MISTRAS Group, Inc. (MG: NYSE), a leading "one source"
multinational provider of integrated technology-enabled asset
protection solutions, reported financial results for its second
quarter and six months ended June 30, 2023.
Highlights of the Second Quarter 2023*
- Revenue of $176.0 million, down 1.7%
- Gross profit of $49.7 million, with gross profit margin
of 28.2%
- GAAP Net income of $0.3 million, with Adjusted EBITDA
of $15.3 million
- Operating Cash Flow of $13.9 million, and Free Cash
Flow of $8.0 million
Highlights of the First Half 2023*
- Revenue of $344.0 million, up 1.0%, a 1.9% increase
excluding FX exchange impact**
- Gross profit of $95.8 million, up 2.5%, with gross
profit margin of 27.8%, up 40 bps
- GAAP Net loss of $4.6 million, with Adjusted EBITDA up
7.9% to $25.7 million
- Operating Cash Flow of $18.3 million, and Free Cash
Flow of $7.7 million
* All comparisons are consolidated and versus
the equivalent prior year period, unless otherwise noted.** Foreign
currency (“FX”) exchange impact is calculated by converting current
period financial results in local currency, using the prior period
exchange rates, and comparing this amount to the current period
financial results in local currency using the current period
exchange rate.
For the second quarter of 2023, consolidated revenue was $176.0
million, a 1.7% decrease, including the unfavorable impact of $0.7
million of FX exchange. The second quarter revenue decline was
primarily attributable to a decrease in workload associated with a
delayed Defense contract and decreases in the Power Generation
industry related to project timing, which more than offset strong
growth in the Commercial Aerospace industry, OnStream Pipeline
InLine Inspection (“ILI”) business, and Data Solutions offerings.
Second quarter 2023 gross profit decreased 7.2% with gross profit
margin declining 170 basis points, as compared to the year ago
period. The gross margin decrease was primarily due to increased
European energy costs and deleveraging of fixed costs due to
revenue levels, partially offset by improved sales mix in the
current quarter.
Selling, general and administrative expenses (“SG&A”) in the
second quarter of 2023 were $41.5 million, up from $40.9 million in
the second quarter of 2022, in part due to aforementioned
unfavorable FX exchange. Second quarter SG&A was down
sequentially from the first quarter of 2023, as a result of
on-going budgeted cost controls.
The Company generated net income of $0.3 million in the second
quarter of 2023, as compared to net income of $4.6 million in the
prior year period. Adjusted EBITDA was $15.3 million in the second
quarter of 2023 compared to $18.3 million in the prior year, a
decrease of 16.4%, primarily attributable to the decrease in
revenue and gross profit. The year-to-date 2023 net loss was $4.6
million, resulting in Adjusted EBITDA of $25.7 million which was an
increase of 7.9% over the prior year period, primarily attributable
to a favorable change in sales mix.
Cost Savings Implementation
As announced in February 2023, the Company has been exploring
ways to improve profitability and Adjusted EBITDA, through
meaningful margin improvement and steps to achieve sustained cost
savings. The Company has completed the initial phase of
this project, which it refers to as Project Phoenix, wherein
efficiency and profitability opportunities were
identified. The Company is now undertaking the next
phase of validating actionable initiatives, which can then be
implemented prospectively. The Company will provide an
update at the end of the third quarter of 2023, after further
progress is made towards achievement of such
opportunities.
The Company has already taken certain actions in 2023 which are
expected to yield annualized cost savings of approximately $6.2
million, of which approximately $5.1 million are expected to be
realized in 2023. Most of these cost savings are related to the
Company’s North America operations and are related to a reduction
in overhead functions classified within the SG&A line.
Approximately $4.5 million of the $5.1 million savings anticipated
to be achieved in 2023 were budgeted for, and hence were included
in the Company’s original Adjusted EBITDA guidance for 2023.
Chief Executive Officer Dennis Bertolotti commented, “Although
we continue to generate revenue growth in many of our key markets,
the impact of decreased activity under one of our Defense contracts
offset these gains at a consolidated level. Hence, total revenue
was down marginally, adjusted for the effect of FX exchange.
However, heading into the second half of 2023, we expect Adjusted
EBITDA will improve year over year despite revenue being lower than
initially anticipated. We have implemented cost-saving initiatives
via specific actions, many of which are expected to improve
performance in our legacy Oil and Gas business.
