-
MISTRAS Announces Second Quarter and First Half 2022 Results
Source: Nasdaq GlobeNewswire / 03 Aug 2022 15:01:01 America/Chicago
Top-line Growth of 2.8% for the first six months of 2022, with Aerospace & Defense revenue up 28.4%
Quarterly interest expense reduction of $1.0 million or 32.9%
Ongoing deleveraging, with $8.1 million of quarterly debt repayments, and total debt reduced to $200.4 million
New Growth Initiatives - OneSuite™ (Data Solutions), Sensoria™ (Wind) and Private Space capabilities remain on a strong growth trajectoryPRINCETON JUNCTION, N.J., Aug. 03, 2022 (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 second quarter and six months ended June 30, 2022.
Highlights of the Second Quarter 2022*
- Revenue of $179.0 million, up 0.8%, up 3.2% excluding the impact of unfavorable foreign currency exchange**
- SG&A expenses of $40.7 million, up 2.4% but down 3.2% sequentially
- Net income of $4.6 million or $0.15 per diluted share
- Adjusted EBITDA of $18.3 million
- Operating cash flow of $13.2 million and free cash flow of $9.3 million
Highlights of the First Half 2022
- Revenue of $340.7 million, up 2.8%, up 4.6% excluding the impact of unfavorable foreign currency exchange**
- Income from operations of $4.9 million
- Interest expense of $4.1 million, down 36.3%
- Gross debt of $200.4 million and Net debt of $181.8 million
* All comparisons are consolidated and versus the equivalent prior year period, unless otherwise noted.
** We calculate foreign currency exchange impact by converting our 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 second quarter of 2022, consolidated revenue was $179.0 million, a 0.8% nominal increase, but up 3.2% excluding the impact of unfavorable foreign currency exchange. Second quarter revenue was impacted by project delays in the Company’s oil & gas business, as customers continue to defer projects, associated with high refinery utilization rates due to strong consumer demand. Projects that normally occur in the second quarter are now anticipated to be performed in the third and fourth quarters. This is evident in our Services segment which we expect to approach 2019 revenue levels in the third quarter, driven by the completion of turnarounds and other projects previously scheduled for the first and second quarters of the year.
Second quarter 2022 consolidated gross profit was down slightly compared to the prior year period, with a gross profit margin decline of 120 basis points. This decline was primarily due to higher healthcare costs, the lag in price increases in response to inflationary cost increases and the end of Canadian wage subsidies that were available during the COVID-19 pandemic and are no longer being provided. These adverse factors more than offset the positive impact of a favorable sales mix. The Company anticipates improved gross margin in the second half of 2022, due to increased volumes, a favorable sales mix and reducing the impact of inflationary pressures on gross margin.
Selling, general and administrative expenses in the second quarter of 2022 were $40.7 million, up from $39.7 million in the second quarter of 2021, primarily due to the reversal of remaining COVID-19 temporary cost reductions in August of 2021, which were initially implemented in 2020. However, selling, general and administrative expenses were down 3.2% sequentially from the first quarter of 2022 and remain below second quarter 2019 pre-pandemic levels.
For the second quarter of 2022, the Company reported net income of $4.6 million or $0.15 per diluted share.
Chief Executive Officer Dennis Bertolotti commented, “This was our eighth consecutive quarter of revenue growth despite delays in the timing of some oil & gas projects and unfavorable foreign exchange translation. Most of these delays are expected to shift revenue that had been anticipated to be earned in the second quarter, into the third and fourth quarters, effectively reversing our historically seasonal second and third quarter performance and, ultimately, having little effect on our full year expectations.”
“We continue to see strengthening market conditions in the Aerospace and Defense industry which continued in the second quarter, as our revenue in this end market was the highest it has been since the onset of the pandemic. We are seeing significant increases in the commercial aerospace sector which we anticipate will continue to gain momentum through the remainder of the year. The expansion and installation of new equipment and capabilities at our Georgia Aerospace facility is nearly complete, wherein we are expanding our service offerings that help alleviate our customers’ bottlenecks that have arisen during the pandemic and continue to exist in the aerospace supply chains. We are also optimistic for the continuing prospects of the growing private space sector. Additionally, I am very pleased to have Hon. Jay M. Cohen engaged with MISTRAS as an Advanced Technical Solutions Consultant. Retired Rear Admiral Cohen brings an exceptional reputation and over four decades of expertise in science and technology research, and his knowledge and network of industry contacts will enable us to further expand into a robust naval and defense infrastructure sector.”
