MISTRAS Announces Fourth Quarter and Full Year 2023 Results
- None.
- None.
Insights
The reported Q4 2023 revenue growth of 8.2% to $182.1 million suggests a positive trend in MISTRAS Group's sales performance, indicating an expanding market presence, especially considering the notable growth in the Oil & Gas, Aerospace and Defense and Industrials sectors. The Adjusted EBITDA increase of 22.0% to $19.2 million highlights effective cost management and operational leverage, which could signal to investors the company's improving efficiency and potential for margin expansion. However, the reported net loss of $2.5 million, primarily due to reorganization and other costs, may raise concerns about near-term profitability and the impact of these non-recurring expenses on the bottom line.
The full-year net cash provided by operating activities remaining consistent with the prior year at $26.7 million demonstrates stability in cash generation capabilities. However, the decrease in Free Cash Flow to $3.1 million, compared to $13.0 million in the previous year, reflects increased capital expenditures aimed at strategic growth, which investors should monitor to assess the effectiveness of these investments in driving future revenue growth.
The company's preliminary 2024 outlook, with expected revenue between $725-$750 million and Adjusted EBITDA between $84-$89 million, suggests confidence in continued growth and operational improvements. The anticipated Free Cash Flow of $34-$38 million also points to a significant improvement from 2023, which could be a positive indicator for the company's financial health and its ability to fund future growth initiatives without additional financing.
The industry-specific growth figures, with a 13.4% increase in the Oil & Gas industry, a 15.3% increase in Aerospace and Defense and a 24.3% growth in Industrials, indicate a robust demand in these sectors. This aligns with broader market trends where these industries are experiencing a resurgence, likely due to increased capital spending and technological advancements. MISTRAS Group's ability to capitalize on these trends could position it favorably against competitors. However, the decline in the Power Generation industry due to the completion of specific projects may indicate a need for diversification and the pursuit of new contracts to mitigate the risk of revenue concentration.
With Project Phoenix aimed at improving profitability, the company's focus on efficiency and cost savings could enhance its competitive edge. The anticipated SG&A reduction to approximately 21% of full-year 2024 revenue from 23.6% in 2023 reflects a strategic move to streamline operations. This could positively influence the company's market position by allowing it to operate more leanly and responsively to industry demands.
The disclosure of $6.3 million in reorganization costs associated with Project Phoenix for Q4 2023 and $12.3 million for the full year, which includes costs related to the separation of the former President and CEO, professional fees and restructuring charges, underscores the legal and administrative complexities involved in corporate reorganization. While these costs have impacted net earnings, it is crucial for stakeholders to understand that such reorganization efforts can lead to long-term cost savings and improved operational efficiency. The legal implications of these changes, such as severance agreements and potential contractual disputes, are typically one-time expenses that should be factored into the company's future financial health assessments.
Q4 2023 Revenue of
Q4 2023 Net Loss of
Q4 2023 Adjusted EBITDA (non-GAAP) of
highest Q4 result historically
Full Year 2023 Net Cash Provided by Operating Activities of
whereas Free Cash Flow (non-GAAP) of
reflecting increased strategic spend in expanding growth areas
PRINCETON JUNCTION, N.J., March 06, 2024 (GLOBE NEWSWIRE) -- MISTRAS Group, Inc. (MG: NYSE), a leading "one source" multinational provider of integrated technology-enabled asset protection solutions, reported financial results for its fourth quarter and year ended December 31, 2023.
“I am pleased to report strong top and bottom-line growth in the fourth quarter of 2023. Although a small sample, our fourth quarter performance is evidence of the effectiveness of Project Phoenix initiatives to improve profitability and Adjusted EBITDA through meaningful margin improvement and steps to achieve sustained cost savings. More importantly, this provides momentum heading into 2024, where we expect to realize the majority of the financial benefits from the implementation in 2023 of the initiatives that Project Phoenix has driven throughout the organization. Consequently, I am reiterating our expectation that fiscal 2024 Adjusted EBITDA will be one of our all-time high performance years,” said Manny N. Stamatakis, Interim President and Chief Executive Officer.
