Significantly Improved Quarterly Operating Profit and Net Income Growth
Fourth quarter Gross Profit expands 130 basis points, Operating Income increases 152%
2022 Full Year
Continued deleveraging, with
Highlights of the Fourth Quarter 2022*
- Revenue of
$168.2 million , met the mid-point of management’s most recent guidance - Gross profit of
$50.9 million , with gross profit margin of 30.3%, a 130 basis points increase - Income from Operations of
$5.8 million , a 151.9% increase - Net Income of
$2.8 million or$0.09 per diluted share, both up significantly
Highlights of the Full Year 2022*
- Revenue of
$687.4 million , up 1.5%, yet a 3.7% organic increase excluding the impact of unfavorable foreign currency exchange** - Gross profit of
$198.2 million , up 0.5% with gross profit margin of 28.8% - Income from Operations of
$19.8 million , a 9.0% increase - Net Income of
$6.5 million or$0.21 per diluted share, up 68.4% and 61.5%, respectively
* All comparisons are consolidated and versus the equivalent prior year period, unless otherwise noted.
** Foreign currency exchange impact is calculated by converting current period financial results in local currency, using the prior period exchange rates, and comparing this amount to the current period financial results in local currency using the current period exchange rate.
For the fourth quarter of 2022 consolidated revenue was 168.2 million, a 1.7% decline, yet an 0.8% increase excluding the impact of unfavorable foreign currency exchange of
For the full year, revenue of
Chief Executive Officer
Performance by certain segments during the fourth quarter was as follows:
Services segment fourth quarter revenues were
International segment fourth quarter revenues were
The Company generated
The Company’s net debt (total debt less cash and cash equivalents) was
Outlook for 2023
The Company is providing its preliminary full year guidance for 2023. Based on current market conditions, the Company anticipates 2023 full year revenue between
Conference Call
In connection with this release, MISTRAS will hold a conference call on
To listen to the live webcast of the conference call, visit the Investor Relations section of MISTRAS Group’s website at www.mistrasgroup.com.
Note there is a new process to participate in the live question and answer session. Individuals wishing to participate may preregister at: https://register.vevent.com/register/BI1780b91802aa42619006d0a2f8719dab.
Upon registering, a dial-in number and unique PIN will be provided to join the conference call. Following the conference call, an archived webcast of the event will be available for one year by visiting the Investor Relations section of MISTRAS Group’s website.
About
Backed by an innovative, data-driven asset protection portfolio, proprietary technologies, and decades-long legacy of industry leadership, MISTRAS leads clients in the oil and gas, aerospace and defense, power generation, civil infrastructure, and manufacturing industries towards achieving and maintaining operational excellence. By supporting these organizations that help fuel our vehicles and power our society; inspecting components that are trusted for commercial, defense, and space craft; and building real-time monitoring equipment to enable safe travel across bridges, MISTRAS helps the world at large.
MISTRAS enhances value for its clients by integrating asset protection throughout supply chains and centralizing integrity data through a suite of Industrial IoT-connected digital software and monitoring solutions. The company’s core capabilities also include non-destructive testing (“NDT”) field inspections enhanced by advanced robotics, laboratory quality control and assurance testing, sensing technologies and NDT equipment, asset and mechanical integrity engineering services, and light mechanical maintenance and access services.
