MISTRAS Group, Inc. (MG: NYSE), a leading "one source" global
multinational provider of integrated technology-enabled asset
protection solutions, reported financial results for its second
quarter and six months ended June 30, 2021.
Highlights of the Second Quarter 2021*
- Revenue of $177.7 million, up 42.8%
- Gross profit of $55.3 million, up 34.4%
- Operating income of $11.4 million
- Net income of $5.9 million, and diluted earnings per
share of $0.20
- Adjusted EBITDA of $22.6 million, up
96.5%
- Operating cash flow of $15.0 million and Free Cash Flow
of $8.5 million
Highlights of the First Half 2021*
- Revenue of $331.4 million, up 16.7%
- Gross profit of $95.3 million; gross profit margin of
28.8%
- SG&A of $79.4 million, essentially flat despite the
significant revenue increase year-over-year
- Revised Credit Agreement, combined with lower
outstanding debt and leverage level, significantly reduces
borrowing cost prospectively
- Total debt repayment of $8.5 million during the six
months ended June 30, 2021
* All comparisons are consolidated and versus
the equivalent prior year period, unless otherwise noted.
For the second quarter of 2021, consolidated revenue was $177.7
million, a 42.8% increase compared to $124.4 million in the prior
year period. Second quarter revenue exceeded the
Company’s outlook driven by growth of over 50% in the Company’s oil
and gas market year-over-year, especially in turnarounds, which
started later in the Spring and ran longer than historical norms.
In addition, the Industrial, Power Generation and Transmission,
Other Process Industries and Infrastructure markets were all also
up year-over-year for the second quarter of 2021. The
Aerospace market was down modestly, as gains in the space and
defense sectors somewhat offset commercial aerospace sector
weakness, although the aerospace and defense market in the
International segment was up over the prior year period. The
Services segment’s recovery in the commercial aerospace sector is
underway, as there was sequential revenue growth for the past two
quarters, and this is anticipated to continue into the second half
of 2021.
Second quarter 2021 consolidated gross profit was up 34.4% to
$55.3 million, an increase of $14.2 million. Although
the quarterly gross profit margin of 31.1% was down from 33.1% a
year ago, this was primarily a result of an increase in
pass-through costs in the current year. On a
year-to-date basis, gross profit margin has held constant at 28.8%.
Despite the significant sequential increase in revenue in the
second quarter of 2021, selling, general and administrative
expenses were essentially flat sequentially with the first quarter
of 2021. For the second quarter of 2021, the Company
reported net income of $5.9 million or $0.20 per diluted share.
Adjusted EBITDA was $22.6 million for the second quarter of 2021,
which was an increase of 96.5% over the prior year period,
representing a nearly 5-year quarterly high percentage of revenue
of 12.7%.
Chief Executive Officer Dennis Bertolotti commented, "Our
excellent results in the second quarter represent the first phase
of what I expect to be a normalization of our end markets, led this
quarter by a strong rebound in our Oil and Gas market.
As anticipated, the second quarter benefitted from a late start to
the Spring turnaround season, which consequently ran longer than
usual. It now appears the overall Energy market is stabilizing, so
we expect revenues from this market to grow over the course of the
year. Gross profit was up significantly over last year due to the
gain in volume. Gross profit margin in the quarter was
up compared to full year fiscal 2020 margins, reflecting continued
progress in improving our efficiencies and
productivity. I am also pleased with our expense
controls, which enabled us to hold overhead costs essentially flat
in the second quarter, while significantly increasing
revenue. The net result was one of our most profitable
recent quarters with strong cash flows. We had anticipated this
quarter would mark the start of a return to year over year growth,
and we are well positioned to consistently drive improvements
across the organization and to capitalize on the increasing demand
for the valuable services that we provide as we build value for our
shareholders.”
Mr. Bertolotti additionally commented on the Company’s progress
with its growth initiatives and provided an outlook for the
upcoming quarter, “Our end markets are on the mend and we are
prepared to capitalize on the increased demand we expect to see,
especially from the Energy sector. This remains a large
market that seems to have recovered more quickly than some of our
other markets, and where we are gaining share and expanding our
services, such as into mechanical work and data
services.
