Mistras Group, Inc. (NYSE:MG), a leading "one source" global
provider of technology-enabled asset protection solutions, reported
financial results for the fourth quarter of its fiscal year 2016,
which ended May 31, 2016.
Revenues for the fourth quarter grew by 5% year-on-year to
$184.2 million, inclusive of adverse impacts from fires that
interrupted work in the Canadian oil sands region and foreign
exchange rates, which combined to reduce revenues by approximately
2%. Revenues for fiscal year 2016 grew by approximately 1% to
$719.2 million, inclusive of a cumulative reduction of
approximately $25 million, or 4%, from the impact of adverse
foreign exchange rates and the absence of revenues from prior year
dispositions.
As previously announced, the Company has agreed to settle a
class action lawsuit that is pending in U.S. District Court for the
Northern District of California, involving claims related to
California and Federal wage and hour and other labor laws. The
Company accrued a one-time pre-tax charge of $6.3 million, or
approximately $0.13 per diluted share, (net of tax) during the
fourth quarter of fiscal year 2016 for this matter.
Net income for the fourth quarter inclusive of the legal
settlement was $2.8 million, or $0.09 per diluted share. Excluding
the legal settlement, fourth quarter earnings per diluted share was
$0.22. The Company achieved record levels of net income and
earnings per diluted share in fiscal year 2016 of $24.7 million or
$0.82 per diluted share inclusive of the legal settlement charge,
and $28.6 million, or $0.96 per diluted share, excluding the legal
settlement charge. The Company’s comparative prior fiscal year net
income of $2.2 million or $0.07 per diluted share in the fourth
quarter, and $16.1 million net income or $0.54 per diluted share
for the full year, included after-tax structural charges of
approximately $3.7 million or $0.13 per diluted share primarily
related to severance and disposition of two former foreign
operations.
Adjusted EBITDA was $21.4 million, or 11.6% of revenues in the
fourth quarter of fiscal year 2016, a 20% improvement over the
prior year’s $17.9 million, or 10.2% of revenues. Adjusted EBITDA
for the full fiscal year 2016 was $88.1 million and 12.2% of
revenues, 23% higher than the prior year’s $71.9 million and 10.1%
of revenues. The impact of the legal settlement was excluded from
Adjusted EBITDA because management believes this non-recurring
charge is not indicative of the Company’s ongoing performance or
underlying performance trends.
Gross profit margins improved to 28.2% in the fourth quarter of
fiscal year 2016 from the prior year’s 25.7% and to 28.2% for the
entire fiscal year, compared with the prior year’s 26.0%. The
fourth quarter year-on-year improvement was driven by the Services
segment, which improved its gross margin by 140 basis points to
26.3%, and by the International segment, which improved by over
1,000 basis points to 32.0% due in part to the absence of prior
year structural charges. For the entire fiscal year, Services gross
margins improved by 130 basis points to 26.3%, while International
improved by 700 basis points to 30.5%. The improvements for both
the fourth quarter and the entire fiscal year were driven by
improved utilization of technicians, improved contract management
discipline and particularly in the International segment, by the
beneficial impact of organic growth.
Operating income for the fourth quarter of fiscal year 2016
improved by $0.3 million, or 6%, compared with prior year on a GAAP
basis and by $4.2 million, or 57%, excluding special items in both
years. Operating income for the entire fiscal year 2016 improved by
$12.8 million, or 42% on a GAAP basis and by over $18 million or
61%, calculated on the same basis as above. On the same basis of
calculation, operating margin of 6.8% for the entire fiscal year
2016 improved by 250 basis points over the prior year.
Cash flow from operating activities was $68.1 million in fiscal
year 2016, representing improvement of $18.3 million, or 37% over
prior year. Free cash flow, defined as cash flow from operating
activities less cash used to purchase property, plant and equipment
and intangible assets, was $51.9 million in fiscal year 2016,
representing improvement of $18.1 million, or 53% over prior year.
Net debt improved to approximately 0.9x Adjusted EBITDA at May 31,
2016, from 1.7x at May 31, 2015.Performance by segment was as
follows:
Services segment revenues for the fourth
quarter grew 5% year-on-year, as the favorable impact from market
share gains and the timing of turnaround and project-related work
more than offset the adverse impacts of a weak overall oil and gas
market, the Canadian oil sands fires and adverse foreign exchange.