For more information about how MISTRAS helps protect civilization’s critical infrastructure, visit www.mistrasgroup.com or contact
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 2021 Annual Report on Form 10-K dated
Use of Non-GAAP Measures
In addition to financial information prepared in accordance with generally accepted accounting principles in the
Unaudited Consolidated Balance Sheets
(in thousands, except share and per share data)
2022 | 2021 | ||||||
ASSETS | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 20,488 | $ | 24,110 | |||
Accounts receivable, net | 123,657 | 109,511 | |||||
Inventories | 13,556 | 12,686 | |||||
Prepaid expenses and other current assets | 10,181 | 15,031 | |||||
Total current assets | 167,882 | 161,338 | |||||
Property, plant and equipment, net | 77,561 | 86,578 | |||||
Intangible assets, net | 49,015 | 59,381 | |||||
199,635 | 205,439 | ||||||
Deferred income taxes | 779 | 2,174 | |||||
Other assets | 40,032 | 47,285 | |||||
Total Assets | $ | 534,904 | $ | 562,195 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities | |||||||
Accounts payable | $ | 12,532 | $ | 12,870 | |||
Accrued expenses and other current liabilities | 77,844 | 83,863 | |||||
Current portion of long-term debt | 7,425 | 20,162 | |||||
Current portion of finance lease obligations | 4,201 | 3,765 | |||||
Income taxes payable | 1,726 | 755 | |||||
Total current liabilities | 103,728 | 121,415 | |||||
Long-term debt, net of current portion | 183,826 | 182,403 | |||||
Obligations under finance leases, net of current portion | 10,045 | 9,752 | |||||
Deferred income taxes | 6,283 | 8,385 | |||||
Other long-term liabilities | 32,273 | 39,328 | |||||
Total Liabilities | $ | 336,155 | $ | 361,283 | |||
Commitments and contingencies | |||||||
Equity | |||||||
Preferred stock, 10,000,000 shares authorized | — | — | |||||
Common stock, | 298 | 295 | |||||
Additional paid-in capital | 243,031 | 238,687 | |||||
Accumulated Deficit | (11,489 | ) | (17,988 | ) | |||
Accumulated other comprehensive loss | (33,390 | ) | (20,311 | ) | |||
198,450 | 200,683 | ||||||
Non-controlling interests | 299 | 229 | |||||
Total Equity | 198,749 | 200,912 | |||||
Total Liabilities and Equity | $ | 534,904 | $ | 562,195 |
Unaudited Consolidated Statements of Income (Loss)
(in thousands, except per share data)
For the quarter ended | For the year ended | |||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||
Revenue | $ | 168,218 | $ | 171,163 | $ | 687,373 | $ | 677,131 | ||||||
Cost of revenue | 111,720 | 115,233 | 466,567 | 457,013 | ||||||||||
Depreciation | 5,559 | 6,336 | 22,633 | 22,971 | ||||||||||
Gross profit | 50,939 | 49,594 | 198,173 | 197,147 | ||||||||||
Selling, general and administrative expenses | 42,298 | 42,755 | 166,595 | 161,334 | ||||||||||
Bad debt provision for troubled customers, net of recoveries | (247 | ) | — | 42 | — | |||||||||
Legal settlement and litigation charges (benefit), net | — | 1,012 | (994 | ) | 2,042 | |||||||||
Research and engineering | 471 | 576 | 1,994 | 2,518 | ||||||||||
Depreciation and amortization | 2,603 | 2,880 | 10,661 | 11,950 | ||||||||||
Acquisition-related expense, net | 12 | 65 | 76 | 1,133 | ||||||||||
Income from operations | 5,802 | 2,306 | 19,799 | 18,170 | ||||||||||
Interest expense | 3,713 | 2,187 | 10,505 | 10,882 | ||||||||||
Income before provision (benefit) for income taxes | 2,089 | 119 | 9,294 | 7,288 | ||||||||||
Provision (benefit) for income taxes | (774 | ) | 208 | 2,720 | 3,395 | |||||||||
Net income (loss) | 2,863 | (89 | ) | 6,574 | 3,893 | |||||||||
Less: net income (loss) attributable to noncontrolling interests, net of taxes | 21 | 5 | 75 | 33 | ||||||||||
Net income (loss) attributable to | $ | 2,842 | $ | (94 | ) | $ | 6,499 | $ | 3,860 | |||||
Earnings per common share | ||||||||||||||
