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Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
(Mark One)
ýQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended March 31, 2020
 
Or
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from __ to __
 
Commission file number 001- 34481

Mistras Group, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware 22-3341267
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
   
195 Clarksville Road
Princeton Junction, New Jersey
 08550
(Address of principal executive offices) (Zip Code)
 
(609) 716-4000

(Registrant’s telephone number, including area code) 
 
 

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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
ý Yes  o No
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
ý Yes  o No
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer o
 
Accelerated filer x
Non-accelerated filer o
 
Smaller reporting company o
 
Emerging Growth Company o
 
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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
o Yes  ý No


As of May 11, 2020, the registrant had 29,074,110 shares of common stock outstanding.



Table of Contents
TABLE OF CONTENTS
 
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i

Table of Contents
PART I—FINANCIAL INFORMATION
 
ITEM 1. Financial Statements
 


Mistras Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
March 31, 2020December 31, 2019
ASSETS(unaudited) 
Current Assets  
Cash and cash equivalents$17,027  $15,016  
Accounts receivable, net125,130  135,997  
Inventories13,510  13,413  
Prepaid expenses and other current assets13,151  14,729  
Total current assets168,818  179,155  
Property, plant and equipment, net94,971  98,607  
Intangible assets, net72,019  109,537  
Goodwill196,289  282,410  
Deferred income taxes1,910  1,786  
Other assets49,538  48,383  
Total assets$583,545  $719,878  
LIABILITIES AND EQUITY  
Current Liabilities  
Accounts payable$13,110  $15,033  
Accrued expenses and other current liabilities75,156  81,389  
Current portion of long-term debt7,240  6,593  
Current portion of finance lease obligations3,847  4,131  
Income taxes payable2,067  2,094  
Total current liabilities101,420  109,240  
Long-term debt, net of current portion250,786  248,120  
Obligations under finance leases, net of current portion12,401  13,043  
Deferred income taxes6,761  21,290  
Other long-term liabilities40,424  42,163  
Total liabilities411,792  433,856  
Commitments and contingencies
Equity  
Preferred stock, 10,000,000 shares authorized
    
Common stock, $0.01 par value, 200,000,000 shares authorized, 29,042,069 and 28,945,472 shares issued
290  289  
Additional paid-in capital230,472  229,205  
Retained earnings (deficit)(20,896) 77,613  
Accumulated other comprehensive loss(38,294) (21,285) 
Total Mistras Group, Inc. stockholders’ equity171,572  285,822  
Non-controlling interests181  200  
Total equity171,753  286,022  
Total liabilities and equity$583,545  $719,878  
 
The accompanying notes are an integral part of these condensed consolidated financial statements.

1

Table of Contents
Mistras Group, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Income (Loss)
(in thousands, except per share data)
 Three months ended
 March 31, 2020March 31, 2019
  
Revenue$159,465  $176,787  
Cost of revenue113,324  122,417  
Depreciation5,497  5,496  
Gross profit40,644  48,874  
Selling, general and administrative expenses41,558  41,763  
Bad debt provision for troubled customers, net of recoveries  5,491  
Impairment charges106,062    
Pension withdrawal expense  534  
Research and engineering824  857  
Depreciation and amortization3,970  4,172  
Acquisition-related expense (benefit), net(542) 453  
Loss from operations(111,228) (4,396) 
Interest expense2,789  3,527  
Loss before provision (benefit) for income taxes(114,017) (7,923) 
Benefit for income taxes(15,495) (2,637) 
Net loss(98,522) (5,286) 
Less: Net income (loss) attributable to non-controlling interests, net of taxes(13) 7  
Net loss attributable to Mistras Group, Inc.$(98,509) $(5,293) 
Earnings (loss) per common share:  
Basic$(3.40) $(0.19) 
Diluted$(3.40) $(0.19) 
Weighted-average common shares outstanding:  
Basic28,963  28,574  
Diluted28,963  28,574  
 
The accompanying notes are an integral part of these condensed consolidated financial statements.