Services revenues for fiscal year 2016 were 2% higher than prior
year, driven by low single digit organic growth, plus acquisition
growth that was mostly offset by adverse foreign exchange.
Services fourth quarter 2016 operating margin improved by 70
basis points to 10.3% excluding the legal charge. Services
full year 2016 operating margin improved by 150 basis points to
10.6% excluding the legal charge. Services improvements were driven
by improved utilization of technicians and improved contract
management discipline.
International segment revenues for the fourth
quarter grew 11% year-on-year, as double-digit organic growth more
than offset the adverse impact of foreign exchange and prior year
dispositions. International revenues for fiscal year 2016 declined
by 3%, as the combined impact of foreign exchange and dispositions
outweighed high single-digit organic growth.
International segment operating income was $2 million in the
fourth quarter of fiscal year 2016 compared with a prior year
operating loss. For the full fiscal year 2016, International
operating income was $9 million compared with a prior year
operating loss. The Company’s four largest country operations each
experienced year-on-year operating income improvements in every
quarter of fiscal year 2016, driven by the combined impact of the
prior year structural initiatives, positive organic growth and an
improved sales mix.
Products and Systems segment revenues for the
fourth quarter declined by $1.7 million or 20% year-on-year, and by
$1.0 million or 3% during fiscal year 2016. Products and Systems
operating income declined by approximately $1 million in the fourth
quarter of 2016, driven by the timing of sales, but improved
modestly for the full fiscal year.
Sotirios Vahaviolos, Chairman and Chief Executive Officer
stated, "Mistras Group continued to perform well in our Services
segment and in all of our International businesses. I am
particularly pleased with our revenue growth for the fourth quarter
and for the entire fiscal year, in a market environment where
organic revenue declines have become more typical as commodity
prices caused customers to be very cautious in their
spending. After the 4th quarter ended, we were awarded a
multi-year contract to perform a wide range of nondestructive and
destructive testing services for a major European aircraft engine
manufacturer. We will be providing more information on this
very important new contract shortly."
Dr. Vahaviolos added: “Despite the uncertainty and turbulence in
the oil and gas market, we continue to be there for our customers,
helping to maintain the integrity of their assets with our wide
ranging inspection techniques, our premier safety record and a
focus on helping them save money. Overall, I am extremely pleased
with the improvement in our financial performance. Our improved
profit margins and cash flows reflect the strength of our franchise
and our ability to invest in the future of our Company. We will
continue to be a trusted service provider for our clients, in good
markets and in difficult ones, in every market in which we do
business."
Share Repurchases
The Company has not yet repurchased shares pursuant to its
existing $50 million stock repurchase authorization that was put
into place in 2015. The Company plans to become more active in this
regard, and the Company’s Board of Directors has approved a plan to
repurchase shares owned by its largest shareholder, Chairman and
Chief Executive Officer, Dr. Sotirios Vahaviolos. The Company plans
to purchase up to 1 million shares owned by Dr. Vahaviolos at a
rate of up to $2 million per month. The Company expects to execute
an agreement with Dr. Vahaviolos shortly, which will set the
repurchase prices at a discount of 2% below the average closing
price of Mistras Group common stock in the preceding calendar
month, subject to agreed-upon minimum and maximum repurchase
prices.
Dr. Vahaviolos stated “I have decided to sell a minority portion
of my Mistras Group stock for the first time. Once we consummate
this agreement, the Company will achieve the benefits of buying
back its stock without reducing its float, and it will enable me to
start diversifying my personal finances.”
Planning Assumptions and Guidance for Fiscal
2017
The Company is introducing its planning assumptions and guidance
for fiscal year 2017 that commenced on June 1, 2016. The market
price of petroleum products continues to be volatile, influenced by
both economic and political factors which are difficult to predict.
The Company continues to operate its business with an expectation
that the “lower for longer” dynamic will be in place for the
foreseeable future, and that the market for inspection services
will be correspondingly flat to down.