I am also very pleased to announce the launching of MISTRAS
OneSuite™ software platform, which serves as an ecosystem of
integrated software and data service apps making integrity data as
insight-driven, user-friendly, accessible, and actionable for the
benefit of our customers. Our revised credit agreement, in
combination with our lower debt and leverage level, will reduce our
annual interest expense by almost $6 million per year commencing in
the third quarter. And with its more accommodative
terms, this will enable us to increase our investment in emerging
technologies, such as OneSuite™, as well as emerging markets such
as renewable energy and private space flight, each of which could
develop into significant markets. We are very pleased
to be back in a growth mindset, with the second quarter 2021
potentially representing an important inflection point.
Our goal was to return to a revenue run rate by the end of 2021,
that would be approximating the rate exiting fiscal 2019, and with
the second quarter 2021, we have achieved that goal. We
are cautiously optimistic the third quarter 2021 will be another
good growth quarter, assuming the COVID-19 pandemic does not have a
material impact on our domestic and international
operations. Our continued investment during the
pandemic on our sales, marketing and intellectual property
advantages, along with our focus on customers’ needs, is leading us
to more cross over services, thereby adding value and allowing us
to outperform our competition.”
Segment Performance:
Services segment second quarter revenues were
$145.0 million, up 44.0%, primarily due to an increase in Energy
segment revenues against a quarter that was more significantly
impacted by COVID-19. For the second quarter, gross profit was
$43.8 million, up 28.9% from a year ago on a 30.2% gross margin
versus a gross margin of 33.7% in the year ago quarter.
International segment second quarter revenues
were $32.0 million, up 49.7% from $21.3 million a year
ago. The increase is reflects the depths of the
COVID-19 pandemic in 2020 and a recovery in the energy markets this
year. International segment second quarter gross
profits were up 78.3%, as gross margins improved to 30.1% from
25.3% in the year ago period.
Products and Systems revenue were $3.2 million
in the second quarter, down from $4.0 million a year ago, although
second quarter gross profits rose 6.2% to $2.0 million from $1.8
million a year ago as the gross margin increased to 60.9% as
compared to 45.9% in the year ago period.
The Company generated $18.1 million of cash flows from operating
activities, and $7.3 million of free cash flow respectively, for
the first six months of 2021, enabling the Company to pay down $8.5
million of total debt during the first half of 2021.
The Company’s total debt was $211.2 million at June 30, 2021,
compared to $220.2 million at December 31, 2020. Cash and cash
equivalents decreased by approximately $5.8 million, from $25.8
million at December 31, 2020 to $19.9 million at June 30,
2021. Net debt (total debt less cash and cash
equivalents) decreased by $3.2 million during the first half of
2021.
Outlook for the Third Quarter of 2021
The Company’s business has been recovering over the past four
quarters, from the low experienced in the second quarter of 2020,
when the effect of COVID-19 was most impactful to its financial
results. Although energy prices and demand are currently stable,
the ongoing COVID-19 pandemic continues to significantly impact the
Company’s second largest market, Aerospace. The Company expects
revenue to increase in the low-to-mid teens percentage in the third
quarter of 2021 over the prior year quarter. Adjusted EBITDA is
expected to be higher in the third quarter of 2021 than the prior
year period, but lower sequentially than the second quarter of
2021, due to substantially all of the remaining temporary cost
reductions from 2020 being restored during the third quarter of
2021. This outlook is contingent on continuing macroeconomic
stability, including i) continuing stabilization in crude oil
markets, ii) a timely and effective COVID-19 vaccination rollout in
2021 and iii), no new or increased stay-in-place mandates resulting
from an increased spread of COVID-19 variants, which would impact
the Company’s ability to work as a critical service
provider.
Conference Call
In connection with this release, MISTRAS will hold a conference
call on August 3, 2021 at 9 a. m. (Eastern). The call will be
broadcast over the Web and can be accessed on MISTRAS' Website,
www.mistrasgroup.com . Individuals in the U.S. wishing to
participate in the conference call by phone may dial 1-844-832-7227
and use confirmation code 6969718 when prompted. The International
dial-in number is 1-224-633-1529. Those who wish to listen to the
call later can access an archived copy of the conference call at
the MISTRAS Website.