Edward Prajzner, Senior Executive Vice President and Chief Financial Officer, commented, “Fourth quarter results clearly demonstrate that we can drive significant bottom line growth by leveraging improved sales efficiency and enhanced operational productivity. Despite headwinds faced earlier in the year, we saw positive momentum in the second half of 2023 and our fourth quarter results are a tangible example of the momentum we have built heading into 2024. We are pleased by the early success achieved on our Project Phoenix objectives, but also recognize this is only the beginning and our job is not yet complete. The entire organization is re-energized and intently focused on finding new opportunities to efficiently leverage our core competencies.”
Highlights for the Fourth Quarter 2023*
- Revenue of
$182.1 million , an increase of8.2% - Gross profit of
$53.6 million , an increase of5.3% , with gross profit margin of29.5% , a decrease of 80 basis points due to an unfavorable sales mix and higher employee benefit credits in the prior year period - Selling, general and administrative expenses of
$42.9 million , up1.7% , due to higher foreign currency exchange losses and other discrete items, offset by savings associated with Project Phoenix actions and other cost reduction measures - Net loss of
$2.5 million , or ($0.08) per share, reflecting reorganization and other costs of$6.3 million ; Net income excluding special items (non-GAAP) of$2.9 million , or$0.10 per share - Adjusted EBITDA of
$19.2 million , an increase of22.0% , as a result of operating leverage and cost controls
* All comparisons are consolidated and versus the equivalent prior year period, unless otherwise noted.
For the fourth quarter of 2023, consolidated revenue was
Fourth quarter 2023 gross profit increased
Selling, general and administrative expenses (“SG&A”) in the fourth quarter of 2023 were
The Company reported a quarterly net loss of
Net income excluding special items (non-GAAP) was
Adjusted EBITDA was
Highlights for Full Year 2023*
- Revenue of
$705.5 million , an increase of2.6% and exceeding the high end of the Company’s revised Guidance - Gross profit of
$203.8 million , with gross profit margin of28.9% , an increase of 10 basis points due to improved revenue mix for the year, partially offset by higher employee benefit credits in the prior year period - SG&A of
$166.7 million , up marginally, less than1% , due to higher foreign currency exchange losses and other discrete items, which offset the savings associated with our Project Phoenix initiatives - Net loss of
$17.5 million , or ($0.58) per share, primarily due to reorganization and other costs of$12.3 million and a$13.8 million non-cash goodwill impairment charge - Adjusted EBITDA of
$65.8 million , an increase of13.2% and in line with the Company’s revised Guidance
* All comparisons are consolidated and versus the equivalent prior year period, unless otherwise noted.
For the full year, revenue increased
For the full year 2023, gross profit increased
Cash Flow and Balance Sheet
The Company generated
The Company’s gross debt was
Reorganization and Other
For the fourth quarter of 2023, the Company recorded
Refer to the Company’s press release associated with Project Phoenix released on November 2, 2023 for additional details associated with this important initiative.
Preliminary 2024 Outlook
The Company reiterates the preliminary guidance released in conjunction with the release of its financial results for the third quarter of 2023. For 2024, the Company anticipates full year revenue between
Mr. Stamatakis concluded, “I am extremely encouraged by the strong early returns from the Project Phoenix related actions. The increased discipline and accountability implemented throughout the organization in connection with Project Phoenix have resulted in an increased focus on achieving the goals we have set for revenue growth, efficiency improvements and increased profitability. We are now firmly set on a course to achieve continuous improvement, further integrate Data Analytical Solutions, and uncover other opportunities where our proprietary technologies and extensive knowledge and know-how can solve problems for our customers and create value for our shareholders.”
Conference Call
In connection with this release, MISTRAS will hold a conference call on March 7, 2024, at 9:00 a.m. (Eastern).
