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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): March 6, 2024
 
Mistras Group, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware 001-34481 22-3341267
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
 
195 Clarksville Road  
Princeton Junction,New Jersey 08550
(Address of principal executive offices) (Zip Code)
 
Registrant’s telephone number, including area code: (609) 716-4000
 
Not Applicable
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
 
☐          Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐           Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d 2(b))
 
☐            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valueMGNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐ 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o 



Item 2.02.  Results of Operations and Financial Condition
 
On March 6, 2024, the Company issued a press release announcing the financial results for our fourth quarter and year ended December 31, 2023. A copy of the press release is attached as Exhibit 99.1 to this report.

Disclosure of Non-GAAP Financial Measures
 
In the press release attached, the Company uses the terms “Adjusted EBITDA”, “free cash flow” and "net debt", which are not measures of financial performance under U.S. generally accepted accounting principles (“GAAP”). Also, in the tables to the press release, the non-GAAP financial measures "Segment and Total Company Income before Special Items” (which includes operating income before special items) and are presented and reconciled to financial measures under GAAP within the table "Segment and Total Company Income (Loss) from Operations (GAAP) to Income (Loss) from Operations before Special Items (Non-GAAP)" and the non-GAAP financial measure "Diluted EPS excluding Special Items", are presented and reconciled to financial measure under GAAP within the table "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)". Information about these non-GAAP measures are included in the press release.

Our management uses these non-GAAP measurements as a measure of operating performance and liquidity to assist in comparing performance from period to period on a consistent basis, as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations. Adjusted EBITDA and free cash flow are also performance evaluation metrics used to determine incentive compensation for executive officers.

We believe 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 and liquidity on a consistent basis and measure underlying trends and results of the Company's business. Adjusted EBITDA and operating income before special items assist in evaluating our operating performance because they remove the impact of certain items that management believes do not directly reflect our core operations. For instance, Adjusted EBITDA generally excludes interest expense, taxes and depreciation and amortization, each of which can vary substantially from company to company depending upon accounting methods and the book value and age of assets, capital structure, capital investment cycles and the method by which assets were acquired. It also eliminates stock-based compensation, which is a non-cash expense and is excluded by management when evaluating the underlying performance of our business operations.

Our management uses free cash flow when evaluating the performance of our business operations. This measurement also takes into account cash used to purchase fixed assets needed for business operations which are not expensed. We believe this measurement provides an additional tool to compare cash generated by our operations on a consistent basis and measure underlying trends and results in our business.

While Adjusted EBITDA and free cash flow are terms and financial measurements commonly used by investors and securities analysts, they have limitations. As non-GAAP measurements, Adjusted EBITDA and free cash flows have no standard meaning and, therefore, may not be comparable with similar measurements for other companies. Similarly, segment and total company income before special items and diluted EPS excluding special items has no standard meaning and may not be comparable to measurements for other companies. Adjusted EBITDA and free cash flow are generally limited as analytical tools because they exclude charges and expenses we do incur as part of our operations as well as cash uses which are included in a GAAP cash flow statement. In addition, free cash flow does not represent residual cash flow available for discretionary expenditures since items such as debt repayments are not deducted in determining such measurement.

None of these non-GAAP financial measurements should be considered in isolation or as a substitute for analyzing our results as reported under U.S. generally accepted accounting principles.

Item 9.01.  Financial Statement and Exhibits
 
Exhibit No.     Description    
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SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 MISTRAS GROUP, INC.
   
   
Date: March 6, 2024By:/s/ Edward J. Prajzner
  Name:Edward J. Prajzner
  Title:Senior Executive Vice President and Chief Financial Officer


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Exhibit 99.1
image.jpg


MISTRAS Announces Fourth Quarter and Full Year 2023 Results
Q4 2023 Revenue of $182.1 million, up 8.2%

Q4 2023 Net Loss of $2.5 million reflecting $6.3 million of reorganization and other costs and $1.2 million of foreign currency exchange losses

Q4 2023 Adjusted EBITDA (non-GAAP) of $19.2 million compared to $15.7 million in the prior year, up 22.0%; highest Q4 result historically

Full Year 2023 Net Cash Provided by Operating Activities of $26.7 million consistent with the prior year,
whereas Free Cash Flow (non-GAAP) of $3.1 million was lower than the prior year,
reflecting increased strategic spend in expanding growth areas


PRINCETON JUNCTION, N.J., March 6, 2024 (GLOBE NEWSWIRE) - MISTRAS Group, Inc. (MG: NYSE), a leading "one source" multinational provider of integrated technology-enabled asset protection solutions, reported financial results for its fourth quarter and year ended December 31, 2023.