About MISTRAS Group, Inc. - One Source for Asset
Protection Solutions®
MISTRAS Group, Inc. (NYSE: MG) is a leading “one source”
multinational provider of integrated technology-enabled asset
protection solutions, helping to maximize the safety and
operational uptime for civilization’s most critical industrial and
civil assets.
Backed by an innovative, data-driven asset protection portfolio,
proprietary technologies, and a 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 utilizing OneSuite™ serving as an ecosystem
platform, pulling together all of MISTRAS’ software and data
services capabilities, for the benefit of customers and their
evolving digital requirements.
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
https://www.mistrasgroup.com/ or contact
Nestor S. Makarigakis, Group Vice President of Marketing at
marcom@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 2020 Annual Report on Form 10-K dated March 16,
2021, 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
In addition to financial information prepared in accordance with
generally accepted accounting principles in the U.S. (GAAP), this
press release also contains adjusted financial measures that we
believe provide investors and management with supplemental
information relating to operating performance and trends that
facilitate comparisons between periods and with respect to
projected information. The term "Adjusted EBITDA" used in this
release is a financial measurement not calculated in accordance
with GAAP and is defined as net income attributable to MISTRAS
Group, Inc. plus: interest expense, provision for income taxes,
depreciation and amortization, share-based compensation expense and
certain acquisition related costs (including transaction due
diligence costs and adjustments to the fair value of contingent
consideration), foreign exchange (gain) loss, non-cash impairment
charges and, if applicable, certain additional special items which
are noted. A reconciliation of Adjusted EBITDA to a financial
measurement under GAAP is set forth in a table attached to this
press release. In the press release, the Company also uses the term
"non-GAAP Net Income", which is GAAP net income adjusted for
certain items management believes are unusual and non-recurring.
The Company uses the term “free cash flow”, a non-GAAP measurement
the Company defines as cash provided by operating activities less
capital expenditures (which is classified as an investing
activity). The Company also uses the term “net debt”, a non-GAAP
measurement defined as the sum of the current and long-term
portions of long-term debt, less cash and cash equivalent. In the
tables attached is a table reconciling "Net Income (Loss) (GAAP)"
to "Net Income Excluding Special Items (non-GAAP), which reconciles
the non-GAAP amount to a GAAP measurement. In addition, the Company
has also included in the attached tables non-GAAP measurement”
“Segment and Total Company Income (Loss) Before Special Items”,
reconciling these measurements to financial measurements under
GAAP.
Mistras Group, Inc. and
SubsidiariesCondensed Consolidated Balance