2

Table of Contents
Mistras Group, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)
(in thousands)
 
 Three months ended
 March 31, 2020March 31, 2019
Net loss$(98,522) $(5,286) 
Other comprehensive income (loss):  
Foreign currency translation adjustments(17,009) 2,131  
Comprehensive loss(115,531) (3,155) 
Less: comprehensive income (loss) attributable to non-controlling interest(19) 9  
Comprehensive loss attributable to Mistras Group, Inc.$(115,512) $(3,164) 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.

3

Table of Contents
Mistras Group, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Equity
(in thousands)
Three months ended
Common StockAdditional
paid-in capital
Retained
earnings
(deficit)
Accumulated
other
comprehensive income (loss)
Total
Mistras Group,
Inc.
Stockholders’ Equity
Noncontrolling Interest 
SharesAmountTotal Equity
Balance at December 31, 201928,945  $289  $229,205  $77,613  $(21,285) $285,822  $200  $286,022  
Net loss—  —  —  (98,509) —  (98,509) (13) (98,522) 
Other comprehensive loss, net of tax—  —  —  —  (17,009) (17,009) (6) (17,015) 
Share-based payments—  —  1,425  —  —  1,425  —  1,425  
Net settlement of restricted stock units97  1  (158) —  —  (157) —  (157) 
Balance at March 31, 202029,042  $290  $230,472  $(20,896) $(38,294) $171,572  $181  $171,753  
Balance at December 31, 201828,563  $285  $226,616  $71,553  $(27,557) $270,897  $177  $271,074  
Net income (loss)—  —  —  (5,293) —  (5,293) 7  (5,286) 
Other comprehensive income, net of tax—  —  —  —  2,131  2,131  2  2,133  
Share-based payments61  1  1,426  —  —  1,427  —  1,427  
Net settlement of restricted stock units—  —  (284) —  —  (284) —  (284) 
Exercise of stock options3  —  32  —  —  32  —  32  
Balance at March 31, 201928,627  $286  $227,790  $66,260  $(25,426) $268,910  $186  $269,096  


The accompanying notes are an integral part of these condensed consolidated financial statements.

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Mistras Group, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands) 
 Three months ended
 March 31, 2020March 31, 2019
Cash flows from operating activities  
Net loss $(98,522) $(5,286) 
Adjustments to reconcile net loss to net cash provided by operating activities  
Depreciation and amortization9,467  9,668  
Impairment charges106,062    
Deferred income taxes(13,739) 244  
Share-based compensation expense1,345  1,356  
Bad debt provision for troubled customers, net of recoveries  5,491  
Fair value adjustments to contingent consideration (542) 305  
Foreign currency (gain) loss307  (647) 
Other76  (163) 
Changes in operating assets and liabilities, net of effect of acquisitions and dispositions 
Accounts receivable7,884  4,904  
Inventories(405) (505) 
Prepaid expenses and other assets(985) (5,425) 
Accounts payable(1,526) (541) 
Accrued expenses and other liabilities(3,315) (3,189) 
Income taxes payable  1,965  
Net cash provided by operating activities6,107  8,177  
Cash flows from investing activities  
Purchase of property, plant and equipment(4,301) (5,637) 
Purchase of intangible assets(87) (88) 
Proceeds from sale of equipment184  724  
Net cash used in investing activities(4,204) (5,001) 
Cash flows from financing activities  
Repayment of finance lease obligations(1,167) (1,124) 
Proceeds from borrowings of long-term debt280  121  
Repayment of long-term debt(1,639) (1,694) 
Proceeds from revolver13,500  6,500  
Repayment of revolver(8,500) (7,500) 
Payment of financing costs(522)   
Payment of contingent consideration for business acquisitions(1,303)   
Taxes paid related to net share settlement of share-based awards(157) (284) 
Proceeds from exercise of stock options  32  
Net cash provided by (used in) financing activities492  (3,949) 
Effect of exchange rate changes on cash and cash equivalents(384) (171) 
Net change in cash and cash equivalents2,011  (944) 
Cash and cash equivalents at beginning of period15,016  25,544  
Cash and cash equivalents at end of period$17,027  $24,600  
Supplemental disclosure of cash paid  
Interest$2,726  $3,428  
Income taxes$61  $1,091  
Noncash investing and financing  
Equipment acquired through finance lease obligations$667  $1,086  