Basic | $ | 0.09 | $ | 0.00 | $ | 0.22 | $ | 0.13 | ||||||
Diluted | $ | 0.09 | $ | 0.00 | $ | 0.21 | $ | 0.13 | ||||||
Weighted average common shares outstanding: | ||||||||||||||
Basic | 29,983 | 29,637 | 29,901 | 29,572 | ||||||||||
Diluted | 30,258 | 30,138 | 30,229 | 30,130 |
Unaudited Operating Data by Segment
(in thousands)
For the quarter ended | For the year ended | ||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
Revenue | |||||||||||||||
Services | $ | 138,085 | $ | 141,136 | $ | 573,336 | $ | 555,387 | |||||||
International | 28,984 | 28,546 | 112,425 | 117,245 | |||||||||||
Products and Systems | 4,061 | 4,332 | 12,727 | 13,831 | |||||||||||
Corporate and eliminations | (2,912 | ) | (2,851 | ) | (11,115 | ) | (9,332 | ) | |||||||
$ | 168,218 | $ | 171,163 | $ | 687,373 | $ | 677,131 | ||||||||
For the quarter ended | For the year ended | ||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
Gross profit | |||||||||||||||
Services | $ | 40,701 | $ | 38,797 | $ | 159,049 | $ | 155,384 | |||||||
International | 8,267 | 8,004 | 33,591 | 34,282 | |||||||||||
Products and Systems | 1,976 | 2,346 | 5,490 | 7,001 | |||||||||||
Corporate and eliminations | (5 | ) | 447 | 43 | 480 | ||||||||||
$ | 50,939 | $ | 49,594 | $ | 198,173 | $ | 197,147 |
Unaudited Revenues by Category
(in thousands)
Revenue by industry was as follows:
Three Months Ended | Services | International | Products | Corp/Elim | Total | ||||||||||
Oil & Gas | $ | 86,474 | $ | 8,636 | $ | 123 | $ | — | $ | 95,233 | |||||
Aerospace & Defense | 12,369 | 4,308 | 68 | — | 16,745 | ||||||||||
Industrials | 9,668 | 5,835 | 812 | — | 16,315 | ||||||||||
Power Generation and Transmission | 8,619 | 1,799 | 624 | — | 11,042 | ||||||||||
Other | 8,561 | 3,716 | 5 | — | 12,282 | ||||||||||
Infrastructure, Research & Engineering | 4,658 | 1,930 | 1,505 | — | 8,093 | ||||||||||
Petrochemical | 5,304 | 123 | — | — | 5,427 | ||||||||||
Other | 2,432 | 2,637 | 924 | (2,912 | ) | 3,081 | |||||||||
Total | $ | 138,085 | $ | 28,984 | $ | 4,061 | $ | (2,912 | ) | $ | 168,218 |
Three Months Ended | Services | International | Products | Corp/Elim | Total | |||||||||||
Oil & Gas | $ | 82,296 | $ | 9,215 | $ | 170 | $ | — | $ | 91,681 | ||||||
Aerospace & Defense | 14,274 | 4,172 | 121 | — | 18,567 | |||||||||||
Industrials | 11,252 | 6,264 | 761 | — | 18,277 | |||||||||||
Power Generation and Transmission | 12,947 | 2,151 | 604 | — | 15,702 | |||||||||||
Other | 11,711 | 3,019 | (12 | ) | — | 14,718 | ||||||||||
Infrastructure, Research & Engineering | 1,330 | 2,019 | 1,208 | — | 4,557 | |||||||||||
Petrochemical | 3,003 | 36 | — | — | 3,039 | |||||||||||
Other | 4,323 | 1,670 | 1,480 | (2,851 | ) | 4,622 | ||||||||||
Total | $ | 141,136 | $ | 28,546 | $ | 4,332 | $ | (2,851 | ) | $ | 171,163 |
Year ended | Services | International | Products | Corp/Elim | Total | ||||||||||
Oil & Gas | 356,763 | 30,654 | 335 | — | 387,752 | ||||||||||
Aerospace & Defense | 61,475 | 18,763 | 314 | — | 80,552 | ||||||||||
Industrials | 38,197 | 23,703 | 2,083 | — | 63,983 | ||||||||||
Power Generation and Transmission | 31,197 | 8,304 | 2,603 | — | 42,104 | ||||||||||
Other | 40,778 | 14,021 | 28 | — | 54,827 | ||||||||||
Infrastructure, Research & Engineering | 15,283 | 7,946 | 3,994 | — | 27,223 | ||||||||||
Petrochemical | 15,360 | 536 | — | — | 15,896 | ||||||||||
Other | $ | 14,283 | $ | 8,498 | $ | 3,370 | $ | (11,115 | ) | $ | 15,036 | ||||
Total | $ | 573,336 | $ | 112,425 | $ | 12,727 | $ | (11,115 | ) | $ | 687,373 |
Year ended | Services | International | Products | Corp/Elim | Total | ||||||||||
Oil & Gas | 330,880 | 35,232 | 808 | — | 366,920 | ||||||||||
Aerospace & Defense | 51,593 | 16,513 | 286 | — | 68,392 | ||||||||||
Industrials | 41,873 | 24,000 | 1,842 | — | 67,715 | ||||||||||
Power Generation and Transmission | 39,966 | 9,927 | 2,853 | — | 52,746 | ||||||||||