Total revenues for fiscal year 2017 are expected to be between
$720 million and $735 million, representing an increase over fiscal
year 2016 of from 0% to 2%. Adjusted EBITDA for fiscal year 2017 is
expected to be between $89 million to $95 million, representing an
increase of from 1% to 8% over fiscal year 2016 results.
The Company expects that its operating and free cash flow will
be similar to that of fiscal year 2016. The Company expects to
deploy its available free cash flow for three purposes:
acquisitions, debt reduction and stock buybacks, in roughly equal
amounts.
The Company expects that its net income will be in a range of
from $29 million to $33 million, and that its earnings per diluted
share will be in a range of from $0.99 to $1.12, representing an
increase of from 3% to 17% over fiscal year 2016’s benchmark of
$0.96, excluding the legal settlement charge.
Regarding seasonality, the Company believes that the first
fiscal quarter of its fiscal year 2016 contained an unusually high
amount of customer turnaround and project work that was driven by
refinery strikes that occurred earlier in calendar year 2015.
Because a similar dynamic did not reoccur in calendar 2016, the
Company expects that the absence of this special work in the first
quarter of fiscal year 2017 will cause its revenues, Adjusted
EBITDA, net income and earnings per diluted share to be lower than
in the prior year’s first quarter. The Company also expects that
market share gains, acquisitions and other improvements will cause
these metrics to compare favorably in subsequent fiscal
quarters.
Conference Call
In connection with this release, Mistras will hold a conference
call on Thursday, August 11, 2016 at 9:00 a.m. (Eastern). The call
will be broadcast over the Web and can be accessed on Mistras'
Website, www.mistrasgroup.com. Individuals in the U.S. wishing to
participate in the conference call by phone may call 1-844-832-7227
and use confirmation code 60777892 when prompted. The International
dial-in number is 1-224-633-1529.
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; destructive testing 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.
Forward-Looking and Cautionary Statements
Certain statements made in this press release are
"forward-looking statements" about Mistras' financial results and
estimates, products and services, business model, strategy, growth
opportunities, profitability and competitive position, and other
matters. These forward-looking statements generally use words such
as "future," "possible," "potential," "targeted," "anticipate,"
"believe," "estimate," "expect," "intend," "plan," "predict,"
"project," "will," "may," "should," "could," "would" and other
similar words and phrases. Such statements are not guarantees of
future performance or results, and will not necessarily be accurate
indications of the times at, or by which, such performance or
results will be achieved, if at all. These statements are subject
to risks and uncertainties that could cause actual performance or
results to differ materially from those expressed in these
statements. A list, description and discussion of these and other
risks and uncertainties can be found in the "Risk Factors" section
of the Company's Annual Report on Form 10-K for fiscal year 2015
filed with the Securities and Exchange Commission on August 12,
2015, as updated by our reports on Form 10-Q and Form 8-K, and
these will be updated further upon the Company filing its annual
report on Form 10-K for fiscal year 2016. 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
In addition to financial information prepared in accordance with
US 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. These adjusted financial measures are
non-GAAP and should be considered in addition to, but not as a
substitute for, the information prepared in accordance with US
GAAP. We typically exclude certain GAAP items that management does
not believe affect our basic operations and that do not meet the
GAAP definition of unusual or non-recurring items. Other companies
may define these measures in different ways. The term "Adjusted
EBITDA" used in this release is a financial measurement not
calculated in accordance with generally accepted accounting
principles in the U.S. ("US GAAP"). A Reconciliation of Adjusted
EBITDA to a financial measurement under US GAAP is set forth in a
table attached to this press release. In addition, the Company has
also included in the attached tables non-GAAP measurements “Segment
and Total Company Income (Loss) Before Special Items” and “Net
Income Excluding Legal Settlement and Diluted EPS Excluding Legal
Settlement”, reconciling these measurements to financial
measurements under US GAAP. The Company uses the term “free cash
flow”, a non-GAAP measurement the Company defines as free cash flow
as cash provided by operating activities less capital expenditures
(which is classified as an investing activity). 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 and capital
lease obligations, less cash and cash equivalents. The Company
believes that investors and other users of the financial statements
benefit from the presentation of these non-GAAP measurements
because they provide additional metrics to compare the Company's
operating performance on a consistent basis and measure underlying
trends and results of the Company's business.