“We continue to see expansion in our growth initiatives as Onstream, our inline inspection business within the midstream sector, reported its highest ever revenue quarter. We expect to continue to see this trend continuing into the second half of 2022, due to increased production levels and the corresponding transportation and distribution activity, due to high crude oil prices. Our data solutions businesses, including PCMS and New Century Software, also had strong quarters as well. The adoption of OneSuite continues to increase, with over 90 integrated applications having been installed at nearly 40 different customers. This continues to prove to us, and our customers, the versatility and capabilities of OneSuite as it is currently operating at over 150 sites with close to 900 individual subscriptions. OneSuite revenue remains on track to double this year.”
Mr. Bertolotti concluded, “I am looking forward to the second half of 2022, during which the third quarter could be one of our strongest Services segment revenue quarters ever, due in part to the continued rapid growth of our digital solutions service offerings including OneSuite, and the continued recovery and growth of our other end markets as we continue to meet and exceed customer needs. Inflation remains an ongoing challenge, but we are making progress as we actively engage with our customers, and they begin to acknowledge the inevitable cost of an inflationary environment. Our continued focus on improving cost leverage and recovery in markets with higher than corporate average margins has positioned us to have robust consolidated profitability for the remainder of the year. With our recently announced new credit facility, we will enjoy the flexibility to increase our investment in both organic growth initiatives and more closely evaluate acquisitions that meet our strategic objectives. I am very excited about our prospects for growth in both our existing and new markets in 2022 and beyond.”
Performance by certain Segments:
Services segment second quarter revenue was $149.5 million, up 3.1% from $145.0 million in the prior year quarter. Revenues continue to reflect recovery in the Energy markets. For the second quarter, gross profit was $43.0 million, compared to $43.8 million in the prior year. Gross profit margin was 28.7% for the second quarter of 2022, compared to 30.2% in the second quarter of 2021. This decrease of 150 basis points was due primarily to higher healthcare costs in the US and the end of Canadian wage subsidies that were available during the COVID-19 pandemic and are no longer being provided, partially offset by favorable sales mix.
International segment second quarter revenues were $29.6 million, down 7.3% from $32.0 million in the prior year quarter but up 3.7% in local currencies before translation, which represents organic growth, due to increased opportunities in a recovering aerospace market, increased nuclear business, and large projects in the Energy markets. International segment second quarter gross profit margin was 31.9%, compared to 30.1% in the prior year, a 180-basis point improvement attributable to favorable sales mix.
Cash Flow and Balance Sheet
The Company’s net cash from operating activities was $7.8 million for the first six months of 2022, compared to $18.1 million in the prior year. Free cash flow was $0.7 million for the first six months of 2022, compared to $7.3 million in the prior year.
For the second quarter of 2022, free cash flow was $9.3 million compared to $8.5 million in the prior year period, an increase of 9.4%.The Company’s net debt (total debt less cash and cash equivalents) was $181.8 million as of June 30, 2022, compared to $178.5 million as of December 31, 2021. Gross debt decreased by $8.4 million during the quarter ended June 30, 2022, from $208.8 million as of March 31, 2022, to $200.4 million as of June 30, 2022.
Outlook
The Company reaffirms its previously announced outlook for the full year 2022, that being revenue between $695 and $715 million, Adjusted EBITDA between $65 and $69 million and free cash flow between $27 and $30 million. While the second quarter 2022 results were below the Company’s expectations, it is confident in the level of work expected for the second half of 2022, given strong energy markets, improving commercial aerospace demand, robust industrial manufacturing and a rapidly developing Data Solutions offering.Conference Call
