Mistras Group, Inc. Delivers First Quarter Revenue Growth of 34%; Net Income Increases 103%


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Mistras Group, Inc. Delivers First Quarter Revenue Growth of 34%; Net Income Increases 103%

Oct 10, 2011

PRINCETON JUNCTION, N.J., Oct. 10, 2011 (GLOBE NEWSWIRE) -- Mistras Group, Inc. (NYSE:MG), a leading "one source" global provider of technology-enabled asset protection solutions, today reported financial results for the first quarter of fiscal 2012. Revenue for the first quarter of fiscal 2012 was $91.4 million, an increase of 34%, over the $68.4 million reported in the first quarter of fiscal 2011. Net income for the first quarter of fiscal 2012 grew by 103% to $3.2 million, or $0.11 per diluted share, versus $1.6 million, or $0.06 per diluted share, in the first quarter of fiscal 2011. Adjusted EBITDA*, a non-GAAP measure detailed later in this release, increased 42% to $12.0 million in the first quarter of fiscal 2012 versus $8.5 million in the first quarter of fiscal 2011.

Consistent with prior quarters, organic growth contributed the bulk of the revenue gain. In the first quarter of fiscal 2012, the organic growth rate was 19%, while acquisition growth was 12% and the balance of growth was due to foreign currency fluctuations.

Additional Financial Highlights for the first quarter of Fiscal 2012:

  • Operating income margins grew by 170 basis points and Adjusted EBITDA* margins grew by 70 basis points compared to the same quarter of fiscal 2011.
  • The Company generated $12.8 million in net cash from operating activities in the first quarter of fiscal 2012 versus $9.2 million in the same quarter of fiscal 2011, representing an increase of 39%.
  • Revenues from the oil and gas market grew by 24% while revenues from all other markets combined grew by more than 40% in the first quarter of fiscal 2012.

Chairman and Chief Executive Officer, Dr. Sotirios J. Vahaviolos stated that, "We were pleased with the continued momentum of our business in the first quarter of fiscal 2012, which is traditionally a soft quarter for us. Once again, organic revenue growth was a significant driver behind our results, rising to 19% in the first quarter. Our unique approach, which provides 'One Source' Asset Protection Solutions to our customers, continues to receive broad acceptance in the many target markets that we serve."

Business Outlook/Guidance for Fiscal Year 2012

The Company's outlook is for continued double digit growth in revenue and Adjusted EDITDA*. The Company is affirming its previously issued guidance for fiscal 2012 revenues to be in the range of $375 million to $390 million and Adjusted EBITDA* to be in the range of $59 million to $64 million. Mistras does not provide specific guidance for individual quarters, but will update its annual guidance at least quarterly.

Earnings Conference Call

In connection with this earnings release, Mistras will hold its quarterly conference call on Tuesday, October 11, 2011 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 1-800-901-5241 and use confirmation code 55375743 when prompted. The International dial-in number is 1-617-786-2963.

About Mistras Group, Inc.

MISTRAS is a leading "one source" global provider of technology-enabled asset protection solutions used to evaluate the structural integrity of critical energy, industrial and public infrastructure. Mission critical services and solutions are delivered globally and provide customers the ability to extend the useful life of their assets, improve productivity & 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 & 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.

The MISTRAS Group, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6966

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, 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 12, 2011, 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 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 measure underlying trends and results of the Company's business. A reconciliation of this to a financial measurement under GAAP is set forth in a table attached to this press release.


