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Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	May 31, 2012	Aug. 01, 2012	Nov. 30, 2011
Document and Entity Information
Entity Registrant Name	Mistras Group, Inc.
Entity Central Index Key	0001436126
Document Type	10-K
Document Period End Date	May 31, 2012
Amendment Flag	false
Current Fiscal Year End Date	--05-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 389.0
Entity Common Stock, Shares Outstanding		28,038,007
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY

Consolidated Balance Sheets - USD ($) $ in Thousands	May 31, 2012	May 31, 2011
Current Assets
Cash and cash equivalents	$ 8,410	$ 10,879
Accounts receivable, net	104,515	78,031
Inventories, net	12,492	9,830
Deferred income taxes	1,885	1,278
Prepaid expenses and other current assets	6,321	6,761
Total current assets	133,623	106,779
Property, plant and equipment, net	63,527	49,168
Intangible assets, net	34,469	27,304
Goodwill	96,819	64,146
Other assets	1,378	1,240
Total assets	329,816	248,637
Current Liabilities
Current portion of long-term debt	5,971	7,226
Current portion of capital lease obligations	5,951	5,853
Accounts payable	11,944	6,656
Accrued expenses and other current liabilities	39,334	28,028
Income taxes payable	1,119	2,825
Total current liabilities	64,319	50,588
Long-term debt, net of current portion	34,258	14,625
Obligations under capital leases, net of current portion	13,094	9,623
Deferred income taxes	4,901	2,863
Other long-term liabilities	19,996	3,452
Total liabilities	136,568	81,151
Commitments and contingencies
Preferred stock, 10,000,000 shares authorized
Equity
Common stock, $0.01 par value, 200,000,000 shares authorized, 28,025,507 and 27,667,122 shares issued and outstanding as of May 31, 2012 and May 31, 2011, respectively	280	277
Additional paid-in capital	188,443	180,594
Retained earnings (accumulated deficit)	7,336	(14,017)
Accumulated other comprehensive (loss) income	(3,047)	303
Total Mistras Group, Inc. stockholders' equity	193,012	167,157
Noncontrolling interest	236	329
Total equity	193,248	167,486
Total liabilities, preferred stock and equity	$ 329,816	$ 248,637

Consolidated Balance Sheets (Parenthetical) - $ / shares	May 31, 2012	May 31, 2011
Consolidated Balance Sheets
Preferred stock, shares authorized	10,000,000	10,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	28,025,507	27,667,122
Common stock, shares outstanding	28,025,507	27,667,122

- Definition

The maximum number of securities classified as temporary equity that are permitted to be issued by an entity's charter and bylaws. Temporary equity is a security with redemption features that are outside the control of the issuer, is not classified as an asset or liability in conformity with GAAP, and is not mandatorily redeemable. Includes any type of security that is redeemable at a fixed or determinable price or on a fixed or determinable date or dates, is redeemable at the option of the holder, or has conditions for redemption which are not solely within the control of the issuer. If convertible, the issuer does not control the actions or events necessary to issue the maximum number of shares that could be required to be delivered under the conversion option if the holder exercises the option to convert the stock to another class of equity. If the security is a warrant or a rights issue, the warrant or rights issue is considered to be temporary equity if the issuer cannot demonstrate that it would be able to deliver upon the exercise of the option by the holder in all cases. Includes stock with put option held by ESOP and stock redeemable by holder only in the event of a change in control of the issuer.

+ References + Details

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	May 31, 2012	May 31, 2011	May 31, 2010
Revenues:
Services	$ 394,035	$ 308,702	$ 248,672
Products	42,840	29,887	23,456
Total revenues	436,875	338,589	272,128
Cost of revenues:
Cost of services	271,676	209,512	169,591
Cost of products sold	19,940	12,468	8,889
Depreciation related to services	14,929	12,576	9,840
Depreciation related to products	640	630	670
Total cost of revenues	307,185	235,186	188,990
Gross profit	129,690	103,403	83,138
Selling, general and administrative expenses	83,098	65,983	55,463
Research and engineering	2,059	2,150	2,402
Depreciation and amortization	6,455	5,386	4,673
Acquisition-related costs	1,309
Legal reserve		273	(297)
Income from operations	36,769	29,611	20,897
Other expenses
Interest expense	3,803	2,773	3,531
(Gain) loss on extinguishment of long-term debt	(671)		387
Income before provision for income taxes	33,637	26,838	16,979
Provision for income taxes	12,291	10,502	6,527
Net income	21,346	16,336	10,452
Net loss (income) attributable to noncontrolling interests, net of taxes	7	95	(23)
Net income attributable to Mistras Group, Inc.	21,353	16,431	10,429
Accretion of preferred stock			6,499
Net income attributable to common shareholders	$ 21,353	$ 16,431	$ 16,928
Earnings per common share:
Basic (in dollars per share)	$ 0.77	$ 0.61	$ 0.78
Diluted (in dollars per share)	$ 0.74	$ 0.61	$ 0.43
Weighted average common shares outstanding:
Basic (in shares)	27,839	26,724	21,744
Diluted (in shares)	28,685	26,933	24,430

Consolidated Statements of Stockholders' Equity (deficit) - USD ($) shares in Thousands, $ in Thousands	Total	Total Mistras Group, Inc. Stockholders' Equity	Common Stock	Additional paid-in capital	Retained earnings (accumulated deficit)	Accumulated other comprehensive income (loss)	Noncontrolling Interest	Comprehensive Income
Balance at May. 31, 2009	$ (47,667)	$ (47,912)	$ 130	$ 917	$ (47,376)	$ (1,583)	$ 245
Balance (in shares) at May. 31, 2009			13,000
Increase (Decrease) in Stockholders' Equity
Net income	10,452	10,429			10,429		23	$ 10,452
Other comprehensive income, net of tax:
Foreign currency translation adjustment	(4)	(4)				(4)		(4)
Comprehensive Income	10,448	10,425					23	10,448
Accretion of preferred stock	6,499	6,499			6,499
Issuance of common stock upon conversion of class A & B preferred stock	84,484	84,484	$ 68	84,416
Issuance of common stock upon conversion of class A & B preferred stock (in shares)			6,759
Issuance of common stock	74,017	74,017	$ 67	73,950
Issuance of common stock (in shares)			6,700
Stock compensation	2,695	2,695		2,695
Exercise of stock options	78	78	$ 2	76
Exercise of stock options (in shares)			204
Balance at May. 31, 2010	130,554	130,286	$ 267	162,054	(30,448)	(1,587)	268
Balance (in shares) at May. 31, 2010			26,663
Increase (Decrease) in Stockholders' Equity
Net income	16,336	16,431			16,431		(95)	16,336
Other comprehensive income, net of tax:
Foreign currency translation adjustment	1,905	1,890				1,890	15	1,905
Comprehensive Income	18,241	18,321					(80)	18,241
Issuance of common stock	14,682	14,682	$ 10	14,672
Issuance of common stock (in shares)			990
Stock compensation	3,751	3,751		3,751
Stock compensation (in shares)			3
Excess tax benefit from stock compensation	22	22		22
Exercise of stock options	95	95		95
Exercise of stock options (in shares)			11
Noncontrolling interest in subsidiary	141						141
Balance at May. 31, 2011	167,486	167,157	$ 277	180,594	(14,017)	303	329
Balance (in shares) at May. 31, 2011			27,667
Increase (Decrease) in Stockholders' Equity
Net income	21,346	21,353			21,353		(7)	21,346
Other comprehensive income, net of tax:
Foreign currency translation adjustment	(3,361)	(3,350)				(3,350)	(11)	(3,361)
Comprehensive Income	17,985	18,003					(18)	17,985
Stock compensation	5,097	5,097		5,097
Stock compensation (in shares)			16
Net settlement on vesting of restricted stock units	(283)	(283)		(283)
Net settlement on vesting of restricted stock units (in shares)			36
Excess tax benefit from stock compensation	554	554		554
Exercise of stock options	2,484	2,484	$ 3	2,481
Exercise of stock options (in shares)			307
Noncontrolling interest in subsidiary	(75)						(75)	$ (75)
Balance at May. 31, 2012	$ 193,248	$ 193,012	$ 280	$ 188,443	$ 7,336	$ (3,047)	$ 236
Balance (in shares) at May. 31, 2012			28,026