There were also several bright spots related to revenue growth
drivers in the second quarter of 2023. In particular, West Penn, a
key shop laboratory business which specializes in Aerospace,
reported an all-time record revenue quarter. Additionally,
OnStream, our ILI pipeline testing business, achieved its best
second quarter revenue in its history. The OnStream growth was
driven by a record quarter for its US business, which increased
revenue by over 75% for the first half of 2023, compared to the
prior year period. Within Data Solutions, our PCMS/New Century
business also experienced growth in the quarter, driven by
continued customer adoption of its predictive analytics via
OneSuite. There was also progress achieved in strengthening our
financial position, with strong cash flow, and a significant
reduction in days sales outstanding, which contributed to a further
reduction in our outstanding debt.”
Mr. Bertolotti continued, “In the second half of the year, we
will continue to seek additional, incremental benefits from Project
Phoenix, expanding upon what we have already implemented in cost
reduction efforts during the first half of 2023. We will continue
to improve operating efficiency, which will contribute to an
improved bottom line result. We also anticipate that second half
revenue will be stable, with modest growth over the comparable
prior year period, but with an expanded improvement in Adjusted
EBITDA due to a favorable sales mix shift and on-going cost
controls.”
Mr. Bertolotti concluded, “Our cash flow remains strong, and I
am pleased with the investments that we have made in 2023 related
to our higher growth businesses via increased capital expenditures,
which will further our expansion in key growth markets. As a result
of our cost savings initiatives and the growth in our high margin
businesses, I am optimistic that Mistras is positioned to
capitalize on the growing demand for our offerings, accelerating
our transition to profitable growth.”
Performance by certain segments during the second quarter was as
follows:
North America segment (Referred to as
“Services” in prior filings) second quarter revenue was $145.6
million, down 2.7% from $149.5 million in the prior year quarter
but down 1.9% when adjusting for unfavorable foreign currency
exchange. The revenue decline was primarily due to a decrease in
workload under a Defense contract and decreases in Power Generation
project timing, which offset the strong growth achieved in our West
Penn, OnStream and other Data Solutions related businesses. For the
second quarter, gross profit was $39.7 million, compared to $43.0
million in the prior year. Gross profit margin was 27.3% for the
second quarter of 2023, a 140 basis point decline from 28.7% in the
second quarter of the prior year. This decrease was primarily due
to unabsorbed overhead costs associated with lower revenue levels,
partially offset by improved sales mix in the current year
period.
International segment second quarter revenue
was $30.3 million, up 2.3% from $29.6 million in the prior year
quarter and up 0.7% excluding the impact of favorable FX exchange.
This revenue growth was primarily due to increased turnaround
projects than in the prior year comparable quarter. International
segment second quarter gross profit margin was 27.7%, compared to
31.9% in the prior year, a 420-basis point decrease, primarily
attributable to inflationary pressures including rising energy and
incremental subcontractor costs.
Cash Flow and Balance Sheet The Company’s net
cash provided by operating activities was $18.3 million for the
first six months of 2023, compared to $7.8 million in the prior
year. Free cash flow was $7.7 million for the first six months of
2023, compared to $0.7 million in the prior year. The Company’s
improved cash flow performance was primarily attributable to an
improvement in days sales outstanding during the current year.
Capital expenditures increased by $3.5 million versus the first six
months of 2022, as the Company is increasing investments to foster
revenue growth.
The Company’s gross debt was $183.7 million as of June 30, 2023,
compared to $191.3 million as of December 31, 2022. Gross debt
decreased by $5.6 million during the quarter ended June 30, 2023,
from $189.3 million as of March 31, 2023, to $183.7 million as of
June 30, 2023. The Company’s net debt was $165.7 million as of June
30, 2023.
Reorganization and OtherFor the second quarter
of 2023, the Company recorded $1.2 million of reorganization costs
related to on-going efficiency and productivity initiatives,
primarily related to overhead cost savings. For the quarter, these
charges included professional fees and certain restructuring
charges associated with changes made in the Company’s
organizational structure. For the six months ended June 30, 2023,
the Company recorded $3.3 million of total reorganization costs.
The actions taken in the first half of this year are expected to
contribute $5.1 million to Adjusted EBITDA in the current year, of
which $4.5 million was expected and budgeted for in the Company’s
original outlook for 2023.
OutlookThe Company is updating its guidance
ranges, to reflect current market conditions and the Company’s
focus on profitable growth and cost savings. Revenue for the full
year 2023 is now expected to be between $700 and $720 million, due
primarily to reductions in legacy Oil and Gas revenue particularly
the Downstream sub-category. Adjusted EBITDA is now expected to be
between $68 and $71 million. The Company has already taken certain
actions in 2023 which are expected to yield annualized cost savings
of approximately $6.2 million, of which approximately $5.1 million
is expected to be realized in 2023 and had been budgeted for, and
hence was included in the Company’s original guidance for
2023. Operating cash flow will be adversely impacted by
certain cash expenses to achieve cost savings. The Company’s Free
Cash Flow guidance is being adjusted to between $23 and $25 million
due to the reduction in the Company’s Adjusted EBITDA guidance and
higher than anticipated Capital Expenditures of over $20 million.