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/BIe6bb24671aee4266a3bd30d29905a100
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 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, strong commitment to Environmental, Social, and Governance (ESG) initiatives, and a decades-long legacy of industry leadership, MISTRAS leads clients in the oil and gas, aerospace and defense, renewable and nonrenewable power, civil infrastructure, and manufacturing industries towards achieving operational and environmental 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; building real-time monitoring equipment to enable safe travel across bridges; and helping to propel sustainability, 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 field and in-line 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 and the environment, visit https://www.mistrasgroup.com/.
MEDIA CONTACT:
Nestor S. Makarigakis
Group Vice-President of Marketing and Communications
+1 (609) 716-4000 | marcom@mistrasgroup.com
Forward-Looking and Cautionary Statements
Certain statements contained in this press release are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, but are not limited to, our 2024 outlook, guidance, costs savings and other benefits we expect to realize from Project Phoenix and actions that we expect or seek to take in furtherance of our strategies and activities to enhance our financial results and future growth. Such forward-looking statements relate to MISTRAS' financial results and estimates, products and services, business model, Project Phoenix, 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 2022 Annual Report on Form 10-K dated March 15, 2023, 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 Financial 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 are not prepared in accordance with GAAP and 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 trends and projected information. The term "Adjusted EBITDA" used in this release is a financial measurement not calculated in accordance with GAAP and is defined by the Company as net income attributable to MISTRAS Group, Inc. plus: interest expense, provision for income taxes, depreciation and amortization, share-based compensation expense, 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, reorganization and related charges and, if applicable, certain additional special items which are noted. A reconciliation of Adjusted EBITDA to Net Income (Loss) as computed under GAAP is set forth in a table attached to this press release. The Company also uses the term “net debt”, a non-GAAP financial measurement the Company defines as the sum of the current and long-term portions of long-term debt, less cash and cash equivalents and the term “free cash flow”, a non-GAAP financial measurement the Company defines as cash provided by operating activities less capital expenditures (which is classified as an investing activity). A reconciliation of these non-GAAP financial measurements to GAAP are also set forth in tables attached to this press release. In the tables attached is also a table reconciling “Segment and Total Company Income (Loss) from Operations (GAAP) to Income (Loss) from Operations before Special Items (non-GAAP)”, “Net Loss (GAAP) and Diluted EPS (GAAP) to Net Loss Excluding Special Items (non-GAAP) and Diluted EPS Excluding Special Items (non-GAAP)” which reconciles the non-GAAP amounts to the GAAP financial measurement. Each of these non-GAAP financial measurements has material limitations as a performance or liquidity measure and should not be considered alternatives to Net Income (Loss) or any other measurements derived in accordance with GAAP. Because Income (loss) from operations before special items and other non-GAAP financial measurements used in this press release may not be calculated in the same manner by all companies, these measurements may not be comparable to other similarly-titled measurements used by other companies.
| Mistras Group, Inc. and Subsidiaries Unaudited Consolidated Balance Sheets (in thousands, except share and per share data) | |||||||