“I am pleased to report strong top and bottom-line growth in the fourth quarter of 2023. Although a small sample, our fourth quarter performance is evidence of the effectiveness of Project Phoenix initiatives to improve profitability and Adjusted EBITDA through meaningful margin improvement and steps to achieve sustained cost savings. More importantly, this provides momentum heading into 2024, where we expect to realize the majority of the financial benefits from the implementation in 2023 of the initiatives that Project Phoenix has driven throughout the organization. Consequently, I am reiterating our expectation that fiscal 2024 Adjusted EBITDA will be one of our all-time high performance years,” said Manny N. Stamatakis, Interim President and Chief Executive Officer.

Edward Prajzner, Senior Executive Vice President and Chief Financial Officer, commented, “Fourth quarter results clearly demonstrate that we can drive significant bottom line growth by leveraging improved sales efficiency and enhanced operational productivity. Despite headwinds faced earlier in the year, we saw positive momentum in the second half of 2023 and our fourth quarter results are a tangible example of the momentum we have built heading into 2024. We are pleased by the early success achieved on our Project Phoenix objectives, but also recognize this is only the beginning and our job is not yet complete. The entire organization is re-energized and intently focused on finding new opportunities to efficiently leverage our core competencies.”


Highlights for the Fourth Quarter 2023*
•Revenue of $182.1 million, an increase of 8.2%
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•Gross profit of $53.6 million, an increase of 5.3%, with gross profit margin of 29.5%, a decrease of 80 basis points due to an unfavorable sales mix and higher employee benefit credits in the prior year period

•Selling, general and administrative expenses of $42.9 million, up 1.7%, due to higher foreign currency exchange losses and other discrete items, offset by savings associated with Project Phoenix actions and other cost reduction measures

•Net loss of $2.5 million, or ($0.08) per share, reflecting reorganization and other costs of $6.3 million; Net income excluding special items (non-GAAP) of $2.9 million, or $0.10 per share

•Adjusted EBITDA of $19.2 million, an increase of 22.0%, as a result of operating leverage and cost controls

* All comparisons are consolidated and versus the equivalent prior year period, unless otherwise noted.

For the fourth quarter of 2023, consolidated revenue was $182.1 million, an increase of 8.2% from the fourth quarter of 2022. Revenue growth in the fourth quarter was led by a 13.4% increase in the Oil & Gas industry, a 15.3% increase in the Aerospace and Defense industry and 24.3% growth in the Industrials industry, which represent our three largest industries. Growth in the Oil & Gas industry was led by strong turnaround activity, which is expected to continue into the first quarter of fiscal 2024. Revenue in the Company’s other industries, primarily Power Generation, was down from the prior year period primarily due to the completion of certain projects.

Fourth quarter 2023 gross profit increased 5.3%, although gross profit margin was down compared to the year ago period. Gross profit improved from the increase in revenues, while gross profit margin decreased due to an unfavorable sales mix and higher employee benefit credits in the prior year period.

Selling, general and administrative expenses (“SG&A”) in the fourth quarter of 2023 were $42.9 million, up 1.7% from the year ago period, due to higher foreign currency exchange losses and other discrete items, offset by savings associated with Project Phoenix actions and other cost reduction measures. Beginning in the first quarter of 2024, the Company expects SG&A to be significantly below comparable year levels due to Project Phoenix actions completed in 2023. The Company anticipates that SG&A will reduce to approximately 21% of full year 2024 revenue, from 23.6% in full year 2023. The Company reported a quarterly net loss of $2.5 million, or $0.08 loss per share, which included $6.3 million of reorganization and related costs and $1.2 million of foreign currency exchange losses.

Net income excluding special items (non-GAAP) was $2.9 million, or $0.10 per share, for the fourth quarter of 2023, compared to $0.09 per share in the prior year period.