The Free Cash Flow guidance excludes the aforementioned impact of
certain cash expenses to achieve cost savings.
Conference Call In connection with this
release, MISTRAS will hold a conference call on August 3, 2023, at
9:00 a.m. (Eastern).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/BI7c5435a7a0a842eaa827bbb551ae1307.
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 MISTRAS Group, Inc. - One Source for Asset
Protection Solutions®MISTRAS Group, Inc. (NYSE: MG) is a
leading "one source" multinational provider of integrated
technology-enabled asset protection solutions, helping to maximize
the safety and operational uptime for civilization’s most critical
industrial and civil assets.
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
www.mistrasgroup.com or contact Nestor S. Makarigakis, Group Vice
President of Marketing at marcom@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 2022 Annual Report on Form 10-K dated March 15,
2023, 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 MeasuresIn addition to
financial information prepared in accordance with generally
accepted accounting principles in the U.S. (GAAP), this press
release also contains adjusted financial measures that we believe
provide investors and management with supplemental information
relating to operating performance and trends that facilitate
comparisons between periods and with respect to projected
information. The term "Adjusted EBITDA" used in this release is a
financial measurement not calculated in accordance with GAAP and is
defined as net income attributable to MISTRAS Group, Inc. plus:
interest expense, provision for income taxes, depreciation and
amortization, share-based compensation expense, certain acquisition
related costs (including transaction due diligence costs and
adjustments to the fair value of contingent consideration), foreign
exchange (gain) loss, non-cash impairment charges, reorganization
and related charges and, if applicable, certain additional special
items which are noted. A reconciliation of Adjusted EBITDA to a
financial measurement under GAAP is set forth in a table attached
to this press release. The Company also uses the term “net debt”, a
non-GAAP measurement defined as the sum of the current and
long-term portions of long-term debt, less cash and cash
equivalents and the term “free cash flow”, a non-GAAP measurement
the Company defines as cash provided by operating activities less
capital expenditures (which is classified as an investing
activity). A reconciliation of these non-GAAP financial
measurements to GAAP are also set forth in tables attached to this
press release. In the tables attached is also a table reconciling
“Segment and Total Company Income (Loss) from Operations (GAAP) to
Income (Loss) from Operations before Special Items (non-GAAP)",
“Net Loss (GAAP) and Diluted EPS (GAAP) to Net Loss Excluding
Special Items (non-GAAP) and Diluted EPS Excluding Special Items
(non-GAAP)” which reconciles the non-GAAP amounts to GAAP
measurements.
Mistras Group, Inc. and
SubsidiariesCondensed Consolidated Balance
Sheets(in thousands, except share and per share data)
|
|
June 30, 2023 |
|
December 31, 2022 |
ASSETS |
|
(unaudited) |
|
|
Current Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
17,999 |
|
|
$ |
20,488 |
|
Accounts receivable, net |
|
|
118,773 |
|
|
|
123,657 |
|
Inventories |
|
|
16,067 |
|
|
|
13,556 |
|
Prepaid expenses and other current assets |
|
|
17,991 |
|
|
|
10,181 |
|
Total current assets |
|
|
170,830 |
|
|
|
167,882 |
|
Property, plant and equipment,
net |
|
|
81,297 |
|
|
|
77,561 |
|
Intangible assets, net |
|
|
46,145 |
|