Other | 38,742 | 12,593 | 64 | — | 51,399 | ||||||||||
Infrastructure, Research & Engineering | 16,809 | 11,496 | 3,985 | — | 32,290 | ||||||||||
Petrochemical | 19,378 | 227 | — | — | 19,605 | ||||||||||
Other | 16,146 | 7,257 | 3,993 | (9,332 | ) | 18,064 | |||||||||
Total | $ | 555,387 | $ | 117,245 | $ | 13,831 | $ | (9,332 | ) | $ | 677,131 |
Revenue by Oil & Gas Sub-category was as follows:
Three months ended | Year ended | ||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||
Oil and Gas Revenue by sub-category | |||||||||||
Upstream | 35,154 | 32,692 | 152,590 | 135,615 | |||||||
Midstream | 24,363 | 27,060 | 111,144 | 109,527 | |||||||
Downstream | 35,716 | 31,929 | 124,018 | 121,778 | |||||||
Total | $ | 95,233 | $ | 91,681 | $ | 387,752 | $ | 366,920 |
Unaudited Reconciliation of
Segment and Total Company Income (Loss) from Operations (GAAP) to Income (Loss) from Operations before
Special Items (non-GAAP)
(in thousands)
For the quarter ended | For the year ended | ||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
Services: | |||||||||||||||
Income from operations (GAAP) | $ | 14,301 | $ | 9,467 | $ | 49,616 | $ | 48,458 | |||||||
Bad debt provision for troubled customers, net of recoveries | (247 | ) | — | 42 | — | ||||||||||
Reorganization and other costs | 59 | 32 | 99 | 129 | |||||||||||
Legal settlement and insurance (recoveries) charges, net | — | — | (841 | ) | 1,650 | ||||||||||
Acquisition-related expense, net | — | 94 | 45 | 1,128 | |||||||||||
Income before special items (unaudited, non-GAAP) | $ | 14,113 | $ | 9,593 | $ | 48,961 | $ | 51,365 | |||||||
International: | |||||||||||||||
Income (loss) from operations (GAAP) | $ | 888 | $ | (319 | ) | $ | 3,566 | $ | 1,839 | ||||||
Reorganization and other costs | 71 | 300 | (43 | ) | 424 | ||||||||||
Legal settlement and insurance (recoveries) charges, net | — | 737 | — | 737 | |||||||||||
Income before special items (unaudited, non-GAAP) | $ | 959 | $ | 718 | $ | 3,523 | $ | 3,000 | |||||||
Products and Systems: | |||||||||||||||
Income (loss) from operations (GAAP) | $ | 342 | $ | 536 | $ | (992 | ) | $ | (117 | ) | |||||
Reorganization and other costs | — | — | — | 27 | |||||||||||
Income (loss) before special items (unaudited, non-GAAP) | $ | 342 | $ | 536 | $ | (992 | ) | $ | (90 | ) | |||||
Corporate and Eliminations: | |||||||||||||||
Loss from operations (GAAP) | $ | (9,729 | ) | $ | (7,378 | ) | $ | (32,391 | ) | $ | (32,010 | ) | |||
Legal settlement and insurance (recoveries) charges, net | — | 275 | (153 | ) | (345 | ) | |||||||||
Loss on debt modification | — | — | 693 | 278 | |||||||||||
Reorganization and other costs | — | 93 | 139 | 93 | |||||||||||
Acquisition-related expense, net | 12 | (29 | ) | 31 | 5 | ||||||||||
Loss before special items (unaudited, non-GAAP) | $ | (9,717 | ) | $ | (7,039 | ) | $ | (31,681 | ) | $ | (31,979 | ) | |||
Income from operations (GAAP) | $ | 5,802 | $ | 2,306 | $ | 19,799 | $ | 18,170 | |||||||
Bad debt provision for troubled customers, net of recoveries | (247 | ) | — | 42 | — | ||||||||||
Reorganization and other costs | 130 | 425 | 195 | 673 | |||||||||||
Legal settlement and insurance (recoveries) charges, net | — | 1,012 | (994 | ) | 2,042 | ||||||||||
Loss on debt modification | — | — | 693 | 278 | |||||||||||
Acquisition-related expense, net | 12 | 65 | 76 | 1,133 | |||||||||||
Income before special items (unaudited, non-GAAP) | $ | 5,697 | $ | 3,808 | $ | 19,811 | $ | 22,296 |
Unaudited Summary Cash Flow Information
(in thousands)
For the quarter ended | For the year ended | ||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
Net cash provided by (used in): | |||||||||||||||
Operating activities | $ | 15,875 | $ | 19,792 | $ | 26,406 | $ | 42,261 | |||||||
