• MISTRAS Announces Fourth Quarter and Full Year 2022 Results

    Source: Nasdaq GlobeNewswire / 08 Mar 2023 16:01:01   America/New_York

    Significantly Improved Quarterly Operating Profit and Net Income Growth

    Fourth quarter Gross Profit expands 130 basis points, Operating Income increases 152%

    2022 Full Year Net Income of $6.5 million, a 68% increase from the prior year

    Continued deleveraging, with $11 million of full year debt repayments

    PRINCETON JUNCTION, N.J., March 08, 2023 (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, 2022.

    Highlights of the Fourth Quarter 2022*

    • Revenue of $168.2 million, met the mid-point of management’s most recent guidance
    • Gross profit of $50.9 million, with gross profit margin of 30.3%, a 130 basis points increase
    • Income from Operations of $5.8 million, a 151.9% increase
    • Net Income of $2.8 million or $0.09 per diluted share, both up significantly

    Highlights of the Full Year 2022*

    • Revenue of $687.4 million, up 1.5%, yet a 3.7% organic increase excluding the impact of unfavorable foreign currency exchange**
    • Gross profit of $198.2 million, up 0.5% with gross profit margin of 28.8%
    • Income from Operations of $19.8 million, a 9.0% increase
    • Net Income of $6.5 million or $0.21 per diluted share, up 68.4% and 61.5%, respectively

    *    All comparisons are consolidated and versus the equivalent prior year period, unless otherwise noted.
    ** Foreign currency exchange impact is calculated by converting current period financial results in local currency, using the prior period exchange rates, and comparing this amount to the current period financial results in local currency using the current period exchange rate.

    For the fourth quarter of 2022 consolidated revenue was 168.2 million, a 1.7% decline, yet an 0.8% increase excluding the impact of unfavorable foreign currency exchange of $4.4 million. Fourth quarter 2022 gross profit increased 2.7% as compared to the year ago period, primarily due to lower employee benefit expenses and an improved sales mix in the current year. Selling, general and administrative expenses in the fourth quarter of 2022 were $42.3 million, down from $42.8 million in the fourth quarter of 2021, reflecting the continued emphasis on cost discipline.

    For the full year, revenue of $687.4 increased 1.5% as reported, yet an increase of 3.7% excluding the impact of unfavorable foreign currency exchange of $15.2 million.   Revenue growth reflects continued recovery in the Company’s primary end markets, with as reported Oil and Gas revenue up 5.7% and Aerospace and Defense revenue up 17.8%. For the full year 2022, gross profit increased $1.0 million, with gross profit margin of 28.8% compared to 29.1% in the prior year. On a full year basis in 2022, selling, general and administrative expenses were up just 3.3%, despite the prior year benefiting from temporary COVID-19 cost reductions. Income from operations was $19.8 million for the full year 2022, compared to $18.2 million in 2021. Net income was $6.5 million for the full year 2022, compared to net income of $3.9 million in 2021. Adjusted EBITDA was $58.2 million for 2022 compared to $63.0 million for full year 2021.

    Chief Executive Officer Dennis Bertolotti commented, “As a result of a solid fourth quarter, we met our most recent top-line and exceeded our bottom-line guidance for the year. We continued to organically grow revenue despite the adverse impact of foreign currency exchange, while significantly improving profitability. Upstream, midstream and downstream revenue were all up in 2022, driven by continued improvement at our customers and strong demand for our services. Aerospace and Defense revenue was also up for the year, led by strength in commercial aerospace, offset by project delays in defense revenue during the fourth quarter. Gross margin improved to over 30% for the second consecutive quarter, in part due to pricing actions taken earlier in the year, helping to offset the wage inflation that we have been absorbing, in addition to lower employee benefit expenses. With these customer pricing actions now in place, we expect some tailwinds to both recurring revenue and gross margin for 2023. In the fourth quarter of 2022, we were able to leverage our gross profit margin expansion into a 152% increase in operating income, through continued cost discipline, with selling, general and administrative expenses down from the year ago quarter despite the impact of inflationary costs. Our financial strength was also significantly improved over the prior year, with net debt reduced to $170.8 million from $178.5 million at the end of last year. Over the past four years, gross debt has decreased by almost $100 million and our leverage ratio is the lowest level it has been since immediately prior to the Onstream acquisition in December of 2018. Additionally, our bank refinancing completed in August 2022 added incremental capacity to our total available credit while also providing more favorable credit terms and further improving our financial flexibility.”