|
|
49,015 |
|
Goodwill |
|
|
201,586 |
|
|
|
199,635 |
|
Deferred income taxes |
|
|
915 |
|
|
|
779 |
|
Other assets |
|
|
40,173 |
|
|
|
40,032 |
|
Total assets |
|
$ |
540,946 |
|
|
$ |
534,904 |
|
LIABILITIES AND
EQUITY |
|
|
|
|
Current Liabilities |
|
|
|
|
Accounts payable |
|
$ |
17,014 |
|
|
$ |
12,532 |
|
Accrued expenses and other current liabilities |
|
|
78,972 |
|
|
|
77,844 |
|
Current portion of long-term debt |
|
|
7,550 |
|
|
|
7,425 |
|
Current portion of finance lease obligations |
|
|
5,188 |
|
|
|
4,201 |
|
Income taxes payable |
|
|
980 |
|
|
|
1,726 |
|
Total current liabilities |
|
|
109,704 |
|
|
|
103,728 |
|
Long-term debt, net of current
portion |
|
|
176,121 |
|
|
|
183,826 |
|
Obligations under finance
leases, net of current portion |
|
|
12,441 |
|
|
|
10,045 |
|
Deferred income taxes |
|
|
10,103 |
|
|
|
6,283 |
|
Other long-term
liabilities |
|
|
32,044 |
|
|
|
32,273 |
|
Total liabilities |
|
|
340,413 |
|
|
|
336,155 |
|
Equity |
|
|
|
|
Preferred stock, 10,000,000 shares authorized |
|
|
— |
|
|
|
— |
|
Common stock, $0.01 par value, 200,000,000 shares authorized,
30,301,985 and 29,895,487 shares issued and outstanding |
|
|
302 |
|
|
|
298 |
|
Additional paid-in capital |
|
|
245,058 |
|
|
|
243,031 |
|
Accumulated deficit |
|
|
(16,138 |
) |
|
|
(11,489 |
) |
Accumulated other comprehensive loss |
|
|
(29,035 |
) |
|
|
(33,390 |
) |
Total Mistras Group, Inc. stockholders’ equity |
|
|
200,187 |
|
|
|
198,450 |
|
Non-controlling interests |
|
|
346 |
|
|
|
299 |
|
Total equity |
|
|
200,533 |
|
|
|
198,749 |
|
Total liabilities and equity |
|
$ |
540,946 |
|
|
$ |
534,904 |
|
Mistras Group, Inc. and
SubsidiariesUnaudited Condensed Consolidated
Statements of Income (Loss)(in thousands, except per share
data)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
Revenue |
$ |
176,030 |
|
|
$ |
179,031 |
|
|
$ |
344,046 |
|
|
$ |
340,693 |
|
Cost of revenue |
|
120,442 |
|
|
|
119,980 |
|
|
|
236,493 |
|
|
|
235,738 |
|
Depreciation |
|
5,866 |
|
|
|
5,493 |
|
|
|
11,754 |
|
|
|
11,505 |
|
Gross
profit |
|
49,722 |
|
|
|
53,558 |
|
|
|
95,799 |
|
|
|
93,450 |
|
Selling, general and administrative expenses |
|
41,484 |
|
|
|
40,856 |
|
|
|
84,305 |
|
|
|
82,777 |
|
Bad debt provision for troubled customers, net of recoveries |
|
— |
|
|
|
289 |
|
|
|
— |
|
|
|
289 |
|
Reorganization and other costs |
|
1,240 |
|
|
|
(180 |
) |
|
|
3,316 |
|
|
|
(65 |
) |
Legal settlement and insurance recoveries, net |
|
150 |
|
|
|
(153 |
) |
|
|
150 |
|
|
|
(994 |
) |
Research and engineering |
|
511 |
|
|
|
522 |
|
|
|
991 |
|
|
|
1,073 |
|
Depreciation and amortization |
|
2,443 |
|
|
|
2,635 |
|
|
|
4,969 |
|
|
|
5,430 |
|
Acquisition-related expense,
net |
|
1 |
|
|
|
13 |
|
|
|
3 |
|
|
|
63 |
|
Income from
operations |
|
3,893 |
|
|
|
9,576 |
|
|
|
2,065 |
|
|
|
4,877 |
|
Interest expense |
|
3,858 |
|
|
|
2,117 |
|
|
|
7,927 |
|
|
|
4,055 |
|
Income before
provision (benefit) for income taxes |
|
35 |
|
|
|
7,459 |
|
|
|
(5,862 |
) |
|
|
822 |
|
Provision (benefit) for income taxes |
|
(341 |
) |
|
|
2,793 |
|
|
|
(1,260 |
) |
|
|
1,509 |
|
Net Income
(Loss) |
|
376 |
|
|
|
4,666 |
|
|
|
(4,602 |
) |
|
|
(687 |
) |
Less: net income attributable to noncontrolling interests, net of
taxes |
|
39 |
|
|
|
23 |
|
|
|
47 |
|
|
|
33 |
|
Net Income (Loss)
attributable to Mistras Group, Inc. |
$ |
337 |
|
|
$ |
4,643 |
|
|
$ |
(4,649 |
) |
|
$ |
(720 |
) |
|
|
|
|
|
|
|
|
Earnings (loss) per common
share: |
|
|
|
|
|
|
|
Basic |
$ |
0.01 |
|
|
$ |
0.15 |
|
|
$ |
(0.15 |
) |
|
$ |
(0.02 |
) |
Diluted |
$ |
0.01 |
|
|
$ |
0.15 |
|
|
$ |
(0.15 |
) |
|
$ |
(0.02 |
) |