Sheets(in thousands, except share and per share data)
|
June 30, 2021 |
|
December 31, 2020 |
ASSETS |
(unaudited) |
|
|
Current Assets |
|
|
|
Cash and cash equivalents |
$ |
19,942 |
|
|
$ |
25,760 |
|
Accounts receivable, net |
122,887 |
|
|
107,628 |
|
Inventories |
12,836 |
|
|
13,134 |
|
Prepaid expenses and other current assets |
15,843 |
|
|
16,066 |
|
Total current assets |
171,508 |
|
|
162,588 |
|
Property, plant and equipment,
net |
91,898 |
|
|
92,681 |
|
Intangible assets, net |
64,608 |
|
|
68,642 |
|
Goodwill |
208,175 |
|
|
206,008 |
|
Deferred income taxes |
2,553 |
|
|
2,069 |
|
Other assets |
48,639 |
|
|
51,325 |
|
Total assets |
$ |
587,381 |
|
|
$ |
583,313 |
|
LIABILITIES AND
EQUITY |
|
|
|
Current Liabilities |
|
|
|
Accounts payable |
$ |
18,015 |
|
|
$ |
14,240 |
|
Accrued expenses and other current liabilities |
87,472 |
|
|
78,500 |
|
Current portion of long-term debt |
17,835 |
|
|
10,678 |
|
Current portion of finance lease obligations |
3,809 |
|
|
3,765 |
|
Income taxes payable |
1,269 |
|
|
2,664 |
|
Total current liabilities |
128,400 |
|
|
109,847 |
|
Long-term debt, net of current
portion |
193,332 |
|
|
209,538 |
|
Obligations under finance
leases, net of current portion |
10,594 |
|
|
11,115 |
|
Deferred income taxes |
8,623 |
|
|
8,236 |
|
Other long-term
liabilities |
44,783 |
|
|
47,358 |
|
Total liabilities |
385,732 |
|
|
386,094 |
|
Commitments and
contingencies |
|
|
|
Equity |
|
|
|
Preferred stock, 10,000,000 shares authorized |
— |
|
|
— |
|
Common stock, $0.01 par value, 200,000,000 shares authorized,
29,431,879 and 29,234,143 shares issued and outstanding |
294 |
|
|
292 |
|
Additional paid-in capital |
236,125 |
|
|
234,638 |
|
Accumulated Deficit |
(21,273 |
) |
|
(21,848 |
) |
Accumulated other comprehensive loss |
(13,707 |
) |
|
(16,061 |
) |
Total Mistras Group, Inc. stockholders’ equity |
201,439 |
|
|
197,021 |
|
Noncontrolling interests |
210 |
|
|
198 |
|
Total equity |
201,649 |
|
|
197,219 |
|
Total liabilities and equity |
$ |
587,381 |
|
|
$ |
583,313 |
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
SubsidiariesUnaudited Condensed Consolidated
Statements of Income (Loss)(in thousands, except per share
data)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
|
|
|
|
|
|
Revenue |
$ |
177,677 |
|
$ |
124,435 |
|
|
$ |
331,412 |
|
|
$ |
283,900 |
|
Cost of revenue |
116,787 |
|
77,954 |
|
|
225,030 |
|
|
191,278 |
|
Depreciation |
5,554 |
|
5,323 |
|
|
11,045 |
|
|
10,820 |
|
Gross
profit |
55,336 |
|
41,158 |
|
|
95,337 |
|
|
81,802 |
|
Selling, general and administrative expenses |
39,719 |
|
37,607 |
|
|
79,358 |
|
|
79,165 |
|
Impairment charges |
— |
|
— |
|
|
— |
|
|
106,062 |
|
Legal settlement and litigation charges, net |
— |
|
— |
|
|
1,030 |
|
|
— |
|
Research and engineering |
620 |
|
708 |
|
|
1,347 |
|
|
1,532 |
|
Depreciation and amortization |
3,078 |
|
3,207 |
|
|
6,152 |
|
|
7,177 |
|
Acquisition-related expense
(benefit), net |
545 |
|
19 |
|
|
822 |
|
|
(523 |
) |
Income (loss) from
operations |
11,374 |
|
(383 |
) |
|
6,628 |
|
|
(111,611 |
) |
Interest expense |