    Mr. Bertolotti additionally commented on the Company’s progress noting, “I am proud of our organization, which has once again overcome economic challenges to generate profitable growth in 2022. We remain focused on our objective to return our results to pre-pandemic levels through growth in our core markets, expansion into adjacent markets, and the introduction of new technologies to capitalize on emerging opportunities in the markets we serve. We have kicked off our operational review with AlixPartners, which we will refer to as Project Phoenix. This review is designed to accelerate profitable growth and meaningful adjusted EBITDA improvement opportunities while also identifying steps to achieve sustained cost savings. We are laser‐focused on taking steps to position us for success to drive shareholder value. We will provide updates on the status of this project throughout 2023 as they become available.”

    Mr. Bertolotti further continued, “Our core markets have shown a resiliency, and we are seeing a surge in demand for our more recently launched state-of-the-art data solutions offerings. I am pleased to announce that we have surpassed our goal of installing 100 patented Sensoria™ Wind Blade Monitoring systems in 2022, having installed systems on over 130 wind turbines this year. This significant milestone demonstrates our commitment to providing exceptional value to our renewable energy customers, by enhancing their uptime and safety. Moreover, our data solutions offerings which serve our core markets have experienced strong demand with the MISTRAS Digital field execution platform and OneSuite asset protection software ecosystem leading the charge. Customers who have adopted both applications are now embracing our revolutionary technology as a bundled solution at an ever-increasing number of sites. We are excited to offer our clients yet another solution that maximizes their asset protection and operational efficiency and further supports our brand promise of: One Source for Asset Protection Solutions. Having implemented OneSuite at over 160 customer sites and issued licenses to more than 1,200 individual subscriptions, the adoption of OneSuite and its suite of 90 integrated applications - now combined with MISTRAS Digital - is setting a new standard in the industry. We are confident that our recent accomplishments signify substantial progress towards achieving our vision of becoming the go-to integrated-solution partner.”

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

    Services segment fourth quarter revenues were $138.1 million, down 2.2% from $141.1 million in the prior year quarter and down 1.2% excluding the impact of unfavorable foreign currency exchange. For the fourth quarter, gross profit was $40.7 million, compared to $38.8 million in the prior year. Gross profit margin was 29.5% for the fourth quarter of 2022, a 200 basis point improvement from 27.5% in the fourth quarter of the prior year. This increase was primarily due to lower employee benefit expenses and improved sales mix.

    International segment fourth quarter revenues were $29.0 million, up 1.5% from $28.5 million in the prior year quarter and up 12.3% excluding the impact of unfavorable foreign currency exchange. The increase was due to timing of projects and continued recovery in the Aerospace business. International segment fourth quarter gross profit margin was 28.5%, compared to 28.0% in the prior year.

    The Company generated $26.4 million of net cash from operating activities in 2022, compared with $42.3 million in 2021, with the decline primarily due to an increase in working capital, most notably an increase in days sales outstanding (“DSO”).   The Company is focused on reducing DSO during fiscal 2023. Free cash flow was $13.0 million for the year ended December 31, 2022, compared with $23.0 million for the year ended December 31, 2021. Free cash flow in the current year was reduced by a $4.5 million payment related to the CARES Act employer payroll tax deferral and a $2.4 million legal settlement payment, both of which had been accrued in previous years.

    The Company’s net debt (total debt less cash and cash equivalents) was $170.8 million as of December 31, 2022, compared to $178.5 million as of December 31, 2021. Gross debt decreased by $11.3 million during the twelve months ended December 31, 2022, from $202.6 million at the end of 2021 to $191.3 million as of December 31, 2022. The Company’s leverage ratio at December 31, 2022 was the lowest it has been since prior to the Onstream acquisition in December of 2018. The Company’s bank defined consolidated debt leverage ratio was just under 3.5 times as of the twelve-month period ended December 31, 2022.