Weighted-average common shares
outstanding: |
|
|
|
|
|
|
|
Basic |
|
30,368 |
|
|
|
29,957 |
|
|
|
30,214 |
|
|
|
29,840 |
|
Diluted |
|
30,660 |
|
|
|
30,233 |
|
|
|
30,214 |
|
|
|
29,840 |
|
Mistras Group, Inc. and
SubsidiariesUnaudited Operating Data by
Segment(in thousands)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenues |
|
|
|
|
|
|
|
North America |
$ |
145,550 |
|
|
$ |
149,528 |
|
|
$ |
282,482 |
|
|
$ |
282,474 |
|
International |
|
30,277 |
|
|
|
29,610 |
|
|
|
59,684 |
|
|
|
57,748 |
|
Products and Systems |
|
3,329 |
|
|
|
2,652 |
|
|
|
7,068 |
|
|
|
5,588 |
|
Corporate and eliminations |
|
(3,126 |
) |
|
|
(2,759 |
) |
|
|
(5,188 |
) |
|
|
(5,117 |
) |
|
$ |
176,030 |
|
|
$ |
179,031 |
|
|
$ |
344,046 |
|
|
$ |
340,693 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Gross
profit |
|
|
|
|
|
|
|
North America |
$ |
39,679 |
|
|
$ |
42,954 |
|
|
$ |
76,316 |
|
|
$ |
73,479 |
|
International |
|
8,398 |
|
|
|
9,440 |
|
|
|
15,766 |
|
|
|
17,630 |
|
Products and Systems |
|
1,614 |
|
|
|
1,157 |
|
|
|
3,676 |
|
|
|
2,325 |
|
Corporate and eliminations |
|
31 |
|
|
|
7 |
|
|
|
41 |
|
|
|
16 |
|
|
$ |
49,722 |
|
|
$ |
53,558 |
|
|
$ |
95,799 |
|
|
$ |
93,450 |
|
Mistras Group, Inc. and
SubsidiariesUnaudited Revenues by
Category(in thousands)
Revenue by industry was as follows:
Three Months Ended
June 30, 2023 |
North America |
|
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 Process Industries |
|
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 |
Three Months Ended
June 30, 2022 |
North America |
|
International |
|
Products |
|
Corp/Elim |
|
Total |
Oil & Gas |
$ |
93,098 |
|
$ |
8,028 |
|
$ |
139 |
|
$ |
— |
|
|
$ |
101,265 |
Aerospace & Defense |
|
17,300 |
|
|
5,118 |
|
|
26 |
|
|
— |
|
|
|
22,444 |
Industrials |
|
9,794 |
|
|
6,506 |
|
|
333 |
|
|
— |
|
|
|
16,633 |
Power generation &
Transmission |
|
8,378 |
|
|
1,997 |
|
|
678 |
|
|
— |
|
|
|
11,053 |
Other Process Industries |
|
11,641 |
|
|
3,754 |
|
|
14 |
|
|
— |
|
|
|
15,409 |
Infrastructure, Research &
Engineering |
|
3,183 |
|
|
2,193 |
|
|
442 |
|
|
— |
|
|
|
5,818 |
Petrochemical |
|
3,584 |
|
|
55 |
|
|
— |
|
|
— |
|
|
|
3,639 |
Other |
|
2,550 |
|
|
1,959 |
|
|
1,020 |
|
|
(2,759 |
) |
|
|
2,770 |
Total |
$ |
149,528 |
|
$ |
29,610 |
|
$ |
2,652 |
|
$ |
(2,759 |
) |
|
$ |
179,031 |
Six Months Ended June
30, 2023 |
North America |
|
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 Process Industries |
|
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 |
|
|
|
|
|
|
|
|
|
|
Six Months Ended June
30, 2022 |
North America |
|
International |
|
Products |
|
Corp/Elim |
|
Total |
Oil & Gas |
$ |
179,711 |
|
$ |
15,600 |
|
$ |
177 |
|
$ |
— |
|
|
$ |
195,488 |
Aerospace & Defense |
|
32,322 |
|
|
10,058 |
|
|
134 |
|
|
— |
|
|
|
42,514 |
Industrials |
|
18,801 |
|
|
12,034 |
|
|
835 |
|
|
— |
|
|
|
31,670 |
Power generation &
Transmission |
|
12,200 |
|
|
4,559 |
|
|
1,523 |
|
|
— |
|
|
|
18,282 |
Other Process Industries |
|
21,934 |
|
|
7,272 |
|
|
15 |
|
|
— |
|
|
|
29,221 |
Infrastructure, Research &
Engineering |
|
5,689 |
|
|
4,232 |
|
|
1,339 |
|
|
— |
|
|
|
11,260 |
Petrochemical |
|
6,629 |
|
|
133 |
|
|
— |
|
|
— |
|
|
|
6,762 |
Other |
|
5,188 |
|
|
3,860 |
|
|
1,565 |
|
|
(5,117 |
) |
|
|
5,496 |
Total |
$ |
282,474 |
|
$ |
57,748 |
|
$ |
5,588 |
|
$ |
(5,117 |
) |
|
$ |
340,693 |
Mistras Group, Inc. and
SubsidiariesUnaudited Revenues by Category
(continued)(in thousands)
The Company has retrospectively reclassified certain Oil and Gas
sub-category revenues for each quarterly period in 2022 in order to
conform the classification with the current year presentation.
