PRINCETON JUNCTION, N.J., Aug. 5, 2015 (GLOBE NEWSWIRE) -- Mistras Group, Inc. (NYSE:MG), a leading "one source" global provider of technology-enabled asset protection solutions, today reported financial results for its fourth quarter and entire fiscal year 2015, which ended May 31, 2015. Revenues for the fourth quarter of fiscal 2015 were $174.7 million, 2.5% less than the prior year's fourth quarter. Adverse foreign exchange rates reduced fourth quarter revenues by $9.3 million. Revenues for the fourth quarter of fiscal 2015 increased by 2.7% on a constant dollar basis. Net income for the fourth quarter of fiscal 2015 was $2.2 million, or $0.07 per diluted share, compared with net income of $6.4 million or $0.22 per diluted share in the prior year period. During the fourth quarter of fiscal year 2015 the Company recognized $3.7 million ($0.13 per diluted share) of net of tax charges relating to several important structural changes. These charges totaled $4.7 million on a pre-tax basis as follows: Excluding these charges, net income in the fourth quarter of fiscal year 2015 was $5.9 million, or $0.20 per diluted share. Adjusted EBITDA was $17.7 million in the fourth quarter of fiscal year 2015, compared with $19.3 million in the prior year period. For the entire fiscal year 2015, revenues increased 14.1%, reaching $711.3 million. Net income was $16.1 million, or $0.54 per diluted share, compared with $22.5 million or $0.77 per diluted share in the prior year. Excluding fiscal 2015 structural charges, net income for fiscal year 2015 was $20.0 million or $0.68 per diluted share. Adjusted EBITDA was $71.7 million for fiscal year 2015 compared with $70.4 million in the prior fiscal year. Financial Highlights: Gross Profit Operating Cash Flow The Company's operations and profitability were adversely impacted in fiscal year 2015 by the Nation's first refinery strike in 25 years and by uncertainty related to the price of oil, which caused some customers to defer previously scheduled projects. Despite these adverse factors, the Company's Services and Products and Systems segments combined to grow their revenues by $95 million (20%) and their Adjusted EBITDA by $10.0 million (15%), respectively, during fiscal year 2015. These gains were a result of strong execution in a difficult environment, highlighted by close collaboration with customers and a focus on reducing costs. In contrast, the Company's International segment experienced declines in revenues of $14 million, or (9%), and Adjusted EBITDA of $7 million, or (49%), respectively, during fiscal year 2015. Adverse foreign exchange rates accounted for most of the revenue decline, while a misalignment of staffing resources with market demand was the biggest factor in the profit decline. Sotirios Vahaviolos, Chairman and Chief Executive Officer stated, "Fiscal year 2015 was a year of mixed performance, both for the market and for our Company. The combined impact of the oil price drop and the refinery strikes abruptly halted market growth during our third quarter. Despite these difficulties, Our North American results met our expectations, as the Mistras value proposition continued to be very compelling to our customers and our team executed well. Operating cash flows improved by $14 million during fiscal year 2015 and we paid down more than $40 million of debt in the second half of the fiscal year. However, we were disappointed with our International segment results. Most of this segment's 9% revenue decline was due to foreign exchange, but market conditions were also softer than we expected, particularly in Russia and Brazil, and our utilization of billable service technicians suffered in these and in other markets." Dr. Vahaviolos continued, "As market conditions worsened, we had hundreds of conversations with our customers to ensure that we are in alignment with their needs and priorities. We became acutely aware of the market's desire for value and lower spending. These conversations caused us to intensify our internal efforts and take the difficult actions mentioned earlier in this press release. Going forward, Mistras will focus on serving vibrant markets where we can make a dramatic difference for our customers and generate terrific results." Dr. Vahaviolos concluded, "On the whole, I am pleased with our North American performance and I am very confident that our structural