Adjusted EBITDA was $19.2 million in the fourth quarter of 2023 compared to $15.7 million in the prior year, an increase of 22.0%.

Highlights for Full Year 2023*
•Revenue of $705.5 million, an increase of 2.6% and exceeding the high end of the Company’s revised Guidance

•Gross profit of $203.8 million, with gross profit margin of 28.9%, an increase of 10 basis points due to improved revenue mix for the year, partially offset by higher employee benefit credits in the prior year period

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•SG&A of $166.7 million, up marginally, less than 1%, due to higher foreign currency exchange losses and other discrete items, which offset the savings associated with our Project Phoenix initiatives

•Net loss of $17.5 million, or ($0.58) per share, primarily due to reorganization and other costs of $12.3 million and a $13.8 million non-cash goodwill impairment charge

•Adjusted EBITDA of $65.8 million, an increase of 13.2% and in line with the Company’s revised Guidance

* All comparisons are consolidated and versus the equivalent prior year period, unless otherwise noted.

For the full year, revenue increased 2.6%. Revenue growth was primarily driven by a 7.3% increase in the Oil and Gas industry, with growth in all sub-categories of Upstream, Midstream, and Downstream in addition to a 10.3% increase in the Industrials industry. These increases were partially offset by a decrease in revenue in the Power Generation industry due the completion of certain contracts and declines in Other Process Industries and Aerospace & Defense. Aerospace and Defense revenue decreased compared to the prior full year period but rebounded with robust growth during the fourth quarter of 2023.

For the full year 2023, gross profit increased $5.6 million, or 2.8%, with gross profit margin of 28.9%, a slight increase from 28.8% in the prior year. On a full year basis in 2023, SG&A was essentially flat. Net loss was $17.5 million for the full year 2023, compared to net income of $6.5 million in 2022. Adjusted EBITDA was $65.8 million, up 13.2% from $58.2 million in 2022.

Cash Flow and Balance Sheet
The Company generated $26.7 million of net cash from operating activities in 2023, compared to $26.4 million in 2022. Free cash flow was $3.1 million for the year ended December 31, 2023, compared to $13.0 million in the prior year. The Company’s decreased cash flow in 2023 was primarily attributable to a significant increase in capital expenditures during the current year of $10.2 million as compared to 2022. The Company is intently focused on organic growth investments via strategic capital expenditures and improved commercial functions, in order to foster revenue growth in expanding areas including Aerospace shop laboratories and Data Analytical Solutions.

The Company’s gross debt was $190.4 million as of December 31, 2023, compared to $191.3 million as of December 31, 2022 and $193.9 million as of September 30, 2023.

Reorganization and Other
For the fourth quarter of 2023, the Company recorded $6.3 million of reorganization costs related to on-going efficiency and productivity initiatives, primarily related to overhead cost savings achieved via Project Phoenix. For the fourth quarter of 2023, these charges included costs associated with the separation of the Company’s former President and CEO, professional fees and certain restructuring charges associated with changes made in the Company’s organizational structure. For the year ended December 31, 2023, the Company recorded $12.3 million of total reorganization costs.

Refer to the Company’s press release associated with Project Phoenix released on November 2, 2023 for additional details associated with this important initiative.

Preliminary 2024 Outlook
The Company reiterates the preliminary guidance released in conjunction with the release of its financial results for the third quarter of 2023. For 2024, the Company anticipates full year revenue between $725-$750 million and Adjusted EBITDA between $84-$89 million. The Company additionally expects to generate Free Cash Flow of between $34-$38 million. This outlook for 2024 includes approximately $20 million in incremental benefit from savings associated with Project Phoenix initiatives in 2024.
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Mr. Stamatakis concluded, “I am extremely encouraged by the strong early returns from the Project Phoenix related actions. The increased discipline and accountability implemented throughout the organization in connection with Project Phoenix have resulted in an increased focus on achieving the goals we have set for revenue growth, efficiency improvements and increased profitability. We are now firmly set on a course to achieve continuous improvement, further integrate Data Analytical Solutions, and uncover other opportunities where our proprietary technologies and extensive knowledge and know-how can solve problems for our customers and create value for our shareholders.”