    Outlook for 2023
    The Company is providing its preliminary full year guidance for 2023. Based on current market conditions, the Company anticipates 2023 full year revenue between $710 to $740 million and adjusted EBITDA between $70 to $75 million. The Company additionally expects to generate Free Cash Flow between $30 to $33 million. The Company is optimistic about its current level of activity, given stable energy markets, improving commercial aerospace demand, and a rapidly developing Data Solutions offering.

    Conference Call
    In connection with this release, MISTRAS will hold a conference call on March 9, 2023, 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/BI1780b91802aa42619006d0a2f8719dab.

    Upon registering, a dial-in number and unique PIN will be provided to join the conference call. Following the conference call, an archived webcast of the event will be available for one year by visiting the Investor Relations section of MISTRAS Group’s website.

    About 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 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) 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
    Unaudited Consolidated Balance Sheets
    (in thousands, except share and per share data)

     December 31,
      2022   2021 
    ASSETS   
    Current Assets   
    Cash and cash equivalents$20,488  $24,110 
    Accounts receivable, net 123,657   109,511 
    Inventories 13,556   12,686 
    Prepaid expenses and other current assets 10,181   15,031 
    Total current assets 167,882   161,338 
    Property, plant and equipment, net 77,561   86,578 
    Intangible assets, net 49,015   59,381 
    Goodwill 199,635   205,439 
    Deferred income taxes 779   2,174 
    Other assets 40,032   47,285 
    Total Assets$534,904  $562,195 
        
    LIABILITIES AND EQUITY   
    Current Liabilities   
    Accounts payable$12,532  $12,870 
    Accrued expenses and other current liabilities 77,844   83,863 
    Current portion of long-term debt 7,425   20,162 
    Current portion of finance lease obligations 4,201   3,765 
    Income taxes payable 1,726   755 
    Total current liabilities 103,728   121,415 
    Long-term debt, net of current portion 183,826   182,403 
    Obligations under finance leases, net of current portion 10,045   9,752 
    Deferred income taxes 6,283   8,385 
    Other long-term liabilities 32,273   39,328 
    Total Liabilities$336,155  $361,283 
        
    Commitments and contingencies   
        
    Equity   
    Preferred stock, 10,000,000 shares authorized     
    Common stock, $0.01 par value, 200,000,000 shares authorized, 29,895,487 and 29,546,263 shares issued 298   295 
    Additional paid-in capital 243,031   238,687 
    Accumulated Deficit (11,489)  (17,988)
    Accumulated other comprehensive loss (33,390)  (20,311)
    Total Mistras Group, Inc. stockholders’ equity 198,450   200,683 
    Non-controlling interests 299   229 
    Total Equity 198,749   200,912 
    Total Liabilities and Equity$534,904  $562,195 



    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,
      2022   2021   2022   2021
            
    Revenue$168,218  $171,163  $687,373  $677,131
    Cost of revenue 111,720   115,233   466,567   457,013
    Depreciation 5,559   6,336   22,633   22,971
    Gross profit 50,939   49,594   198,173   197,147
    Selling, general and administrative expenses 42,298   42,755   166,595   161,334
    Bad debt provision for troubled customers, net of recoveries (247)     42   
    Legal settlement and litigation charges (benefit), net    1,012   (994)  2,042
    Research and engineering 471   576   1,994   2,518
    Depreciation and amortization 2,603   2,880   10,661   11,950
    Acquisition-related expense, net 12   65   76   1,133
    Income from operations 5,802   2,306   19,799   18,170
    Interest expense 3,713   2,187   10,505   10,882
    Income before provision (benefit) for income taxes 2,089   119   9,294   7,288
    Provision (benefit) for income taxes (774)  208   2,720   3,395
    Net income (loss) 2,863   (89)  6,574   3,893
    Less: net income (loss) attributable to noncontrolling interests, net of taxes 21   5   75   33
    Net income (loss) attributable to Mistras Group, Inc.$2,842  $(94) $6,499  $3,860
    Earnings per common share       
    Basic$0.09  $0.00  $0.22  $0.13
    Diluted$0.09  $0.00  $0.21  $0.13
    Weighted average common shares outstanding:       
    Basic 29,983   29,637   29,901   29,572
    Diluted 30,258   30,138   30,229   30,130



    Mistras Group, Inc. and Subsidiaries

    Unaudited Operating Data by Segment
    (in thousands)