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	May 31, 2012	May 31, 2011	May 31, 2010
Cash flows from operating activities
Net income attributable to Mistras Group, Inc.	$ 21,353	$ 16,431	$ 10,429
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	22,024	18,592	15,183
Deferred income taxes	(984)	1,779	907
Provision for doubtful accounts	479	253	532
Loss on extinguishment of long-term debt	(671)		387
(Gain) loss on sale of assets	(90)	21	196
Amortization of deferred financing costs	147	169	206
Stock compensation expense	5,097	3,751	2,695
Interest rate swap		(210)	(506)
Noncontrolling interest	(7)	(95)	23
Foreign currency loss (gain)	(508)	(335)	(1,284)
Changes in operating assets and liabilities, net of effect of acquisitions
Accounts receivable	(18,030)	(22,664)	(15,213)
Inventories	(1,708)	(77)	(116)
Prepaid expenses and other current assets	(1,503)		(682)
Other assets	(8)	47	1,259
Accounts payable	3,149	1,904	1,806
Income taxes payable	(3,036)	(515)	3,748
Accrued expenses and other liabilities	5,698	6,203	(583)
Net cash provided by operating activities	31,402	25,254	18,987
Cash flows from investing activities
Purchase of property, plant and equipment	(9,592)	(10,075)	(1,947)
Purchase of intangible assets	(813)	(520)	(36)
Acquisition of businesses, net of cash acquired	(29,216)	(26,195)	(14,699)
Proceeds from sale of equipment	2,109	312	148
Net cash used in investing activities	(37,512)	(36,478)	(16,534)
Cash flows from financing activities
Repayment of capital lease obligations	(6,984)	(6,230)	(6,071)
Repayment of long-term debt	(12,346)	(7,141)	(68,942)
Net (repayments) borrowings from former revolver	(3,850)	3,850	(15,505)
Net borrowings from current revolver	25,000
Proceeds from borrowings of long-term debt			25,000
Net (repayments) proceeds from other short-term borrowings	(1,868)	45
Payment of financing costs	(623)		(484)
Proceeds from capital contribution from noncontrolling interests		21
Acquisition of noncontrolling interest in subsidiary	(75)
Net proceeds from issuance of common stock		14,682	74,007
Taxes paid related to net share settlement of equity awards	(283)
Excess tax benefit from stock compensation	554	22
Proceeds from the exercise of stock options	2,484	95	78
Net cash provided by financing activities	2,009	5,344	8,083
Effect of exchange rate changes on cash and cash equivalents	1,632	722	(167)
Net change in cash and cash equivalents	(2,469)	(5,158)	10,369
Cash and cash equivalents
Beginning of period	10,879	16,037	5,668
End of period	8,410	10,879	16,037
Supplemental disclosure of cash paid
Interest	2,749	2,783	3,943
Income taxes	14,871	9,257	2,306
Noncash investing and financing
Equipment acquired through capital lease obligations	9,504	6,403	5,986
Issuance of notes payable and other debt obligations primarily related to acquisitions	$ 3,340	$ 10,407	$ 5,739

Description of Business and Basis of Presentation

12 Months Ended

May 31, 2012

Description of Business and Basis of Presentation

Description of Business and Basis of Presentation

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 and public infrastructure. The Company combines industry-leading products and technologies, expertise in mechanical integrity (MI) and non-destructive testing (NDT) 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. Given the role the services of the Company play in ensuring the safe and efficient operation of infrastructure, the Company has historically provided a majority of its services to its customers on a regular, recurring basis. The Company serves a global customer base of companies with asset-intensive infrastructure, including companies in the oil and gas, fossil and nuclear power, alternative and renewable energy, public infrastructure, chemicals, aerospace and defense, transportation, primary metals and metalworking, pharmaceuticals and food processing industries.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Mistras Group, Inc. and its wholly or majority-owned subsidiaries. Where the Company’s ownership interest is less than 100%, the noncontrolling interests are reported in stockholders’ equity in the accompanying consolidated balance sheets. The noncontrolling interest in net income, net of tax, is classified separately in the accompanying consolidated statements of operations.

All significant intercompany accounts and transactions have been eliminated in consolidation. Mistras Group, Inc.’s and its subsidiaries’ fiscal years end on May 31 except for the companies in the International segment, which end on April 30. The effect of this difference in timing of reporting foreign operations on the consolidated results of operations and consolidated financial position is not significant. Reference to a fiscal year or a year, such as fiscal 2012, means the fiscal year ended May 31, 2012.

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.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 2-6
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Name Statement of Position (SOP)
-Publisher AICPA
-Number 94-6
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Name FASB Interpretation (FIN)
-Publisher FASB
-Number 46R
-Paragraph 4, 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section 50
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-URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18780-107790

Reference 5: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6359553&loc=d3e288-107754

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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6373374&loc=d3e70478-108055

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Reference 12: http://www.xbrl.org/2003/role/presentationRef
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Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Summary of Significant Accounting Policies

12 Months Ended

May 31, 2012

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Revenue Recognition

Revenue recognition policies for the various sources of revenues are as follows:

Services

The Company predominantly derives revenues by providing its services on a time and material basis and recognizes revenues when services are rendered. At the end of any reporting period, there may be earned but unbilled revenues that are accrued. The Company had $8.9 million and $2.9 million of unbilled revenues accrued for fiscal 2012 and 2011, respectively. Payments received in advance of services being rendered are reflected as deferred revenues, which are subsequently recognized as services rendered.

Software

Revenues from the sale of perpetual licenses are recognized upon the delivery and acceptance of the software. Revenues from term licenses are recognized ratably over the period of the license. Revenues from maintenance, unspecified upgrades and technical support are recognized ratably over the period such items are delivered. For multiple-element arrangement software contracts that include non-software elements, and where the software is essential to the functionality of the non-software elements (collectively referred to as software multiple-element arrangements), the Company applies the multiple element accounting principles as described below.

Products

Revenues from product sales are recognized when risk of loss and title passes to the customer. The exceptions to this accounting treatment would be for multiple-element arrangements (described below) or those situations where specialized installation or customer acceptance is required. Payments received in advance of revenue recognition are reflected as deferred revenues.

Percentage of Completion

A portion of the Company’s revenues are generated from engineering and manufacturing of custom products under long-term contracts that may last from several months to several years, depending on the contract. Revenues from long-term contracts are recognized on the percentage-of-completion method of accounting. Under the percentage-of-completion method of accounting revenues are recognized as work is performed. The percentage of completion at any point in time is based on total costs or total labor dollars incurred to date in relation to the total estimated costs or total labor dollars estimated at completion. The percentage of completion is then applied to the total contract revenue to determine the amount of revenue to be recognized in the period. Application of the percentage-of-completion method of accounting requires the use of estimates of costs to be incurred for the performance of the contract. Contract costs include all direct materials, direct labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs, and all costs associated with operation of equipment. The cost estimation process is based upon the professional knowledge and experience of the Company’s engineers, project managers and financial professionals. Factors that are considered in estimating the work to be completed include the availability and productivity of labor, the nature and complexity of the work to be performed, the effect of change orders, the availability of materials, the effect of any delays in project performance and the recoverability of any claims. Whenever revisions of estimated contract costs and 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.

Multiple-element Arrangements

The Company occasionally enters into transactions that represent multiple-element arrangements, which may include any combination of services, software, and hardware. When a sales arrangement contains multiple elements, such as hardware and services and/or software products, the Company allocates revenue to each element based on a selling price hierarchy. The selling price for a deliverable is based on its vendor specific objective evidence (VSOE) if available, third party evidence (TPE) if VSOE is not available, or estimated selling price (ESP) if neither VSOE nor TPE is available. The Company has historically utilized the VSOE due to the nature of its products. In multiple element arrangements where more-than-incidental software deliverables are included, revenue is allocated to each separate unit of accounting for each of the non-software deliverables and to the software deliverables as a group using the relative selling prices of each of the deliverables in the arrangement based on the aforementioned selling price hierarchy.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the accompanying consolidated financial statements. The more significant estimates include valuation of goodwill and intangible assets, useful lives of long-lived assets, allowances for doubtful accounts, inventory valuation, reserves for self-insured workers compensation and health benefits and provision for income taxes. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Accounts Receivable

Accounts receivable are stated net of an allowance for doubtful accounts and sales allowances. Outstanding accounts receivable balances are reviewed periodically, and allowances are provided at such time that management believes it is probable that such balances will not be collected within a reasonable period of time. The Company extends credit to its customers based upon credit evaluations in the normal course of business, primarily with 30-day terms. Bad debts are provided for based on historical experience and management’s evaluation of outstanding accounts receivable. Accounts are written off when they are deemed uncollectible.

Inventories

Inventories are stated at the lower of cost, as determined by using the first-in, first-out method, or market. Work in process and finished goods inventory include material, direct labor, variable costs and overhead.

