• MISTRAS Announces Third Quarter 2024 Results

    Источник: Nasdaq GlobeNewswire / 30 окт 2024 16:01:01   America/New_York

    Quarterly Revenue Growth of 1.9%, driven by continued strong growth in the International segment

    Quarterly Net Income of $6.4 million, or $0.20 per diluted share

    Quarterly Adjusted EBITDA (non-GAAP) of $23.3 million, an increase of 11.5%

    PRINCETON JUNCTION, N.J., Oct. 30, 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 third quarter and nine months ended September 30, 2024.

    Highlights of the Third Quarter 2024*

    • Revenue of $182.7 million, a 1.9% increase
    • Gross profit expanded to $54.6 million, with gross profit margin of 29.9%
    • Net income of $6.4 million and Earnings Per Diluted Share of $0.20
    • Adjusted EBITDA up 11.5% to $23.3 million

    Highlights of the Year-to-Date 2024*

    • Revenue of $556.9 million, a 6.4% increase
    • Gross profit increased 7.7% to $161.8 million, with gross profit margin of 29.1%, a 40 basis point expansion
    • Net income of $13.8 million and Earnings Per Diluted Share of $0.44
    • Adjusted EBITDA up 32.1% to $61.6 million

    * All comparisons are consolidated and versus the equivalent prior year period, unless otherwise noted. Please see the reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures and additional information about the non-GAAP financial measures set forth in tables attached to this press release.

    Manny Stamatakis, Interim Chief Executive Officer commented “the Company’s third quarter results were in line with our expectations, with the bottom line growing significantly faster than the top line, once again demonstrating the margin accretive actions and significant operating leverage improvements that we have instituted into our business model. Revenue was up nearly 2% during the quarter, led by growth in the International Segment, along with revenue growth in the North America segment’s Aerospace and Defense, Industrials and Power Generation & Transmission industries. The Company’s Oil and Gas Downstream revenue decreased during the third quarter as we had anticipated, due to a relatively moderate Fall turn around season compared to a more robust Spring turn around season. Adjusted EBITDA was up over 11% compared to the prior year period, reflecting significant improvement in our operating leverage. I am also pleased with our third consecutive quarter generating Net Income, which is a function of continued revenue growth, gross profit expansion, and selling, general and administrative expenses (“SG&A”) reductions.

    Mr. Stamatakis continued, “I am encouraged with the progress being achieved by the collaboration between our Commercial and Operations functions, which is resulting in the successful renewal of long-term agreements with a number of our largest customers. Our continued cost discipline, strategic partnerships with our valuable portfolio of clients, and the Company’s long-term vision have us excited for the prospect of continued profitable growth for Mistras.”

    Edward Prajzner, Senior Executive Vice President and Chief Financial Officer, commented, “due to our improved results and operating leverage, we generated $19.4 million of operating cash flow and $13.2 million of free cash flow during the third quarter. We used this cash flow to pay down a significant amount of first half 2024 borrowings during the third quarter, and our gross debt is the lowest level it has been since the acquisition of Onstream in December of 2018. We are funding our organic growth initiatives with operating cash flow, which significantly improved in the third quarter.”

    For the third quarter of 2024, consolidated revenue was $182.7 million, a 1.9% increase. Revenue growth in the quarter was led by strong growth in the International segment of 8.7%. On a consolidated basis, revenue expanded by 9.1% in the Aerospace and Defense industry, 17.2% in the Industrials industry, and 19.7% in the Power Generation & Transmission industry. As anticipated, Oil & Gas revenue was down 3.6% in the quarter as a result of the expected moderate Fall turnaround season.

    Third quarter 2024 gross profit increased 0.4% to $54.6 million, with gross profit margin contracting 40 basis points. The decrease in gross profit margin to 29.9% was primarily due to higher healthcare claims expense in the third quarter, which was partially offset by continued strong growth in our higher margin Aerospace and Defense industry.

    SG&A in the third quarter of 2024 was $38.9 million, down 1.7% compared to $39.5 million in the third quarter of 2023 and also down 5.1% sequentially from the second quarter of 2024, as a result of the ongoing cost containment activities. SG&A for the nine months ended September 30, 2024, was down 2.3% compared to the prior year period.