Mistras Group, Inc.
Unaudited Consolidated Balance Sheets
(in thousands, except share data)
 August 31, 2011May 31, 2011
 Current Assets     
 Cash and cash equivalents   $ 6,491  $ 10,879
 Accounts receivable, net   72,706  78,031
 Inventories, net   10,226  9,830
 Deferred income taxes   1,282  1,278
 Prepaid expenses and other current assets   6,825  6,761
Total current assets  97,530  106,779
Property, plant and equipment, net  52,750  49,168
Intangible assets, net  28,163  27,304
Goodwill  68,970  64,146
Other assets  1,104  1,240
Total assets  $ 248,517  $ 248,637
Current Liabilities    
Current portion of long-term debt  $ 6,551  $ 7,226
Current portion of capital lease obligations  6,526  5,853
Accounts payable  5,580  6,656
Accrued expenses and other current liabilities  29,020  28,028
Income taxes payable  2,365  2,825
Total current liabilities  50,042  50,588
Long-term debt, net of current portion  9,495  14,625
Obligations under capital leases, net of current portion  11,047  9,623
Deferred income taxes  2,920  2,863
Other long-term liabilities  3,719  3,452
Total liabilities  77,223  81,151
Commitments and contingencies    
Preferred stock, 10,000,000 shares authorized  --   -- 
Common stock, $0.01 par value, 200,000,000 shares authorized, 27,712,038 and 27,667,122
shares issued and outstanding as of August 31, 2011 and May 31, 2011, respectively
 277  277
Additional paid-in capital  181,521  180,594
Accumulated deficit  (10,789)  (14,017)
Accumulated other comprehensive income (loss)  (7)  303
Total Mistras Group, Inc. stockholders' equity  171,002  167,157
Noncontrolling interest  292  329
Total equity  171,294  167,486
Total liabilities, preferred stock and equity  $ 248,517  $ 248,637
Mistras Group, Inc.
Unaudited Consolidated Statement of Operations
(in thousands, except per share data)
  Three months ended August 31, 
Services  $ 82,902  $ 61,252
Products  8,545  7,158
Total revenues  91,447  68,410
Cost of revenues:    
Cost of services  56,887  41,391
Cost of products sold  3,640  3,277
Depreciation related to services  3,323  2,809
Depreciation related to products  177  155
Total cost of revenues  64,027  47,632
Gross profit  27,420  20,778
Selling, general and administrative expenses  19,381  15,479
Research and engineering  589  555
Depreciation and amortization  1,479  1,178
Legal reserve  --   250
Income from operations  5,971  3,316
Other expenses    
Interest expense  661  690
Income before provision for income taxes   5,310  2,626
Provision for income taxes  2,116  1,054
Net income  3,194  1,572
Net loss attributable to noncontrolling interests, net of taxes  34  20
Net income attributable to Mistras Group, Inc.  $ 3,228  $ 1,592
Earnings per common share:    
Basic  $ 0.12  $ 0.06
Diluted  $ 0.11  $ 0.06
Weighted average common shares outstanding:    
Basic  27,677  26,664
Diluted  28,225  26,778
Mistras Group, Inc.
Unaudited Operating Data by Segment
(in thousands)
  Three months ended August 31, 
 Services   $ 75,689  $ 55,282
 Products and Systems   7,513  5,310
 International   9,773  9,040
 Corporate and eliminations   (1,528)  (1,222)
   $ 91,447  $ 68,410
  Three months ended August 31, 
 Gross profit     
 Services   $ 20,308  $ 15,001
 Products and Systems   3,751  2,569
 International   3,431  3,271
 Corporate and eliminations   (70)  (63)
   $ 27,420  $ 20,778
Mistras Group, Inc.
Unaudited Reconciliation of
Net Income Attributable to Mistras Group, Inc. to EBITDA and Adjusted EBITDA
(in thousands)
  Three months ended August 31, 
EBITDA and Adjusted EBITDA data    
Net income attributable to Mistras Group, Inc.  $ 3,228  $ 1,592
Interest expense   661  690
Provision for income taxes   2,116  1,054
Depreciation and amortization   4,979  4,142
EBITDA   $ 10,984  $ 7,478
Legal reserve  --   250
Stock compensation expense   1,002  729
Adjusted EBITDA   $ 11,986  $ 8,457
CONTACT: Nestor S. Makarigakis

         Manager of Marketing and Communications

         MISTRAS Group, Inc.

         1 (609) 716-4000