Total Oil and Gas sub-category revenues were unchanged in total in
each quarterly period and for the full year ended December 31,
2022. The table below presents the reclassified balances for each
quarterly period in the prior year.
|
2022 Quarterly Revenues |
|
Three months ended March 31, |
|
Three months ended June 30, |
|
Three months ended September 30, |
|
Three months ended December 31, |
Oil and Gas Revenue by
sub-category |
|
|
|
|
|
|
|
Upstream |
$ |
36,397 |
|
$ |
38,051 |
|
$ |
35,173 |
|
$ |
36,435 |
Midstream |
|
20,427 |
|
|
27,153 |
|
|
25,885 |
|
|
23,540 |
Downstream |
|
37,399 |
|
|
36,061 |
|
|
35,973 |
|
|
35,258 |
Total |
$ |
94,223 |
|
$ |
101,265 |
|
$ |
97,031 |
|
$ |
95,233 |
|
Three months ended June 30, |
|
Six months ended June 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
Oil and Gas Revenue by
sub-category |
|
|
|
|
|
|
|
Upstream |
$ |
41,961 |
|
$ |
38,051 |
|
$ |
78,900 |
|
$ |
74,448 |
Midstream |
|
27,293 |
|
|
27,153 |
|
|
48,524 |
|
|
47,580 |
Downstream |
|
36,870 |
|
|
36,061 |
|
|
77,365 |
|
|
73,460 |
Total |
$ |
106,124 |
|
$ |
101,265 |
|
$ |
204,789 |
|
$ |
195,488 |
Consolidated Revenue by type was as follows:
|
Three months ended June 30, |
|
Six months ended June 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
Field Services |
$ |
116,104 |
|
$ |
121,364 |
|
$ |
225,784 |
|
$ |
226,859 |
Shop Laboratories |
|
14,244 |
|
|
9,916 |
|
|
27,376 |
|
|
23,005 |
Data Solutions |
|
18,107 |
|
|
16,236 |
|
|
34,919 |
|
|
28,635 |
Other |
|
27,575 |
|
|
31,515 |
|
|
55,967 |
|
|
62,194 |
Total |
$ |
176,030 |
|
$ |
179,031 |
|
$ |
344,046 |
|
$ |
340,693 |
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation
ofSegment and Total Company Income (Loss) from
Operations (GAAP) to Income before Special Items
(non-GAAP)(in thousands)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
North
America: |
|
|
|
|
|
|
|
Income from operations (GAAP) |
$ |
12,338 |
|
|
$ |
14,855 |
|
|
$ |
21,715 |
|
|
$ |
18,615 |
|
Bad debt provision for troubled customers, net of recoveries |
|
— |
|
|
|
289 |
|
|
|
— |
|
|
|
289 |
|
Reorganization and other costs |
|
478 |
|
|
|
1 |
|
|
|
539 |
|
|
|
28 |
|
Legal settlement and insurance recoveries, net |
|
150 |
|
|
|
— |
|
|
|
150 |
|
|
|
(841 |
) |
Acquisition-related expense, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
45 |
|
Income from operations before special items (non-GAAP) |
$ |
12,966 |
|
|
$ |
15,145 |
|
|
$ |
22,404 |
|
|
$ |
18,136 |
|
International: |
|
|
|
|
|
|
|
Income (loss) from operations (GAAP) |
$ |
507 |
|
|
$ |
1,580 |
|
|
$ |
(61 |
) |
|
$ |
1,864 |
|
Reorganization and other costs |
|
88 |
|
|
|
(187 |
) |
|
|
195 |
|
|
|
(99 |
) |
Income from operations before special items (non-GAAP) |
$ |
595 |
|
|
$ |
1,393 |
|
|
$ |
134 |
|
|
$ |
1,765 |
|
Products and
Systems: |
|
|
|
|
|
|
|
Income (loss) from operations (GAAP) |
$ |
94 |
|
|
$ |
(420 |
) |
|
$ |
478 |
|