| December 31, | |||||||
| 2023 | 2022 | ||||||
| ASSETS | |||||||
| Current Assets | |||||||
| Cash and cash equivalents | $ | 17,646 | $ | 20,488 | |||
| Accounts receivable, net | 132,847 | 123,657 | |||||
| Inventories | 15,283 | 13,556 | |||||
| Prepaid expenses and other current assets | 14,580 | 10,181 | |||||
| Total current assets | 180,356 | 167,882 | |||||
| Property, plant and equipment, net | 80,972 | 77,561 | |||||
| Intangible assets, net | 43,994 | 49,015 | |||||
| Goodwill | 187,354 | 199,635 | |||||
| Deferred income taxes | 2,316 | 779 | |||||
| Other assets | 39,784 | 40,032 | |||||
| Total Assets | $ | 534,776 | $ | 534,904 | |||
| LIABILITIES AND EQUITY | |||||||
| Current Liabilities | |||||||
| Accounts payable | $ | 17,032 | $ | 12,532 | |||
| Accrued expenses and other current liabilities | 84,331 | 77,844 | |||||
| Current portion of long-term debt | 8,900 | 7,425 | |||||
| Current portion of finance lease obligations | 5,159 | 4,201 | |||||
| Income taxes payable | 1,101 | 1,726 | |||||
| Total current liabilities | 116,523 | 103,728 | |||||
| Long-term debt, net of current portion | 181,499 | 183,826 | |||||
| Obligations under finance leases, net of current portion | 11,261 | 10,045 | |||||
| Deferred income taxes | 2,552 | 6,283 | |||||
| Other long-term liabilities | 32,438 | 32,273 | |||||
| Total Liabilities | $ | 344,273 | $ | 336,155 | |||
| Commitments and contingencies | |||||||
| Equity | |||||||
| Preferred stock, 10,000,000 shares authorized | — | — | |||||
| Common stock, | 305 | 298 | |||||
| Additional paid-in capital | 247,165 | 243,031 | |||||
| Accumulated Deficit | (28,942 | ) | (11,489 | ) | |||
| Accumulated other comprehensive loss | (28,336 | ) | (33,390 | ) | |||
| Total Mistras Group, Inc. stockholders’ equity | 190,192 | 198,450 | |||||
| Non-controlling interests | 311 | 299 | |||||
| Total Equity | 190,503 | 198,749 | |||||
| Total Liabilities and Equity | $ | 534,776 | $ | 534,904 | |||
| Mistras Group, Inc. and Subsidiaries Unaudited Consolidated Statements of Income (Loss) (in thousands, except per share data) | |||||||||||||||
| For the quarter ended December 31, | For the year ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Revenue | $ | 182,073 | $ | 168,218 | $ | 705,473 | $ | 687,373 | |||||||
| Cost of revenue | 122,365 | 111,720 | 477,671 | 466,567 | |||||||||||
| Depreciation | 6,081 | 5,559 | 23,995 | 22,633 | |||||||||||
| Gross profit | 53,627 | 50,939 | 203,807 | 198,173 | |||||||||||
| Selling, general and administrative expenses | 42,914 | 42,168 | 166,749 | 166,400 | |||||||||||
| Bad debt provision for troubled customers, net of recoveries | — | (247 | ) | — | 42 | ||||||||||
| Reorganization and other costs | 6,252 | 130 | 12,269 | 195 | |||||||||||
| Legal settlement and litigation charges (benefit), net | 908 | — | 1,058 | (994 | ) | ||||||||||
| Goodwill Impairment charges | — | — | 13,799 | — | |||||||||||
| Research and engineering | 295 | 471 | 1,723 | 1,994 | |||||||||||
| Depreciation and amortization | 2,548 | 2,603 | 10,104 | 10,661 | |||||||||||
| Acquisition-related expense, net | 4 | 12 | 9 | 76 | |||||||||||
| Income (loss) from operations | 706 | 5,802 | (1,904 | ) | 19,799 | ||||||||||
| Interest expense | 4,668 | 3,713 | 16,761 | 10,505 | |||||||||||
| Income (loss) before provision (benefit) for income taxes | (3,962 | ) | 2,089 | (18,665 | ) | 9,294 | |||||||||
| Provision (benefit) for income taxes | (1,449 | ) | (774 | ) | (1,220 | ) | 2,720 | ||||||||
| Net income (loss) | (2,513 | ) | 2,863 | (17,445 | ) | 6,574 | |||||||||
| Less: net income attributable to noncontrolling interests, net of taxes | 1 | 21 | 8 | 75 | |||||||||||
| Net income (loss) attributable to Mistras Group, Inc. | $ | (2,514 | ) | $ | 2,842 | $ | (17,453 | ) | $ | 6,499 | |||||
| Earnings per common share | |||||||||||||||
| Basic | $ | (0.08 | ) | $ | 0.09 | $ | (0.58 | ) | $ | 0.22 | |||||
| Diluted | $ | (0.08 | ) | $ | 0.09 | $ | (0.58 | ) | $ | 0.21 | |||||
| Weighted average common shares outstanding: | |||||||||||||||