Software Costs

Costs that are related to the conceptual formulation and design of licensed programs are expensed as research and engineering. For programs the Company licenses to customers, the Company capitalizes costs that are incurred to produce the finished product after technological feasibility has been established. The capitalized amounts are amortized using the straight-line basis over three years, which is the estimated life of the related software. The Company performs periodic reviews to ensure that unamortized program costs remain recoverable from future revenues. Costs to support or service these licensed programs are expensed as the costs are incurred.

The Company capitalizes certain costs that are incurred to purchase or to create and implement internal-use software, which includes software coding, installation, testing and data conversion. Capitalized costs are amortized on a straight-line basis over three years.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost. Depreciation of property, plant and equipment is computed utilizing the straight-line method over the estimated useful lives of the assets. Amortization of leasehold improvements is computed utilizing the straight-line method over the shorter of the remaining lease term or estimated useful life. The cost and accumulated depreciation and amortization applicable to assets retired or otherwise disposed of are removed from the asset accounts and any gain or loss is included in the consolidated statement of operations. Repairs and maintenance costs are expensed as incurred.

Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price over the fair market value of net assets of the acquired business at the date of acquisition. Goodwill is presumed to have an indefinite useful life and is tested, at least annually, for impairment at the reporting unit level. For purposes of the Company’s goodwill impairment testing, the Company has identified the reporting units as operating segments. Impairment exists when the carrying amount of goodwill exceeds its implied fair value. At May 31, 2012, the carrying amount of goodwill totaled $96.8 million. As discussed further below, the Company early adopted the FASB Accounting Standards Update (ASU) 2011-08, Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for Impairment, which permits an entity to make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step goodwill impairment test. For fiscal 2012, the Company’s qualitative assessment indicates that it was not more likely than not that the fair value of each reporting unit is less than its carrying amount and, therefore, the two-step goodwill impairment test was not required.

Intangible assets are recorded at cost. Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives.

Impairment of Long-lived Assets

The Company reviews the recoverability of its long-lived assets on a periodic basis in order to identify business conditions which may indicate a possible impairment. The assessment for potential impairment is based primarily on the Company’s ability to recover the carrying value of its long-lived assets from expected future undiscounted cash flows. If the total expected future undiscounted cash flows are less than the carrying amount of the assets, a loss is recognized for the difference between fair value (computed based upon the expected future discounted cash flows) and the carrying value of the assets.

Shipping and Handling Costs

Shipping and handling costs are included in cost of revenues.

Taxes Collected from Customers

Taxes collected from customers and remitted to governmental authorities are presented in the consolidated statements of operations on a net basis.

Research and Engineering

Research and product development costs are expensed as incurred.

Advertising, Promotions and Marketing

The costs for advertising, promotion and marketing programs are expensed as incurred and are included in selling, general and administrative expenses. Advertising expense was approximately $1.1 million, $0.8 million and $0.8 million for fiscal 2012, 2011 and 2010, respectively.

Fair Value of Financial Instruments

The Company includes disclosure of fair value information about financial instruments, whether or not recognized in the consolidated balance sheets, for which it is practicable to estimate that fair value. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and other financial current assets and liabilities approximate fair value based on the short-term nature of the items. The carrying value of the Company’s long-term debt approximates fair value since it amended its credit agreement on December 21, 2011, bringing the Company’s interest rate to current market rates. The fair value of the Company’s notes payable and capital lease obligations approximates their carrying amounts based on anticipated interest rates which management believes would currently be available to the Company for similar issues of debt. The Company’s contingent consideration liabilities related to its acquisitions are recorded at fair value using Level 3 fair value measurements (significant unobservable inputs). The fair value of these liabilities is determined using probability-weighted assessments of the likelihood of achievement for each respective acquisition agreement. These assessments are reviewed and adjusted, as necessary, on a quarterly basis.

Foreign Currency Translation

The financial position and results of operations of the Company’s foreign subsidiaries are measured using their functional currency, which in all cases presently, is the local currency. Assets and liabilities of the foreign subsidiaries are translated into the U.S. Dollar at the exchange rates in effect at the balance sheet date. Income and expenses are translated at the average exchange rate during the year. Translation gains and losses are reported as a component of other comprehensive income for the period and included in accumulated other comprehensive income within stockholders’ equity.

Foreign currency (gains) and losses arising from transactions denominated in currencies other than the Company’s or its subsidiary’s functional currency are included in net income and were approximately ($0.5) million, ($0.3) million and ($1.3) million in fiscal 2012, 2011 and 2010, respectively.

Derivative Financial Instruments

The Company recognizes its derivatives as either assets or liabilities, measures those instruments at fair value and recognizes the changes in fair value of the derivative in net income or other comprehensive income, as appropriate. In the past, the Company has hedged a portion of the variable rate interest payments on debt using interest rate swap contracts to convert variable payments into fixed payments. The Company does not apply hedge accounting to its interest rate swap contracts. Changes in the fair value of these instruments are reported as a component of interest expense. As of May 31, 2012 and 2011, the Company had no outstanding interest rate swap contracts.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. At times, cash deposits may exceed the limits insured by the Federal Deposit Insurance Corporation. The Company believes it is not exposed to any significant credit risk or risk of nonperformance of financial institutions.

The Company sells its services and products primarily to large companies, extends reasonably short duration payment terms, performs credit evaluations and does not require collateral. The Company maintains reserves for potential credit losses.

The Company has one customer, BP p.l.c. (BP), which accounted for 16%, 18% and 18% of revenues for fiscal 2012, 2011 and 2010, respectively. Accounts receivable from this customer was approximately 9% and 15% of total accounts receivable, net, at May 31, 2012 and 2011, respectively. The relationship with BP is comprised of separate contracts for non-destructive testing and inspection services with multiple affiliated entities within the broad BP organization. The Company conducts business with various divisions or affiliates of the BP organization through numerous contracts covering many segments of BP’s business including downstream (refinery), midstream (pipelines) and upstream (exploration). These contracts are typically negotiated locally with the specific location, are of varying lengths, have different start and end dates and differ in terms of the scope of work and nature of services provided. Most contracts are based on time and materials.

Self-Insurance

The Company is self-insured for certain losses relating to workers compensation and health benefits claims. The Company maintains third-party excess insurance coverage for all workers compensation and health benefit claims in excess of approximately $0.3 million to reduce its exposure from such claims. Self-insured losses are accrued when it is probable that an uninsured claim has been incurred but not reported and the amount of the loss can be reasonably estimated at the balance sheet date. Management monitors and reviews all claims and their related liabilities on an ongoing basis.

Equity-based Compensation

The Company measures the cost of employee services received in exchange for an award of equity instruments based upon the grant-date fair value of the award. The Company uses the “straight-line” attribution method for allocating compensation costs and recognizes the fair value of each equity award on a straight-line basis over the vesting period of the related awards.

The Company uses the Black-Scholes option-pricing model to estimate the fair value of the stock option awards as of the grant date. The Black-Scholes model, by its design, is highly complex and dependent upon key data inputs estimated by management. The primary data inputs with the greatest degree of judgment are the expected term of stock option awards and the estimated volatility of the Company’s common stock price. The Black-Scholes model is sensitive to changes in these two variables. Since the Company’s initial public offering (IPO), the expected term of the Company’s stock options is generally determined using the mid-point between the vesting period and the end of the contractual term. Expected stock price volatility is typically based on the daily historical trading data for a period equal to the expected term. Because the Company’s historical trading data only dates back to October 8, 2009, the first trading date after its IPO, the Company has estimated expected volatility using an analysis of the stock price volatility of comparable peer companies. Prior to the Company’s IPO, the exercise price equaled the estimated fair market value of the Company’s common stock, as determined by its board of directors. Since the Company’s IPO, the exercise price of stock option grants is determined using the closing market price of the Company’s common stock on the date of grant.

The fair value of stock option awards was estimated at the date of grant using the Black-Scholes option-pricing model with the following range of assumptions:

	For the years ended May 31,
	2012		2011		2010

Dividend yield	0.0	%	0.0	%	0.0	%
Expected volatility	37	%	44	%	44	%
Risk-free interest rate	1.1	%	2.6	%	1.9%-3.0	%
Expected term (years)	6.3		6.3		4.0-6.3

The fair value of the Company’s stock awards, including restricted stock units, is determined using the closing market price of the Company’s common stock on the date of grant.

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.

Income tax 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 are recognized as incurred within “provision for income taxes” in the consolidated statements of operations.

Comprehensive Income

Comprehensive income is defined to include all changes in equity, except those resulting from investments by stockholders and distribution to stockholders, and is reported in the statement of stockholders’ equity (deficit). Included in the Company’s comprehensive income are net income and foreign currency translation adjustments.