Conference Call
In connection with this release, MISTRAS will hold a conference call on March 7, 2024, 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/BI1d9e10d7ee7d412d8d7ff829b244567f

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 https://www.mistrasgroup.com/.

MEDIA CONTACT:
Nestor S. Makarigakis
Group Vice-President of Marketing and Communications
+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-
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looking statements include, but are not limited to, our 2024 outlook, guidance, costs savings and other benefits we expect to realize from Project Phoenix and 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, 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 Financial Measures
In 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 are not prepared in accordance with GAAP and 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 trends and projected information. The term "Adjusted EBITDA" used in this release is a financial measurement not calculated in accordance with GAAP and is defined by the Company 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 Net Income (Loss) as computed under GAAP is set forth in a table attached to this press release. The Company also uses the term “net debt”, a non-GAAP financial measurement the Company defines 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 financial 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 the GAAP financial measurement. Each of these non-GAAP financial measurements has material limitations as a performance or liquidity measure and should not be considered alternatives to Net Income (Loss) or any other measurements derived in accordance with GAAP. Because Income (loss) from operations before special items and other non-GAAP financial measurements used in this press release may not be calculated in the same manner by all companies, these measurements may not be comparable to other similarly-titled measurements used by other companies.





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Mistras Group, Inc. and Subsidiaries
Unaudited Consolidated Balance Sheets
(in thousands, except share and per share data)
December 31,
20232022
ASSETS
Current Assets
Cash and cash equivalents$17,646 $20,488 
Accounts receivable, net132,847 123,657 
Inventories15,283 13,556 
Prepaid expenses and other current assets14,580 10,181 
Total current assets180,356 167,882 
Property, plant and equipment, net80,972 77,561 
Intangible assets, net43,994 49,015 
Goodwill187,354 199,635 
Deferred income taxes2,316 779 
Other assets39,784 40,032 
Total Assets$534,776 $534,904 
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable$17,032 $12,532 
Accrued expenses and other current liabilities84,331 77,844 
Current portion of long-term debt8,900 7,425 
Current portion of finance lease obligations5,159 4,201 
Income taxes payable1,101 1,726 
Total current liabilities116,523 103,728 
Long-term debt, net of current portion181,499 183,826 
Obligations under finance leases, net of current portion11,261 10,045 
Deferred income taxes2,552 6,283 
Other long-term liabilities32,438 32,273 
Total Liabilities$344,273 $336,155 
Commitments and contingencies
Equity
Preferred stock, 10,000,000 shares authorized— — 
Common stock, $0.01 par value, 200,000,000 shares authorized, 30,597,633 and 29,895,487 shares issued 305 298 
Additional paid-in capital247,165 243,031 
Accumulated Deficit(28,942)(11,489)
Accumulated other comprehensive loss(28,336)(33,390)
Total Mistras Group, Inc. stockholders’ equity190,192 198,450 
Non-controlling interests311 299 
Total Equity190,503 198,749 
Total Liabilities and Equity$534,776 $534,904 
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Mistras Group, Inc. and Subsidiaries
Unaudited Consolidated Statements of Income (Loss)
(in thousands, except per share data)
 
For the quarter ended
December 31,		For the year ended
December 31,
2023202220232022
Revenue$182,073 $168,218 $705,473 $687,373 
Cost of revenue122,365 111,720 477,671 466,567 
Depreciation6,081 5,559 23,995 22,633 
Gross profit53,627 50,939 203,807 198,173 
Selling, general and administrative expenses42,914 42,168 166,749 166,400 
Bad debt provision for troubled customers, net of recoveries— (247)— 42 
Reorganization and other costs6,252 130 12,269 195 
Legal settlement and litigation charges (benefit), net908 — 1,058 (994)
Goodwill Impairment charges— — 13,799 — 
Research and engineering295 471 1,723 1,994 
Depreciation and amortization2,548 2,603 10,104 10,661 
Acquisition-related expense, net4 12 9 76 
Income (loss) from operations706 5,802 (1,904)19,799 
Interest expense4,668 3,713 16,761 10,505 
Income (loss) before provision (benefit) for income taxes (3,962)2,089 (18,665)9,294 
Provision (benefit) for income taxes(1,449)(774)(1,220)2,720 
Net income (loss)(2,513)2,863 (17,445)6,574 
Less: net income attributable to noncontrolling interests, net of taxes1 21 8 75 
Net income (loss) attributable to Mistras Group, Inc.$(2,514)$2,842 $(17,453)$6,499 
Earnings per common share
Basic$(0.08)$0.09 $(0.58)$0.22 
Diluted$(0.08)$0.09 $(0.58)$0.21 
Weighted average common shares outstanding:
Basic30,473 29,983 30,330 29,901 
Diluted30,473 30,258 30,330 30,229 