3,155 |
|
2,976 |
|
|
6,368 |
|
|
5,765 |
|
Income (loss) before benefit
for income taxes |
8,219 |
|
(3,359 |
) |
|
260 |
|
|
(117,376 |
) |
Provision (benefit) for income taxes |
2,274 |
|
(694 |
) |
|
(326 |
) |
|
(16,189 |
) |
Net Income (loss) |
5,945 |
|
(2,665 |
) |
|
586 |
|
|
(101,187 |
) |
Less: net income (loss) attributable to noncontrolling interests,
net of taxes |
8 |
|
(9 |
) |
|
11 |
|
|
(22 |
) |
Net Income (loss) attributable
to Mistras Group, Inc |
$ |
5,937 |
|
$ |
(2,656 |
) |
|
$ |
575 |
|
|
$ |
(101,165 |
) |
|
|
|
|
|
|
|
|
Earnings (loss) per common
share: |
|
|
|
|
|
|
|
Basic |
$ |
0.20 |
|
$ |
(0.09 |
) |
|
$ |
0.02 |
|
|
$ |
(3.49 |
) |
Diluted |
$ |
0.20 |
|
$ |
(0.09 |
) |
|
$ |
0.02 |
|
|
$ |
(3.49 |
) |
Weighted-average common shares
outstanding: |
|
|
|
|
|
|
|
Basic |
29,602 |
|
29,085 |
|
|
29,514 |
|
|
29,024 |
|
Diluted |
30,136 |
|
29,085 |
|
|
30,039 |
|
|
29,024 |
|
|
|
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
SubsidiariesUnaudited Operating Data by
Segment(in thousands)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Revenues |
|
|
|
|
|
|
|
Services |
$ |
144,977 |
|
|
$ |
100,677 |
|
|
$ |
269,275 |
|
|
$ |
229,550 |
|
International |
31,951 |
|
|
21,343 |
|
|
59,599 |
|
|
50,410 |
|
Products and Systems |
3,203 |
|
|
4,002 |
|
|
6,191 |
|
|
6,814 |
|
Corporate and eliminations |
(2,454 |
) |
|
(1,587 |
) |
|
(3,653 |
) |
|
(2,874 |
) |
|
$ |
177,677 |
|
|
$ |
124,435 |
|
|
$ |
331,412 |
|
|
$ |
283,900 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Gross
profit |
|
|
|
|
|
|
|
Services |
$ |
43,761 |
|
|
$ |
33,940 |
|
|
$ |
74,837 |
|
|
$ |
66,177 |
|
International |
9,615 |
|
|
5,392 |
|
|
17,240 |
|
|
13,415 |
|
Products and Systems |
1,952 |
|
|
1,838 |
|
|
3,233 |
|
|
2,206 |
|
Corporate and eliminations |
8 |
|
|
(12 |
) |
|
27 |
|
|
4 |
|
|
$ |
55,336 |
|
|
$ |
41,158 |
|
|
$ |
95,337 |
|
|
$ |
81,802 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation
ofSegment and Total Company Income from Operations
(GAAP) to Income before Special Items (non-GAAP)(in
thousands)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, 2020 |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Services: |
|
|
|
|
|
|
|
Income (loss) from operations (GAAP) |
$ |
18,358 |
|
|
$ |
10,837 |
|
|
$ |
22,906 |
|
|
$ |
(70,657 |
) |
Impairment charges |
— |
|
|
— |
|
|
— |
|
|
86,200 |
|
Reorganization and other costs |
26 |
|
|
45 |
|
|
97 |
|
|
67 |
|
Legal settlement and litigation charges, net |
— |
|
|
— |
|
|
1,650 |
|
|
— |
|
Acquisition-related expense (benefit), net |
545 |
|
|
19 |
|
|
788 |
|
|
(523 |
) |
Income before special items (non-GAAP) |
$ |
18,929 |
|
|
$ |
10,901 |
|
|
$ |
25,441 |
|
|
$ |
15,087 |
|
International: |
|
|
|
|
|
|
|
Income (loss) from operations (GAAP) |
$ |
1,809 |
|
|
$ |
(1,937 |
) |
|
$ |
989 |
|
|
$ |
(22,356 |
) |
Impairment charges |
— |
|
|
— |
|
|
— |
|
|
19,862 |
|
Reorganization and other costs |
30 |
|
|
366 |
|
|
126 |
|
|
292 |
|
Income (loss) before special items (non-GAAP) |
$ |
1,839 |
|
|
$ |
(1,571 |
) |
|
$ |
1,115 |
|
|
$ |
(2,202 |
) |