| Basic | 30,473 | 29,983 | 30,330 | 29,901 | |||||||||||
| Diluted | 30,473 | 30,258 | 30,330 | 30,229 | |||||||||||
| Mistras Group, Inc. and Subsidiaries Unaudited Operating Data by Segment (in thousands) | |||||||||||||||
| For the quarter ended December 31, | For the year ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Revenue | |||||||||||||||
| North America | $ | 148,035 | $ | 138,085 | $ | 579,330 | $ | 573,336 | |||||||
| International | 33,750 | 28,984 | 124,414 | 112,425 | |||||||||||
| Products and Systems | 3,089 | 4,061 | 12,986 | 12,727 | |||||||||||
| Corporate and eliminations | (2,801 | ) | (2,912 | ) | (11,257 | ) | (11,115 | ) | |||||||
| $ | 182,073 | $ | 168,218 | $ | 705,473 | $ | 687,373 | ||||||||
| For the quarter ended December 31, | For the year ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Gross profit | |||||||||||||||
| North America | $ | 42,872 | $ | 40,701 | $ | 163,960 | $ | 159,049 | |||||||
| International | 9,363 | 8,267 | 33,610 | 33,591 | |||||||||||
| Products and Systems | 1,684 | 1,976 | 6,457 | 5,490 | |||||||||||
| Corporate and eliminations | (294 | ) | (5 | ) | (220 | ) | 43 | ||||||||
| $ | 53,625 | $ | 50,939 | $ | 203,807 | $ | 198,173 | ||||||||
| Mistras Group, Inc. and Subsidiaries Unaudited Revenues by Category (in thousands) | |||||||||||||||||||
| Revenue by industry was as follows: | |||||||||||||||||||
| Three Months Ended December 31, 2023 | North America | International | Products | Corp/Elim | Total | ||||||||||||||
| Oil & Gas | $ | 97,558 | $ | 10,324 | $ | 72 | $ | — | $ | 107,954 | |||||||||
| Aerospace & Defense | 14,484 | 4,817 | 11 | — | 19,312 | ||||||||||||||
| Industrials | 11,825 | 8,018 | 437 | — | 20,280 | ||||||||||||||
| Power Generation & Transmission | 5,764 | 1,769 | 578 | — | 8,111 | ||||||||||||||
| Other Process Industries | 8,129 | 3,889 | 39 | — | 12,057 | ||||||||||||||
| Infrastructure, Research & Engineering | 3,924 | 2,773 | 409 | — | 7,106 | ||||||||||||||
| Petrochemical | 3,189 | 329 | — | — | 3,518 | ||||||||||||||
| Other | 3,162 | 1,831 | 1,543 | (2,801 | ) | 3,735 | |||||||||||||
| Total | $ | 148,035 | $ | 33,750 | $ | 3,089 | $ | (2,801 | ) | $ | 182,073 | ||||||||
| Three Months Ended December 31, 2022 | North America | 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 & Transmission | 8,619 | 1,799 | 624 | — | 11,042 | ||||||||||||||
| Other Process Industries | 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 | ||||||||
| Year ended December 31, 2023 | North America | International | Products | Corp/Elim | Total | ||||||||||||||
| Oil & Gas | $ | 379,221 | $ | 36,615 | $ | 159 | $ | — | $ | 415,995 | |||||||||
| Aerospace & Defense | 56,000 | 20,711 | 286 | — | 76,997 | ||||||||||||||
| Industrials | 42,518 | 26,292 | 1,773 | — | 70,583 | ||||||||||||||
| Power Generation and Transmission | 23,598 | 6,609 | 3,767 | — | 33,974 | ||||||||||||||
| Other Process Industries | 33,035 | 14,456 | 112 | — | 47,603 | ||||||||||||||
| Infrastructure, Research & Engineering | 16,620 | 9,320 | 3,168 | — | 29,108 | ||||||||||||||
| Petrochemical | 13,216 | 1,216 | — | — | 14,432 | ||||||||||||||
| Other | $ | 15,122 | $ | 9,195 | $ | 3,721 | $ | (11,257 | ) | $ | 16,781 | ||||||||
| Total | $ | 579,330 | $ | 124,414 | $ | 12,986 | $ | (11,257 | ) | $ | 705,473 | ||||||||
| Year ended December 31, 2022 | North America | 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 Process Industries | 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 | ||||||||
Mistras Group, Inc. and Subsidiaries
Unaudited Revenues by Category (continued)
(in thousands)
The Company has retrospectively reclassified certain Oil and Gas sub-category revenues for each quarterly period in 2022 in order to conform the classification with the current year presentation. Total Oil and Gas sub-category revenues were unchanged in total in each quarterly period and for the full year ended December 31, 2022. The table below presents the reclassified balances for each quarterly period in the prior year.