    The Company reported net income of $6.4 million, or $0.20 per diluted share in the third quarter of 2024, as compared to a net loss of $10.3 million, or $0.34 per diluted share in the prior year period. Third quarter net income excluding special items (non-GAAP) was $6.3 million or $0.20 per diluted share excluding special items (non-GAAP) as compared to $5.6 million of net income excluding special items or $0.18 per diluted share excluding special items in the prior year period.

    Adjusted EBITDA was $23.3 million in the third quarter of 2024 compared to $20.9 million in the prior year period, an increase of 11.5%. Adjusted EBITDA for the nine months ended September 30, 2024 was $61.6 million compared to $46.6 million in the prior year period, an increase of 32.1% primarily attributable to a more favorable sales mix and overhead cost containment.

    Performance by certain segments during the third quarter was as follows:

    North America segment third quarter 2024 revenue was $149.8 million, up 0.7% from $148.8 million in the prior year period. The revenue increase was primarily due to strong revenue growth of 13.6% achieved in the Aerospace and Defense industry which was partially offset by the aforementioned contraction in Oil & Gas revenue due to timing of turn arounds. For the third quarter of 2024, gross profit was $42.5 million, compared to $44.8 million in the prior year period. Gross profit margin was 28.4% for the third quarter of 2024, a 170-basis point decrease from 30.1% in the prior year period. This decrease in gross profit margin was primarily due to higher healthcare claims expense.

    International segment third quarter 2024 revenue was $33.7 million, up 8.7% from $31.0 million in the prior year period. This revenue growth was primarily due to a 86.4% increase in Power Generation & Transmission and a   36.2% increase in Other Process Industries in addition to a 2.4% increase in Oil & Gas, which was partially offset by a decrease of 2.0% in Aerospace and Defense industry revenue. International segment third quarter 2024 gross profit grew by 19.5% to $10.1 million, with gross profit margin of 30.1%, compared to 27.4% in the prior year period, a 270-basis point increase, primarily attributable to improved operating leverage and sales mix.

    Cash Flow and Balance Sheet
    The Company’s net cash provided by operating activities was $24.5 million for the first nine months of 2024, compared to $10.7 million in the prior year period. Free cash flow, a non-GAAP financial measure, was $6.3 million for the first nine months of 2024, compared to negative $5.6 million in the prior year period. This increase was primarily attributable to significantly improved financial results in 2024 and improvements in working capital, primarily accounts receivable, experienced in the third quarter of 2024. Capital expenditures increased by $1.9 million in the first nine months of 2024 compared to the prior year period as the Company is continuing to invest in growth opportunities including other internal automations, workflow, and productivity enhancements.

    The Company’s gross debt was $189.7 million as of September 30, 2024, compared to $190.4 million as of December 31, 2023, and $199.7 million as of June 30, 2024. The decrease in gross debt during the period was attributable to the favorable cash flow impacts described above. The Company’s net debt, a non-GAAP financial measure, was $169.3 million as of September 30, 2024, compared to $172.8 million as of December 31, 2023.

    2024 Outlook
    The Company has revised its guidance ranges for the full year 2024 as follows:

    1. Full year Revenue is expected to be between $725 and $730 million (from $725-$750 million previously)
    2. Adjusted EBITDA is expected to be between $80 and $82 million (from $84-$89 million previously)
    3. Free cash flow is expected to be between $18 and $22 million (from $34-$38 million previously)

    These changes were attributable to current market conditions, project pushouts and an unanticipated buildup of accounts receivable.

    Preliminary 2025 Outlook
    Given the expected growth in the Company’s higher margin businesses and continued operating leverage improvements, the Company anticipates a meaningful improvement in its net income, with a low double-digit expansion in Adjusted EBITDA and a low single-digit organic revenue growth for fiscal 2025.