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Mistras Group, Inc. and Subsidiaries
Unaudited Operating Data by Segment
(in thousands)
 For the quarter ended
December 31,		For the year ended
December 31,
2023202220232022
Revenue
North America$148,035 $138,085 $579,330 $573,336 
International33,750 28,984 124,414 112,425 
Products and Systems3,089 4,061 12,986 12,727 
Corporate and eliminations(2,801)(2,912)(11,257)(11,115)
$182,073 $168,218 $705,473 $687,373 
 For the quarter ended
December 31,		For the year ended
December 31,
2023202220232022
Gross profit
North America$42,872 $40,701 $163,960 $159,049 
International9,363 8,267 33,610 33,591 
Products and Systems1,684 1,976 6,457 5,490 
Corporate and eliminations(294)(5)(220)43 
$53,625 $50,939 $203,807 $198,173 

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Mistras Group, Inc. and Subsidiaries
Unaudited Revenues by Category
(in thousands)

Revenue by industry was as follows:
Three Months Ended December 31, 2023North AmericaInternationalProductsCorp/ElimTotal
Oil & Gas$97,558 $10,324 $72 $— $107,954 
Aerospace & Defense14,484 4,817 11 — 19,312 
Industrials11,825 8,018 437 — 20,280 
Power Generation & Transmission5,764 1,769 578 — 8,111 
Other Process Industries8,129 3,889 39 — 12,057 
Infrastructure, Research & Engineering3,924 2,773 409 — 7,106 
Petrochemical3,189 329 — — 3,518 
Other3,162 1,831 1,543 (2,801)3,735 
Total$148,035 $33,750 $3,089 $(2,801)$182,073 

Three Months Ended December 31, 2022North AmericaInternationalProductsCorp/ElimTotal
Oil & Gas$86,474 $8,636 $123 $— $95,233 
Aerospace & Defense12,369 4,308 68 — 16,745 
Industrials9,668 5,835 812 — 16,315 
Power Generation & Transmission8,619 1,799 624 — 11,042 
Other Process Industries8,561 3,716 5 — 12,282 
Infrastructure, Research & Engineering4,658 1,930 1,505 — 8,093 
Petrochemical5,304 123 — — 5,427 
Other2,432 2,637 924 (2,912)3,081 
Total$138,085 $28,984 $4,061 $(2,912)$168,218 
















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Year ended December 31, 2023North AmericaInternationalProductsCorp/ElimTotal
Oil & Gas$379,221 $36,615 $159 $— $415,995 
Aerospace & Defense56,000 20,711 286 — 76,997 
Industrials42,518 26,292 1,773 — 70,583 
Power Generation and Transmission23,598 6,609 3,767 — 33,974 
Other Process Industries33,035 14,456 112 — 47,603 
Infrastructure, Research & Engineering16,620 9,320 3,168 — 29,108 
Petrochemical13,216 1,216 — — 14,432 
Other15,122 9,195 3,721 (11,257)16,781 
Total$579,330 $124,414 $12,986 $(11,257)$705,473 
Year ended December 31, 2022North AmericaInternationalProductsCorp/ElimTotal
Oil & Gas$356,763 $30,654 $335 $— $387,752 
Aerospace & Defense61,475 18,763 314 — 80,552 
Industrials38,197 23,703 2,083 — 63,983 
Power Generation and Transmission31,197 8,304 2,603 — 42,104 
Other Process Industries40,778 14,021 28 — 54,827 
Infrastructure, Research & Engineering15,283 7,946 3,994 — 27,223 
Petrochemical15,360 536 — — 15,896 
Other14,283 8,498 3,370 (11,115)15,036 
Total$573,336 $112,425 $12,727 $(11,115)$687,373 