Products and
Systems: |
|
|
|
|
|
|
|
Income (loss) from operations (GAAP) |
$ |
209 |
|
|
$ |
(96 |
) |
|
$ |
(372 |
) |
|
$ |
(1,776 |
) |
Reorganization and other costs |
— |
|
|
— |
|
|
27 |
|
|
— |
|
Income (loss) before special items (non-GAAP) |
$ |
209 |
|
|
$ |
(96 |
) |
|
$ |
(345 |
) |
|
$ |
(1,776 |
) |
Corporate and
Eliminations: |
|
|
|
|
|
|
|
Loss from operations (GAAP) |
$ |
(9,002 |
) |
|
$ |
(9,187 |
) |
|
$ |
(16,895 |
) |
|
$ |
(16,822 |
) |
Loss on debt modification |
277 |
|
|
645 |
|
|
277 |
|
|
645 |
|
Legal settlement and litigation charges, net |
— |
|
|
— |
|
|
(620 |
) |
|
$ |
— |
|
Reorganization and other costs |
— |
|
|
86 |
|
|
— |
|
|
123 |
|
Acquisition-related expense, net |
— |
|
|
— |
|
|
34 |
|
|
— |
|
Loss before special items (non-GAAP) |
$ |
(8,725 |
) |
|
$ |
(8,456 |
) |
|
$ |
(17,204 |
) |
|
$ |
(16,054 |
) |
Total
Company: |
|
|
|
|
|
|
|
Income (loss) from operations (GAAP) |
$ |
11,374 |
|
|
$ |
(383 |
) |
|
$ |
6,628 |
|
|
$ |
(111,611 |
) |
Impairment charges |
— |
|
|
— |
|
|
— |
|
|
106,062 |
|
Reorganization and other costs |
56 |
|
|
497 |
|
|
250 |
|
|
482 |
|
Loss on debt modification |
277 |
|
|
645 |
|
|
277 |
|
|
645 |
|
Legal settlement and litigation charges, net |
— |
|
|
— |
|
|
1,030 |
|
|
— |
|
Acquisition-related expense (benefit), net |
545 |
|
|
19 |
|
|
822 |
|
|
(523 |
) |
Income (loss) before special items (non-GAAP) |
$ |
12,252 |
|
|
$ |
778 |
|
|
$ |
9,007 |
|
|
$ |
(4,945 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
SubsidiariesUnaudited Summary Cash Flow
Information(in thousands)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, 2020 |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Net cash provided by (used
in): |
|
|
|
|
|
|
|
Operating activities |
$ |
14,978 |
|
|
$ |
28,755 |
|
|
$ |
18,126 |
|
|
$ |
34,862 |
|
Investing activities |
(6,142 |
) |
|
(3,044 |
) |
|
(10,318 |
) |
|
(7,248 |
) |
Financing activities |
(13,405 |
) |
|
(20,829 |
) |
|
(12,970 |
) |
|
(20,337 |
) |
Effect of exchange rate changes on cash |
334 |
|
|
679 |
|
|
(656 |
) |
|
295 |
|
Net change in cash and cash
equivalents |
$ |
(4,235 |
) |
|
$ |
5,561 |
|
|
$ |
(5,818 |
) |
|
$ |
7,572 |
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation of
Net Cash Provided by Operating Activities (GAAP) to Free
Cash Flow (non-GAAP)(in thousands)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, 2020 |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
|
|
|
|
|
|
Net cash provided by operating activities
(GAAP) |
$ |
14,978 |
|
|
$ |
28,755 |
|
|
$ |
18,126 |
|
|
$ |
34,862 |
|
Less: |
|
|
|
|
|
|
|
Purchases of property, plant and equipment |
(6,185 |
) |
|
(3,142 |
) |
|
(10,188 |
) |
|
(7,443 |
) |
Purchases of intangible assets |
(268 |
) |
|
(108 |
) |
|
(618 |
) |
|
(195 |
) |
Free cash flow
(non-GAAP) |
$ |
8,525 |
|
|
$ |
25,505 |
|
|
$ |
7,320 |
|
|
$ |
27,224 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation of
Gross Debt (GAAP) to Net Debt (non-GAAP)(in
thousands)
|
June 30, 2021 |
|
December 31, 2020 |
|
|
|
|
Current portion of long-term debt |
$ |
17,835 |
|
|
$ |
