | 8,398 | 19,530 | 15,766 | |||||||||||
Products and Systems | 1,687 | 1,614 | 3,300 | 3,676 | |||||||||||
Corporate and eliminations | 21 | 31 | 49 | 41 | |||||||||||
$ | 56,116 | $ | 49,722 | $ | 107,205 | $ | 95,799 | ||||||||
Unaudited Revenues by Category (in thousands) | |||||||||||||||
Revenue by industry was as follows: | |||||||||||||||
Three Months Ended | International | Products | Corp/Elim | Total | |||||||||||
Oil & Gas | $ | 96,356 | $ | 12,735 | $ | 165 | $ | — | $ | 109,256 | |||||
Aerospace & Defense | 16,596 | 5,697 | 47 | — | 22,340 | ||||||||||
Industrials | 11,853 | 5,878 | 563 | — | 18,294 | ||||||||||
Power Generation & Transmission | 7,332 | 1,254 | 447 | — | 9,033 | ||||||||||
Other | 10,368 | 4,504 | 37 | — | 14,909 | ||||||||||
Infrastructure, Research & Engineering | 5,125 | 2,813 | 695 | — | 8,633 | ||||||||||
Petrochemical | 3,848 | 171 | — | — | 4,019 | ||||||||||
Other | 4,916 | 1,212 | 1,419 | (4,258 | ) | 3,289 | |||||||||
Total | $ | 156,394 | $ | 34,264 | $ | 3,373 | $ | (4,258 | ) | $ | 189,773 |
Three Months Ended | International | Products | Corp/Elim | Total | |||||||||||
Oil & Gas | $ | 97,500 | $ | 8,609 | $ | 15 | $ | — | $ | 106,124 | |||||
Aerospace & Defense | 13,665 | 5,136 | 217 | — | 19,018 | ||||||||||
Industrials | 11,066 | 6,203 | 468 | — | 17,737 | ||||||||||
Power Generation & Transmission | 5,459 | 1,530 | 1,167 | — | 8,156 | ||||||||||
Other | 8,864 | 4,466 | 51 | — | 13,381 | ||||||||||
Infrastructure, Research & Engineering | 4,171 | 2,028 | 547 | — | 6,746 | ||||||||||
Petrochemical | 1,577 | 156 | — | — | 1,733 | ||||||||||
Other | 3,248 | 2,149 | 864 | (3,126 | ) | 3,135 | |||||||||
Total | $ | 145,550 | $ | 30,277 | $ | 3,329 | $ | (3,126 | ) | $ | 176,030 |
Six Months Ended | International | Products | Corp/Elim | Total | |||||||||||
Oil & Gas | $ | 199,383 | $ | 22,801 | $ | 237 | $ | — | $ | 222,421 | |||||
Aerospace & Defense | 31,971 | 12,429 | 58 | — | 44,458 | ||||||||||
Industrials | 20,762 | 11,731 | 1,000 | — | 33,493 | ||||||||||
Power Generation & Transmission | 10,924 | 2,936 | 1,025 | — | 14,885 | ||||||||||
Other | 18,296 | 8,437 | 76 | — | 26,809 | ||||||||||
Infrastructure, Research & Engineering | 9,097 | 5,018 | 1,104 | — | 15,219 | ||||||||||
Petrochemical | 7,661 | 702 | — | — | 8,363 | ||||||||||
Other | 8,649 | 3,257 | 3,083 | (6,422 | ) | 8,567 | |||||||||
Total | $ | 306,743 | $ | 67,311 | $ | 6,583 | $ | (6,422 | ) | $ | 374,215 |
Six Months Ended | International | Products | Corp/Elim | Total | |||||||||||
Oil & Gas | $ | 187,273 | $ | 17,464 | $ | 52 | $ | — | $ | 204,789 | |||||
Aerospace & Defense | 27,276 | 10,116 | 228 | — | 37,620 | ||||||||||
Industrials | 20,368 | 12,256 | 1,026 | — | 33,650 | ||||||||||
Power Generation & Transmission | 10,446 | 3,187 | 2,493 | — | 16,126 | ||||||||||
Other | 17,973 | 7,703 | 78 | — | 25,754 | ||||||||||
Infrastructure, Research & Engineering | 6,654 | 4,164 | 1,689 | — | 12,507 | ||||||||||
Petrochemical | 6,714 | 301 | — | — | 7,015 | ||||||||||
Other | 5,778 | 4,493 | 1,502 | (5,188 | ) | 6,585 | |||||||||
Total | $ | 282,482 | $ | 59,684 | $ | 7,068 | $ | (5,188 | ) | $ | 344,046 |
Oil & Gas Revenue by sub-industry was as follows: | |||||||||||