The accompanying notes are an integral part of these condensed consolidated financial statements.
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Mistras Group, Inc. and Subsidiaries
Notes to Unaudited Condensed Consolidated Financial Statements
(tabular dollars and shares in thousands, except per share data)


1. Description of Business and Basis of Presentation
 
Description of Business
 
Mistras Group, Inc. and subsidiaries ("the Company") is a leading “one source” global provider of technology-enabled asset protection solutions used to evaluate the structural integrity and reliability of critical energy, industrial, public infrastructure and commercial aerospace components. The Company combines industry-leading products and technologies, expertise in mechanical integrity (MI), non-destructive testing (NDT) and mechanical services and proprietary data analysis software to deliver a comprehensive portfolio of customized solutions, ranging from routine inspections to complex, plant-wide asset integrity assessments and management. These mission critical solutions enhance customers’ ability to extend the useful life of their assets, increase productivity, minimize repair costs, comply with governmental safety and environmental regulations, manage risk and avoid catastrophic disasters. The Company serves a global customer base of companies with asset-intensive infrastructure, including companies in the oil and gas, commercial aerospace and defense, fossil and nuclear power, alternative and renewable energy, public infrastructure, chemicals, transportation, primary metals and metalworking, pharmaceutical/biotechnology and food processing industries and research and engineering institutions.

Recent Developments

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic, which continues to spread throughout the United States. The COVID-19 pandemic has caused significant volatility in domestic and international markets. There is on-going uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. and international economies. In addition, oil prices have dropped significantly, and airline traffic has experienced a significant decline. These declines were driven by the uncertainty surrounding the COVID-19 pandemic and, in the case of the oil and gas market, other macroeconomic events such as the geopolitical tensions between OPEC and Russia, which also resulted in a significant drop in oil prices.

The COVID-19 pandemic and significant drop in oil prices has adversely affected the Company's workforce and operations, as well as the operations of its customers, suppliers and contractors. These negative factors have also resulted in significant volatility and uncertainty in the markets in which the Company operates. To successfully navigate through this unprecedented period, the Company continues to focus on the following key priorities:

Ensuring the health and safety of its employees and those of its customers and suppliers;
Maintaining business continuity and financial strength and stability; and
Serving its customers as they provide essential products and services to the world.

While the Company cannot fully assess the impact that the COVID-19 pandemic or the significant drop in oil prices will have on its operations at this time, there are certain impacts that the Company has identified:

The financial market volatility that resulted from COVID-19 and the drop in oil prices required the Company to reassess the goodwill it had recorded related to various prior acquisitions under the guidance of ASC 350. The Company determined that the fair values of various reporting units were less than their carrying values (including goodwill). As a result, the Company recorded an impairment charge related to goodwill of approximately $77.1 million in the three months ended March 31, 2020. See Note 8–Goodwill.
This same financial market volatility required the Company to reassess the tangible and intangible assets recorded under the guidance of ASC 360. The Company determined that the fair values of certain asset groups were less than their carrying values (excluding goodwill). As a result, the Company recorded impairment charges related to intangible assets of approximately $28.8 million and a right-of-use asset of approximately $0.2 million in the three months ended March 31, 2020. See Note 9–Intangible Assets and Note 13–Leases.
As of March 31, 2020, the Company was in compliance with the terms of its $300 million revolving line of credit and $100 million senior secured term loan A facility provided by its banking group. Given the uncertainty of the Company's projected cash flows as a result of the impact of the COVID-19 pandemic and the drop in oil prices, the Company entered into an amendment on May 15, 2020 with its banking group that, among other provisions, modifies
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Mistras Group, Inc. and Subsidiaries
Notes to Unaudited Condensed Consolidated Financial Statements
(tabular dollars and shares in thousands, except per share data)
the current financial covenants. The Company believes that it is probable, based on the amended covenants, that the Company will be able to comply with the amended covenants and fulfil its obligations under the credit agreement; however, such matters cannot be predicted with certainty. See Note 11–Long-Term Debt.

