Attached files
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| 8-K - FORM 8-K - Mistras Group, Inc. | mistras_8k.htm |
Exhibit 99.1
Mistras Group, Inc. Strong 3rd Quarter Results Demonstrate Continued Growth in Revenues and Profits.
Revenues Up 23%, Adjusted EBITDA* Up 61%, Net Income Triples.
PRINCETON JUNCTION, N.J., April 12, 2011 (GLOBE NEWSWIRE) — Mistras Group, Inc. (NYSE:MG - News), a leading “one source” global provider of technology-enabled asset protection solutions, today reported financial results for its fiscal third quarter ending February 28, 2011. Revenue for the third quarter of fiscal 2011 was $79.2 million, an increase of $14.9 million, or 23%, compared to $64.4 million reported in the third quarter of fiscal 2010. Adjusted EBITDA*, a non-GAAP measure detailed later in this release, increased 61% to $10.5 million in the third quarter of fiscal 2011 versus $6.5 million in the third quarter of fiscal 2010. Net income for the third quarter of fiscal 2011 tripled to $2.4 million, or $0.09 per diluted share, versus $0.8 million, or $0.03 per diluted share, in the third quarter of fiscal 2010.
Revenue growth of 23% in the fiscal third quarter was driven by organic growth of 17% and acquisition growth of 6% with minimal impact from movements in foreign currency. During the third quarter of fiscal 2011, the Company achieved revenue growth across all of its segments, including gains of 26% in the Services segment, 14% in the Products and Systems segment and 7% in the International segment.
Additional Financial Highlights for the 3 month and 9 month periods:
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Revenue grew 23% in the first nine months of fiscal 2011 to $236.5 million, up from $192.3 million in the first nine months of fiscal 2010.
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Adjusted EBITDA*, a non-GAAP measure detailed later in this release, grew 35% to $34.9 million in the first nine months of fiscal 2011 versus $25.8 million in the first nine months of fiscal 2010.
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Adjusted EBITDA* as a percentage of revenue increased 130 basis points in the first 9 months of fiscal 2011 to approximately 15%.
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Net income grew 89% for the first nine months of fiscal 2011 to $9.7 million, or $0.36 per diluted share, up from $5.2 million or $0.21 per diluted share in the first nine months of fiscal 2010.
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The Company generated $21.4 million in net cash from operating activities in the first nine months of fiscal 2011, versus $12.4 million in the first nine months of fiscal 2010, representing an increase of 73%.
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Gross profit as a percentage of revenue, or gross profit margin, was up in both the third quarter (110 basis points) and first nine months (10 basis points) of fiscal 2011 versus prior year.
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Chairman and Chief Executive Officer, Dr. Sotirios J. Vahaviolos stated that “We are very pleased with the financial results for the third quarter, which is historically one of our softer quarters. Consistent, sustained revenue and EBITDA growth has helped us drive our operating leverage, generate more cash from operations and improve our G&A expenses as a percentage of revenues. Once again, our “one source” asset protection solution model has demonstrated its ability to significantly improve results over the prior year as it will be moving forward.”
Business Outlook for Fiscal 2011
The
Company is forecasting continued double digit growth in Revenues and Adjusted EBITDA* for the remainder of Fiscal 2011.
The Company is affirming its previously issued guidance and projects its fiscal 2011 revenues to be above the midpoint of the
range of $310 million to $340 million and Adjusted EBITDA* to be above the midpoint of the range of $45 million to $50
million. Mistras does not provide specific guidance for individual quarters, but will reaffirm or update its annual guidance
at least quarterly.
Conference
Call to Discuss Third Quarter Results
Mistras will have a conference call on Wednesday, April 13th, 2011 at 9:00 am Eastern Time to discuss its results for the third quarter of fiscal year 2011. The call will be broadcast over the Web and can be accessed on Mistras’ Website, www.mistrasgroup.com. Individuals in the U.S. wishing to participate in the conference call by phone may call (800) 510-9834 and use confirmation code 64642932 when prompted. The International number is (617) 614-3669. Those who wish to listen to the call later can access an archived copy of the conference call at the Mistras Website.
About Mistras Group, Inc.
Mistras offers one of the broadest “one source” services and technology-enabled asset protection solution portfolios in the industry used to evaluate the structural integrity of energy, industrial and public infrastructure. Mission critical services and solutions are delivered globally and provide customers with the ability to extend the useful life of their assets, improve productivity and profitability, comply with government safety and environmental regulations and enhance risk management operational decisions.
Mistras uniquely combines its industry leading products and technologies - 24/7 on-line monitoring of critical assets; mechanical integrity (“MI”) and non-destructive testing (“NDT”) services; and its proprietary world class data warehousing and analysis software - to provide comprehensive and competitive products, systems and services solutions from a single source provider.
For more information, please visit the company’s website at www.mistrasgroup.com or contact Frank Joyce, Chief Financial Officer at 609-716-4103.