Three Months Ended | Six Months Ended | ||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||
Oil and Gas Revenue by sub-category | |||||||||||
Upstream | $ | 42,349 | $ | 41,961 | $ | 84,116 | $ | 78,900 | |||
Midstream | 25,292 | 27,293 | 46,684 | 48,524 | |||||||
Downstream | 41,615 | 36,870 | 91,621 | 77,365 | |||||||
Total | $ | 109,256 | $ | 106,124 | $ | 222,421 | $ | 204,789 |
Consolidated Revenue by type was as follows: | |||||||||||
Three Months Ended | Six Months Ended | ||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||
Field Services | $ | 134,528 | $ | 116,104 | $ | 260,883 | $ | 225,784 | |||
16,938 | 14,244 | 34,133 | 27,376 | ||||||||
Data Analytical Solutions | 18,342 | 18,107 | 33,881 | 34,919 | |||||||
Other | 19,965 | 27,575 | 45,318 | 55,967 | |||||||
Total | $ | 189,773 | $ | 176,030 | $ | 374,215 | $ | 344,046 | |||
Unaudited Reconciliation of Segment and Total Company Income (Loss) from Operations (GAAP) to Income before Special Items (non-GAAP) (in thousands) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Income from operations (GAAP) | $ | 18,727 | $ | 12,338 | $ | 32,287 | $ | 21,715 | |||||||
Reorganization and other costs | 92 | 478 | 92 | 539 | |||||||||||
Legal settlement and insurance recoveries, net | 60 | 150 | 60 | 150 | |||||||||||
Income from operations before special items (non-GAAP) | $ | 18,879 | $ | 12,966 | $ | 32,439 | $ | 22,404 | |||||||
International: | |||||||||||||||
Income (loss) from operations (GAAP) | $ | 1,647 | $ | 507 | $ | 2,771 | $ | (61 | ) | ||||||
Reorganization and other costs, net | 161 | 88 | 263 | 195 | |||||||||||
Income from operations before special items (non-GAAP) | $ | 1,808 | $ | 595 | $ | 3,034 | $ | 134 | |||||||
Products and Systems: | |||||||||||||||
Income from operations (GAAP) | $ | 495 | $ | 94 | $ | 809 | $ | 478 | |||||||
Reorganization and other costs | — | — | 2 | — | |||||||||||
Income from operations before special items (non-GAAP) | $ | 495 | $ | 94 | $ | 811 | $ | 478 | |||||||
Corporate and Eliminations: | |||||||||||||||
Loss from operations (GAAP) | $ | (8,910 | ) | $ | (9,046 | ) | $ | (18,356 | ) | $ | (20,067 | ) | |||
Reorganization and other costs | 265 | 674 | 1,718 | 2,582 | |||||||||||
Acquisition-related expense, net | — | 1 | 1 | 3 | |||||||||||
Loss from operations before special items (non-GAAP) | $ | (8,645 | ) | $ | (8,371 | ) | $ | (16,637 | ) | $ | (17,482 | ) | |||
Income from operations (GAAP) | $ | 11,959 | $ | 3,893 | $ | 17,511 | $ | 2,065 | |||||||
Reorganization and other costs | 518 | 1,240 | 2,075 | 3,316 | |||||||||||
Legal settlement and insurance recoveries, net | 60 | 150 | 60 | 150 | |||||||||||
Acquisition-related expense, net | — | 1 | 1 | 3 | |||||||||||
Income from operations before special items (non-GAAP) | $ | 12,537 | $ | 5,284 | $ | 19,647 | $ | 5,534 |
Unaudited Reconciliation of Gross Debt (GAAP) to Net Debt (non-GAAP) (in thousands) | ||||||||
Current portion of long-term debt | $ | 10,021 | $ | 8,900 | ||||
Long-term debt, net of current portion | 189,692 | 181,499 | ||||||
Total Gross Debt (GAAP) | 199,713 | 190,399 | ||||||
Less: Cash and cash equivalents | (17,177 | ) | (17,646 | ) | ||||
Total Net Debt (non-GAAP) | $ | 182,536 | $ | 172,753 | ||||