|
Mistras Group, Inc. and
Subsidiaries |
Unaudited Condensed Consolidated Balance
Sheets |
(in thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
May 31, 2016 |
|
May 31, 2015 |
ASSETS |
|
|
|
|
Current Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
21,188 |
|
|
$ |
10,555 |
|
Accounts receivable, net |
|
137,913 |
|
|
133,228 |
|
Inventories |
|
9,918 |
|
|
10,841 |
|
Deferred income taxes |
|
6,216 |
|
|
5,144 |
|
Prepaid expenses and other current
assets |
|
12,711 |
|
|
11,698 |
|
Total current assets |
|
187,946 |
|
|
171,466 |
|
Property, plant and
equipment, net |
|
78,676 |
|
|
79,256 |
|
Intangible assets,
net |
|
43,492 |
|
|
51,276 |
|
Goodwill |
|
169,220 |
|
|
166,414 |
|
Deferred income taxes |
|
1,000 |
|
|
1,208 |
|
Other assets |
|
2,341 |
|
|
2,107 |
|
Total Assets |
|
$ |
482,675 |
|
|
$ |
471,727 |
|
|
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
|
Current Liabilities |
|
|
|
|
Accounts payable |
|
$ |
10,796 |
|
|
$ |
10,529 |
|
Accrued expenses and other current
liabilities |
|
62,983 |
|
|
55,914 |
|
Current portion of long-term
debt |
|
12,553 |
|
|
17,902 |
|
Current portion of capital lease
obligations |
|
7,835 |
|
|
8,646 |
|
Income taxes payable |
|
2,710 |
|
|
532 |
|
Total current liabilities |
|
96,877 |
|
|
93,523 |
|
Long-term debt, net of
current portion |
|
72,456 |
|
|
95,557 |
|
Obligations under capital
leases, net of current portion |
|
11,932 |
|
|
10,717 |
|
Deferred income taxes |
|
18,328 |
|
|
16,984 |
|
Other long-term
liabilities |
|
6,794 |
|
|
9,934 |
|
Total Liabilities |
|
206,387 |
|
|
226,715 |
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
Preferred stock, 10,000,000 shares
authorized |
|
— |
|
|
— |
|
Common stock, $0.01 par value,
200,000,000 shares authorized |
|
290 |
|
|
287 |
|
Additional paid-in capital |
|
213,737 |
|
|
208,064 |
|
Retained earnings |
|
82,235 |
|
|
57,581 |
|
Accumulated other comprehensive
loss |
|
(20,099 |
) |
|
(21,113 |
) |
Total Mistras Group, Inc.
stockholders’ equity |
|
276,163 |
|
|
244,819 |
|
Noncontrolling interests |
|
125 |
|
|
193 |
|
Total Equity |
|
276,288 |
|
|
245,012 |
|
Total Liabilities and Equity |
|
$ |
482,675 |
|
|
$ |
471,727 |
|
|
Mistras Group, Inc. and
Subsidiaries |
Unaudited Condensed Consolidated Statements of
Income |
(in thousands, except per share
data) |
|
|
|
|
Three months ended May 31, |
|
Year ended May 31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
184,187 |
|
|
$ |
174,686 |
|
|
$ |
719,181 |
|
|
$ |
711,252 |
|
Cost of revenues |
|
126,434 |
|
|
124,263 |
|
|
494,911 |
|
|
506,281 |
|
Depreciation |
|
5,753 |
|
|
5,457 |
|
|
21,262 |
|
|
20,238 |
|
Gross
profit |
|
52,000 |
|
|
44,966 |
|
|
203,008 |
|
|
184,733 |
|
Selling, general and administrative
expenses |
|
37,638 |
|
|
38,820 |
|
|
141,229 |
|
|
143,978 |
|
Research and engineering |
|
624 |
|
|
599 |
|
|
2,523 |
|
|
