Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 01, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-34481 | |
Entity Registrant Name | Mistras Group, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 22-3341267 | |
Entity Address, Address Line One | 195 Clarksville Road | |
Entity Address, City or Town | Princeton Junction, | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 08550 | |
City Area Code | 609 | |
Local Phone Number | 716-4000 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | MG | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 30,301,985 | |
Entity Central Index Key | 0001436126 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current Assets | ||
Cash and cash equivalents | $ 16,717 | $ 20,488 |
Accounts receivable, net | 120,425 | 123,657 |
Inventories | 14,763 | 13,556 |
Prepaid expenses and other current assets | 14,008 | 10,181 |
Total current assets | 165,913 | 167,882 |
Property, plant and equipment, net | 78,816 | 77,561 |
Intangible assets, net | 47,360 | 49,015 |
Goodwill | 199,956 | 199,635 |
Deferred income taxes | 326 | 779 |
Other assets | 38,448 | 40,032 |
Total assets | 530,819 | 534,904 |
Current Liabilities | ||
Accounts payable | 13,640 | 12,532 |
Accrued expenses and other current liabilities | 77,127 | 77,844 |
Current portion of long-term debt | 7,372 | 7,425 |
Current portion of finance lease obligations | 4,752 | 4,201 |
Income taxes payable | 333 | 1,726 |
Total current liabilities | 103,224 | 103,728 |
Long-term debt, net of current portion | 181,972 | 183,826 |
Obligations under finance leases, net of current portion | 11,170 | 10,045 |
Deferred income taxes | 7,874 | 6,283 |
Other long-term liabilities | 30,431 | 32,273 |
Total liabilities | 334,671 | 336,155 |
Commitments and contingencies (Note 14) | ||
Equity | ||
Preferred stock, 10,000,000 shares authorized | 0 | 0 |
Common stock, $0.01 par value, 200,000,000 shares authorized, 30,230,446 and 29,895,487 shares issued and outstanding | 302 | 298 |
Additional paid-in capital | 244,131 | 243,031 |
Accumulated deficit | (16,475) | (11,489) |
Accumulated other comprehensive loss | (32,117) | (33,390) |
Total Mistras Group, Inc. stockholders’ equity | 195,841 | 198,450 |
Non-controlling interests | 307 | 299 |
Total equity | 196,148 | 198,749 |
Total liabilities and equity | $ 530,819 | $ 534,904 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 30,230,446 | 29,895,487 |
Common stock, shares outstanding (in shares) | 30,230,446 | 29,895,487 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Revenue | $ 168,016 | $ 161,662 |
Cost of revenue | 116,051 | 115,758 |
Depreciation | 5,888 | 6,012 |
Gross profit | 46,077 | 39,892 |
Selling, general and administrative expenses | 42,823 | 41,922 |
Reorganization and other costs | 2,076 | 114 |
Legal settlement and insurance recoveries, net | 0 | (841) |
Research and engineering | 480 | 551 |
Depreciation and amortization | 2,525 | 2,795 |
Acquisition-related expense, net | 3 | 49 |
Loss from operations | (1,830) | (4,698) |
Interest expense | 4,068 | 1,938 |
Loss before benefit for income taxes | (5,898) | (6,636) |
Benefit for income taxes | (920) | (1,283) |
Net Loss | (4,978) | (5,353) |
Less: net income attributable to noncontrolling interests, net of taxes | 8 | 10 |
Net Loss attributable to Mistras Group, Inc. | $ (4,986) | $ (5,363) |
Loss per common share | ||
Basic (in dollars per share) | $ (0.17) | $ (0.18) |
Diluted (in dollars per share) | $ (0.17) | $ (0.18) |
Weighted-average common shares outstanding: | ||
Basic (in shares) | 30,021 | 29,634 |
Diluted (in shares) | 30,021 | 29,634 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net Loss | $ (4,978) | $ (5,353) |
Other comprehensive loss: | ||
Foreign currency translation adjustments | 1,273 | 555 |
Comprehensive Loss | (3,705) | (4,798) |
Less: net income attributable to noncontrolling interests, net of taxes | 8 | 10 |
Comprehensive loss attributable to Mistras Group, Inc. | $ (3,713) | $ (4,808) |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Equity - USD ($) | Total | Total Mistras Group, Inc. Stockholders’ Equity | Common Stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive loss | Noncontrolling Interest |
Beginning balance (in shares) at Dec. 31, 2021 | 29,546,000 | ||||||
Beginning balance at Dec. 31, 2021 | $ 200,912,000 | $ 200,683,000 | $ 295,000 | $ 238,687,000 | $ (17,988,000) | $ (20,311,000) | $ 229,000 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net Loss | (5,353,000) | (5,363,000) | (5,363,000) | 10,000 | |||