Recent Accounting Pronouncements

In October 2009, the FASB issued Accounting Standards Update (ASU) 2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements (a consensus of the FASB Emerging Issues Task Force), which requires companies to allocate the overall consideration in multiple-element arrangements to each deliverable by using a best estimate of the selling price of individual deliverables in the arrangement in the absence of vendor-specific objective evidence or other third-party evidence of the selling price. Effective June 1, 2011, the Company adopted, on a prospective basis, the provisions of this updated accounting standard related to revenue recognition associated with contractual arrangements involving multiple elements. The adoption of this pronouncement did not have a material impact on the Company’s consolidated financial statements.

In April 2010, the FASB issued ASU 2010-17, Revenue Recognition—Milestone Method (Topic 605): Milestone Method of Revenue Recognition (a consensus of the FASB Emerging Issues Task Force). ASU 2010-17 provides guidance on applying the milestone method to milestone payments for achieving specified performance measure when those payments are related to uncertain future events limited to transactions involving research and development. Entities can make an accounting policy election to recognize arrangement consideration received for achieving specified performance measures during the period in which the milestones are achieved, provided certain criteria are met. Effective June 1, 2011, the Company adopted, on a prospective basis, the provisions of this updated accounting standard related to milestones. The adoption of this pronouncement did not have a material impact on the Company’s consolidated financial statements.

In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. ASU 2011-05 allows an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This authoritative guidance eliminates the option to present the components of other comprehensive income as part of the statement of equity. ASU 2011-05 does not change the items that must be reported in other comprehensive income, when an item of other comprehensive income must be reclassified to net income, or the Company’s option to present components of other comprehensive income either net of related tax effects or before related tax effects, nor does it affect how earnings per share is calculated or presented. ASU 2011-05 requires retrospective application, and it is effective for fiscal years and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted. The Company does not expect that the adoption of this pronouncement will have a material impact on the Company’s consolidated financial statements.

In September 2011, the FASB issued ASU 2011-08, Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for Impairment. ASU 2011-08 permits an entity to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is concluded that this is the case, it is then necessary to perform the currently prescribed two-step goodwill impairment test. Otherwise, the two-step goodwill impairment test is not required. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed in fiscal years beginning after December 15, 2011. Early adoption is permitted. The Company elected to early adopt this guidance in fiscal 2012. The adoption of this pronouncement did not have a material impact on the Company’s financial condition or results of operations.

Earnings per Share

12 Months Ended

May 31, 2012

Earnings per Share

Earnings per Share

3. Earnings per Share

Basic earnings per share is computed by dividing net income attributable to common shareholders by the weighted average number of shares outstanding during the period. Diluted earnings per share is computed by dividing net income attributable to common shareholders by the sum of (1) the weighted average number of shares of common stock outstanding during the period, and (2) the dilutive effect of assumed conversion of equity awards using the treasury stock method. For fiscal 2010, the amount of net income (numerator) used in the computation of diluted earnings per share did not include preferred stock accretion as such accretion provided an anti-dilutive effect. With respect to the number of weighted average shares outstanding (denominator), diluted shares reflects: (i) only the exercise of options to acquire common stock to the extent that the options’ exercise prices are less than the average market price of common shares during the period and (ii) the pro forma vesting of restricted stock units.

The following table sets forth the computations of basic and diluted earnings per share:

	For the year ended May 31,
	2012		2011		2010

Basic earnings per share
Numerator:
Net income attributable to common shareholders	$	21,353	$	16,431	$	16,928
Denominator
Weighted average common shares outstanding	27,839		26,724		21,744
Basic earnings per share	$	0.77	$	0.61	$	0.78

Diluted earnings per share:
Numerator:
Net income attributable to common shareholders	$	21,353	$	16,431	$	10,429
Denominator
Weighted average common shares outstanding	27,839		26,724		21,744
Dilutive effect of stock options outstanding	737		173		298
Dilutive effect of restricted stock units outstanding	109		36		—
Dilutive effect of conversion of preferred shares			—		2,388
	28,685		26,933		24,430
Diluted earnings per share	$	0.74	$	0.61	$	0.43

The following common shares and equivalents related to options outstanding under the Company’s stock option plans were excluded from the computation of diluted earnings per share as the effect would have been anti-dilutive:

	For the year ended May 31,
	2012	2011	2010

Common stock equivalents attributable to stock options outstanding	5	2,154	2,252
Total shares	5	2,154	2,252

Accounts Receivable, net

12 Months Ended

May 31, 2012

Accounts Receivable, net

Accounts Receivable, net

4. Accounts Receivable, net

Accounts receivable consist of the following:

	May 31,
	2012			2011

Trade accounts receivable	$	106,821		$	79,800
Allowance for doubtful accounts	(2,306		)	(1,769		)
Accounts receivable, net	$	104,515		$	78,031

- Definition

The entire disclosure for claims held for amounts due a company. Examples include trade accounts receivables, notes receivables, loans receivables.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 3, 4
-Article 5

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 7
-Article 9

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 01-6
-Paragraph 13
-Subparagraph d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 4
-Section 08
-Paragraph k

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.3,4)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

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-Name Accounting Standards Codification
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-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6965416&loc=d3e5074-111524

Reference 7: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6965416&loc=d3e5066-111524

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
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-Paragraph 1
-Subparagraph (SX 210.4-08.(k))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=6965416&loc=d3e5162-111524

+ Details

Inventories, net

12 Months Ended

May 31, 2012

Inventories, net

Inventories, net

5. Inventories, net

Inventories consist of the following:

	May 31,
	2012		2011

Raw materials	$	3,054	$	2,832
Work in process	2,232		1,531
Finished goods	4,287		3,623
Supplies	2,919		1,844
Inventory, net	$	12,492	$	9,830

Inventories are net of reserves for slow-moving and obsolete inventory of approximately $1.2 million and $1.0 million at May 31, 2012 and 2011, respectively.

Property, Plant and Equipment, net

12 Months Ended

May 31, 2012

Property, Plant and Equipment, net

Property, Plant and Equipment, net

6. Property, Plant and Equipment, net

Property, plant and equipment consist of the following:

	Useful Life	May 31,
	(Years)	2012			2011

Land		$	1,892		$	2,210
Building and improvements	30-40	16,950			14,779
Office furniture and equipment	5-8	6,760			5,006
Machinery and equipment	5-7	105,096			80,587
		130,698			102,582
Accumulated depreciation and amortization		(67,171		)	(53,414		)
Property, plant and equipment, net		$	63,527		$	49,168

Depreciation expense was approximately $16.4 million, $13.5 million and $10.9 million for the years ended May 31, 2012, 2011 and 2010, respectively.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References + Details

Goodwill

12 Months Ended

May 31, 2012

Goodwill.

Goodwill

7. Goodwill

The changes in the carrying amount of goodwill are as follows:

	May 31,
	2012			2011

Balance at June 1,	$	64,146		$	44,315
Goodwill acquired during the year	34,857			19,435
Foreign currency translation	(2,184		)	396

Balance at May 31,	$	96,819		$	64,146

Acquisitions

12 Months Ended

May 31, 2012

Acquisitions

Acquisitions

8. Acquisitions

The Company completed the acquisition of eleven companies during fiscal 2012. These acquisitions were for asset protection companies specializing in advanced ultrasonic inspection, NDT services and inspection, ultrasonic testing (UT) and acoustic emission (AE) products and systems, and in-house component inspection. These companies were acquired to complement the service and product offerings within the Services, Products and Systems, and International segments. Three of the acquired companies were asset purchases that met the definition of “acquisitions of businesses” under the provision of FASB Accounting Standards Codification (ASC) 805-10-20. In the remaining acquisitions, the Company acquired 100% of the common stock of the acquirees. Seven of the acquired companies have been integrated into the International segment; three of the acquired companies have been integrated into the Services segment; and one of the acquired companies has been integrated into the Products and Systems segment. In addition to the cash and debt consideration related to the acquisitions completed in fiscal 2012, the Company accrued a liability of approximately $8.5 million as of May 31, 2012, which represents the estimated fair value of contingent consideration expected to be payable in the event that certain of the acquired companies achieve specific performance metrics over the next four years of operations. The total potential contingent consideration for acquisitions completed in fiscal 2012 ranges from zero to $9.9 million as of May 31, 2012.