|
$ |
(1,002 |
) |
Income (loss) from operations (GAAP) |
$ |
94 |
|
|
$ |
(420 |
) |
|
$ |
478 |
|
|
$ |
(1,002 |
) |
Corporate and
Eliminations: |
|
|
|
|
|
|
|
Loss from operations (GAAP) |
$ |
(9,046 |
) |
|
$ |
(6,439 |
) |
|
$ |
(20,067 |
) |
|
$ |
(14,600 |
) |
Legal settlement and insurance recoveries, net |
|
— |
|
|
|
(153 |
) |
|
|
— |
|
|
|
(153 |
) |
Reorganization and other costs |
|
674 |
|
|
|
6 |
|
|
|
2,582 |
|
|
|
6 |
|
Acquisition-related expense, net |
|
1 |
|
|
|
13 |
|
|
|
3 |
|
|
|
18 |
|
Loss from operations before special items (non-GAAP) |
$ |
(8,371 |
) |
|
$ |
(6,573 |
) |
|
$ |
(17,482 |
) |
|
$ |
(14,729 |
) |
Total
Company: |
|
|
|
|
|
|
|
Income from operations (GAAP) |
$ |
3,893 |
|
|
$ |
9,576 |
|
|
$ |
2,065 |
|
|
$ |
4,877 |
|
Bad debt provision for troubled customers, net of recoveries |
|
— |
|
|
|
289 |
|
|
|
— |
|
|
|
289 |
|
Reorganization and other costs |
|
1,240 |
|
|
|
(180 |
) |
|
|
3,316 |
|
|
|
(65 |
) |
Legal settlement and insurance recoveries, net |
|
150 |
|
|
|
(153 |
) |
|
|
150 |
|
|
|
(994 |
) |
Acquisition-related expense, net |
|
1 |
|
|
|
13 |
|
|
|
3 |
|
|
|
63 |
|
Income from operations before special items (non-GAAP) |
$ |
5,284 |
|
|
$ |
9,545 |
|
|
$ |
5,534 |
|
|
$ |
4,170 |
|
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation of
Gross Debt (GAAP) to Net Debt (non-GAAP)(in
thousands)
|
|
June 30, 2023 |
|
December 31, 2022 |
|
|
|
|
|
Current portion of long-term debt |
|
$ |
7,550 |
|
|
$ |
7,425 |
|
Long-term debt, net of current
portion |
|
|
176,121 |
|
|
|
183,826 |
|
Total Gross Debt (GAAP) |
|
|
183,671 |
|
|
|
191,251 |
|
Less: Cash and cash
equivalents |
|
|
(17,999 |
) |
|
|
(20,488 |
) |
Total Net Debt (non-GAAP) |
|
$ |
165,672 |
|
|
$ |
170,763 |
|
Mistras Group, Inc. and
SubsidiariesUnaudited Summary Cash Flow
Information(in thousands)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net cash provided by (used
in): |
|
|
|
|
|
|
|
Operating activities |
$ |
13,888 |
|
|
$ |
13,208 |
|
|
$ |
18,321 |
|
|
$ |
7,809 |
|
Investing activities |
|
(5,351 |
) |
|
|
(3,762 |
) |
|
|
(9,811 |
) |
|
|
(6,499 |
) |
Financing activities |
|
(7,236 |
) |
|
|
(9,379 |
) |
|
|
(11,187 |
) |
|
|
(5,056 |
) |
Effect of exchange rate changes on cash |
|
(19 |
) |
|
|
(1,379 |
) |
|
|
188 |
|
|
|
(1,755 |
) |
Net change in cash and cash
equivalents |
$ |
1,282 |
|
|
$ |
(1,312 |
) |
|
$ |
(2,489 |
) |
|
$ |
(5,501 |
) |
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation of
Net Cash Provided by Operating Activities (GAAP) to Free
Cash Flow (non-GAAP)(in thousands)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities (GAAP) |
$ |
13,888 |
|
|
$ |
13,208 |
|
|
$ |
18,321 |
|
|
$ |
7,809 |
|
Less: |
|
|
|
|
|
|
|
Purchases of property, plant
and equipment |
|
(5,469 |
) |
|
|
(3,631 |
) |
|
|
(9,801 |
) |
|
|
(6,692 |
) |
Purchases of intangible
assets |
|
(461 |
) |
|
|
(248 |
) |
|
|
(822 |
) |
|
|