Other comprehensive income (loss), net of tax | 555,000 | 555,000 | 555,000 | ||||
Share-based payments | 1,515,000 | 1,515,000 | 1,515,000 | ||||
Net settlements of restricted stock units (in shares) | 174,000 | ||||||
Net settlement of restricted stock units | (544,000) | (544,000) | $ 2,000 | (546,000) | |||
Ending balance (in shares) at Mar. 31, 2022 | 29,720,000 | ||||||
Ending balance at Mar. 31, 2022 | 197,085,000 | 196,846,000 | $ 297,000 | 239,656,000 | (23,351,000) | (19,756,000) | 239,000 |
Beginning balance (in shares) at Dec. 31, 2022 | 29,895,000 | ||||||
Beginning balance at Dec. 31, 2022 | 198,749,000 | 198,450,000 | $ 298,000 | 243,031,000 | (11,489,000) | (33,390,000) | 299,000 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net Loss | (4,978,000) | (4,986,000) | (4,986,000) | 8,000 | |||
Other comprehensive income (loss), net of tax | 1,273,000 | 1,273,000 | 1,273,000 | ||||
Share-based payments | 1,877,000 | 1,877,000 | 1,877,000 | ||||
Net settlements of restricted stock units (in shares) | 335,000 | ||||||
Net settlement of restricted stock units | (773,000) | (773,000) | $ 4,000 | (777,000) | |||
Ending balance (in shares) at Mar. 31, 2023 | 30,230,000 | ||||||
Ending balance at Mar. 31, 2023 | $ 196,148,000 | $ 195,841,000 | $ 302,000 | $ 244,131,000 | $ (16,475,000) | $ (32,117,000) | $ 307,000 |
Unaudited Condensed Consolida_6
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities | ||
Net loss | $ (4,978) | $ (5,353) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||
Depreciation and amortization | 8,413 | 8,807 |
Deferred income taxes | 1,801 | 196 |
Share-based compensation expense | 1,877 | 1,515 |
Bad debt provision for troubled customers, net of recoveries | (30) | 0 |
Fair value adjustments to contingent consideration | 0 | 45 |
Foreign currency loss | 219 | 686 |
Other | (315) | 86 |
Changes in operating assets and liabilities, net of effect of acquisitions and dispositions | ||
Accounts receivable | 3,777 | (17,831) |
Inventories | (1,137) | (96) |
Prepaid expenses and other assets | (4,234) | 3,421 |
Accounts payable | 992 | (440) |
Accrued expenses and other liabilities | (766) | 3,605 |
Income taxes payable | (248) | 493 |
Payment of contingent consideration liability in excess of acquisition-date fair value | (938) | (533) |
Net cash provided by (used in) operating activities | 4,433 | (5,399) |
Cash flows from investing activities | ||
Purchase of property, plant and equipment | (4,332) | (3,061) |
Purchase of intangible assets | (361) | (151) |
Proceeds from sale of equipment | 233 | 475 |
Net cash used in investing activities | (4,460) | (2,737) |
Cash flows from financing activities | ||
Repayment of finance lease obligations | (1,174) | (1,076) |
Repayment of long-term debt | (1,904) | (4,152) |
Proceeds from revolver | 27,000 | 26,000 |
Repayment of revolver | (27,100) | (15,500) |
Payment of contingent consideration for business acquisitions | 0 | (405) |
Taxes paid related to net share settlement of share-based awards | (773) | (544) |
Net cash provided by (used in) financing activities | (3,951) | 4,323 |
Effect of exchange rate changes on cash and cash equivalents | 207 | (376) |
Net change in cash and cash equivalents | (3,771) | (4,189) |
Cash and cash equivalents at beginning of period | 20,488 | 24,110 |
Cash and cash equivalents at end of period | 16,717 | 19,921 |
Supplemental disclosure of cash paid (received) | ||
Interest, net | 5,112 | 1,711 |
Income taxes, net of refunds | 1,949 | (4,661) |
Noncash investing and financing | ||
Equipment acquired through finance lease obligations | $ 2,800 | $ 848 |
Description of Business_and Bas
Description of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation Description of Business Mistras Group, Inc. and subsidiaries (the Company) 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, the Company helps clients with asset-intensive infrastructure in the oil and gas, aerospace and defense, industrials, power generation and transmission (including alternative and renewable energy), other process industries and infrastructure, research and engineering and other 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 systems to help avoid catastrophic incidents, the Company helps the world at large. The Company enhances value for its clients by integrating asset protection throughout supply chains and centralizing integrity data through a suite of Industrial Internet of Things ("IoT")-connected digital software and monitoring solutions, including OneSuite™, which serves as an ecosystem platform, pulling together all of the Company’s software and data services capabilities, for the benefit of its customers. 