Assets and liabilities of the acquired businesses were included in the consolidated balance sheets as of May 31, 2012 based on their estimated fair value on the date of acquisition as determined in a purchase price allocation, using available information and making assumptions management believes are reasonable. The Company is still in the process of completing its valuation of the intangible assets of six acquisitions completed in fiscal 2012. These valuations and purchase price allocations are expected to be finalized prior to the end of the Company’s first quarter of fiscal 2013. The results of operations of each of the acquisitions completed in fiscal 2012 are included in each respective operating segment’s results of operations from the date of acquisition. The Company’s allocation of purchase price for these acquisitions is included in the table below. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition:

	2012			2011

Number of entities	11			5

Cash paid	$	30,453		$	26,195
Subordinated notes issued	3,348			10,387
Contingent consideration	10,625			4,649

Purchase price	$	44,426		$	41,231

Current (liabilities) assets acquired	(5,773		)	924
Debt and other long-term liabilities	(9,106		)	(1,120		)
Property, plant and equipment	14,260			6,365
Deferred tax (liability) asset	(1,746		)	80
Intangibles	11,934			15,664
Goodwill	34,857			19,435
Less: noncontrolling interest	—			(117		)
Net assets acquired	$	44,426		$	41,231

The amortization period for intangible assets acquired in fiscal 2012 ranges from two to twelve years. The Company recorded approximately $34.9 million of goodwill in connection with its fiscal 2012 acquisitions, reflecting the strategic fit and revenue and earnings growth potential of these businesses. For acquisitions completed prior to fiscal 2012, substantially all of the goodwill recognized is expected to be deductible for tax purposes. However, a significant portion of the goodwill recorded in fiscal 2012 relates to the acquisition of the common stock of the acquiree, which is generally not deductible for tax purposes.

Revenue included in the consolidated statement of operations for fiscal 2012 from these acquisitions for the period subsequent to the closing of each transaction was approximately $28.4 million. Income from operations included in the consolidated statement of operations for fiscal 2012 from these acquisitions for the period subsequent to the closing of each transaction was approximately $0.7 million.

The unaudited pro forma information for the periods set forth below gives effect to the fiscal 2012 acquisitions as if they had occurred at the beginning of each period presented. The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisitions been consummated as of that time (unaudited, in thousands):

	For the years ended May 31,
	2012		2011
Revenues	$	502,581	$	398,128

Income from operations	$	33,244	$	28,431

During fiscal 2012, the Company incurred acquisition-related costs of $1.8 million in connection with due diligence, professional fees, and other expenses for its fiscal 2012 acquisition activity. Additionally, the Company adjusted the fair value of certain acquisition-related contingent consideration liabilities. For the year ended May 31, 2012, these adjustments resulted in a net decrease of approximately $0.5 million to the Company’s acquisition-related contingent consideration liabilities, which were approximately $13.1 million as of May 31, 2012 and recorded on the balance sheet in accrued expenses and other liabilities and other long-term liabilities. These adjustments also resulted in a corresponding net increase to income from operations of approximately $0.5 million for the year ended May 31, 2012. Both the fair value adjustments to acquisition-related contingent consideration liabilities and the acquisition-related expenses have been classified as acquisition-related costs in the statement of operations for fiscal 2012. Acquisition-related costs for the Company’s fiscal 2011 and 2010 acquisition activity were insignificant.

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 88-16
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141
-Paragraph 51, 52
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Appendix F
-Paragraph F4
-Subparagraph e

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Paragraph 67-73
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 30
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6911361&loc=d3e6927-128479

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
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-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6972119&loc=d3e1490-128463

Reference 7: http://www.xbrl.org/2003/role/presentationRef
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-SubTopic 20
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Reference 10: http://www.xbrl.org/2003/role/presentationRef
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Reference 14: http://www.xbrl.org/2003/role/presentationRef
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Reference 15: http://www.xbrl.org/2003/role/presentationRef
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Reference 19: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Intangible Assets

12 Months Ended

May 31, 2012

Intangible Assets

Intangible Assets

9. Intangible Assets

The gross carrying amount and accumulated amortization of intangible assets are as follows:

		May 31,
		2012							2011
	Useful Life (Years)	Gross Amount		Accumulated Amortization			Net Carrying		Gross Amount		Accumulated Amortization			Net Carrying

Software	3-15	$	13,177	$	(6,691	)	$	6,486	$	12,425	$	(6,207	)	$	6,218
Customer relationships	5-7	45,050		(21,642		)	23,408		36,305		(17,609		)	18,696
Covenants not to compete	2-5	7,969		(7,167		)	802		7,605		(6,754		)	851
Other	2-5	6,177		(2,404		)	3,773		3,782		(2,243		)	1,539
Total		$	72,373	$	(37,904	)	$	34,469	$	60,117	$	(32,813	)	$	27,304

Amortization expense for the years ended May 31, 2012, 2011 and 2010 was approximately $5.6 million, $5.0 million and $4.2 million, respectively, including amortization of software for the years ended May 31, 2012, 2011 and 2010 of $0.3 million, $0.4 million and $0.5 million, respectively.

Amortization expense in each of the five years and thereafter subsequent to May 31, 2012 related to the Company’s intangible assets is expected to be as follows:

2013	$	7,092
2014	6,513
2015	5,920
2016	4,618
2017	3,173
Thereafter	7,153

Total	$	34,469

Accrued Expenses and Other Current Liabilities

12 Months Ended

May 31, 2012

Accrued Expenses and Other Current Liabilities

Accrued Expenses and Other Current Liabilities

10. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following:

	May 31,
	2012		2011

Accrued salaries, wages and related employee benefits	$	17,195	$	12,066
Contingent consideration	2,371		1,587
Accrued worker compensation and health benefits	3,678		6,471
Deferred revenues	5,390		2,039
Other accrued expenses		10,700	5,865
Total accrued expenses and other liabilities	$	39,334	$	28,028

Long-Term Debt

12 Months Ended

May 31, 2012

Long-Term Debt

Long-Term Debt

11. Long-Term Debt

Long-term debt consists of the following:

	May 31,
	2012			2011
Senior credit facility:
Revolver	$	25,000		$	3,850
Notes payable	12,532			15,808
Other	2,697			2,193
	40,229			21,851
Less: Current maturities	(5,971		)	(7,226		)
Long-term debt, net of current maturities	$	34,258		$	14,625

Senior Credit Facility

In December 2011, the Company entered into a Third Amended and Restated Credit Agreement (Credit Agreement) with Bank of America, N.A., as agent for the lenders and a lender, and JPMorgan Chase Bank, N.A., Keybank National Association and TD Bank, N.A., as lenders. The Credit Agreement provides the Company with a $125.0 million revolving line of credit, which, under certain circumstances, can be increased to $150.0 million. The Credit Agreement has a maturity date of December 20, 2016. The Company may borrow up to $30.0 million in non-U.S. Dollar currencies and use up to $10.0 million of the credit limit for the issuance of letters of credit. In December 2011, outstanding borrowings under the former credit agreement were repaid in full using proceeds from the Credit Agreement. As of May 31, 2012, there were outstanding borrowings of $25.0 million and a total of $1.9 million of outstanding letters of credit under the current revolving credit facility.

Loans under the Credit Agreement bear interest at LIBOR plus an applicable LIBOR margin ranging from 1% to 2%, or a base rate less a margin of 1.25% to 0.25%, at the option of the Company, or based upon the Company’s Funded Debt Leverage Ratio. Funded Debt Leverage Ratio is generally the ratio of (1) all outstanding indebtedness for borrowed money and other interest-bearing indebtedness as of the date of determination to (2) EBITDA (which is (a) net income, less (b) income (or plus loss) from discontinued operations and extraordinary items, plus (c) income tax expenses, plus (d) interest expense, plus (e) depreciation, depletion, and amortization (including non-cash loss on retirement of assets), plus (f) stock compensation expense, less (g) cash expense related to stock compensation, plus or minus certain other adjustments) for the period of four consecutive fiscal quarters immediately preceding the date of determination. The Company has the benefit of the lowest margin if its Funded Debt Leverage Ratio is equal to or less than 0.5 to 1, and the margin increases as the ratio increases, to the maximum margin if the ratio is greater than 2.5 to 1. The Company will also bear additional costs for market disruption, regulatory changes effecting the lenders’ funding costs, and default pricing of an additional 2% interest rate margin if the Funded Debt Leverage Ratio exceeds 3.0 to 1. Amounts borrowed under the Credit Agreement are secured by liens on substantially all of the assets of the Company.