changes will have a positive and immediate impact upon the Company's performance, particularly overseas." Planning Assumptions and Guidance for Fiscal 2016 The Company is introducing its planning assumptions and guidance for fiscal year 2016. The market price of petroleum products continues to be volatile, influenced by both economic and political factors. Against this backdrop, the Company expects the market price of oil will approximate $55 during its fiscal year, and that the market for inspection services will be roughly flat. Foreign exchange rates fell significantly during fiscal 2015 and the U.S. dollar rose against every major currency. For example, at its present levels the Euro is approximately 12% lower than in fiscal year 2015. The Company's planning assumption is that foreign exchange rates will remain near present levels. Total revenues for fiscal year 2016 are expected to be between $710 million and $725 million, representing an increase over 2015 of from 0% to 2%, including the expected adverse impact of FX and dispositions, or 2% to 4% exclusive of these factors. Assumptions include: Total Adjusted EBITDA is expected to be between $72 million and $78 million, representing an increase of from 1% to 9% over fiscal year 2015 results. Conference Call In connection with this release, Mistras will hold a conference call on Thursday, August 6, 2015 at 9:00 a.m. (Eastern). Individuals in the U.S. wishing to participate in the conference call by phone may call 1-844-832-7227 and use confirmation code 92985495 when prompted. The International dial-in number is 1-224-633-1529. The call will be also be webcast and can be accessed on Mistras' website, www.mistrasgroup.com. About Mistras Group, Inc. Mistras offers one of the broadest "one source" services and technology-enabled asset protection solution portfolios in the industry used to evaluate the structural integrity of energy, industrial and public infrastructure. Mission critical services and solutions are delivered globally and provide customers with the ability to extend the useful life of their assets, improve productivity and profitability, comply with government safety and environmental regulations and enhance risk management operational decisions. Mistras uniquely combines its industry leading products and technologies - 24/7 on-line monitoring of critical assets; mechanical integrity ("MI") and non-destructive testing ("NDT") services; destructive testing services; and its proprietary world class data warehousing and analysis software - to provide comprehensive and competitive products, systems and services solutions from a single source provider. For more information, please visit the company's website at www.mistrasgroup.com. Forward-Looking and Cautionary Statements Certain statements made in this press release are "forward-looking statements" about Mistras' financial results and estimates, products and services, business model, strategy, growth opportunities, profitability and competitive position, and other matters. These forward-looking statements generally use words such as "future," "possible," "potential," "targeted," "anticipate," "believe," "estimate," "expect," "intend," "plan," "predict," "project," "will," "may," "should," "could," "would" and other similar words and phrases. Such statements are not guarantees of future performance or results, and will not necessarily be accurate indications of the times at, or by which, such performance or results will be achieved, if at all. These statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in these statements. A list, description and discussion of these and other risks and uncertainties can be found in the "Risk Factors" section of the Company's Annual Report on Form 10-K for fiscal year 2014 filed with the Securities and Exchange Commission on August 8, 2014, as updated by our reports on Form 10-Q and Form 8-K. The forward-looking statements are made as of the date hereof, and Mistras undertakes no obligation to update such statements as a result of new information, future events or otherwise. * Use of Non-GAAP Measures The term "Adjusted EBITDA" used in this release is a financial measurement not calculated in accordance with generally accepted accounting principles in the U.S. ("US GAAP"). A Reconciliation of Adjusted EBITDA to a comparable financial measurement under US GAAP is set forth