     For the quarter ended
    December 31,
     For the year ended
    December 31,
      2022   2021   2022   2021 
    Revenue       
    Services$138,085  $141,136  $573,336  $555,387 
    International 28,984   28,546   112,425   117,245 
    Products and Systems 4,061   4,332   12,727   13,831 
    Corporate and eliminations (2,912)  (2,851)  (11,115)  (9,332)
     $168,218  $171,163  $687,373  $677,131 
            
            
     For the quarter ended
    December 31,
     For the year ended
    December 31,
      2022   2021   2022   2021 
    Gross profit       
    Services$40,701  $38,797  $159,049  $155,384 
    International 8,267   8,004   33,591   34,282 
    Products and Systems 1,976   2,346   5,490   7,001 
    Corporate and eliminations (5)  447   43   480 
     $50,939  $49,594  $198,173  $197,147 



    Mistras Group, Inc. and Subsidiaries

    Unaudited Revenues by Category
    (in thousands)

    Revenue by industry was as follows:

    Three Months Ended December 31, 2022Services International Products Corp/Elim Total
    Oil & Gas$86,474 $8,636 $123 $  $95,233
    Aerospace & Defense 12,369  4,308  68     16,745
    Industrials 9,668  5,835  812     16,315
    Power Generation and Transmission 8,619  1,799  624     11,042
    Other 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


    Three Months Ended December 31, 2021Services International Products Corp/Elim Total
    Oil & Gas$82,296 $9,215 $170  $  $91,681
    Aerospace & Defense 14,274  4,172  121      18,567
    Industrials 11,252  6,264  761      18,277
    Power Generation and Transmission 12,947  2,151  604      15,702
    Other Process Industries 11,711  3,019  (12)     14,718
    Infrastructure, Research & Engineering 1,330  2,019  1,208      4,557
    Petrochemical 3,003  36        3,039
    Other 4,323  1,670  1,480   (2,851)  4,622
    Total$141,136 $28,546 $4,332  $(2,851) $171,163


    Year ended December 31, 2022Services 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


              
    Year ended December 31, 2021Services International Products Corp/Elim Total
    Oil & Gas 330,880  35,232  808     366,920
    Aerospace & Defense 51,593  16,513  286     68,392
    Industrials 41,873  24,000  1,842     67,715
    Power Generation and Transmission 39,966  9,927  2,853     52,746
    Other Process Industries 38,742  12,593  64     51,399
    Infrastructure, Research & Engineering 16,809  11,496  3,985     32,290
    Petrochemical 19,378  227       19,605
    Other 16,146  7,257  3,993  (9,332)  18,064
    Total$555,387 $117,245 $13,831 $(9,332) $677,131

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

     Three months ended December 31, Year ended December 31,
      2022  2021  2022  2021
    Oil and Gas Revenue by sub-category       
    Upstream 35,154  32,692  152,590  135,615
    Midstream 24,363  27,060  111,144  109,527
    Downstream 35,716  31,929  124,018  121,778
    Total$95,233 $91,681 $387,752 $366,920



    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,
      2022   2021   2022   2021 
    Services:       
    Income from operations (GAAP)$14,301  $9,467  $49,616  $48,458 
    Bad debt provision for troubled customers, net of recoveries (247)     42    
    Reorganization and other costs 59   32   99   129 
    Legal settlement and insurance (recoveries) charges, net       (841)  1,650 
    Acquisition-related expense, net    94   45   1,128 
    Income before special items (unaudited, non-GAAP)$14,113  $9,593  $48,961  $51,365 
            
    International:       
    Income (loss) from operations (GAAP)$888  $(319) $3,566  $1,839 
    Reorganization and other costs 71   300   (43)  424 
    Legal settlement and insurance (recoveries) charges, net    737      737 
    Income before special items (unaudited, non-GAAP)$959  $718  $3,523  $3,000 
            
    Products and Systems:       
    Income (loss) from operations (GAAP)$342  $536  $(992) $(117)
    Reorganization and other costs          27 
    Income (loss) before special items (unaudited, non-GAAP)$342  $536  $(992) $(90)
            