The Credit Agreement contains financial covenants requiring that the Company maintain a Funded Debt Leverage Ratio of less than 3.0 to 1 and an Interest Coverage Ratio of at least 3.0 to 1. Interest Coverage Ratio means the ratio, as of any date of determination, of (a) EBITDA for the 12 month period immediately preceding the date of determination, to (b) all interest, premium payments, debt discount, fees, charges and related expenses of the Company and its subsidiaries in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, paid during the 12 month period immediately preceding the date of determination. The Credit Agreement also limits the Company’s ability to, among other things, create liens, make investments, incur more indebtedness, merge or consolidate, make dispositions of property, pay dividends and make distributions to stockholders, enter into a new line of business, enter into transactions with affiliates and enter into burdensome agreements. The Credit Agreement does not limit the Company’s ability to acquire other businesses or companies except that the acquired business or company must be in its line of business, the Company must be in compliance with the financial covenants on a pro forma basis after taking into account the acquisition, and, if the acquired business is a separate subsidiary, in certain circumstances the lenders will receive the benefit of a guaranty of the subsidiary and liens on its assets and a pledge of its stock.

During the year ended May 31, 2012, the Company capitalized approximately $0.6 million of costs related to the new credit agreement and expensed approximately $0.1 million of deferred financing costs related to its former credit facility. Also during the year, the Company recorded a $0.8 million gain related to the early extinguishment of debt assumed in an acquisition. The accelerated amounts expensed and gain on early extinguishment are classified as gain on extinguishment of long-term debt in the consolidated statement of operations.

Notes Payable and Other Debt

In connection with acquisitions through fiscal 2012, the Company issued subordinated notes payable to the sellers. The maturity of these notes range from three to five years from the date of acquisition with interest rates ranging from 0% to 7%. The Company has discounted certain of these obligations to reflect a 3.5% to 10.0% market interest rate. Unamortized discount on the notes was approximately $0.1 million as of May 31, 2012 and 2011. Amortization is recorded as interest expense in the consolidated statements of operations.

Scheduled principal payments due under all borrowing agreements in each of the five years and thereafter subsequent to May 31, 2012 are as follows:

2013	$	5,971
2014	3,663
2015	3,034
2016	2,093
2017	25,081
Thereafter	387

Total	$	40,229

Obligations under Capital Leases

12 Months Ended

May 31, 2012

Obligations under Capital Leases

Obligations under Capital Leases

12. Obligations under Capital Leases

The Company leases certain office space, including its headquarters, and service equipment under capital leases, requiring monthly payments ranging from $1 thousand to $72 thousand, including effective interest rates that range from approximately 1% to 9% expiring through May 2018. The net book value of assets under capital lease obligations was $5.9 million and $14.4 million at May 31, 2012 and 2011, respectively.

Scheduled future minimum lease payments subsequent to May 31, 2012 are as follows:

2013	$	7,017
2014	6,071
2015	4,140
2016	2,470
2017	811
Thereafter	224
Total Minimum Lease Payments	20,733
Less: amount representing interest	(1,688		)
Present value of minimum lease payments	19,045
Less: current portion of obligations under capital leases	(5,951		)

Obligations under capital leases, net of current portion	$	13,094

Commitments and Contingencies

12 Months Ended

May 31, 2012

Commitments and Contingencies

Commitments and Contingencies

13. Commitments and Contingencies

Operating Leases

The Company is party to various noncancelable lease agreements, primarily for its international and domestic office and lab space. Minimum future lease payments under noncancelable operating leases in each of the five years and thereafter subsequent to May 31, 2012 are as follows:

2013	$	3,493
2014	2,437
2015	1,725
2016	1,035
2017	587
Thereafter	2,287

Total	$	11,564

Total rent expense was $5.4 million, $4.2 million and $3.2 million for the years ended May 31, 2012, 2011 and 2010, respectively.

Litigation

The Company is subject to periodic lawsuits, investigations and claims that arise in the ordinary course of business. Although the Company cannot predict with certainty the ultimate resolution of lawsuits, investigations and claims asserted against it, the Company does not believe that any currently pending legal proceeding to which the Company is a party will have a material adverse effect on its business, results of operations, cash flows or financial condition. The costs of defense and amounts that may be recovered in such matters may be covered by insurance.

The Company was a defendant in two related purported class action lawsuits in California, based upon alleged violations of California labor and employment law: Quiroz v. Mistras Group, Inc., et al, U.S. District Court, Central District of California (Case No. CV09-7146 PSG), filed in September 2009, and Ballard v. Mistras Group, Inc., et al, U.S. District Court, Central District of California (Case No. 2:10-cv-03186 (PSG)), filed in March 2010. The settlement for these cases received final court approval in August 2011. The Company incurred a $0.4 million charge during the year ended May 31, 2011 for these cases.

Acquisition-related contingencies

The Company is liable for contingent consideration in connection with certain of its acquisitions. As of May 31, 2012, total potential acquisition-related contingent consideration ranged from zero to $19.1 million and would be payable upon the achievement of specific performance metrics by certain of the acquired companies over the next four years of operations. See Note 8 to these consolidated financial statements for further discussion of the Company’s acquisitions.

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 9, 10, 11, 12
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.25)
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-SubTopic 10
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-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6398077&loc=d3e12565-110249

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
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-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6394976&loc=d3e25287-109308

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6449706&loc=d3e16207-108621

+ Details

Employee Benefit Plans

12 Months Ended

May 31, 2012

Employee Benefit Plans

Employee Benefit Plans

14. Employee Benefit Plans

The Company provides a 401(k) savings plan for eligible U.S. based employees. Employee contributions are discretionary up to the IRS limits each year and catch up contributions are allowed for employees 50 years of age or older. Under the 401(k) plan, employees become eligible to participate on the first day of the month after six months of continuous service. Under this plan, the Company matches 50% of the employee’s contributions up to 6% of the employee’s annual compensation, as defined by the plan. There is a five-year vesting schedule for the Company match. The Company’s contribution to the plan was approximately $2.1 million, $1.9 million and $1.4 million for the years ended May 31, 2012, 2011 and 2010, respectively.

The Company participates with other employers in contributing to a union plan, which covers certain U.S. based union employees. The plan is not administered by the Company and contributions are determined in accordance with provisions of a collective bargaining agreement. The Company’s contributions to the plan were approximately $0.1 million in each of the years ended May 31, 2012, 2011 and 2010. The Company has benefit plans covering certain employees in selected foreign countries. Amounts charged to expense under these plans were not significant in any year.

Income Taxes

12 Months Ended

May 31, 2012

Income Taxes

Income Taxes

15. Income Taxes

Income before provision for income taxes is as follows:

	For the year ended May 31,
	2012		2011		2010

Income before provision for income taxes from:
U.S. operations	$	27,951	$	22,422	$	14,557
Foreign operations	5,686		4,416		2,422

Earnings before income taxes	$	33,637	$	26,838	$	16,979

The provision for income taxes consists of the following:

	For the year ended May 31,
	2012			2011			2010

Current
Federal	$	8,792		$	5,921		$	3,797
States and local	1,762			1,589			1,044
Foreign	2,042			1,444			890
Reserve for uncertain tax positions	47			(231		)	(112		)
Total current	12,643			8,723			5,619
Deferred
Federal	216			2,036			883
States and local	105			(359		)	453
Foreign	(359		)	85			(230		)
Total deferred	(38		)	1,762			1,106
Net change in valuation allowance	(314		)	17			(198		)
Net deferred	(352		)	1,779			908
Provision for income taxes	$	12,291		$	10,502		$	6,527

The provision for income taxes differs from the amount computed by applying the statutory federal tax rate to income tax as follows:

	For the year ended May 31,
	2012					2011					2010

Federal tax at statutory rate	$	11,773		35.0	%	$	9,393		35.0	%	$	5,943		35.0	%
State taxes, net of federal benefit	1,213			3.6	%	799			2.9	%	987			5.8	%
Foreign tax at lower rates	(307		)	(0.9	)%	(16		)	(0.1	)%	(189		)	(1.1	)%
Permanent differences	(98		)	(0.3	)%	585			2.2	%	255			1.5	%
Other	24			0.0	%	(276		)	(1.0	)%	(271		)	(1.6	)%
Change in valuation allowance	(314		)	(0.9	)%	17			0.1	%	(198		)	(1.2	)%

Total provision for income taxes	$	12,291		36.5	%	$	10,502		39.1	%	$	6,527		38.4	%

Deferred income tax attributes resulting from differences between financial accounting amounts and income tax basis of assets and liabilities are as follows:

	May 31,
	2012			2011

Deferred income tax assets
Allowance for doubtful accounts	$	941		$	560
Inventory	490			444
Intangible assets	5,144			4,919
Accrued expenses	2,670			782
Net operating loss carryforward	3,757			102
Capital lease obligation	587			797
Stock-based compensation	3,314			2,032
Other	65			193
Deferred income tax assets	16,968			9,829
Valuation allowance	(4,491		)	(31		)
Net deferred income tax assets	12,477			9,798
Deferred income tax liabilities
Property and equipment	(7,675		)	(7,078		)
Goodwill	(4,907		)	(3,655		)
Intangible assets	(2,607		)	(226		)
Other	(304		)	(424		)
Deferred income tax liabilities	(15,493		)	(11,383		)
Net deferred income taxes	$	(3,016	)	$	(1,585	)

At May 31, 2012, the Company has recorded a valuation allowance against certain state and foreign deferred income tax assets based on its assessment that the respective deferred income tax assets would not be realized. As of May 31, 2012, the Company has available state net operating losses of approximately $1.0 million with expiration dates starting in fiscal 2015.