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. The Company has three operating segments. During the first quarter of 2023, the Company renamed the Services segment to more closely align to the geographical area in which the Segment operates. We did not recast the corresponding financial information for the historical periods presented, as there was no change in the manner which our chief operating decision maker reviews the financial results of each Segment and allocates resources. Our Segments, with the updated naming convention, are as follows: • North America (Referred to as "Services" in prior filings). This segment provides asset protection solutions predominantly in North America, with the largest concentration in the United States, followed by Canada, consisting primarily of NDT, inspection, mechanical and engineering services that are used to evaluate the safety, structural integrity and reliability of critical energy, industrial and public infrastructure and commercial aerospace components. Software, digital and data services are included in this segment. • International. This segment offers services, products and systems similar to those of the other segments to select markets within Europe, the Middle East, Africa, Asia and South America, but not to customers in China and South Korea, which are served by the Products and Systems segment. • Products and Systems. This segment designs, manufactures, sells, installs and services the Company’s asset protection products and systems, including equipment and instrumentation, predominantly in the United States. Recent Developments Overall, the Company has taken actions to help ensure the health and safety of Company employees and those of its customers and suppliers; maintain business continuity and financial strength and stability; and serve customers as they provide essential products and services to the world. During 2022, the Company experienced unfavorable foreign currency exchange impacts as it relates to the Company's European operations, which has continued in 2023. Additionally, the Russian-Ukrainian war continues to create disruptions in the oil and gas market and the supply chain in general, which is resulting in some disruption to our business operations. The Company’s European operations are currently experiencing increased costs associated with higher energy costs, among others, due in part to the Russian-Ukrainian war. In 2022, the Company eliminated substantially all of the COVID related cost reduction initiatives undertaken in 2020, including re-installment of the savings plan employer match and increasing wages back to pre-pandemic amounts. The Company is currently unable to predict with certainty the overall impact that the factors discussed above and the effect of inflationary pressures may have on its business, results of operations or liquidity or in other ways which the Company cannot yet determine. The Company will continue to monitor market conditions and respond accordingly. Basis of Presentation The Unaudited Condensed Consolidated Financial Statements contained in this report have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP") and Securities and Exchange Commission ("SEC") guidance allowing for reduced disclosure for interim periods. In the opinion of management, the Unaudited Condensed Consolidated Financial Statements include all adjustments, which are of a normal recurring nature, necessary for a fair presentation of the results for the interim periods of the years ending December 31, 2023 and December 31, 2022. Certain items included in these statements are based on management’s estimates. Actual results may differ from those estimates. The results of operations for any interim period are not necessarily indicative of the results expected for the year. The accompanying Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the notes to the Audited Consolidated Financial Statements contained in the Company's 2022 Annual Report on Form 10-K ("2022 Annual Report"). Principles of Consolidation The accompanying Unaudited Condensed Consolidated Financial Statements include the accounts of Mistras Group, Inc. as well as its wholly-owned subsidiaries, majority-owned subsidiaries and consolidated variable interest entities (VIE). For subsidiaries in which the Company’s ownership interest is less than 100%, the non-controlling interests are reported in stockholders’ equity in the accompanying Condensed Consolidated Balance Sheets. The non-controlling interests in net results, net of tax, is classified separately in the accompanying Unaudited Condensed Consolidated Statements of Loss. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations of companies acquired are included from the date of acquisition. Reclassification Certain amounts in prior periods have been reclassified to conform to the current year presentation. Such reclassifications did not have a material effect on the Company's financial condition or results of operations as previously reported. Significant Accounting Policies The Company’s significant accounting policies are disclosed in Note 1– Summary of Significant Accounting Policies and Practices in the 2022 Annual Report. On an ongoing basis, the Company evaluates its estimates and assumptions, including among other things, those related to revenue recognition, long-lived assets, goodwill and acquisitions. Since the date of the 2022 Annual Report, there have been no material changes to the Company's significant accounting policies. Income Taxes As of March 31, 2023, management concluded that it is more likely than not that a substantial portion of the Company's deferred tax assets will be realized. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company’s effective income tax rate was approximately 15.6% and 19.3% for the three months ended March 31, 2023 and 2022, respectively. The effective income tax rate benefit for the three months ended March 31, 2023 was lower than the statutory rate primarily due to the impact of an unfavorable discrete item related to stock compensation. Recent Accounting Pronouncements In March 2020 and updated in January 2021, the FASB issued Accounting Standards Update ("ASU") 2020-04 and 2021-01, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The amendments provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The guidance provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another rate that is expected to be discontinued. The amendments in ASU 2020-04 are effective for all entities as of March 12, 2020 through December 31, 2024. The Company is currently evaluating applicable contracts and the available expedients provided by the new guidance. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue The Company derives the majority of its revenue by providing services on a time and material basis, and are short-term in nature. The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers . Performance Obligations The Company provides highly integrated and bundled inspection services to its customers. The majority of the Company's contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and is, therefore, not distinct. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the Company's best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is a relative selling price based on price lists. Contract modifications are not routine in the performance of the Company's contracts. Generally, when contracts are modified, the modification is to account for changes in scope to the goods and services that are provided. In most instances, contract modifications are for goods or services that are distinct, and, therefore, are accounted for as a separate contract. The Company's performance obligations are satisfied over time as work progresses or at a point in time. The majority of the Company's revenue is recognized over time as work progresses for the Company's service deliverables, which includes providing testing, inspection and mechanical services to our customers. Revenue is recognized over time based on time and material incurred to date which best portrays the transfer of control to the customer. The Company also utilizes an available practical expedient that provides for revenue to be recognized in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date. Fixed fee arrangements are determined based on expected labor, material, and overhead to be consumed on fulfillment of such services. For these arrangements, revenue is recognized on a cost-to-cost method tracked on an input