    Conference Call
    In connection with this release, MISTRAS will hold a conference call on October 31, 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/BIf848f0928520406c928ea91abde4515a

    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 and preliminary 2025 outlook, guidance, costs savings and other benefits we expect to realize from our previously announced Project Phoenix initiatives and additional operational and strategic 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 initiatives, operational and strategic initiatives to improve operating leverage, 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 2023 Annual Report on Form 10-K filed on March 11, 2024, 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 the Company’s 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 measure 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 other costs 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 “free cash flow”, a non-GAAP financial measure the Company defines as cash provided by operating activities less capital expenditures (which is classified as an investing activity). The Company additionally uses the terms:   “Segment and Total Company Income (Loss) from Operations (GAAP) to Income (Loss) from Operations before Special Items (non-GAAP)”, “Net Income (Loss) (GAAP) and Diluted EPS (GAAP) to Net Income Excluding Special Items (non-GAAP) and Diluted EPS Excluding Special Items (non-GAAP)” which reconciles the non-GAAP amounts to the GAAP financial measure. This press release also includes the term “net debt”, a non-GAAP financial measure which the Company defines as the sum of the current and long-term portions of long term debt, less cash and cash equivalents. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are also set forth in tables attached to this press release. Each of these non-GAAP financial measures has material limitations as a performance or liquidity measure and should not be considered alternatives to Net Income (Loss) or any other measures derived in accordance with GAAP. Because Income (loss) from operations before special items and other non-GAAP financial measures used in this press release may not be calculated in the same manner by all companies, these measures may not be comparable to other similarly-titled measures used by other companies.

     
    Mistras Group, Inc. and Subsidiaries
    Unaudited Condensed Consolidated Balance Sheets
    (in thousands, except share and per share data)
        
     September 30, 2024 December 31, 2023
    ASSETS(unaudited)  
    Current Assets   
    Cash and cash equivalents$20,360  $17,646 
    Accounts receivable, net 144,104   132,847 
    Inventories 14,510   15,283 
    Prepaid expenses and other current assets 14,353   14,580 
    Total current assets 193,327   180,356 
    Property, plant and equipment, net 79,852   80,972 
    Intangible assets, net 41,504   43,994 
    Goodwill 185,872   187,354 
    Deferred income taxes 5,641   2,316 
    Other assets 45,485   39,784 
    Total assets$551,681  $534,776 
    LIABILITIES AND EQUITY   
    Current Liabilities   
    Accounts payable$13,272  $17,032 
    Accrued expenses and other current liabilities 85,623   84,331 
    Current portion of long-term debt 10,711   8,900 
    Current portion of finance lease obligations 4,594   5,159 
    Income taxes payable 964   1,101 
    Total current liabilities 115,164   116,523 
    Long-term debt, net of current portion 178,989   181,499 
    Obligations under finance leases, net of current portion 11,154   11,261 
    Deferred income taxes 3,781   2,552 
    Other long-term liabilities 37,050   32,438 
    Total liabilities 346,138   344,273 
    Equity   
    Preferred stock, 10,000,000 shares authorized     
    Common stock, $0.01 par value, 200,000,000 shares authorized, 31,006,864 and 30,597,633 shares issued and outstanding 385   305 
    Additional paid-in capital 250,016   247,165 
    Accumulated deficit (15,177)  (28,942)
    Accumulated other comprehensive loss (30,020)  (28,336)
    Total Mistras Group, Inc. stockholders’ equity 205,204   190,192 
    Non-controlling interests 339   311 
    Total equity 205,543   190,503 
    Total liabilities and equity$551,681  $534,776 
            
            


     
    Mistras Group, Inc. and Subsidiaries
    Unaudited Condensed Consolidated Statements of Income (Loss)
    (in thousands, except per share data)
        
     Three Months Ended
    September 30,
     Nine Months Ended
    September 30,
      2024   2023   2024   2023 
            