The following table summarizes the changes in the Company’s gross unrecognized tax benefits, excluding interest and penalties:

	For the year ended May 31,
	2012		2011			2010
Balance at June 1	375		$	502		$	558
Additions for tax positions related to the current fiscal year	24		31			—
Additions for tax positions related to prior years	44		54			111
Decreases for tax positions related to prior years	(22	)	(119		)	—
Current year acquisitions	561		—			—
Reductions related to the expiration of statutes of limitations	(11	)	(93		)	(167		)
Balance at May 31	971		375			502

The Company has recorded the unrecognized tax benefits in other long-term liabilities in the consolidated balance sheets as of May 31, 2012, 2011 and 2010. As of May 31, 2012, 2011 and 2010, there were approximately $1.2 million, $0.4 million, and $0.6 million of unrecognized tax benefits, respectively, including penalties and interest that if recognized would favorably affect the effective tax rate. Interest and penalties related to unrecognized tax benefits are recorded in income tax expense and are not significant for the years ending May 31, 2012, 2011 and 2010. The Company does not anticipate material changes to its unrecognized tax benefits within the next year.

The Company has not recognized U.S. tax expense on its undistributed international earnings of approximately $4.3 million and $2.9 million for fiscal 2012 and 2011, respectively, since it intends to indefinitely reinvest these earnings outside the United States. Any additional U.S. income taxes incurred would be reduced by available foreign tax credits. If the earnings of such foreign subsidiaries were not indefinitely reinvested, a deferred tax liability may have been required.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 43, 44, 45, 46, 47, 48, 49
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319

Reference 5: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(h))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
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-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319

+ Details

Capitalization

12 Months Ended

May 31, 2012

Capitalization

Capitalization

16. Capitalization

Common Stock

In October 2009, the Company completed its initial public offering of 10,000,000 shares of common stock at a price of $12.50 per share. The Company sold 6,700,000 shares and received net proceeds of approximately $74.0 million from the offering. The Company used approximately $68.0 million of the net proceeds to repay the outstanding principal balance of the term loan ($25.0 million), outstanding balance of the revolver ($41.4 million) and accrued interest thereon ($0.1 million) in October 2009, as well as approximately $1.5 million to pay costs and expenses related to the offering. The remaining proceeds of approximately $6.0 million were used in connections with acquisitions the Company has made and for working capital purposes.

In May 2011, the Company completed a secondary offering of 3,754,061 shares of common stock at a price of $16.00 per share. The Company sold 989,660 shares and 2,764,401 shares were sold by a selling stockholder. The Company received net proceeds of approximately $14.7 million from the offering. The Company used the net proceeds for general corporate purposes including the reduction of outstanding indebtedness, acquisitions, capital expenditures and working capital.

Dividends on common stock will be paid when, and if declared by the board of directors. Each holder of common stock is entitled to vote on all matters and is entitled to one vote for each share held.

Preferred Stock

Prior to its IPO in October 2009, the Company completed several private placements of its Class A and Class B preferred stock. These preferred shares included various redemption and conversion features and were reported outside the equity section and adjusted to fair value, which represented their redemption value at each reporting date. Effective upon the closing of the IPO, all of the preferred shares outstanding as of the offering were converted to common stock.

Equity Awards

In September 2009, the Company’s board of directors and shareholders adopted and approved the 2009 Long-Term Incentive Plan (the 2009 Plan), which became effective upon the closing of the IPO. Awards granted under the 2009 Plan may be in the form of stock options, restricted stock units and other forms of stock-based incentives, including stock appreciation rights and deferred stock rights. The term of each incentive and non-qualified stock option is ten years. Vesting generally occurs over a period of four years, the expense for which is recorded on a straight-line basis over the requisite service period. The 2009 Plan allows for the grant of awards of up to approximately 2,286,000 shares of common stock, of which 1,699,000 shares were available for future grants as of May 31, 2012. Prior to the Company’s IPO in October 2009, the Company had two stock option plans: (i) the 1995 Incentive Stock Option and Restricted Stock Purchase Plan (the 1995 Plan), and (ii) the 2007 Stock Option Plan (the 2007 Plan). No additional awards may be granted from these two plans. As of May 31, 2012, there was an aggregate of approximately 2,549,000 stock options outstanding and approximately 442,000 unvested restricted stock units outstanding under the 2009 Plan, the 2007 Plan, and the 1995 Plan.

For the fiscal year ended May 31, 2012, 2011 and 2010, the Company recognized stock-based compensation expense related to stock option awards of approximately $3.2 million, $3.3 million and $2.7 million, respectively. As of May 31, 2012, there was approximately $3.8 million of unrecognized compensation costs, net of estimated forfeitures, related to stock option awards, which are expected to be recognized over a remaining weighted average period of 1.2 years. Cash proceeds from, and the aggregate intrinsic value of, stock options exercised during the years ended May 31, 2012, 2011 and 2010 were as follows:

	For the year ended May 31,
	2012		2011		2010

Cash proceeds from options exercised	$	2,484	$	95	$	78
Aggregate intrinsic value of options exercised	4,439		97		2,167

A summary of the stock option activity, weighted average exercise prices, options outstanding and exercisable as of May 31, 2012 is as follows (in thousands, except per share amounts):

	For the year ended May 31,
	2012				2011				2010
	Common Stock Options		Weighted Average Exercise Price		Common Stock Options		Weighted Average Exercise Price		Common Stock Options		Weighted Average Exercise Price

Outstanding at beginning of year:	2,867		$	12.27	2,925		$	12.29	940		$	6.81
Granted	5		$	22.35	35		$	10.03	2,219		$	13.48
Exercised	(307	)	$	8.07	(11	)	$	8.35	(205	)	$	0.38
Expired or forfeited	(16	)	$	7.69	(82	)	$	12.77	(29	)	$	9.54
Outstanding at end of year:	2,549		$	12.82	2,867		$	12.27	2,925		$	12.29

	For the year ended May 31,
	2012			2011			2010
Options exercisable at end of year		1,339			952			263
Weighted average grant date fair value (per share) of options granted during the period		$	8.46		$	4.47		$	5.10

			For the year ended May 31, 2012
			Options Outstanding			Options Exercisable
Range of Exercise Prices	Total Options Outstanding		Weighted Average Remaining Life (Years)	Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price

$6.15-$13.08	439		6.5	$	9.62	308		$	9.29
$13.09-$22.35	2,110		7.3	$	13.50	1,031		$	13.46

	2,549					1,339

Aggregate Intrinsic Value	$	24,765				$	13,442

The Company also recognized approximately $1.9 million and $0.5 million in stock-based compensation expense related to restricted stock unit awards during the fiscal year ended May 31, 2012 and May 31, 2011, respectively. There was no such expense incurred in fiscal 2010. As of May 31, 2012, there were approximately $5.6 million of unrecognized compensation costs, net of estimated forfeitures, related to restricted stock unit awards, which are expected to be recognized over a remaining weighted average period of 2.9 years.

In October 2011, the Company granted approximately 9,000 shares of fully-vested common stock to its five non-employee directors, in connection with its non-employee director compensation plan. These shares had a grant date fair value of approximately $0.2 million, which was recorded as stock-based compensation expense during the year ended May 31, 2012.

During the year ended May 31, 2012, approximately 52,000 restricted stock units vested, the fair value of which was $0.5 million. Upon vesting, restricted stock units are generally net share-settled to cover the required withholding tax and the remaining amount is converted into an equivalent number of shares of common stock. The restricted stock units that vested in fiscal 2012 were net-share settled such that the Company withheld shares with value equivalent to the employees’ minimum statutory obligation for the applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. The Company withheld approximately 16,000 shares based on the value of the restricted stock units on their vesting date as determined by the Company’s closing stock price. Total payments for the employees’ tax obligations to the taxing authorities were $0.3 million and are reflected as a financing activity within the consolidated statements of cash flows. These net-share settlements had the effect of share repurchases by the Company as they reduced and retired the number of shares that otherwise would have been issued as a result of the vesting and did not represent an expense to the Company.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
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-Number 12
-Paragraph 10
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-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Article 3

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-Number 43
-Chapter 1
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-Paragraph 7, 11A
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+ Details

Related Party Transactions

12 Months Ended

May 31, 2012

Related Party Transactions

Related Party Transactions

17. Related Party Transactions

The Company leases its headquarters under a capital lease (Note 12) from a shareholder and officer of the Company requiring monthly payments through October 2014. Total rent payments made during fiscal 2012 was approximately $0.8 million.