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. These forward-looking statements generally use words such as “future,” “possible,” “potential,” “targeted,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “predict,” “project,” “will,” “may,” “should,” “could,” “would” and other similar words and phrases. Such statements are not guarantees of future performance or results, and will not necessarily be accurate indications of the times at, or by which, such performance or results will be achieved, if at all. These statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in these statements. A list, description and discussion of these and other risks and uncertainties can be found in the “Risk Factors” section of the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on August 17, 2010. The forward-looking statements are made as of the date hereof, and Mistras undertakes no obligation to update such statements as a result of new information, future events or otherwise.
* Use of Non-GAAP Measures
The term “Adjusted EBITDA” is a financial measurement not calculated in accordance with U.S. generally accepted accounting principles. The Company believes that investors and other users of the financial statements benefit from the presentation of Adjusted EBITDA because it provides an additional metric to compare the Company’s operating performance on a consistent basis and measures underlying trends and results of the Company’s business. An explanation of Adjusted EBITDA and a reconciliation of this to a financial measurement under GAAP are set forth in a table attached to this press release.
Mistras Group, Inc.
Unaudited Consolidated Balance Sheets
(in thousands, except share data)
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February 28, 2011
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May 31, 2010
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ASSETS
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Current Assets
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Cash and cash equivalents
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$ | 6,560 | $ | 16,037 | ||||
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Accounts receivable, net
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62,290 | 54,721 | ||||||
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Inventories, net
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10,285 | 8,736 | ||||||
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Deferred income taxes
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2,271 | 2,189 | ||||||
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Prepaid expenses and other current assets
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5,622 | 5,292 | ||||||
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Total current assets
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87,028 | 86,975 | ||||||
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Property, plant and equipment, net
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46,322 | 39,981 | ||||||
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Intangible assets, net
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19,317 | 16,088 | ||||||
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Goodwill
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53,442 | 44,315 | ||||||
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Other assets
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896 | 1,273 | ||||||
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Total assets
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$ | 207,005 | $ | 188,632 | ||||
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LIABILITIES, PREFERRED STOCK AND EQUITY
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Current liabilities
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Current portion of long-term debt
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$ | 4,769 | $ | 6,303 | ||||
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Current portion of capital lease obligations
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5,997 | 5,370 | ||||||
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Accounts payable
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4,733 | 4,640 | ||||||
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Accrued expenses and other current liabilities
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22,288 | 20,090 | ||||||
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Income taxes payable
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2,212 | 3,281 | ||||||
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Total current liabilities
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39,999 | 39,684 | ||||||
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Long-term debt, net of current portion
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9,793 | 5,691 | ||||||
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Obligations under capital leases, net of current portion
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8,676 | 9,199 | ||||||
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Deferred income taxes
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3,526 | 2,087 | ||||||
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Other long-term liabilities
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1,058 | 1,417 | ||||||
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Total liabilities
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63,052 | 58,078 | ||||||
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Commitments and contingencies
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Preferred stock, 10,000,000 shares authorized
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— | — | ||||||
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Equity
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Common stock, $0.01 par value, 200,000,000 shares authorized, 26,670,181 and 26,663,528 shares issued and outstanding as of February 28, 2011 and May 31, 2010, respectively
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267 | 267 | ||||||
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Additional paid-in capital
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164,764 | 162,054 | ||||||
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Accumulated deficit
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(20,735 | ) | (30,448 | ) | ||||
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Accumulated other comprehensive loss
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(707 | ) | (1,587 | ) | ||||
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Total Mistras Group, Inc. stockholders’ equity
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143,589 | 130,286 | ||||||
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Noncontrolling interest
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364 | 268 | ||||||
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Total equity
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143,953 | 130,554 | ||||||
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Total liabilities, preferred stock and equity
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$ | 207,005 | $ | 188,632 | ||||
Mistras Group, Inc.
Unaudited Consolidated Statement of Operations
(in thousands, except per share data)
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Three months ended February 28,
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Nine months ended February 28,
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2011
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2010
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2011
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2010
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Revenues:
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Services
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$ | 72,411 | $ | 57,966 | $ | 216,616 | $ | 176,484 | ||||||||
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Products
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6,802 | 6,390 | 19,844 | 15,860 | ||||||||||||
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Total revenues
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79,213 | 64,356 | 236,460 | 192,344 | ||||||||||||
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Cost of Revenues:
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Cost of services
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50,696 | 41,641 | 147,754 | 120,516 | ||||||||||||
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Cost of goods sold
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2,460 | 2,343 | 7,804 | 6,184 | ||||||||||||
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Depreciation of services
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3,307 | 2,547 | 9,252 | 7,262 | ||||||||||||
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Depreciation of products
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153 | 198 | 467 | 589 | ||||||||||||
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Total cost of revenues
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56,616 | 46,729 | 165,277 | 134,551 | ||||||||||||
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Gross profit
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22,597 | 17,627 | 71,183 | 57,793 | ||||||||||||
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Selling, general and administrative expenses
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16,005 | 14,110 | 47,099 | 40,929 | ||||||||||||
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Research and engineering
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514 | 586 | 1,638 | 1,518 | ||||||||||||
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Depreciation and amortization
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1,385 | 1,299 | 3,889 | 3,558 | ||||||||||||
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Legal reserve
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— | — | 351 | (297 | ) | |||||||||||
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Income from operations
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4,693 | 1,632 | 18,206 | 12,085 | ||||||||||||
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Other expenses
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Interest expense
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596 | 744 | 1,957 | 2,825 | ||||||||||||
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Loss on extinguishment of long-term debt
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— | — | — | 387 | ||||||||||||
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Income before provision for income taxes and noncontrolling interest
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4,097 | 888 | 16,249 | 8,873 | ||||||||||||
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Provision for income taxes
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1,690 | 123 | 6,562 | 3,692 | ||||||||||||
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Net income
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2,407 | 765 | 9,687 | 5,181 | ||||||||||||
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Net loss (income) attributable to noncontrolling interests, net of taxes
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36 | 9 | 26 | (30 | ) | |||||||||||
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Net income attributable to Mistras Group, Inc.