In connection with this release MISTRAS will hold a conference call on August 4, 2022, at 10:00 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/BI61289ae154d54459b1036db29c908b0d. 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 call 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, 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 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 2021 Annual Report on Form 10-K dated March 14, 2022, 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. 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 equivalents and 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). A reconciliation of these non-GAAP financial measurement 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) before special items (non-GAAP), “Net Income (Loss) (GAAP)" to "Net Income (Loss) Excluding Special Items (non-GAAP)”, and “Diluted EPS (GAAP)” to “Diluted EPS Excluding Special Items (non-GAAP)” which reconciles the non-GAAP amount to a GAAP measurement.Mistras Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)June 30, 2022 December 31, 2021 ASSETS (unaudited) Current Assets Cash and cash equivalents $ 18,609 $ 24,110 Accounts receivable, net 129,572 109,511 Inventories 12,967 12,686 Prepaid expenses and other current assets 11,768 15,031 Total current assets 172,916 161,338 Property, plant and equipment, net 80,585 86,578 Intangible assets, net 54,278 59,381 Goodwill 203,106 205,439 Deferred income taxes 1,232 2,174 Other assets 43,425 47,285 Total assets $ 555,542 $ 562,195 LIABILITIES AND EQUITY Current Liabilities Accounts payable $ 17,328 $ 12,870 Accrued expenses and other current liabilities 84,835 83,863 Current portion of long-term debt 21,227 20,162 Current portion of finance lease obligations 3,844 3,765 Income taxes payable 148 755 Total current liabilities 127,382 121,415 Long-term debt, net of current portion 179,162 182,403 Obligations under finance leases, net of current portion 9,444 9,752 Deferred income taxes 8,566 8,385 Other long-term liabilities 36,727 39,328 Total liabilities 361,281 361,283 Equity Preferred stock, 10,000,000 shares authorized — — Common stock, $0.01 par value, 200,000,000 shares authorized, 29,807,038 and 29,546,263 shares issued and outstanding 297 295 Additional paid-in capital 240,697 238,687 Accumulated deficit (18,708 ) (17,988 ) Accumulated other comprehensive loss (28,287 ) (20,311 ) Total Mistras Group, Inc. stockholders’ equity 193,999 200,683 Non-controlling interests 262 229 Total equity 194,261 200,912 Total liabilities and equity $ 555,542 $ 562,195 Mistras Group, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Income (Loss)
(in thousands, except per share data)Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Revenue $ 179,031 $ 177,677 $ 340,693 $ 331,412 Cost of revenue 119,980 116,787 235,738 225,030 Depreciation 5,493 5,554 11,505 11,045 Gross profit 53,558 55,336 93,450 95,337 Selling, general and administrative expenses 40,676 39,719 82,712 79,358 Bad debt provision for troubled customers, net of recoveries 289 — 289 — Legal settlement and insurance recoveries, net (153 ) — (994 ) 1,030 Research and engineering 522 620 1,073 1,347 Depreciation and amortization 2,635 3,078 5,430 6,152 Acquisition-related expense, net 13 545 63 822 Income from operations 9,576 11,374 4,877 6,628 Interest expense 2,117 3,155 4,055 6,368 Income before provision (benefit) for income taxes 7,459 8,219 822 260 Provision (benefit) for income taxes 2,793 2,274 1,509 (326 ) Net Income (Loss) 4,666 5,945 (687 ) 586 Less: net income attributable to noncontrolling interests, net of taxes 23 8 33 11 Net Income (Loss) attributable to Mistras Group, Inc. $ 4,643 $ 5,937 $ (720 ) $ 575 Earnings (loss) per common share: Basic $ 0.15 $ 0.20 $ (0.02 ) $ 0.02 Diluted $ 0.15 $ 0.20 $ (0.02 ) $ 0.02 Weighted-average common shares outstanding: Basic 29,957 29,602 29,840 29,514 Diluted 30,233 30,136 29,840 30,039 Mistras Group, Inc. and Subsidiaries