(399 |
) |
Free cash flow
(non-GAAP) |
$ |
7,958 |
|
|
$ |
9,329 |
|
|
$ |
7,698 |
|
|
$ |
718 |
|
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation of
Net Income (Loss) (GAAP) to Adjusted EBITDA
(non-GAAP)(in thousands)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
Net Income (loss)
(GAAP) |
$ |
376 |
|
|
$ |
4,666 |
|
|
$ |
(4,602 |
) |
|
$ |
(687 |
) |
Less: Net income attributable to non-controlling interests, net of
taxes |
|
39 |
|
|
|
23 |
|
|
|
47 |
|
|
|
33 |
|
Net Income (loss)
attributable to Mistras Group, Inc. |
$ |
337 |
|
|
$ |
4,643 |
|
|
$ |
(4,649 |
) |
|
$ |
(720 |
) |
Interest expense |
|
3,858 |
|
|
|
2,117 |
|
|
|
7,927 |
|
|
|
4,055 |
|
Provision (benefit) for income taxes |
|
(341 |
) |
|
|
2,793 |
|
|
|
(1,260 |
) |
|
|
1,509 |
|
Depreciation and amortization |
|
8,309 |
|
|
|
8,128 |
|
|
|
16,723 |
|
|
|
16,935 |
|
Share-based compensation expense |
|
1,091 |
|
|
|
1,255 |
|
|
|
2,633 |
|
|
|
2,770 |
|
Acquisition-related expense |
|
1 |
|
|
|
13 |
|
|
|
3 |
|
|
|
63 |
|
Reorganization and other related costs (benefit), net |
|
1,240 |
|
|
|
(180 |
) |
|
|
3,316 |
|
|
|
(65 |
) |
Legal settlement and insurance recoveries, net |
|
150 |
|
|
|
(153 |
) |
|
|
150 |
|
|
|
(994 |
) |
Bad debt provision for troubled customers, net of recoveries |
|
— |
|
|
|
289 |
|
|
|
— |
|
|
|
289 |
|
Foreign exchange (gain) loss |
|
654 |
|
|
|
(597 |
) |
|
|
875 |
|
|
|
4 |
|
Adjusted EBITDA
(non-GAAP) |
$ |
15,299 |
|
|
$ |
18,308 |
|
|
$ |
25,718 |
|
|
$ |
23,846 |
|
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation
ofNet 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 June 30, |
|
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
2023 |
|
|
|
2022 |
|
Net income (loss)
attributable to Mistras Group, Inc. (GAAP) |
$ |
337 |
|
|
$ |
4,643 |
|
|
|
$ |
(4,649 |
) |
|
$ |
(720 |
) |
Special items |
|
1,391 |
|
|
|
(31 |
) |
|
|
|
3,469 |
|
|
|
(707 |
) |
Tax impact on special items |
|
(311 |
) |
|
|
24 |
|
|
|
|
(815 |
) |
|
|
180 |
|
Special items, net of tax |
$ |
1,080 |
|
|
$ |
(7 |
) |
|
|
$ |
2,654 |
|
|
$ |
(527 |
) |
Net income (loss)
attributable to Mistras Group, Inc. Excluding Special Items
(non-GAAP) |
$ |
1,417 |
|
|
$ |
4,636 |
|
|
|
$ |
(1,995 |
) |
|
$ |
(1,247 |
) |
|
|
|
|
|
|
|
|
|
Diluted EPS
(GAAP)(1) |
$ |
0.01 |
|
|
$ |
0.15 |
|
|
|
$ |
(0.15 |
) |
|
$ |
(0.02 |
) |
Special items, net of tax |
|
0.04 |
|
|
|
— |
|
|
|
|
0.09 |
|
|
|
(0.02 |
) |
Diluted EPS Excluding
Special Items (non-GAAP) |
$ |
0.05 |
|
|
$ |
0.15 |
|
|
|
$ |
(0.06 |
) |
|
$ |
(0.04 |
) |
_______________(1) For the six months ended June 30, 2023 and
2022, 1,106,595 shares and 1,412,073 shares related to restricted
stock were excluded from the calculation of diluted EPS due to the
net loss for the period.
Mistras (NYSE:MG)
Graphique Historique de l'Action
De Avr 2024 à Mai 2024
Mistras (NYSE:MG)
Graphique Historique de l'Action
De Mai 2023 à Mai 2024