    Revenue$182,694  $179,354  $556,909  $523,399 
    Cost of revenue 122,392   118,812   377,570   355,304 
    Depreciation 5,725   6,160   17,556   17,914 
    Gross profit 54,577   54,382   161,783   150,181 
    Selling, general and administrative expenses 38,872   39,537   121,018   123,844 
    Reorganization and other costs 2,143   2,702   4,218   6,017 
    Goodwill impairment charges    13,799      13,799 
    Legal settlement and insurance recoveries, net (868)     (808)  150 
    Research and engineering 241   438   816   1,428 
    Depreciation and amortization 2,331   2,588   7,170   7,556 
    Acquisition-related expense, net       1   5 
    Income (loss) from operations 11,858   (4,682)  29,368   (2,618)
    Other income (1,479)     (1,479)   
    Interest expense 4,303   4,167   13,145   12,093 
    Income (loss) before provision (benefit) for income taxes 9,034   (8,849)  17,702   (14,711)
    Provision for income taxes 2,618   1,489   3,909   229 
    Net Income (Loss) 6,416   (10,338)  13,793   (14,940)
    Less: net income (loss) attributable to noncontrolling interests, net of taxes 15   (40)  28   7 
    Net Income (Loss) attributable to Mistras Group, Inc.$6,401  $(10,298) $13,765  $(14,947)
            
    Earnings (loss) per common share:       
    Basic$0.21  $(0.34) $0.45  $(0.49)
    Diluted$0.20  $(0.34) $0.44  $(0.49)
    Weighted-average common shares outstanding:       
    Basic 31,002   30,402   30,895   30,277 
    Diluted 31,660   30,402   31,513   30,277 
                    
                    


        
    Mistras Group, Inc. and Subsidiaries
    Unaudited Operating Data by Segment
    (in thousands)
        
     Three Months Ended
    September 30,
     Nine Months Ended
    September 30,
      2024   2023   2024   2023 
    Revenues       
    North America$149,845  $148,814  $456,588  $431,295 
    International 33,662   30,980   100,972   90,664 
    Products and Systems 3,276   2,829   9,860   9,897 
    Corporate and eliminations (4,089)  (3,269)  (10,511)  (8,457)
     $182,694  $179,354  $556,909  $523,399 
            
            
     Three Months Ended
    September 30,
     Nine Months Ended
    September 30,
      2024   2023   2024   2023 
    Gross profit       
    North America$42,487  $44,773  $126,813  $121,088 
    International 10,139   8,481   29,667   24,247 
    Products and Systems 1,933   1,096   5,233   4,773 
    Corporate and eliminations 18   32   70   73 
     $54,577  $54,382  $161,783  $150,181 
                    
                    


              
    Mistras Group, Inc. and Subsidiaries
    Unaudited Revenues by Category
    (in thousands)
    Revenue by industry was as follows:
              
    Three Months Ended September 30, 2024North America International Products Corp/Elim Total
    Oil & Gas$90,460 $9,040 $3 $  $99,503
    Aerospace & Defense 16,181  5,663  42     21,886
    Industrials 12,285  6,749  478     19,512
    Power Generation & Transmission 8,029  3,081  544     11,654
    Other Process Industries 7,836  3,900  79     11,815
    Infrastructure, Research & Engineering 5,189  2,744  797     8,730
    Petrochemical 3,806  198       4,004
    Other 6,059  2,287  1,333  (4,089)  5,590
    Total$149,845 $33,662 $3,276 $(4,089) $182,694
                    


    Three Months Ended September 30, 2023North America International Products Corp/Elim Total
    Oil & Gas$94,390 $8,827 $35  $  $103,252
    Aerospace & Defense 14,240  5,778  47      20,065
    Industrials 10,325  6,018  310      16,653
    Power Generation & Transmission 7,388  1,653  696      9,737
    Other Process Industries 6,933  2,864  (5)     9,792
    Infrastructure, Research & Engineering 6,042  2,383  1,070      9,495
    Petrochemical 3,313  586        3,899
    Other 6,183  2,871  676   (3,269)  6,461
    Total$148,814 $30,980 $2,829  $(3,269) $179,354
                     


    Nine Months Ended September 30, 2024North America International Products Corp/Elim Total
    Oil & Gas$289,843 $31,841 $240 $  $321,924
    Aerospace & Defense 48,152  18,092  100     66,344
    Industrials 33,047  18,480  1,478     53,005
    Power Generation & Transmission 18,953  6,017  1,569     26,539
    Other Process Industries 26,132  12,337  155     38,624
    Infrastructure, Research & Engineering 14,286  7,762  1,901     23,949
    Petrochemical 11,467  900       12,367
    Other 14,708  5,543  4,417  (10,511)  14,157
    Total$456,588 $100,972 $9,860 $(10,511) $556,909