in a table attached to this press release. In addition, the Company has also included in the attached tables, non-GAAP measurements "EBITDA", "Segment and Total Company Income from Operations before Acquisition-Related Expense (Benefit), net", "Net Income Excluding Structural Charges" and "Diluted EPS Excluding Structural Charges," reconciling these measurements to financial measurements under US GAAP. In this release, the term free cash flow, a non-GAAP measurement is also used. We define free cash flow as cash provided by operating activities less capital expenditures (which is classified as an investing activity). The Company believes that investors and other users of the financial statements benefit from the presentation of these non-GAAP measurements because they provide additional metrics to compare the Company's operating performance on a consistent basis and measure underlying trends and results of the Company's business.Revenue Growth Rates: Total Acquisitions Organic FX Total Company Q4 (2.5)% +7.0% (4.3)% (5.2)% Year +14.1% +12.0% +4.2% (2.1)% Services Segment Q4 +4.7% +9.6% (3.9)% (1.0)% Year +21.9% +16.3% +6.1% (0.4)% International Segment Q4 (23.7)% +0.5% (5.1)% (19.1)% Year (8.9)% +1.5% (3.6)% (6.8)% Products and Systems Segment Q4 — — (19.4)% — Year — — (6.8)% — Mistras Group, Inc. and Subsidiaries Unaudited Condensed Consolidated Balance Sheets (in thousands, except share and per share data) May 31, 2015 May 31, 2014 ASSETS Current Assets Cash and cash equivalents $ 10,555 $ 10,020 Accounts receivable, net 133,228 137,824 Inventories 10,841 11,376 Deferred income taxes 5,144 3,283 Prepaid expenses and other current assets 11,698 12,626 Total current assets 171,466 175,129 Property, plant and equipment, net 79,256 77,811 Intangible assets, net 51,276 57,875 Goodwill 166,414 130,516 Deferred income taxes 1,208 1,344 Other assets 2,107 1,297 Total assets $ 471,727 $ 443,972 LIABILITIES AND EQUITY Current Liabilities Accounts payable $ 10,529 $ 14,978 Accrued expenses and other current liabilities 55,914 54,650 Current portion of long-term debt 17,902 8,058 Current portion of capital lease obligations 8,646 7,251 Income taxes payable 532 1,854 Total current liabilities 93,523 86,791 Long-term debt, net of current portion 95,557 68,590 Obligations under capital leases, net of current portion 10,717 13,664 Deferred income taxes 16,984 15,521 Other long-term liabilities 9,934 17,014 Total liabilities 226,715 201,580 Commitments and contingencies Equity Preferred stock, 10,000,000 shares authorized — — Common stock, $0.01 par value, 200,000,000 shares authorized 287 284 Additional paid-in capital 208,064 201,831 Retained earnings 57,581 41,500 Accumulated other comprehensive loss (21,113) (1,511) Total Mistras Group, Inc. stockholders' equity 244,819 242,104 Noncontrolling interests 193 288 Total equity 245,012 242,392 Total liabilities and equity $ 471,727 $ 443,972 Mistras Group, Inc. and Subsidiaries Unaudited Condensed Consolidated Statements of Income (in thousands, except per share data) Three months ended May 31, Year ended May 31, 2015 2014 2015 2014 Revenues: 174,686 179,127 711,252 623,447 Cost of revenues 124,263 128,050 506,281 432,695 Depreciation 5,457 4,688 20,238 17,809 Gross profit 44,966 46,389 184,733 172,943 Selling, general and administrative expenses 38,820 33,348 143,978 123,690 Research and engineering 599 809 2,521 2,995 Depreciation and amortization 3,050 2,891 13,048 10,620 Acquisition-related (benefit), net (2,130) (1,127) (5,167) (2,657) Income from operations 4,627 10,468 30,353 38,295 Interest expense 1,204 883 4,622 3,192 Income before provision for income taxes 3,423 9,585 25,731 35,103 Provision for income taxes 1,283 3,153 9,740 12,528 Net income 2,140 6,432 15,991 22,575 Less: net loss (income) attributable to noncontrolling interests, net of taxes 31 (13) 90 (57) Net income attributable to Mistras Group, Inc. $ 2,171 $ 6,419 $ 16,081 $ 22,518 Earnings per common share Basic $ 0.08 $ 0.23 $ 0.56 $ 0.79 Diluted $ 0.07 $ 0.22 $ 0.54 $ 0.77 Weighted average common shares outstanding: Basic 28,703 28,446 28,613 28,365 Diluted 29,594 29,479 29,590 29,324 Mistras Group, Inc. and Subsidiaries Unaudited Operating Data by Segment (in thousands) Three months ended May 31, Year ended May 31, 2015 2014 2015 2014 Revenues Services $ 135,573 $ 129,435 $ 540,224 $ 443,229 International 32,343 