Mistras Group, Inc. and Subsidiaries
Unaudited 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 
Midstream20,427 27,153 25,885 23,540 
Downstream37,399 36,061 35,973 35,258 
Total$94,223 $101,265 $97,031 $95,233 

Revenue by Oil & Gas Sub-category was as follows:
 Three months ended December 31,Year ended December 31,
 2023202220232022
Oil and Gas Revenue by sub-category  
Upstream$40,887 $36,435 $157,828 $146,056 
Midstream26,539 23,540 101,278 97,005 
Downstream40,528 35,258 156,889 144,691 
Total$107,954 $95,233 $415,995 $387,752 
10

Consolidated Revenue by type was as follows:
 For the quarter ended December 31, For the year ended December 31,
 2023202220232022

Field Services$121,932 $109,666 $470,433 $455,051 
Shop Laboratories15,972 13,276 58,188 48,809 
Data Analytical Solutions19,542 16,624 72,458 62,410 
Other24,627 28,652 104,394 121,103 
Total$182,073 $168,218 $705,473 $687,373 
11

Mistras Group, Inc. and Subsidiaries
Unaudited Reconciliation of
Segment and Total Company Income (Loss) from Operations (GAAP) to Income (Loss) from Operations before
Special Items (non-GAAP)
(in thousands)
 For the quarter ended
December 31,		For the year ended 
December 31,
2023202220232022
North America:
Income from operations (GAAP)$15,451 $14,301 $55,170 $49,616 
Bad debt provision for troubled customers, net of recoveries— (247)— 42 
Reorganization and other costs386 59 960 99 
Legal settlement and insurance (recoveries) charges, net908 — 1,058 (841)
Acquisition-related expense, net— — — 45 
Income before special items (unaudited, non-GAAP)$16,745 $14,113 $57,188 $48,961 
International:
Income (loss) from operations (GAAP)$802 $888 $(12,229)$3,566 
Goodwill Impairment charges— — 13,799 — 
Reorganization and other costs123 71 351 (43)
Income before special items (unaudited, non-GAAP)$925 $959 $1,921 $3,523 
Products and Systems:
Income (loss) from operations (GAAP)$345 $342 $267 $(992)
Reorganization and other costs193 — 382 — 
Income (loss) before special items (unaudited, non-GAAP)$538 $342 $649 $(992)
Corporate and Eliminations:
Loss from operations (GAAP)$(15,892)$(9,729)$(45,112)$(32,391)
Legal settlement and insurance (recoveries) charges, net— — — (153)
Loss on debt modification— — — 693 
Reorganization and other costs5,550 — 10,576 139 
Acquisition-related expense, net4 12 9 31 
Loss before special items (unaudited, non-GAAP)$(10,338)$(9,717)$(34,527)$(31,681)
Total Company
Income (loss) from operations (GAAP)$706 $5,802 $(1,904)$19,799 
Goodwill Impairment charges— — 13,799 — 
Bad debt provision for troubled customers, net of recoveries— (247)— 42 
Reorganization and other costs6,252 130 12,269 195 
Legal settlement and insurance (recoveries) charges, net908 — 1,058 (994)
Loss on debt modification— — — 693 
Acquisition-related expense, net4 12 9 76 
Income before special items (unaudited, non-GAAP)$7,870 $5,697 $25,231 $19,811 

12


Mistras Group, Inc. and Subsidiaries
Unaudited Summary Cash Flow Information
(in thousands)
 For the quarter ended
December 31,		For the year ended
December 31,
 2023202220232022
Net cash provided by (used in):
Operating activities$16,064 $15,875 $26,748 $26,406 
Investing activities(6,963)(3,361)(22,133)(12,238)
Financing activities(5,867)(11,570)(7,706)(16,323)
Effect of exchange rate changes on cash1,660 1,460 249 (1,467)
Net change in cash and cash equivalents$4,894 $2,404 $(2,842)$(3,622)