2,521 |
|
Depreciation and amortization |
|
2,867 |
|
|
3,050 |
|
|
11,212 |
|
|
13,048 |
|
Acquisition-related (benefit)
expense, net |
|
(367 |
) |
|
(2,130 |
) |
|
(1,453 |
) |
|
(5,167 |
) |
Legal settlement |
|
6,320 |
|
|
— |
|
|
6,320 |
|
|
— |
|
Income from
operations |
|
4,918 |
|
|
4,627 |
|
|
43,177 |
|
|
30,353 |
|
Interest expense |
|
382 |
|
|
1,204 |
|
|
4,762 |
|
|
4,622 |
|
Income before provision
for income taxes |
|
4,536 |
|
|
3,423 |
|
|
38,415 |
|
|
25,731 |
|
Provision for income taxes |
|
1,764 |
|
|
1,283 |
|
|
13,765 |
|
|
9,740 |
|
Net
income |
|
2,772 |
|
|
2,140 |
|
|
24,650 |
|
|
15,991 |
|
Less: net income (loss)
attributable to noncontrolling interests, net of taxes |
|
8 |
|
|
(31 |
) |
|
(4 |
) |
|
(90 |
) |
Net income attributable to
Mistras Group, Inc. |
|
$ |
2,764 |
|
|
$ |
2,171 |
|
|
$ |
24,654 |
|
|
$ |
16,081 |
|
|
|
|
|
|
|
|
|
|
Earnings per common
share |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.10 |
|
|
$ |
0.08 |
|
|
$ |
0.85 |
|
|
$ |
0.56 |
|
Diluted |
|
$ |
0.09 |
|
|
$ |
0.07 |
|
|
$ |
0.82 |
|
|
$ |
0.54 |
|
Weighted average common
shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
28,925 |
|
|
28,703 |
|
|
28,856 |
|
|
28,613 |
|
Diluted |
|
30,126 |
|
|
29,594 |
|
|
29,891 |
|
|
29,590 |
|
|
Mistras Group, Inc. and
Subsidiaries |
Unaudited Operating Data by
Segment |
(in thousands) |
|
|
|
|
Three months ended May 31, |
|
Year ended May 31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Revenues |
|
|
|
|
|
|
|
|
Services |
|
$ |
141,795 |
|
|
$ |
135,573 |
|
|
$ |
553,279 |
|
|
$ |
540,224 |
|
International |
|
35,940 |
|
|
32,343 |
|
|
143,025 |
|
|
146,953 |
|
Products and Systems |
|
6,950 |
|
|
8,667 |
|
|
30,293 |
|
|
31,255 |
|
Corporate and eliminations |
|
(498 |
) |
|
(1,897 |
) |
|
(7,416 |
) |
|
(7,180 |
) |
|
|
$ |
184,187 |
|
|
$ |
174,686 |
|
|
$ |
719,181 |
|
|
$ |
711,252 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended May 31, |
|
Year ended May 31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Gross
profit |
|
|
|
|
|
|
|
|
Services |
|
$ |
37,319 |
|
|
$ |
33,749 |
|
|
$ |
145,262 |
|
|
$ |
135,201 |
|
International |
|
11,500 |
|
|
6,777 |
|
|
43,613 |
|
|
34,572 |
|
Products and Systems |
|
3,065 |
|
|
4,111 |
|
|
14,022 |
|
|
14,314 |
|
Corporate and eliminations |
|
116 |
|
|
329 |
|
|
111 |
|
|
646 |
|
|
|
$ |
52,000 |
|
|
$ |
44,966 |
|
|
$ |
203,008 |
|
|
$ |
184,733 |
|
|
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
Subsidiaries |
Unaudited Reconciliation of |
Segment and Total Company Income (Loss) from
Operations (GAAP) to |
Segment and Total Company Income (Loss) before
Special Items (non-GAAP) |
(in thousands) |
|
|
|
Three months ended May 31, |
|
Year ended May 31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Services: |
|
|
|
|
|
|
|
|
Income from operations (GAAP) |
|
$ |
8,267 |
|
|
$ |
12,934 |
|
|