42,363 146,953 161,395 Products and Systems 8,667 10,745 31,255 33,544 Corporate and eliminations (1,897) (3,416) (7,180) (14,721) $ 174,686 $ 179,127 $ 711,252 $ 623,447 Three months ended May 31, Year ended May 31, 2015 2014 2015 2014 Gross profit Services $ 33,749 $ 30,301 $ 135,201 $ 114,182 International 6,777 11,394 34,572 44,893 Products and Systems 4,111 4,719 14,314 14,495 Corporate and eliminations 329 (25) 646 (627) $ 44,966 $ 46,389 $ 184,733 $ 172,943 Mistras Group, Inc. and Subsidiaries Unaudited Reconciliation of Segment and Total Company Income (Loss) from Operations before Acquisition-Related Expense (Benefit), net (non-GAAP) to Segment and Total Company Income (Loss) from Operations (GAAP) (in thousands) Three months ended May 31, Year ended May 31, 2015 2014 2015 2014 Services: Income from operations before acquisition-related (benefit) expense, net $ 11,684 $ 11,685 $ 48,503 $ 44,846 Acquisition-related (benefit) expense, net (1,250) 1,162 (639) 1,625 Income from operations 12,934 10,523 49,142 43,221 International: (Loss) Income from operations before acquisition-related (benefit) expense, net $ (2,605) $ 1,260 $ (3,501) $ 6,786 Acquisition-related (benefit) expense, net (867) 214 (2,926) (3,452) (Loss) Income from operations (1,738) 1,046 (575) 10,238 Products and Systems: Income from operations before acquisition-related (benefit), net $ 1,131 $ 1,405 $ 2,461 $ 1,517 Acquisition-related (benefit), net — — — (1,035) Income from operations 1,131 1,405 2,461 2,552 Corporate and Eliminations: Loss from operations before acquisition-related (benefit) expense, net $ (7,713) $ (5,009) $ (22,277) $ (17,511) Acquisition-related (benefit) expense, net (13) (2,503) (1,602) 205 Loss from operations (7,700) (2,506) (20,675) (17,716) Total Company Income from operations before acquisition-related (benefit), net $ 2,497 $ 9,341 $ 25,186 $ 35,638 Acquisition-related (benefit), net (2,130) (1,127) (5,167) (2,657) Income from operations 4,627 10,468 30,353 38,295 Mistras Group, Inc. and Subsidiaries Unaudited Summary Cash Flow Information (in thousands) Year ended May 31, 2015 2014 Net cash provided by (used in): Operating Activities $ 50,624 $ 36,873 Investing Activities (49,941) (38,005) Financing Activities 481 3,262 Effect of exchange rate changes on cash (629) 88 Net change in cash and cash equivalents $ 535 $ 2,218 Mistras Group, Inc. and Subsidiaries Unaudited Reconciliation of Net Income to EBITDA and Adjusted EBITDA (in thousands) Three months ended May 31, Year ended May 31, 2015 2014 2015 2014 Net Income $ 2,140 $ 6,432 $ 15,991 $ 22,575 Less: net income attributable to noncontrolling interests, net of taxes 31 (13) 90 (57) Net income attributable to Mistras Group, Inc. $ 2,171 $ 6,419 $ 16,081 $ 22,518 Interest expense 1,204 883 4,622 3,192 Provision for income taxes 1,283 3,153 9,740 12,528 Depreciation and amortization 8,507 7,579 33,286 28,429 EBITDA $ 13,165 $ 18,034 $ 63,729 $ 66,667 Share-based compensation expense 1,723 2,248 6,579 6,261 Acquisition-related expense, net (2,130) (1,127) (5,167) (2,657) Charges related to sale of foreign operations 2,516 — 2,516 — Severance costs 1,144 — 1,587 — Foreign exchange losses 260 189 1,474 101 Lease termination and other charges 1,029 — 1,029 — Adjusted EBITDA $ 17,707 $ 19,344 $ 71,747 $ 70,372 Mistras Group, Inc. and Subsidiaries Unaudited Reconciliation of Net Income (GAAP) and Diluted Earnings Per Share (GAAP) to Net Income Excluding Structural Charges (non-GAAP) and Diluted EPS Excluding Structural Charges (non-GAAP) (in thousands) Three months ended May 31, Year ended May 31, 2015 2014 2015 2014 Net income (GAAP) $ 2,140 $ 6,432 $ 15,991 $ 22,575 Charges related to sale of foreign operations, net of tax 2,235 — 2,235 — Severance costs, net of tax 793 — 1,109 — Asset write-offs and lease terminations, net of tax 711 — 711 — Net Income Excluding Structural Charges (non-GAAP) $ 5,879 $ 6,432 $ 20,046 $ 22,575 Diluted earnings per common share (GAAP) $ 0.07 $ 0.22 $ 0.54 $ 0.77 Expected loss on sale of foreign operations 0.08 $ — 0.08 $ — Severance costs 0.03 $ — 0.04 $ — Asset write-offs and lease terminations 0.02 $ — 0.02 $ — Diluted EPS Excluding Structural Charges (non-GAAP) $ 0.20 $ 0.22 $ 0.68 $ 0.77 CONTACT: Nestor S. Makarigakis,
Group Director of Marketing Communications
marcom@mistrasgroup.com
1(609)716-4000
Country Websites
Business Websites