Investing activities | (3,361 | ) | (3,057 | ) | (12,238 | ) | (18,551 | ) | |||||||
Financing activities | (11,570 | ) | (14,379 | ) | (16,323 | ) | (23,245 | ) | |||||||
Effect of exchange rate changes on cash | 1,460 | (843 | ) | (1,467 | ) | (2,115 | ) | ||||||||
Net change in cash and cash equivalents | $ | 2,404 | $ | 1,513 | $ | (3,622 | ) | $ | (1,650 | ) |
Unaudited Reconciliation of
Net Cash Provided by Operating Activities (GAAP) to Free Cash Flow (non-GAAP)
(in thousands)
For the quarter ended | For the year ended | ||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
Net cash provided by operating activities (GAAP) | $ | 15,875 | $ | 19,792 | $ | 26,406 | $ | 42,261 | |||||||
Less: | |||||||||||||||
Purchases of property, plant and equipment | (3,541 | ) | (3,031 | ) | (12,591 | ) | (18,161 | ) | |||||||
Purchases of intangible assets | (245 | ) | (228 | ) | (825 | ) | (1,115 | ) | |||||||
Free cash flow (non-GAAP) | $ | 12,089 | $ | 16,533 | $ | 12,990 | $ | 22,985 |
Unaudited Reconciliation of
Gross Debt (GAAP) to Net Debt (non-GAAP)
(in thousands)
For the year ended | ||||||||
2022 | 2021 | |||||||
Current portion of long-term debt | $ | 7,425 | $ | 20,162 | ||||
Long-term debt, net of current portion | 183,826 | 182,403 | ||||||
Total Gross Debt (GAAP) | 191,251 | 202,565 | ||||||
Less: Cash and cash equivalents | (20,488 | ) | (24,110 | ) | ||||
Total Net Debt (non-GAAP) | $ | 170,763 | $ | 178,455 |
Unaudited Reconciliation of
Net Income (Loss) (GAAP) to Adjusted EBITDA (non-GAAP)
(in thousands)
For the quarter ended | For the year ended | |||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||
Net income (loss) | $ | 2,863 | $ | (89 | ) | $ | 6,574 | $ | 3,893 | |||||
Less: Net income attributable to noncontrolling interests, net of taxes | 21 | 5 | 75 | 33 | ||||||||||
Net income (loss) attributable to | $ | 2,842 | $ | (94 | ) | $ | 6,499 | $ | 3,860 | |||||
Interest expense | 3,713 | 2,187 | 10,505 | 10,882 | ||||||||||
Provision (benefit) for income taxes | (774 | ) | 208 | 2,720 | 3,395 | |||||||||
Depreciation and amortization | 8,162 | 9,216 | 33,294 | 34,921 | ||||||||||
Share-based compensation expense | 1,169 | 1,505 | 5,335 | 5,421 | ||||||||||
Reorganization and other related costs, net | 130 | 425 | 195 | 673 | ||||||||||
Legal settlement and insurance recoveries, net | — | 1,012 | (994 | ) | 2,042 | |||||||||
Acquisition-related expense, net | 12 | 65 | 76 | 1,133 | ||||||||||
Loss on debt modification | — | — | 693 | 278 | ||||||||||
Bad debt provision for troubled customers, net of recoveries | (247 | ) | — | 42 | — | |||||||||
Foreign exchange (gain) loss | 709 | 27 | (215 | ) | 371 | |||||||||
Adjusted EBITDA | $ | 15,716 | $ | 14,551 | $ | 58,150 | $ | 62,976 |
Unaudited Reconciliation of
Net Income (Loss) (GAAP) and Diluted EPS (GAAP) to Net Income Excluding Special Items (non-GAAP)
and Diluted EPS Excluding Special Items (non-GAAP)
(tabular dollars in thousands, except per share data)
For the quarter ended | For the year ended | ||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
Net income (loss) attributable to | $ | 2,842 | $ | (94 | ) | $ | 6,499 | $ | 3,860 | ||||||
Special items | (105 | ) | 1,502 | 12 | 4,126 | ||||||||||
Tax impact on special items | 25 | (301 | ) | (17 | ) | (917 | ) | ||||||||
Special items, net of tax | $ | (80 | ) | $ | 1,201 | $ | (5 | ) | $ | 3,209 | |||||
Net income attributable to | $ | 2,762 | $ | 1,107 | $ | 6,494 | $ | 7,069 | |||||||
Diluted EPS (GAAP) | $ | 0.09 | $ | 0.00 | $ | 0.21 | $ | 0.13 | |||||||
Special items, net of tax | 0.00 | 0.04 | 0.00 | 0.10 | |||||||||||
Diluted EPS Excluding Special Items (non-GAAP) | $ | 0.09 | $ | 0.04 | $ | 0.21 | $ | 0.23 |
![](https://ml.globenewswire.com/media/NmY2MzM4ZGItNjFhNS00NDIyLWE2N2MtOWI2ZDgxODc5NmY1LTEwMjE2MTU=/tiny/MISTRAS-Group-Inc-.png)
Source: MISTRAS Group, Inc.