Mistras Group, Inc. and Subsidiaries
Unaudited Reconciliation of
Net Cash Provided by Operating Activities (GAAP) to Free Cash Flow (non-GAAP)
(in thousands)
For the quarter ended
December 31,		For the year ended
December 31,
2023202220232022
Net cash provided by operating activities (GAAP)$16,064 $15,875 $26,748 $26,406 
Less:
    Purchases of property, plant and equipment(6,451)(3,541)(20,854)(12,591)
    Purchases of intangible assets(927)(245)(2,795)(825)
Free cash flow (non-GAAP)$8,686 $12,089 $3,099 $12,990 

13


Mistras Group, Inc. and Subsidiaries
Unaudited Reconciliation of
Gross Debt (GAAP) to Net Debt (non-GAAP)
(in thousands)


 For the year ended
December 31,
20232022
Current portion of long-term debt$8,900 $7,425 
Long-term debt, net of current portion181,499 183,826 
Total Gross Debt (GAAP)190,399 191,251 
Less: Cash and cash equivalents(17,646)(20,488)
Total Net Debt (non-GAAP)$172,753 $170,763 

14


Mistras Group, Inc. and Subsidiaries
Unaudited Reconciliation of
Net Income (Loss) (GAAP) to Adjusted EBITDA (non-GAAP)
(in thousands)


 For the quarter ended
December 31,		For the year ended
December 31,
2023202220232022
Net income (loss)$(2,513)$2,863 $(17,445)$6,574 
Less: Net income attributable to noncontrolling interests, net of taxes1 21 8 75 
Net income (loss) attributable to Mistras Group, Inc.$(2,514)$2,842 $(17,453)$6,499 
Interest expense4,668 3,713 16,761 10,505 
Provision (benefit) for income taxes(1,449)(774)(1,220)2,720 
Depreciation and amortization8,629 8,162 34,099 33,294 
Share-based compensation expense1,498 1,169 5,147 5,335 
Goodwill Impairment charges— — 13,799 — 
Reorganization and other related costs, net6,252 130 12,269 195 
Legal settlement and insurance recoveries, net908 — 1,058 (994)
Acquisition-related expense, net4 12 9 76 
Loss on debt modification— — — 693 
Bad debt provision for troubled customers, net of recoveries— (247)— 42 
Foreign exchange (gain) loss1,182 709 1,331 (215)
Adjusted EBITDA$19,178 $15,716 $65,800 $58,150 



15

Mistras Group, Inc. and Subsidiaries
Unaudited Reconciliation of
Net Income (Loss) (GAAP) and Diluted EPS (GAAP) to Net Income Excluding Special Items (non-GAAP)
and Diluted EPS Excluding Special Items (non-GAAP)
(tabular dollars in thousands, except per share data)

For the quarter ended December 31,For the year ended December 31,
2023202220232022
Net income (loss) attributable to Mistras Group, Inc. (GAAP)$(2,514)$2,842 $(17,453)$6,499 
Bad debt provision for troubled customers, net of recoveries— (247)— 42 
Goodwill Impairment charges— — 13,799 — 
Reorganization and other related costs, net6,252 130 12,269 195 
Loss on debt modification— — — 693 
Legal settlement and insurance recoveries, net908 — 1,058 (994)
Acquisition-related expense, net4 12 9 76 
Special items total7,164 (105)27,135 12 
Tax impact on special items(1,787)25 (3,256)(5)
Special items, net of tax$5,377 $(80)$23,879 $7 
Net income attributable to Mistras Group, Inc. Excluding Special Items (non-GAAP)$2,863 $2,762 $6,426 $6,506 
Diluted EPS (GAAP)$(0.08)$0.09 $(0.58)$0.21 
Special items, net of tax0.18 — 0.79 — 
Diluted EPS Excluding Special Items (non-GAAP)$0.10 $0.09 $0.21 $0.21 



16
v3.24.0.1
Cover Page
Mar. 16, 2021
Cover [Abstract]  
Document Type 8-K
Document Period End Date Mar. 06, 2024
Entity Registrant Name Mistras Group, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-34481
Entity Tax Identification Number 22-3341267
Entity Address, Address Line One 195 Clarksville Road
Entity Address, Postal Zip Code 08550
Entity Address, City or Town Princeton Junction,
Entity Address, State or Province NJ
City Area Code 609
Local Phone Number 716-4000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.01 par value
Trading Symbol MG
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0001436126
Amendment Flag false
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