10,678 |
|
Long-term debt, net of current
portion |
193,332 |
|
|
209,538 |
|
Total Gross Debt (GAAP) |
211,167 |
|
|
220,216 |
|
Less: Cash and cash
equivalents |
(19,942 |
) |
|
(25,760 |
) |
Total Net Debt (non-GAAP) |
$ |
191,225 |
|
|
$ |
194,456 |
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation of
Net Income (Loss) (GAAP) to Adjusted EBITDA
(non-GAAP)(in thousands)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
|
|
Net Income (loss) (GAAP) |
$ |
5,945 |
|
$ |
(2,665 |
) |
|
$ |
586 |
|
|
$ |
(101,187 |
) |
Less: Net income (loss) attributable to non-controlling interests,
net of taxes |
8 |
|
(9 |
) |
|
11 |
|
|
(22 |
) |
Net Income (loss)
attributable to Mistras Group, Inc. |
$ |
5,937 |
|
$ |
(2,656 |
) |
|
$ |
575 |
|
|
$ |
(101,165 |
) |
Interest expense |
3,155 |
|
2,976 |
|
|
6,368 |
|
|
5,765 |
|
Provision (benefit) for income taxes |
2,274 |
|
(694 |
) |
|
(326 |
) |
|
(16,189 |
) |
Depreciation and amortization |
8,632 |
|
8,530 |
|
|
17,197 |
|
|
17,997 |
|
Share-based compensation expense |
1,202 |
|
1,395 |
|
|
2,464 |
|
|
2,740 |
|
Impairment charges |
— |
|
— |
|
|
— |
|
|
106,062 |
|
Acquisition-related expense (benefit), net |
545 |
|
19 |
|
|
822 |
|
|
(523 |
) |
Reorganization and other related costs |
56 |
|
497 |
|
|
250 |
|
|
482 |
|
Legal settlement and litigation charges, net |
— |
|
— |
|
|
1,030 |
|
|
— |
|
Loss on debt modification |
277 |
|
645 |
|
|
277 |
|
|
645 |
|
Foreign exchange loss |
474 |
|
764 |
|
|
932 |
|
|
1,067 |
|
Adjusted EBITDA
(non-GAAP) |
$ |
22,552 |
|
$ |
11,476 |
|
|
$ |
29,589 |
|
|
$ |
16,881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mistras Group, Inc. and
SubsidiariesUnaudited Reconciliation
ofNet Income (Loss) (GAAP) and Diluted EPS (GAAP)
to Net Income (Loss) Excluding Special Items (non-GAAP)
and Diluted EPS Excluding Special Items
(non-GAAP)(tabular dollars in thousands, except per share
data)
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, 2020 |
|
2021 |
|
2020 |
|
|
2021 |
|
2020 |
Net income (loss) attributable to Mistras Group, Inc.
(GAAP) |
$ |
5,937 |
|
|
$ |
(2,656 |
) |
|
|
$ |
575 |
|
|
$ |
(101,165 |
) |
Special items |
878 |
|
|
1,161 |
|
|
|
2,379 |
|
|
106,666 |
|
Tax impact on special items |
(189 |
) |
|
(191 |
) |
|
|
(557 |
) |
|
(14,041 |
) |
Special items, net of tax |
$ |
689 |
|
|
$ |
970 |
|
|
|
$ |
1,822 |
|
|
$ |
92,625 |
|
Net income (loss)
attributable to Mistras Group, Inc. Excluding Special Items
(non-GAAP) |
$ |
6,626 |
|
|
$ |
(1,686 |
) |
|
|
$ |
2,397 |
|
|
$ |
(8,540 |
) |
|
|
|
|
|
|
|
|
|
Diluted EPS
(GAAP)(1) |
$ |
0.20 |
|
|
$ |
(0.09 |
) |
|
|
$ |
0.02 |
|
|
$ |
(3.49 |
) |
Special items, net of tax |
0.02 |
|
|
0.03 |
|
|
|
0.02 |
|
|
3.19 |
|
Diluted EPS Excluding
Special Items (non-GAAP) |
$ |
0.22 |
|
|
$ |
(0.06 |
) |
|
|
$ |
0.04 |
|
|
$ |
(0.30 |
) |
_______________(1) For the three and six months ended June 30,
2020, 118 and 223 shares, respectively, related to restricted stock
were excluded from the calculation of diluted EPS due to the net
loss for the period.
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