$ |
52,552 |
|
|
$ |
49,142 |
|
Legal settlement |
|
6,320 |
|
|
— |
|
|
6,320 |
|
|
— |
|
Severance costs |
|
— |
|
|
— |
|
|
188 |
|
|
— |
|
Acquisition-related (benefit)
expense, net |
|
(254 |
) |
|
(1,249 |
) |
|
(1,061 |
) |
|
(639 |
) |
Income before special items
(non-GAAP) |
|
14,333 |
|
|
11,684 |
|
|
57,999 |
|
|
48,503 |
|
|
|
|
|
|
|
|
|
|
International: |
|
|
|
|
|
|
|
|
Income (loss) from operations
(GAAP) |
|
$ |
2,368 |
|
|
$ |
(1,738 |
) |
|
$ |
9,293 |
|
|
$ |
(575 |
) |
Severance costs |
|
646 |
|
|
681 |
|
|
885 |
|
|
1,082 |
|
Asset write-offs and lease
terminations |
|
— |
|
|
872 |
|
|
— |
|
|
872 |
|
Acquisition-related (benefit)
expense, net |
|
(84 |
) |
|
(867 |
) |
|
(520 |
) |
|
(2,926 |
) |
Income (loss) before special items
(non-GAAP) |
|
2,930 |
|
|
(1,052 |
) |
|
9,658 |
|
|
(1,547 |
) |
|
|
|
|
|
|
|
|
|
Products and
Systems: |
|
|
|
|
|
|
|
|
Income from operations (GAAP) |
|
$ |
11 |
|
|
$ |
1,131 |
|
|
$ |
2,688 |
|
|
$ |
2,461 |
|
Severance costs |
|
28 |
|
|
99 |
|
|
34 |
|
|
99 |
|
Asset write-offs and lease
terminations |
|
— |
|
|
157 |
|
|
— |
|
|
157 |
|
Acquisition-related (benefit)
expense, net |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Income before special items
(non-GAAP) |
|
39 |
|
|
1,387 |
|
|
2,722 |
|
|
2,717 |
|
|
|
|
|
|
|
|
|
|
Corporate and
Eliminations: |
|
|
|
|
|
|
|
|
Loss from operations (GAAP) |
|
$ |
(5,728 |
) |
|
$ |
(7,700 |
) |
|
$ |
(21,356 |
) |
|
$ |
(20,675 |
) |
Severance costs |
|
— |
|
|
542 |
|
|
— |
|
|
542 |
|
Charges related to sale of foreign
operations |
|
— |
|
|
2,516 |
|
|
— |
|
|
2,516 |
|
Acquisition-related (benefit)
expense, net |
|
(29 |
) |
|
(14 |
) |
|
128 |
|
|
(1,602 |
) |
Loss before special items
(non-GAAP) |
|
(5,757 |
) |
|
(4,656 |
) |
|
(21,228 |
) |
|
(19,219 |
) |
|
|
|
|
|
|
|
|
|
Total
Company |
|
|
|
|
|
|
|
|
Income from operations (GAAP) |
|
$ |
4,918 |
|
|
$ |
4,627 |
|
|
$ |
43,177 |
|
|
$ |
30,353 |
|
Special items |
|
$ |
6,627 |
|
|
$ |
2,736 |
|
|
$ |
5,974 |
|
|
$ |
101 |
|
Income before special items
(non-GAAP) |
|
$ |
11,545 |
|
|
$ |
7,363 |
|
|
$ |
49,151 |
|
|
$ |
30,454 |
|
|
Mistras Group, Inc. and
Subsidiaries |
Unaudited Summary Cash Flow
Information |
(in thousands) |
|
|
|
|
Year ended May 31, |
|
|
2016 |
|
2015 |
|
|
|
Net cash
provided by (used in): |
|
|
|
|
Operating Activities |
|
$ |
68,124 |
|
|
49,840 |
|
Investing Activities |
|
(16,752 |
) |
|
(49,651 |
) |
Financing Activities |
|
(40,378 |
) |
|
2,066 |
|
Effect of exchange rate
changes on cash |
|
(361 |
) |
|
(1,720 |
) |
Net change in
cash and cash equivalents |
|
$ |
10,633 |
|
|
$ |
535 |
|
|
|
|
|
|
Mistras Group, Inc. and
Subsidiaries |
Unaudited Reconciliation of |
Net Income to Adjusted EBITDA |
(in thousands) |
|
|
|
Three months ended May 31, |
|
Year ended May 31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
Net Income |
|