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2,443 | 774 | 9,713 | 5,151 | ||||||||||||
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Accretion of preferred stock
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— | — | — | 6,499 | ||||||||||||
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Net income attributable to common shareholders
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$ | 2,443 | $ | 774 | $ | 9,713 | $ | 11,650 | ||||||||
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Earnings per common share:
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Basic
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$ | 0.09 | $ | 0.03 | $ | 0.36 | $ | 0.58 | ||||||||
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Diluted
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$ | 0.09 | $ | 0.03 | $ | 0.36 | $ | 0.21 | ||||||||
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Weighted average common shares outstanding:
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Basic
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26,667 | 26,469 | 26,665 | 20,103 | ||||||||||||
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Diluted
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26,919 | 27,764 | 26,824 | 24,511 | ||||||||||||
Mistras Group, Inc.
Unaudited Operating Data by Segment
(in thousands)
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Three months ended February 28,
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Nine months ended February 28,
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2011
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2010
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2011
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2010
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Revenues
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Services
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$ | 66,708 | $ | 52,912 | $ | 198,098 | $ | 159,552 | ||||||||
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Products and Systems
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5,436 | 4,768 | 15,974 | 13,137 | ||||||||||||
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International
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8,671 | 8,092 | 27,062 | 23,322 | ||||||||||||
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Corporate and eliminations
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(1,602 | ) | (1,416 | ) | (4,674 | ) | (3,667 | ) | ||||||||
| $ | 79,213 | $ | 64,356 | $ | 236,460 | $ | 192,344 | |||||||||
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Three months ended February 28,
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Nine months ended February 28,
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| 2011 | 2010 | 2011 | 2010 | |||||||||||||
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Gross profit
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Services
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$ | 16,650 | $ | 11,898 | $ | 53,404 | $ | 41,831 | ||||||||
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Products and Systems
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3,049 | 2,711 | 8,440 | 7,217 | ||||||||||||
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International
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2,935 | 3,222 | 9,466 | 9,212 | ||||||||||||
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Corporate and eliminations
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(37 | ) | (204 | ) | (127 | ) | (467 | ) | ||||||||
| $ | 22,597 | $ | 17,627 | $ | 71,183 | $ | 57,793 | |||||||||
Mistras Group, Inc.
Unaudited Reconciliation of
Net Income Attributable to Mistras Group, Inc. to EBITDA and Adjusted EBITDA
(in thousands)
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Three months ended February 28,
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Nine months ended February 28,
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2011
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2010
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2011
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2010
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EBITDA and Adjusted EBITDA data
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Net income attributable to Mistras Group, Inc.
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$ | 2,443 | $ | 774 | $ | 9,713 | $ | 5,151 | ||||||||
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Interest expense
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596 | 744 | 1,957 | 2,825 | ||||||||||||
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Provision for income taxes
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1,690 | 123 | 6,562 | 3,692 | ||||||||||||
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Depreciation and amortization
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4,845 | 4,044 | 13,608 | 11,409 | ||||||||||||
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EBITDA
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$ | 9,574 | $ | 5,685 | $ | 31,840 | $ | 23,077 | ||||||||
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Legal reserve
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— | — | 351 | (297 | ) | |||||||||||
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Large customer bankruptcy
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— | — | — | 767 | ||||||||||||
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Stock compensation expense
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903 | 827 | 2,680 | 1,860 | ||||||||||||
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Loss on extinguishment of debt
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— | — | — | 387 | ||||||||||||
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Adjusted EBITDA
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$ | 10,477 | $ | 6,512 | $ | 34,871 | $ | 25,794 | ||||||||
“Adjusted EBITDA” is defined as net income attributable to Mistras Group, Inc. plus: interest expense, provision for income taxes, depreciation and amortization, stock-based compensation expense, certain acquisition related costs and certain one-time and generally non-recurring items (which are included in the reconciliation above).