              
    Nine Months Ended September 30, 2023North America International Products Corp/Elim Total
    Oil & Gas$281,663 $26,291 $87 $  $308,041
    Aerospace & Defense 41,516  15,894  275     57,685
    Industrials 30,693  18,274  1,336     50,303
    Power Generation & Transmission 17,834  4,840  3,189     25,863
    Other Process Industries 24,906  10,567  73     35,546
    Infrastructure, Research & Engineering 12,696  6,547  2,759     22,002
    Petrochemical 10,027  887       10,914
    Other 11,960  7,364  2,178  (8,457)  13,045
    Total$431,295 $90,664 $9,897 $(8,457) $523,399
                    

    Oil & Gas Revenue by sub-category was as follows:

     Three Months Ended
    September 30,
     Nine Months Ended
    September 30,
      2024  2023  2024  2023
    Oil and Gas Revenue by sub-category       
    Upstream$43,835 $38,041 $127,951 $116,941
    Midstream 21,545  26,215  68,229  74,739
    Downstream 34,123  38,996  125,744  116,361
    Total$99,503 $103,252 $321,924 $308,041
                

    Consolidated Revenue by type was as follows:

     Three Months Ended
    September 30,
     Nine Months Ended
    September 30,
      2024  2023  2024  2023
            
    Field Services$127,246 $122,717 $388,129 $348,501
    Shop Laboratories 15,014  14,840  49,147  42,216
    Data Analytical Solutions 17,876  17,997  51,757  52,916
    Other 22,558  23,800  67,876  79,766
    Total$182,694 $179,354 $556,909 $523,399
                
                


        
    Mistras Group, Inc. and Subsidiaries
    Unaudited Reconciliation of Segment and Total Company Income (Loss)
    from Operations (GAAP) to Income (Loss) before Special Items (non-GAAP)
    (in thousands)
        
     Three Months Ended
    September 30,
     Nine Months Ended
    September 30,
      2024   2023   2024   2023 
    North America:       
    Income from operations (GAAP)$17,455  $18,004  $49,742  $39,719 
    Reorganization and other costs 835   35   927   574 
    Legal settlement and insurance recoveries, net (868)     (808)  150 
    Income from operations before special items (non-GAAP)$17,422  $18,039  $49,861  $40,443 
    International:       
    Income (loss) from operations (GAAP)$1,778  $(12,970) $4,548  $(13,031)
    Goodwill Impairment charges    13,799      13,799 
    Reorganization and other costs, net 147   33   410   228 
    Income from operations before special items (non-GAAP)$1,925  $862  $4,958  $996 
    Products and Systems:       
    Income (loss) from operations (GAAP)$670  $(557) $1,479  $(78)
    Reorganization and other costs 182   189   184   189 
    Income (loss) from operations before special items (non-GAAP)$852  $(368) $1,663  $111 
    Corporate and Eliminations:       
    Loss from operations (GAAP)$(8,045) $(9,159) $(26,401) $(29,228)
    Reorganization and other costs 979   2,445   2,697   5,026 
    Acquisition-related expense, net       1   5 
    Loss from operations before special items (non-GAAP)$(7,066) $(6,714) $(23,703) $(24,197)
    Total Company:       
    Income (loss) from operations (GAAP)$11,858  $(4,682) $29,368  $(2,618)
    Goodwill Impairment charges    13,799      13,799 
    Reorganization and other costs 2,143   2,702   4,218   6,017 
    Legal settlement and insurance recoveries, net (868)     (808)  150 
    Acquisition-related expense, net       1   5 
    Income from operations before special items (non-GAAP)$13,133  $11,819  $32,779  $17,353 
                    
                    


        
    Mistras Group, Inc. and Subsidiaries
    Unaudited Reconciliation of
    Gross Debt (GAAP) to Net Debt (non-GAAP)
    (in thousands)
        
     September 30, 2024 December 31, 2023
        
    Current portion of long-term debt$10,711  $8,900 
    Long-term debt, net of current portion 178,989   181,499 
    Total Gross Debt (GAAP) 189,700   190,399 
    Less: Cash and cash equivalents (20,360)  (17,646)
    Total Net Debt (non-GAAP)$169,340  $172,753 
            