Unaudited Operating Data by Segment
(in thousands)Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Revenues Services $ 149,528 $ 144,977 $ 282,474 $ 269,275 International 29,610 31,951 57,748 59,599 Products and Systems 2,652 3,203 5,588 6,191 Corporate and eliminations (2,759 ) (2,454 ) (5,117 ) (3,653 ) $ 179,031 $ 177,677 $ 340,693 $ 331,412 Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Gross profit Services $ 42,954 $ 43,761 $ 73,479 $ 74,837 International 9,440 9,615 17,630 17,240 Products and Systems 1,157 1,952 2,325 3,233 Corporate and eliminations 7 8 16 27 $ 53,558 $ 55,336 $ 93,450 $ 95,337 Mistras Group, Inc. and Subsidiaries
Unaudited Revenues by Category
(in thousands)Revenue by industry was as follows:
Three Months Ended June 30, 2022 Services International Products Corp/Elim Total Oil & Gas $ 93,098 $ 8,028 $ 139 $ — $ 101,265 Aerospace & Defense 17,300 5,118 26 — 22,444 Industrials 9,794 6,506 333 — 16,633 Power generation & Transmission 8,378 1,997 678 — 11,053 Other Process Industries 11,641 3,754 14 — 15,409 Infrastructure, Research & Engineering 3,183 2,193 442 — 5,818 Petrochemical 3,584 55 — — 3,639 Other 2,550 1,959 1,020 (2,759 ) 2,770 Total $ 149,528 $ 29,610 $ 2,652 $ (2,759 ) $ 179,031 Three Months Ended June 30, 2021 Services International Products Corp/Elim Total Oil & Gas $ 85,831 $ 9,533 $ 212 $ — $ 95,576 Aerospace & Defense 12,779 4,127 29 — 16,935 Industrials 11,242 6,194 418 — 17,854 Power generation & Transmission 10,073 3,183 830 — 14,086 Other Process Industries 10,356 3,627 35 — 14,018 Infrastructure, Research & Engineering 5,174 3,254 825 — 9,253 Petrochemical 5,936 47 — — 5,983 Other 3,586 1,986 854 (2,454 ) 3,972 Total $ 144,977 $ 31,951 $ 3,203 $ (2,454 ) $ 177,677 Six Months Ended June 30, 2022 Services International Products Corp/Elim Total Oil & Gas $ 179,711 $ 15,600 $ 177 $ — $ 195,488 Aerospace & Defense 32,322 10,058 134 — 42,514 Industrials 18,801 12,034 835 — 31,670 Power generation & Transmission 12,200 4,559 1,523 — 18,282 Other Process Industries 21,934 7,272 15 — 29,221 Infrastructure, Research & Engineering 5,689 4,232 1,339 — 11,260 Petrochemical 6,629 133 — — 6,762 Other 5,188 3,860 1,565 (5,117 ) 5,496 Total $ 282,474 $ 57,748 $ 5,588 $ (5,117 ) $ 340,693 Six Months Ended June 30, 2021 Services International Products Corp/Elim Total Oil & Gas $ 165,051 $ 17,469 $ 268 $ — $ 182,788 Aerospace & Defense 24,602 8,444 64 — 33,110 Industrials 20,061 11,043 745 — 31,849 Power generation & Transmission 15,607 5,161 1,589 — 22,357 Other Process Industries 18,212 6,539 44 — 24,795 Infrastructure, Research & Engineering 8,343 7,010 1,969 — 17,322 Petrochemical 11,400 119 — — 11,519 Other 5,999 3,814 1,512 (3,653 ) 7,672 Total $ 269,275 $ 59,599 $ 6,191 $ (3,653 ) $ 331,412 Revenue by Oil & Gas Sub-category was as follows:
Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Oil and Gas Revenue by sub-category Upstream $ 39,443 $ 36,205 $ 81,108 $ 70,131 Midstream 32,949 29,797 57,856 52,235 Downstream 28,873 29,574 56,524 60,422 Total $ 101,265 $ 95,576 $ 195,488 $ 182,788 Mistras Group, Inc. and Subsidiaries
Unaudited Reconciliation of
Segment and Total Company Income (Loss) from Operations (GAAP) to Income before Special Items (non-GAAP)
(in thousands)Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Services: Income from operations (GAAP) $ 14,855 $ 18,358 $ 18,615 $ 22,906 Bad debt provision for troubled customers, net of recoveries 289 — 289 — Reorganization and other costs 1 26 28 97 Legal settlement and insurance recoveries, net — — (841 ) 1,650 Acquisition-related expense, net — 545 45 788 Income from operations before special items (non-GAAP) $ 15,145 $ 18,929 $ 18,136 $ 25,441 International: Income from operations (GAAP) $ 1,580 $ 1,809 $ 1,864 $ 989 Reorganization and other costs (187 ) 30 (99 ) 126 Income from operations before special items (non-GAAP) $ 1,393 $ 1,839 $ 1,765 $ 1,115 Products and Systems: Income (loss) from operations (GAAP) $ (420 ) $ 209 $ (1,002 ) $ (372 ) Reorganization and other costs — — — 27 Income (loss) from operations (GAAP) $ (420 ) $ 209 $ (1,002 ) $ (345 ) Corporate and