$ |
2,772 |
|
|
$ |
2,140 |
|
|
$ |
24,650 |
|
|
$ |
15,991 |
|
Less: net income (loss)
attributable to noncontrolling interests, net of taxes |
|
8 |
|
|
(31 |
) |
|
(4 |
) |
|
(90 |
) |
Net income attributable
to Mistras Group, Inc. |
|
$ |
2,764 |
|
|
$ |
2,171 |
|
|
$ |
24,654 |
|
|
$ |
16,081 |
|
Interest expense |
|
382 |
|
|
1,204 |
|
|
4,762 |
|
|
4,622 |
|
Provision for income
taxes |
|
1,764 |
|
|
1,283 |
|
|
13,765 |
|
|
9,740 |
|
Depreciation and
amortization |
|
8,620 |
|
|
8,507 |
|
|
32,474 |
|
|
33,286 |
|
Share-based
compensation expense |
|
1,517 |
|
|
1,723 |
|
|
6,514 |
|
|
6,579 |
|
Acquisition-related
(benefit) expense, net |
|
(367 |
) |
|
(2,130 |
) |
|
(1,453 |
) |
|
(5,167 |
) |
Charges related to sale
of foreign operations |
|
— |
|
|
2,516 |
|
|
— |
|
|
2,516 |
|
Severance costs |
|
814 |
|
|
1,322 |
|
|
1,107 |
|
|
1,723 |
|
Foreign exchange
(gains) losses |
|
(416 |
) |
|
260 |
|
|
(59 |
) |
|
1,474 |
|
Lease termination and
other charges |
|
— |
|
|
1,029 |
|
|
— |
|
|
1,029 |
|
Legal settlement |
|
6,320 |
|
|
— |
|
|
6,320 |
|
|
— |
|
Adjusted EBITDA |
|
$ |
21,398 |
|
|
$ |
17,885 |
|
|
$ |
88,084 |
|
|
$ |
71,883 |
|
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
Subsidiaries |
Unaudited Reconciliation of |
Net Income (GAAP) and Diluted Earnings Per
Share (GAAP) to |
Net Income Excluding Legal Settlement
(non-GAAP) |
and Diluted EPS Excluding Legal Settlement
(non-GAAP) |
(in thousands) |
|
|
|
Three months ended May 31, |
|
Year ended May 31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
Net income (GAAP) |
|
$ |
2,772 |
|
|
$ |
2,140 |
|
|
$ |
24,650 |
|
|
$ |
15,991 |
|
Legal settlement, net
of tax benefit at 37.7% tax rate |
|
3,937 |
|
|
— |
|
|
3,937 |
|
|
— |
|
Net Income Excluding
Legal Settlement (non-GAAP) |
|
$ |
6,709 |
|
|
$ |
2,140 |
|
|
$ |
28,587 |
|
|
$ |
15,991 |
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share (GAAP) |
|
$ |
0.09 |
|
|
$ |
0.07 |
|
|
$ |
0.82 |
|
|
$ |
0.54 |
|
Legal settlement |
|
0.13 |
|
|
— |
|
|
0.13 |
|
|
— |
|
Diluted EPS Excluding
Legal Settlement (non-GAAP) |
|
$ |
0.22 |
|
|
$ |
0.07 |
|
|
$ |
0.96 |
|
|
$ |
0.54 |
|
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
Subsidiaries |
Unaudited Reconciliation of |
Estimated Adjusted EBITDA and Estimated Net
Income for FY 2017 |
(in millions) |
|
|
|
For the Fiscal Year Ended May 31,
2017 |
|
|
Low |
|
High |
Estimated Net
Income |
|
$ |
29.0 |
|
|
$ |
33.0 |
|
Interest expense |
|
4.0 |
|
|
4.0 |
|
Provision for income taxes |
|
17.5 |
|
|
19.5 |
|
Depreciation and amortization |
|
32.0 |
|
|
32.0 |
|
Share-based compensation
expense |
|
6.5 |
|
|
6.5 |
|
Estimated Adjusted
EBITDA |
|
$ |
89.0 |
|
|
$ |
95.0 |
|
|
Media Contact:
Nestor S. Makarigakis, Group Director of Marketing Communications
marcom@mistrasgroup.com
1(609) 716-4000
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