            


        
    Mistras Group, Inc. and Subsidiaries
    Unaudited Summary Cash Flow Information
    (in thousands)
        
     Three Months Ended
    September 30,
     Nine Months Ended
    September 30,
      2024   2023   2024   2023 
    Net cash provided by (used in):       
    Operating activities$19,356  $(7,637) $24,471  $10,684 
    Investing activities (5,935)  (5,359)  (17,152)  (15,170)
    Financing activities (11,508)  9,348   (6,247)  (1,839)
    Effect of exchange rate changes on cash 1,270   (1,599)  1,642   (1,411)
    Net change in cash and cash equivalents$3,183  $(5,247) $2,714  $(7,736)
            
            


        
    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
    September 30,
     Nine Months Ended
    September 30,
      2024   2023   2024   2023 
            
    Net cash provided by operating activities (GAAP)$19,356  $(7,637) $24,471  $10,684 
    Less:       
    Purchases of property, plant and equipment (4,716)  (4,602)  (14,315)  (14,403)
    Purchases of intangible assets (1,428)  (1,046)  (3,832)  (1,868)
    Free cash flow (non-GAAP)$13,212  $(13,285) $6,324  $(5,587)
                    
                    


        
    Mistras Group, Inc. and Subsidiaries
    Unaudited Reconciliation of
    Net Income (Loss) (GAAP) to Adjusted EBITDA (non-GAAP)
    (in thousands)
        
     Three Months Ended
    September 30,
     Nine Months Ended
    September 30,
      2024   2023   2024   2023 
        
    Net Income (loss) (GAAP)$6,416  $(10,338) $13,793  $(14,940)
    Less: Net income attributable to non-controlling interests, net of taxes 15   (40)  28   7 
    Net Income (loss) attributable to Mistras Group, Inc.$6,401  $(10,298) $13,765  $(14,947)
    Interest expense 4,303   4,167   13,145   12,093 
    Provision for income taxes 2,618   1,489   3,909   229 
    Depreciation and amortization 8,056   8,748   24,726   25,470 
    Share-based compensation expense 1,350   1,010   4,114   3,649 
    Other income (1,479)     (1,479)   
    Acquisition-related expense       1   5 
    Reorganization and other related costs, net 2,143   2,702   4,218   6,017 
    Goodwill Impairment charges    13,799      13,799 
    Legal settlement and insurance recoveries, net (868)     (808)  150 
    Foreign exchange (gain) loss 765   (721)  (23)  149 
    Adjusted EBITDA (non-GAAP)$23,289  $20,896  $61,568  $46,614 
                    
                    


        
    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)
    (dollars in thousands, except per share data)
        
     Three Months Ended
    September 30,
     Nine Months Ended
    September 30,
      2024   2023   2024   2023 
    Net income (loss) attributable to Mistras Group, Inc. (GAAP)$6,401  $(10,298) $13,765  $(14,947)
    Goodwill Impairment charges    13,799      13,799 
    Reorganization and other costs 2,143   2,702   4,218   6,017 
    Legal settlement and insurance recoveries, net (868)     (808)  150 
    Other income (1,479)     (1,479)   
    Acquisition-related expense, net       1   5 
    Special Items Total$(204) $16,501  $1,932  $19,971 
    Tax impact on special items 58   (653)  (463)  (1,468)
    Special items, net of tax$(146) $15,848  $1,469  $18,503 
    Net income attributable to Mistras Group, Inc. Excluding Special Items (non-GAAP)$6,255  $5,550  $15,234  $3,556 
            
    Diluted EPS (GAAP)(1)$0.20  $(0.34) $0.44  $(0.49)
    Special items, net of tax    0.52   0.05   0.61 
    Diluted EPS Excluding Special Items (non-GAAP)$0.20  $0.18  $0.49  $0.12 

    ____________________
    (1) For the three and nine months ended September 30, 2023, 1,508,255 and 926,224 shares related to restricted stock were excluded from the calculation of diluted EPS due to the net loss for the periods, respectively.


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