To respond to the economic downturn resulting from the COVID-19 pandemic and the drop in oil prices, the Company has initiated a cost reduction and efficiency program. All named executive officers of the Company have voluntarily taken temporary salary reductions ranging from 25% to 45% of their base salary. In addition, the Company instituted a reduction for its other salaried employees, at lower percentages, and suspended the Company's voluntary match under the Company sponsored savings plans for its U.S. and Canadian employees. These reductions are for the second quarter of 2020. If the economic downturn continues beyond the second quarter and there is no sign of economic recovery for the Company or its industry, the Company will assess whether to change these cost saving measures. In addition, the Company’s non-employee directors voluntarily agreed to a $3,750 reduction in their second quarter 2020 payment.

The Company is currently unable to predict with certainty the overall impact that the COVID-19 pandemic and drop in oil prices may have on its business, results of operations, or liquidity. The Company may be impacted by the pandemic and drop in oil prices in other ways which the Company cannot yet determine. The Company will continue to monitor market conditions and respond accordingly.

Basis of Presentation
 
The condensed consolidated financial statements contained in this report are unaudited. In the opinion of management, the condensed consolidated financial statements include all adjustments, which are of a normal recurring nature, necessary for a fair presentation of the results for the interim periods of the years ending December 31, 2020 and December 31, 2019. Certain items included in these statements are based on management’s estimates. Actual results may differ from those estimates. The results of operations for any interim period are not necessarily indicative of the results expected for the year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the notes to the audited consolidated financial statements contained in the 2019 Annual Report.
 
Principles of Consolidation
 
The accompanying unaudited condensed consolidated financial statements include the accounts of Mistras Group, Inc. and its wholly and majority-owned subsidiaries. For subsidiaries in which the Company’s ownership interest is less than 100%, the non-controlling interests are reported in stockholders’ equity in the accompanying Condensed Consolidated Balance Sheets. The non-controlling interests in net results, net of tax, is classified separately in the accompanying Unaudited Condensed Consolidated Statements of Income (Loss). All significant intercompany accounts and transactions have been eliminated in consolidation.
 
Reclassification

Certain amounts in prior periods have been reclassified to conform to the current year presentation. Such reclassifications did not have a material effect on the Company's financial condition or results of operations as previously reported.

Customers

For each of the three months ended March 31, 2020 and 2019, no customer represented 10% or more of the Company's revenue.

Significant Accounting Policies
 
The Company’s significant accounting policies are disclosed in Note 1–Summary of Significant Accounting Policies and Practices in the 2019 Annual Report. On an ongoing basis, the Company evaluates its estimates and assumptions, including among other things, those related to revenue recognition, long-lived assets, goodwill and acquisitions. Since the date of the 2019 Annual Report, there have been no material changes to the Company's significant accounting policies.

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Mistras Group, Inc. and Subsidiaries
Notes to Unaudited Condensed Consolidated Financial Statements
(tabular dollars and shares in thousands, except per share data)
Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry-forwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided if it is more likely than not that some or all of a deferred income tax asset will not be realized. Financial accounting standards prescribe a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. These standards also provide guidance on de-recognition, measurement, and classification of amounts relating to uncertain tax positions, accounting for and disclosure of interest and penalties, accounting in interim periods and disclosures required. Interest and penalties related to unrecognized tax positions are recognized as incurred within “provision for income taxes” in the consolidated statements of income. ASC 740-270, Income Taxes-Interim Reporting, requires the Company to use an estimated annual effective tax rate (EAETR) for calculating its tax provision for interim periods. At each interim period, the Company is required, with certain exceptions and limitations, to estimate its forecasted worldwide EAETR, which is applied to the Company's year-to-date consolidated ordinary income or loss resulting in the year-to-date income tax provision before considering items not included in ordinary income or loss. The tax effects of events or transactions not considered to represent ordinary income or loss are accounted for discretely in the interim period and are not included in the determination of the EAETR.

