Mistras (MG) - 2022 Q1 - Quarterly Report

PART I—FINANCIAL INFORMATION ITEM 1. Financial Statements Presents Mistras Group's unaudited condensed consolidated financial statements for Q1 2022 and 2021, detailing financial position, performance, and cash flows with notes Condensed Consolidated Balance Sheets Presents the company's assets, liabilities, and equity as of March 31, 2022, and December 31, 2021 | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :---------------------- | :---------------------------- | :---------------------------- | | Total Assets | $568,228 | $562,195 | | Total Liabilities | $371,143 | $361,283 | | Total Equity | $197,085 | $200,912 | Unaudited Condensed Consolidated Statements of Loss Details the company's revenue, gross profit, and net loss for the three months ended March 31, 2022, and 2021 | Metric | Three months ended March 31, 2022 (in thousands) | Three months ended March 31, 2021 (in thousands) | | :------------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | | Revenue | $161,662 | $153,735 | | Gross profit | $39,892 | $40,001 | | Net Loss attributable to Mistras Group, Inc. | $(5,363) | $(5,362) | | Basic Loss per common share | $(0.18) | $(0.18) | | Diluted Loss per common share | $(0.18) | $(0.18) | Unaudited Condensed Consolidated Statements of Comprehensive Loss Outlines the company's net loss, foreign currency translation adjustments, and total comprehensive loss for Q1 2022 and 2021 | Metric | Three months ended March 31, 2022 (in thousands) | Three months ended March 31, 2021 (in thousands) | | :------------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | | Net Loss | $(5,353) | $(5,359) | | Foreign currency translation adjustments | $555 | $(592) | | Comprehensive Loss attributable to Mistras Group, Inc. | $(4,808) | $(5,954) | Unaudited Condensed Consolidated Statements of Equity Presents changes in total stockholders' equity, including net income (loss) and share-based payments, for Q1 2022 and 2021 | Metric | Balance at March 31, 2022 (in thousands) | Balance at March 31, 2021 (in thousands) | | :------------------------------------------ | :--------------------------------------- | :--------------------------------------- | | Total Mistras Group, Inc. Stockholders' Equity | $196,846 | $191,843 | | Net income (loss) | $(5,363) | $(5,362) | | Share-based payments | $1,515 | $1,262 | Unaudited Condensed Consolidated Statements of Cash Flows Details cash flows from operating, investing, and financing activities for the three months ended March 31, 2022, and 2021 | Cash Flow Activity | Three months ended March 31, 2022 (in thousands) | Three months ended March 31, 2021 (in thousands) | | :------------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | | Net cash provided by (used in) operating activities | $(5,399) | $3,148 | | Net cash used in investing activities | $(2,737) | $(4,176) | | Net cash provided by financing activities | $4,323 | $435 | | Cash and cash equivalents at end of period | $19,921 | $24,177 | Notes to Unaudited Condensed Consolidated Financial Statements Provides detailed explanations and disclosures for the unaudited condensed consolidated financial statements, covering business description, accounting policies, and specific financial items 1. Description of Business and Basis of Presentation Describes Mistras Group's business as an asset protection solutions provider and the adverse impacts of COVID-19, oil prices, and geopolitical conflicts - Mistras Group, Inc. is a multinational provider of integrated technology-enabled asset protection solutions, including NDT field inspections, laboratory testing, sensing technologies, and engineering services, for critical industrial and civil assets[25][28] - The company's operations have been adversely impacted by the COVID-19 pandemic, significant volatility in oil prices, and decreased aerospace industry traffic, with European operations seeing increased energy costs due to the Russian-Ukrainian conflict[29][31][33] - Substantially all cost reduction initiatives undertaken in 2020, including savings plan employer match and wage reductions, have been eliminated[32] 2. Revenue Presents the company's revenue recognition policies and provides a breakdown of revenue by industry and geographic location for Q1 2022 and 2021 - The company primarily derives revenue from highly integrated and bundled inspection services, which are short-term and recognized over time based on time and material incurred[49][51] | Industry | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :-------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Oil & Gas | $94,223 | $87,212 | | Aerospace & Defense | $20,070 | $16,175 | | Industrials | $15,037 | $13,995 | | Power generation & Transmission | $7,229 | $8,271 | | Other Process Industries | $13,812 | $10,777 | | Infrastructure, Research & Engineering | $5,442 | $8,069 | | Petrochemical | $3,123 | $5,536 | | Other | $2,726 | $3,700 | | Total | $161,662 | $153,735 | | Geographic Location | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :------------------ | :----------------------------------------------- | :----------------------------------------------- | | United States | $114,804 | $105,823 | | Other Americas | $18,800 | $20,059 | | Europe | $26,320 | $26,036 | | Asia-Pacific | $1,738 | $1,817 | | Total | $161,662 | $153,735 | 3. Share-Based Compensation Details the company's share-based compensation expense for restricted stock unit awards and unrecognized compensation costs as of March 31, 2022 - The company recognized $0.9 million in share-based compensation expense for restricted stock unit awards for both the three months ended March 31, 2022, and 2021[66] - As of March 31, 2022, there was $9.6 million of unrecognized compensation costs related to restricted stock unit awards, expected to be recognized over a remaining weighted-average period of 3.1 years[66] - Aggregate share-based compensation expense for Performance Restricted Stock Units (PRSUs) increased to approximately $0.3 million for the three months ended March 31, 2022, from $0.1 million in the prior year[73] 4. Earnings (loss) per Share Details the calculation of basic and diluted loss per common share for the three months ended March 31, 2022, and 2021 | Metric | Three months ended March 31, 2022 | Three months ended March 31, 2021 | | :---------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss attributable to Mistras Group, Inc. | $(5,363) | $(5,362) | | Weighted average common shares outstanding | 29,634 | 29,425 | | Basic loss per share | $(0.18) | $(0.18) | | Diluted loss per share | $(0.18) | $(0.18) | - 1,212,000 shares (2022) and **509,0