The Company has a lease for office space located in France, which is partly owned by a shareholder and officer, requiring monthly payment through January 2016. Total rent payments made during fiscal 2012 was approximately $0.2 million.

- Definition

The entire disclosure for related party transactions, including the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
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-Number 210
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+ Details

Segment Disclosure

12 Months Ended

May 31, 2012

Segment Disclosure

Segment Disclosure

18. Segment Disclosure

The Company’s three operating segments are:

· Services. This segment provides asset protection solutions primarily in North America with the largest concentration in the United States, consisting primarily of non-destructive testing and inspection services that are used to evaluate the structural integrity and reliability of critical energy, industrial and public infrastructure.

· Products and Systems. This segment designs, manufactures, sells, installs and services the Company’s asset protection products and systems, including equipment and instrumentation, predominantly in the United States.

· International. This segment offers services, products and systems similar to those of the Company’s other segments to global markets, principally in Europe, the Middle East, Africa, Asia and South America, but not to customers in China and South Korea, which are served by the Products and Systems segment.

Allocations for general corporate services, including accounting, audit, and contract management, that are provided to the segments are reported within Corporate and eliminations. Sales to the International segment from the Products and Systems segment and subsequent sales by the International segment of the same items are recorded and reflected in the operating performance of both segments. Additionally, engineering charges and royalty fees charged to the Services and International segments by the Products and Systems segment are reflected in the operating performance of each segment. All such intersegment transactions are eliminated in the Company’s consolidated financial reporting.

The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies in Note 2. Segment income from operations is determined based on internal performance measures used by the Chief Executive Officer, who is the chief operating decision maker, to assess the performance of each business in a given period and to make decisions as to resource allocations. In connection with that assessment, the Chief Executive Officer may exclude matters such as charges for stock-based compensation and certain other acquisition-related charges and balances, technology and product development costs, certain gains and losses from dispositions, and litigation settlements or other charges. Certain general and administrative costs such as human resources, information technology and training are allocated to the segments. Segment income from operations also excludes interest and other financial charges and income taxes. Corporate and other assets are comprised principally of cash, deposits, property, plant and equipment, domestic deferred taxes, deferred charges and other assets. Corporate loss from operations consists of depreciation on the corporate office facilities and equipment, administrative charges related to corporate personnel and other charges that cannot be readily identified for allocation to a particular segment.

Selected financial information by segment for the periods shown was as follows:

	For the year ended May 31,
	2012			2011			2010

Revenues (1)
Services	$	349,793		$	283,139		$	227,782
Products and Systems	40,083			26,105			18,875
International	59,466			36,798			30,920
Corporate and eliminations	(12,467		)	(7,453		)	(5,449		)
	$	436,875		$	338,589		$	272,128

(1) Revenues by operating segment include intercompany transactions, which are eliminated in Corporate and eliminations. The Services segment had sales to other operating segments of $2.8 million, $1.4 million and $0.5 million for fiscal 2012, 2011 and 2010, respectively. The Products and Systems segment had sales to other operating segments of $9.1 million, $4.4 million and $4.4 million for fiscal 2012, 2011 and 2010, respectively. The International segment had sales to other operating segments of $0.9 million, $0.3 million and $0.6 million for fiscal 2012, 2011 and 2010, respectively.

	For the year ended May 31,
	2012			2011			2010

Gross profit
Services	$	94,413		$	77,883		$	61,963
Products and Systems	18,578			13,239			9,915
International	19,106			12,922			11,668
Corporate and eliminations	(2,407		)	(641		)	(408		)
	$	129,690		$	103,403		$	83,138

Gross profit by operating segment includes intercompany transactions, which are eliminated in Corporate and eliminations.

	For the year ended May 31,
	2012			2011			2010

Income from operations
Services	$	40,069		$	31,856		$	22,614
Products and Systems	8,742			5,123			2,572
International	3,325			3,539			3,008
Corporate and eliminations	(15,367		)	(10,907		)	(7,297		)
	$	36,769		$	29,611		$	20,897

Operating income by operating segment includes intercompany transactions, which are eliminated in Corporate and eliminations.

	For the year ended May 31,
	2012		2011		2010

Depreciation and amortization
Services	$	17,763	$	15,979	$	12,862
Products and Systems	1,831		1,083		887
International	2,342		1,396		1,308
Corporate and eliminations	88		134		126
	$	22,024	$	18,592	$	15,183

	May 31,
	2012		2011

Intangible assets, net
Services	$	17,180	$	15,900
Products and Systems	10,095		10,250
International	6,390		771
Corporate and eliminations	804		383
	$	34,469	$	27,304

	May 31,
	2012		2011

Goodwill
Services	$	58,746	$	51,745
Products and Systems	13,592		10,557
International	24,481		1,844
	$	96,819	$	64,146

	May 31,
	2012		2011

Long-lived assets
Services	$	120,846	$	109,978
Products and Systems	24,242		23,235
International	47,825		6,504
Corporate and eliminations	1,902		901
	$	194,815	$	140,618

	May 31,
	2012			2011

Total assets
Services	$	204,209		$	188,693
Products and Systems	43,914			36,450
International	82,579			26,431
Corporate and eliminations	(886		)	(2,937		)
	$	329,816		$	248,637

Revenues by geographic area

Revenues by geographic area were as follows:

	For the year ended May 31,
	2012		2011		2010

Revenues
United States	$	336,081	$	277,585	$	223,808
Other Americas	40,337		25,338		16,366
Europe	42,820		25,192		20,454
Asia-Pacific	17,637		10,474		11,500
	$	436,875	$	338,589	$	272,128

No individual foreign country or region accounted for a material portion of the Company’s revenues for disclosure purposes. No individual foreign country or region, with the exception of the Company’s subsidiaries in Brazil, had a material amount of our long-lived assets. Long-lived assets in Brazil, including property, plant, and equipment, intangible assets, and goodwill, accounted for approximately $20.9 million, or 11%, of the Company’s long-lived assets as of May 31, 2012. No individual foreign country’s revenues or long-lived assets were material for disclosure purposes as of May 31, 2011.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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-Number 131
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+ Details

Selected Quarterly Financial Information (unaudited)

12 Months Ended

May 31, 2012

Selected Quarterly Financial Information (unaudited)

Selected Quarterly Financial Information (unaudited)

19. Selected Quarterly Financial Information (unaudited)

The following is a summary of the quarterly results of operations for the years ended May 31, 2012 and 2011:

Fiscal quarter ended	May 31, 2012		February 29, 2012		November 30, 2011			August 31, 2011		May 31, 2011			February 28, 2011		November 30, 2010		August 31, 2010

Revenues	$	127,090	$	104,118	$	114,220		$	91,447	$	102,129		$	79,213	$	88,837	$	68,410
Cost of Revenues	85,252		70,574		75,263			60,527		66,422			53,156		57,734		44,668
Depreciation	4,367		3,960		3,742			3,500		3,487			3,460		3,295		2,964
Gross Profit	37,471		29,584		35,215			27,420		32,220			22,597		27,808		20,778
Selling, general and administrative expense	23,533		20,806		19,378			19,381		18,884			16,005		15,615		15,479
Research and engineering	290		578		602			589		512			514		569		555
Depreciation and amortization	1,668		1,805		1,503			1,479		1,497			1,385		1,326		1,178
Acquisition-related costs	799		849		(339		)	—		—			—		—		—
Legal reserve	—		—		—			—		(78		)			101		250
Income from operations	11,181		5,546		14,071			5,971		11,405			4,693		10,197		3,316
Net income	$	7,132	$	3,037	$	7,956		$	3,228	$	6,718		$	2,443	$	5,678	$	1,592
Earnings per common share:
Basic	$	0.25	$	0.11	$	0.29		$	0.12	$	0.25		$	0.09	$	0.21	$	0.06
Diluted	$	0.25	$	0.11	$	0.28		$	0.11	$	0.25		$	0.09	$	0.21	$	0.06

- Definition

The entire disclosure for the quarterly financial data in the annual financial statements. The disclosure may include a tabular presentation of financial information for each fiscal quarter for the current and previous year, including revenues, gross profit, income or loss before extraordinary items and earnings per share data. It also includes an indication if the information in the note is unaudited, comments on the aggregate effect of year-end adjustments, and an explanation of matters or transactions that affect comparability or are pertinent to an understanding of the information furnished.

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