In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020. The CARES Act, among other things, includes tax provisions relating to deferment of employer’s social security payments, net operating loss utilization and carryback periods, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property (QIP). The ultimate impact of the CARES Act may differ from the estimated impact the Company recorded during this interim period due to changes in interpretations and guidance that may be issued and actions the Company may take in response to the CARES Act. The Company will continue to assess the impact that various provisions will have on its business.

The Company continues to evaluate its deferred tax assets each period to determine if a valuation allowance is required based on whether it is more likely than not that some portion of these deferred tax assets will not be realized. As of March 31, 2020, management concluded that it is more likely than not that a substantial portion of the Company's deferred tax assets will be realized. As part of the Company's analysis, it considered both positive and negative factors that impact profitability and whether those factors would lead to a change in the estimate of the Company's deferred tax assets that may be realized in the future. In the current period, the Company began to see impacts on its business as a result of the COVID-19 pandemic. The Company will continue to monitor the impacts of the COVID-19 pandemic on its business, and any sustained or prolonged reductions in future earnings periods may change the Company's conclusions on whether it is more likely than not to realize portions of the Company's deferred tax assets.

The Company’s effective income tax rate was approximately 14% and 33% for the three months ended March 31, 2020 and 2019, respectively. The effective income tax rate for the three months ended March 31, 2020 was lower than the statutory rate primarily due to impairments recorded during the interim period for which no income tax benefits will be realized by us. However, this unfavorable impact on the Company's effective income tax rate was partially offset by income tax benefits of the CARES Act. The CARES Act provides a five-year carryback of net operating losses generated in years 2018-2020. As the statutory federal income tax rate applicable to certain years within the carryback period is 35%, carryback to those years of the Company's estimated 2020 annual tax loss provides a tax benefit in excess of the current federal statutory rate of 21%, resulting in an increased income tax benefit. The Company projects that the income tax effects of the CARES Act will result in additional income tax benefit recognized throughout the 2020 tax year as part of the estimated annual effective tax rate, and a cash refund in 2021 of taxes paid in prior years. The effective income tax rate for the three months ended March 31, 2019 was higher than the statutory rate due to the impact of discrete items, the global intangible low-taxes income (GILTI), and executive compensation, and other provisions resulting from the December 22, 2017 passage of the Tax Cuts and Jobs Act and foreign tax rates different than statutory rates in the U.S.

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Mistras Group, Inc. and Subsidiaries
Notes to Unaudited Condensed Consolidated Financial Statements
(tabular dollars and shares in thousands, except per share data)
Recent Accounting Pronouncements

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by eliminating certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities related to outside basis differences. The standard is effective for interim and annual periods beginning January 1, 2021, with certain amendments applied prospectively and others requiring retrospective application. Early adoption is permitted, with any adjustments reflected as of the beginning of the fiscal year of adoption. If early adoption is elected, all changes as a result of the standard must be adopted in the same period. The Company is currently evaluating the impact of this guidance on its consolidated financial position, results of operations, and cash flows.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The guidance provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another rate that is expected to be discontinued. The amendments in ASU 2020-04 are effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact of this guidance on its consolidated financial position, results of operations, and cash flows.


2. Revenue

The majority of the Company's revenues are derived from providing services on a time and material basis and are short-term in nature. The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers.
Performance Obligations
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC Topic 606.  A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The majority of the Company's contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and is, therefore, not distinct. The Company provides highly integrated and bundled inspection services to its customers. Some of the Company's contracts have multiple performance obligations, most commonly due to the contract providing both goods and services. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using its best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is a relative selling price based on price lists.

Contract modifications are not routine in the performance of the Company contracts. Generally, when contracts are modified, the modification is to account for changes in scope to the goods and services that are provided. In most instances, contract modifications are for goods or services that are distinct, and, therefore, are accounted for as a separate contract.