Eliminations: Loss from operations (GAAP) $ (6,439 ) $ (9,002 ) $ (14,600 ) $ (16,895 ) Loss on debt modification — 277 — 277 Legal settlement and insurance recoveries, net (153 ) — (153 ) (620 ) Reorganization and other costs 6 — 6 — Acquisition-related expense, net 13 — 18 34 Loss from operations before special items (non-GAAP) $ (6,573 ) $ (8,725 ) $ (14,729 ) $ (17,204 ) Total Company: Income from operations (GAAP) $ 9,576 $ 11,374 $ 4,877 $ 6,628 Bad debt provision for troubled customers, net of recoveries 289 — 289 — Reorganization and other costs (180 ) 56 (65 ) 250 Loss on debt modification — 277 — 277 Legal settlement and insurance recoveries, net (153 ) — (994 ) 1,030 Acquisition-related expense, net 13 545 63 822 Income from operations before special items (non-GAAP) $ 9,545 $ 12,252 $ 4,170 $ 9,007 Mistras Group, Inc. and Subsidiaries
Unaudited Summary Cash Flow Information
(in thousands)Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Net cash provided by (used in): Operating activities $ 13,208 $ 14,978 $ 7,809 $ 18,126 Investing activities (3,762 ) (6,142 ) (6,499 ) (10,318 ) Financing activities (9,379 ) (13,405 ) (5,056 ) (12,970 ) Effect of exchange rate changes on cash (1,379 ) 334 (1,755 ) (656 ) Net change in cash and cash equivalents $ (1,312 ) $ (4,235 ) $ (5,501 ) $ (5,818 ) Mistras Group, Inc. and Subsidiaries
Unaudited 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, 2022 2021 2022 2021 Net cash provided by operating activities (GAAP) $ 13,208 $ 14,978 $ 7,809 $ 18,126 Less: Purchases of property, plant and equipment (3,631 ) (6,185 ) (6,692 ) (10,188 ) Purchases of intangible assets (248 ) (268 ) (399 ) (618 ) Free cash flow (non-GAAP) $ 9,329 $ 8,525 $ 718 $ 7,320 Mistras Group, Inc. and Subsidiaries
Unaudited Reconciliation of
Gross Debt (GAAP) to Net Debt (non-GAAP)
(in thousands)June 30, 2022 December 31, 2021 Current portion of long-term debt $ 21,227 $ 20,162 Long-term debt, net of current portion 179,162 182,403 Total Gross Debt (GAAP) 200,389 202,565 Less: Cash and cash equivalents (18,609 ) (24,110 ) Total Net Debt (non-GAAP) $ 181,780 $ 178,455 Mistras Group, Inc. and Subsidiaries
Unaudited Reconciliation of
Net Income (Loss) (GAAP) to Adjusted EBITDA (non-GAAP)
(in thousands)Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Net Income (loss) (GAAP) $ 4,666 $ 5,945 $ (687 ) $ 586 Less: Net income attributable to non-controlling interests, net of taxes 23 8 33 11 Net Income (loss) attributable to Mistras Group, Inc. $ 4,643 $ 5,937 $ (720 ) $ 575 Interest expense 2,117 3,155 4,055 6,368 Provision (benefit) for income taxes 2,793 2,274 1,509 (326 ) Depreciation and amortization 8,128 8,632 16,935 17,197 Share-based compensation expense 1,255 1,202 2,770 2,464 Acquisition-related expense 13 545 63 822 Reorganization and other related costs (benefit), net (180 ) 56 (65 ) 250 Legal settlement and insurance recoveries, net (153 ) — (994 ) 1,030 Loss on debt modification — 277 — 277 Bad debt provision for troubled customers, net of recoveries 289 — 289 — Foreign exchange (gain) loss (597 ) 474 4 932 Adjusted EBITDA (non-GAAP) $ 18,308 $ 22,552 $ 23,846 $ 29,589 Mistras Group, Inc. and Subsidiaries
Unaudited Reconciliation of
Net Income (Loss) (GAAP) and Diluted EPS (GAAP) to Net Income (Loss) Excluding Special Items (non-GAAP)
and Diluted EPS Excluding Special Items (non-GAAP)
(dollars in thousands, except per share data)Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Net income (loss) attributable to Mistras Group, Inc. (GAAP) $ 4,643 $ 5,937 $ (720 ) $ 575 Special items (31 ) 878 (707 ) 2,379 Tax impact on special items 24 (189 ) 180 (557 ) Special items, net of tax $ (7 ) $ 689 $ (527 ) $ 1,822 Net income (loss) attributable to Mistras Group, Inc. Excluding Special Items (non-GAAP) $ 4,636 $ 6,626 $ (1,247 ) $ 2,397 Diluted EPS (GAAP)(1) $ 0.15 $ 0.20 $ (0.02 ) $ 0.02 Special items, net of tax 0.00 0.02 (0.02 ) 0.06 Diluted EPS Excluding Special Items (non-GAAP) $ 0.15 $ 0.22 $ (0.04 ) $ 0.08 _______________
(1) For the six months ended June 30, 2022, 1,412,073 shares related to restricted stock were excluded from the calculation of diluted EPS due to the net loss for the period.