| 2022 Quarterly Revenues | |||||||||||||||
| Three months ended March 31, | Three months ended June 30, | Three months ended September 30, | Three months ended December 31, | ||||||||||||
| Oil and Gas Revenue by sub-category | |||||||||||||||
| Upstream | $ | 36,397 | $ | 38,051 | $ | 35,173 | $ | 36,435 | |||||||
| Midstream | 20,427 | 27,153 | 25,885 | 23,540 | |||||||||||
| Downstream | 37,399 | 36,061 | 35,973 | 35,258 | |||||||||||
| Total | $ | 94,223 | $ | 101,265 | $ | 97,031 | $ | 95,233 | |||||||
Revenue by Oil & Gas Sub-category was as follows:
| Three months ended December 31, | Year ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Oil and Gas Revenue by sub-category | |||||||||||||||
| Upstream | $ | 40,887 | $ | 36,435 | $ | 157,828 | $ | 146,056 | |||||||
| Midstream | 26,539 | 23,540 | 101,278 | 97,005 | |||||||||||
| Downstream | 40,528 | 35,258 | 156,889 | 144,691 | |||||||||||
| Total | $ | 107,954 | $ | 95,233 | $ | 415,995 | $ | 387,752 | |||||||
Consolidated Revenue by type was as follows:
| For the quarter ended December 31, | For the year ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Field Services | $ | 121,932 | $ | 109,666 | $ | 470,433 | $ | 455,051 | |||||||
| Shop Laboratories | 15,972 | 13,276 | 58,188 | 48,809 | |||||||||||
| Data Analytical Solutions | 19,542 | 16,624 | 72,458 | 62,410 | |||||||||||
| Other | 24,627 | 28,652 | 104,394 | 121,103 | |||||||||||
| Total | $ | 182,073 | $ | 168,218 | $ | 705,473 | $ | 687,373 | |||||||
| Mistras Group, Inc. and Subsidiaries 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 December 31, | For the year ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| North America: | |||||||||||||||
| Income from operations (GAAP) | $ | 15,451 | $ | 14,301 | $ | 55,170 | $ | 49,616 | |||||||
| Bad debt provision for troubled customers, net of recoveries | — | (247 | ) | — | 42 | ||||||||||
| Reorganization and other costs | 386 | 59 | 960 | 99 | |||||||||||
| Legal settlement and insurance (recoveries) charges, net | 908 | — | 1,058 | (841 | ) | ||||||||||
| Acquisition-related expense, net | — | — | — | 45 | |||||||||||
| Income before special items (unaudited, non-GAAP) | $ | 16,745 | $ | 14,113 | $ | 57,188 | $ | 48,961 | |||||||
| International: | |||||||||||||||
| Income (loss) from operations (GAAP) | $ | 802 | $ | 888 | $ | (12,229 | ) | $ | 3,566 | ||||||
| Goodwill Impairment charges | — | — | 13,799 | — | |||||||||||
| Reorganization and other costs | 123 | 71 | 351 | (43 | ) | ||||||||||
| Income before special items (unaudited, non-GAAP) | $ | 925 | $ | 959 | $ | 1,921 | $ | 3,523 | |||||||
| Products and Systems: | |||||||||||||||
| Income (loss) from operations (GAAP) | $ | 345 | $ | 342 | $ | 267 | $ | (992 | ) | ||||||
| Reorganization and other costs | 193 | — | 382 | — | |||||||||||
| Income (loss) before special items (unaudited, non-GAAP) | $ | 538 | $ | 342 | $ | 649 | $ | (992 | ) | ||||||
| Corporate and Eliminations: | |||||||||||||||
| Loss from operations (GAAP) | $ | (15,892 | ) | $ | (9,729 | ) | $ | (45,112 | ) | $ | (32,391 | ) | |||