The Company's performance obligations are satisfied over time as work progresses or at a point in time. The majority of the Company's revenue recognized over time as work progresses is related to its service deliverables, which includes providing testing, inspection and mechanical services to the Company's customers. Revenue is recognized over time based on time and material incurred to date which best portrays the transfer of control to the customer. The Company also utilizes an available practical expedient that provides for revenue to be recognized in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date. Fixed fee arrangements are determined based on expected labor, material, and overhead to be consumed on fulfillment of such services. Revenue is recognized on a cost-to-cost method tracked on an input basis.

The majority of the Company's revenue recognized at a point in time is related to product sales when the customer obtains control of the asset, which is generally upon shipment to the customer. Contract costs include labor, material and overhead.

The Company expects any significant remaining performance obligations to be satisfied within one year.

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Mistras Group, Inc. and Subsidiaries
Notes to Unaudited Condensed Consolidated Financial Statements
(tabular dollars and shares in thousands, except per share data)
Contract Estimates

The majority of the Company's revenues are short-term in nature. The Company has many master service agreements (MSAs) that specify an overall framework and contract terms when the Company and customers agree upon services or products to be provided. The actual contracting to provide services or furnish products is triggered by a work order, purchase order, or some similar document issued pursuant to a MSA which sets forth the scope of services and/or identifies the products to be provided. From time-to-time, the Company may enter into long-term contracts, which can range from several months to several years. Revenue on such long-term contracts is recognized as work is performed based on total costs incurred to date in relation to the total estimated costs for the performance of the contract at completion. This includes contract estimates of costs to be incurred for the performance of the contract. Cost estimation is based upon the professional knowledge and experience of the Company's project managers, engineers and financial professionals. Factors that are considered in estimating the work to be completed include the availability of materials, the effect of any delays in the Company's project performance and the recoverability of any claims. Whenever revisions of estimates, contract costs and/or contract values indicate that the contract costs will exceed estimated revenues, thus creating a loss, a provision for the total estimated loss is recorded in that period.

Revenue by Category

The following series of tables present the Company's disaggregated revenues:

Revenue by industry was as follows:

Three Months Ended March 31, 2020ServicesInternationalProductsCorp/ElimTotal
Oil & Gas$83,299  $9,104  $95  $  $92,498  
Aerospace & Defense14,652  7,415  147    22,214  
Industrials 12,867  4,919  488    18,274  
Power generation & Transmission5,095  1,697  854    7,646  
Other Process Industries6,004  2,120  3    8,127  
Infrastructure, Research & Engineering4,517  2,461  560    7,538  
Other2,439  1,351  665  (1,287) 3,168  
Total$128,873  $29,067  $2,812  $(1,287) $159,465  


Three Months Ended March 31, 2019ServicesInternationalProductsCorp/ElimTotal
Oil & Gas$91,666  $9,704  $15  $  $101,385  
Aerospace & Defense12,794  11,654  307    24,755  
Industrials 16,123  5,075  432    21,630  
Power generation & Transmission6,262  1,422  1,380    9,064  
Other Process Industries6,319  2,242  5    8,566  
Infrastructure, Research & Engineering2,590  2,733  847    6,170  
Other4,544  2,332  446  (2,105) 5,217  
Total$140,298  $35,162  $3,432  $(2,105) $176,787  

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Mistras Group, Inc. and Subsidiaries
Notes to Unaudited Condensed Consolidated Financial Statements
(tabular dollars and shares in thousands, except per share data)
Revenue per key geographic location was as follows:

Three Months Ended March 31, 2020ServicesInternationalProductsCorp/ElimTotal
United States$109,581  $154  $1,559  $(711) $110,583  
Other Americas18,735  1,505  278  (153) 20,365  
Europe108  26,235  340  (379) 26,304  
Asia-Pacific449  1,173  635  (44) 2,213  
Total$128,873  $29,067  $2,812  $(1,287) $159,465  


Three Months Ended March 31, 2019ServicesInternationalProductsCorp/ElimTotal
United States$113,136  $276  $1,970  $(1,282) $114,100  
Other Americas26,708  2,229  66  (56) 28,947  
Europe428  31,540  421  (763)