Unaudited Summary Cash Flow Information (in thousands) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Net cash provided by (used in): | |||||||||||||||
Operating activities | $ | 4,511 | $ | 13,888 | $ | 5,115 | $ | 18,321 | |||||||
Investing activities | (5,569 | ) | (5,351 | ) | (11,217 | ) | (9,811 | ) | |||||||
Financing activities | 134 | (7,236 | ) | 5,261 | (11,187 | ) | |||||||||
Effect of exchange rate changes on cash | 1,246 | (19 | ) | 372 | 188 | ||||||||||
Net change in cash and cash equivalents | $ | 322 | $ | 1,282 | $ | (469 | ) | $ | (2,489 | ) | |||||
Unaudited Reconciliation of Net Cash Provided by Operating Activities (GAAP) to Free Cash Flow (non-GAAP) (in thousands) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Net cash provided by operating activities (GAAP) | $ | 4,511 | $ | 13,888 | $ | 5,115 | $ | 18,321 | |||||||
Less: | |||||||||||||||
Purchases of property, plant and equipment | (4,795 | ) | (5,469 | ) | (9,599 | ) | (9,801 | ) | |||||||
Purchases of intangible assets | (1,287 | ) | (461 | ) | (2,404 | ) | (822 | ) | |||||||
Free cash flow (non-GAAP) | $ | (1,571 | ) | $ | 7,958 | $ | (6,888 | ) | $ | 7,698 | |||||
Unaudited Reconciliation of Net Income (Loss) (GAAP) to Adjusted EBITDA (non-GAAP) (in thousands) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Net Income (loss) (GAAP) | $ | 6,373 | $ | 376 | $ | 7,377 | $ | (4,602 | ) | ||||||
Less: Net income attributable to non-controlling interests, net of taxes | 4 | 39 | 13 | 47 | |||||||||||
Net Income (loss) attributable to | $ | 6,369 | $ | 337 | $ | 7,364 | $ | (4,649 | ) | ||||||
Interest expense | 4,413 | 3,858 | 8,842 | 7,927 | |||||||||||
Provision (benefit) for income taxes | 1,173 | (341 | ) | 1,292 | (1,260 | ) | |||||||||
Depreciation and amortization | 8,288 | 8,309 | 16,670 | 16,723 | |||||||||||
Share-based compensation expense | 1,536 | 1,091 | 2,764 | 2,633 | |||||||||||
Acquisition-related expense | — | 1 | 1 | 3 | |||||||||||
Reorganization and other related costs, net | 518 | 1,240 | 2,075 | 3,316 | |||||||||||
Legal settlement and insurance recoveries, net | 60 | 150 | 60 | 150 | |||||||||||
Foreign exchange (gain) loss | (227 | ) | 654 | (789 | ) | 875 | |||||||||
Adjusted EBITDA (non-GAAP) | $ | 22,130 | $ | 15,299 | $ | 38,279 | $ | 25,718 | |||||||
Unaudited Reconciliation of Net Income (Loss) (GAAP) and Diluted EPS (GAAP) to Net Income (Loss) Excluding Special Items (non-GAAP) and Diluted EPS Excluding Special Items (non-GAAP) (dollars in thousands, except per share data) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Net income (loss) attributable to | $ | 6,369 | $ | 337 | $ | 7,364 | $ | (4,649 | ) | ||||||
Special Items Total | $ | 578 | $ | 1,391 | $ | 2,136 | $ | 3,469 | |||||||
Tax impact on special items | (140 | ) | (311 | ) | (521 | ) | (815 | ) | |||||||
Special items, net of tax | $ | 438 | $ | 1,080 | $ | 1,615 | $ | 2,654 | |||||||
Net income (loss) attributable to | $ | 6,807 | $ | 1,417 | $ | 8,979 | $ | (1,995 | ) | ||||||
Diluted EPS (GAAP)(1) | $ | 0.20 | $ | 0.01 | $ | 0.23 | $ | (0.15 | ) | ||||||
Special items, net of tax | 0.01 | 0.04 | 0.05 | 0.09 | |||||||||||
Diluted EPS Excluding Special Items (non-GAAP) | $ | 0.21 | $ | 0.05 | $ | 0.28 | $ | (0.06 | ) |
_______________
(1) For the six months ended
Source: MISTRAS Group, Inc.