| Legal settlement and insurance (recoveries) charges, net | — | — | — | (153 | ) | ||||||||||
| Loss on debt modification | — | — | — | 693 | |||||||||||
| Reorganization and other costs | 5,550 | — | 10,576 | 139 | |||||||||||
| Acquisition-related expense, net | 4 | 12 | 9 | 31 | |||||||||||
| Loss before special items (unaudited, non-GAAP) | $ | (10,338 | ) | $ | (9,717 | ) | $ | (34,527 | ) | $ | (31,681 | ) | |||
| Total Company | |||||||||||||||
| Income (loss) from operations (GAAP) | $ | 706 | $ | 5,802 | $ | (1,904 | ) | $ | 19,799 | ||||||
| Goodwill Impairment charges | — | — | 13,799 | — | |||||||||||
| Bad debt provision for troubled customers, net of recoveries | — | (247 | ) | — | 42 | ||||||||||
| Reorganization and other costs | 6,252 | 130 | 12,269 | 195 | |||||||||||
| Legal settlement and insurance (recoveries) charges, net | 908 | — | 1,058 | (994 | ) | ||||||||||
| Loss on debt modification | — | — | — | 693 | |||||||||||
| Acquisition-related expense, net | 4 | 12 | 9 | 76 | |||||||||||
| Income before special items (unaudited, non-GAAP) | $ | 7,870 | $ | 5,697 | $ | 25,231 | $ | 19,811 | |||||||
| Mistras Group, Inc. and Subsidiaries Unaudited Summary Cash Flow Information (in thousands) | |||||||||||||||
| For the quarter ended December 31, | For the year ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net cash provided by (used in): | |||||||||||||||
| Operating activities | $ | 16,064 | $ | 15,875 | $ | 26,748 | $ | 26,406 | |||||||
| Investing activities | (6,963 | ) | (3,361 | ) | (22,133 | ) | (12,238 | ) | |||||||
| Financing activities | (5,867 | ) | (11,570 | ) | (7,706 | ) | (16,323 | ) | |||||||
| Effect of exchange rate changes on cash | 1,660 | 1,460 | 249 | (1,467 | ) | ||||||||||
| Net change in cash and cash equivalents | $ | 4,894 | $ | 2,404 | $ | (2,842 | ) | $ | (3,622 | ) | |||||
| Mistras Group, Inc. and Subsidiaries Unaudited Reconciliation of Net Cash Provided by Operating Activities (GAAP) to Free Cash Flow (non-GAAP) (in thousands) | |||||||||||||||
| For the quarter ended December 31, | For the year ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net cash provided by operating activities (GAAP) | $ | 16,064 | $ | 15,875 | $ | 26,748 | $ | 26,406 | |||||||
| Less: | |||||||||||||||
| Purchases of property, plant and equipment | (6,451 | ) | (3,541 | ) | (20,854 | ) | (12,591 | ) | |||||||
| Purchases of intangible assets | (927 | ) | (245 | ) | (2,795 | ) | (825 | ) | |||||||
| Free cash flow (non-GAAP) | $ | 8,686 | $ | 12,089 | $ | 3,099 | $ | 12,990 | |||||||
| Mistras Group, Inc. and Subsidiaries Unaudited Reconciliation of Gross Debt (GAAP) to Net Debt (non-GAAP) (in thousands) | ||||||||
| For the year ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Current portion of long-term debt | $ | 8,900 | $ | 7,425 | ||||
| Long-term debt, net of current portion | 181,499 | 183,826 | ||||||
| Total Gross Debt (GAAP) | 190,399 | 191,251 | ||||||
| Less: Cash and cash equivalents | (17,646 | ) | (20,488 | ) | ||||