    Corporate and Eliminations:       
    Loss from operations (GAAP)$(9,729) $(7,378) $(32,391) $(32,010)
    Legal settlement and insurance (recoveries) charges, net    275   (153)  (345)
    Loss on debt modification       693   278 
    Reorganization and other costs    93   139   93 
    Acquisition-related expense, net 12   (29)  31   5 
    Loss before special items (unaudited, non-GAAP)$(9,717) $(7,039) $(31,681) $(31,979)
            
    Total Company       
    Income from operations (GAAP)$5,802  $2,306  $19,799  $18,170 
    Bad debt provision for troubled customers, net of recoveries (247)     42    
    Reorganization and other costs 130   425   195   673 
    Legal settlement and insurance (recoveries) charges, net    1,012   (994)  2,042 
    Loss on debt modification       693   278 
    Acquisition-related expense, net 12   65   76   1,133 
    Income before special items (unaudited, non-GAAP)$5,697  $3,808  $19,811  $22,296 



    Mistras Group, Inc. and Subsidiaries

    Unaudited Summary Cash Flow Information
    (in thousands)

     For the quarter ended
    December 31,
     For the year ended
    December 31,
      2022   2021   2022   2021 
    Net cash provided by (used in):       
    Operating activities$15,875  $19,792  $26,406  $42,261 
    Investing activities (3,361)  (3,057)  (12,238)  (18,551)
    Financing activities (11,570)  (14,379)  (16,323)  (23,245)
    Effect of exchange rate changes on cash 1,460   (843)  (1,467)  (2,115)
    Net change in cash and cash equivalents$2,404  $1,513  $(3,622) $(1,650)



    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,
      2022   2021   2022   2021 
            
    Net cash provided by operating activities (GAAP)$15,875  $19,792  $26,406  $42,261 
    Less:       
    Purchases of property, plant and equipment (3,541)  (3,031)  (12,591)  (18,161)
    Purchases of intangible assets (245)  (228)  (825)  (1,115)
    Free cash flow (non-GAAP)$12,089  $16,533  $12,990  $22,985 



    Mistras Group, Inc. and Subsidiaries

    Unaudited Reconciliation of
    Gross Debt (GAAP) to Net Debt (non-GAAP)
    (in thousands)

      For the year ended
    December 31,
       2022   2021 
         
    Current portion of long-term debt $7,425  $20,162 
    Long-term debt, net of current portion  183,826   182,403 
    Total Gross Debt (GAAP)  191,251   202,565 
    Less: Cash and cash equivalents  (20,488)  (24,110)
    Total Net Debt (non-GAAP) $170,763  $178,455 



    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,
      2022   2021   2022   2021
          
    Net income (loss)$2,863  $(89) $6,574  $3,893
    Less: Net income attributable to noncontrolling interests, net of taxes 21   5   75   33
    Net income (loss) attributable to Mistras Group, Inc.$2,842  $(94) $6,499  $3,860
    Interest expense 3,713   2,187   10,505   10,882
    Provision (benefit) for income taxes (774)  208   2,720   3,395
    Depreciation and amortization 8,162   9,216   33,294   34,921
    Share-based compensation expense 1,169   1,505   5,335   5,421
    Reorganization and other related costs, net 130   425   195   673
    Legal settlement and insurance recoveries, net    1,012   (994)  2,042
    Acquisition-related expense, net 12   65   76   1,133
    Loss on debt modification       693   278
    Bad debt provision for troubled customers, net of recoveries (247)     42   
    Foreign exchange (gain) loss 709   27   (215)  371
    Adjusted EBITDA$15,716  $14,551  $58,150  $62,976



    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,
      2022   2021   2022   2021 
    Net income (loss) attributable to Mistras Group, Inc. (GAAP)$2,842  $(94) $6,499  $3,860 
    Special items (105)  1,502   12   4,126 
    Tax impact on special items 25   (301)  (17)  (917)
    Special items, net of tax$(80) $1,201  $(5) $3,209 
    Net income attributable to Mistras Group, Inc. Excluding Special Items (non-GAAP)$2,762  $1,107  $6,494  $7,069 
            
    Diluted EPS (GAAP)$0.09  $0.00  $0.21  $0.13 
    Special items, net of tax 0.00   0.04   0.00   0.10 
    Diluted EPS Excluding Special Items (non-GAAP)$0.09  $0.04  $0.21  $0.23 


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