| Total Net Debt (non-GAAP) | $ | 172,753 | $ | 170,763 | ||||
| Mistras Group, Inc. and Subsidiaries Unaudited Reconciliation of Net Income (Loss) (GAAP) to Adjusted EBITDA (non-GAAP) (in thousands) | |||||||||||||||
| For the quarter ended December 31, | For the year ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net income (loss) | $ | (2,513 | ) | $ | 2,863 | $ | (17,445 | ) | $ | 6,574 | |||||
| Less: Net income attributable to noncontrolling interests, net of taxes | 1 | 21 | 8 | 75 | |||||||||||
| Net income (loss) attributable to Mistras Group, Inc. | $ | (2,514 | ) | $ | 2,842 | $ | (17,453 | ) | $ | 6,499 | |||||
| Interest expense | 4,668 | 3,713 | 16,761 | 10,505 | |||||||||||
| Provision (benefit) for income taxes | (1,449 | ) | (774 | ) | (1,220 | ) | 2,720 | ||||||||
| Depreciation and amortization | 8,629 | 8,162 | 34,099 | 33,294 | |||||||||||
| Share-based compensation expense | 1,498 | 1,169 | 5,147 | 5,335 | |||||||||||
| Goodwill Impairment charges | — | — | 13,799 | — | |||||||||||
| Reorganization and other related costs, net | 6,252 | 130 | 12,269 | 195 | |||||||||||
| Legal settlement and insurance recoveries, net | 908 | — | 1,058 | (994 | ) | ||||||||||
| Acquisition-related expense, net | 4 | 12 | 9 | 76 | |||||||||||
| Loss on debt modification | — | — | — | 693 | |||||||||||
| Bad debt provision for troubled customers, net of recoveries | — | (247 | ) | — | 42 | ||||||||||
| Foreign exchange (gain) loss | 1,182 | 709 | 1,331 | (215 | ) | ||||||||||
| Adjusted EBITDA | $ | 19,178 | $ | 15,716 | $ | 65,800 | $ | 58,150 | |||||||
| Mistras Group, Inc. and Subsidiaries 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 December 31, | For the year ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net income (loss) attributable to Mistras Group, Inc. (GAAP) | $ | (2,514 | ) | $ | 2,842 | $ | (17,453 | ) | $ | 6,499 | |||||
| Bad debt provision for troubled customers, net of recoveries | — | (247 | ) | — | 42 | ||||||||||
| Goodwill Impairment charges | — | — | 13,799 | — | |||||||||||
| Reorganization and other related costs, net | 6,252 | 130 | 12,269 | 195 | |||||||||||
| Loss on debt modification | — | — | — | 693 | |||||||||||
| Legal settlement and insurance recoveries, net | 908 | — | 1,058 | (994 | ) | ||||||||||
| Acquisition-related expense, net | 4 | 12 | 9 | 76 | |||||||||||
| Special items total | 7,164 | (105 | ) | 27,135 | 12 | ||||||||||
| Tax impact on special items | (1,787 | ) | 25 | (3,256 | ) | (5 | ) | ||||||||
| Special items, net of tax | $ | 5,377 | $ | (80 | ) | $ | 23,879 | $ | 7 | ||||||
| Net income attributable to Mistras Group, Inc. Excluding Special Items (non-GAAP) | $ | 2,863 | $ | 2,762 | $ | 6,426 | $ | 6,506 | |||||||
| Diluted EPS (GAAP) | $ | (0.08 | ) | $ | 0.09 | $ | (0.58 | ) | $ | 0.21 | |||||
| Special items, net of tax | 0.18 | — | 0.79 | — | |||||||||||
| Diluted EPS Excluding Special Items (non-GAAP) | $ | 0.10 | $ | 0.09 | $ | 0.21 | $ | 0.21 | |||||||
FAQ
What was MISTRAS Group's Q4 2023 revenue and net loss?
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