basis. The majority of our revenue recognized at a point in time is related to product sales when the customer obtains control of the asset, which is generally upon shipment to the customer. Contract costs include labor, material and overhead. The Company expects any significant remaining performance obligations to be satisfied within one year. Contract Estimates The majority of the Company's revenues are short-term in nature. The Company enters into master service agreements (MSAs) with customers that specify an overall framework and contract terms. The actual contracting to provide services or furnish products are triggered by a work order, purchase order, or some similar document issued pursuant to a MSA which sets forth the scope of services and/or identifies the products to be provided. From time-to-time, the Company may enter into longer-term contracts, which can range from several months to several years. Revenue on certain contracts is recognized as work is performed based on total costs incurred to date in relation to the total estimated costs for the performance of the contract at completion. This includes contract estimates of costs to be incurred for the performance of the contract. Cost estimation is based upon the professional knowledge and experience of the Company's project managers, engineers and financial professionals. Factors that are considered in estimating the work to be completed include the availability of materials, the effect of any delays in the Company's project performance and the recoverability of any claims. Whenever revisions of estimates, contract costs and/or contract values indicate that the contract costs will exceed estimated revenues, thus creating a loss, a provision for the total estimated loss is recorded in that period. Revenue by Category The following series of tables present the Company's disaggregated revenue: Revenue by industry was as follows: Three Months Ended March 31, 2023 North America International Products & Systems Corp/Elim Total Oil & Gas $ 89,773 $ 8,855 $ 37 $ — $ 98,665 Aerospace & Defense 13,611 4,980 11 — 18,602 Industrials 9,302 6,053 558 — 15,913 Power generation & Transmission 4,987 1,657 1,326 — 7,970 Other Process Industries 9,109 3,237 27 — 12,373 Infrastructure, Research & Engineering 2,483 2,136 1,142 — 5,761 Petrochemical 5,137 145 — — 5,282 Other 2,530 2,344 638 (2,062) 3,450 Total $ 136,932 $ 29,407 $ 3,739 $ (2,062) $ 168,016 Three Months Ended March 31, 2022 North America International Products & Systems Corp/Elim Total Oil & Gas $ 86,613 $ 7,572 $ 38 $ — $ 94,223 Aerospace & Defense 15,022 4,940 108 — 20,070 Industrials 9,007 5,528 502 — 15,037 Power generation & Transmission 3,822 2,562 845 — 7,229 Other Process Industries 10,293 3,518 1 — 13,812 Infrastructure, Research & Engineering 2,506 2,039 897 — 5,442 Petrochemical 3,045 78 — — 3,123 Other 2,638 1,901 545 (2,358) 2,726 Total $ 132,946 $ 28,138 $ 2,936 $ (2,358) $ 161,662 Revenue per key geographic location was as follows: Three Months Ended March 31, 2023 North America International Products & Systems Corp/Elim Total United States $ 120,600 $ 309 $ 1,801 $ (598) $ 122,112 Other Americas 14,270 3,489 326 (432) 17,653 Europe 1,412 24,183 261 (826) 25,030 Asia-Pacific 650 1,426 1,351 (206) 3,221 Total $ 136,932 $ 29,407 $ 3,739 $ (2,062) $ 168,016 Three Months Ended March 31, 2022 North America International Products & Sytems Corp/Elim Total United States $ 113,935 $ 173 $ 1,351 $ (655) $ 114,804 Other Americas 18,052 1,341 16 (609) 18,800 Europe 744 25,920 580 (924) 26,320 Asia-Pacific 215 704 989 (170) 1,738 Total $ 132,946 $ 28,138 $ 2,936 $ (2,358) $ 161,662 Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on the Consolidated Balance Sheets. Amounts are generally billed as work progresses in accordance with agreed-upon contractual terms, generally at periodic intervals (e.g., weekly, bi-weekly or monthly). Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, the Company sometimes receives advances or deposits from its customers before revenue is recognized, resulting in contract liabilities. These assets and liabilities are aggregated on an individual contract basis and reported on the Consolidated Balance Sheets at the end of each reporting period within accounts receivable, net or accrued expenses and other current liabilities. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation The Company has granted share-based incentive awards to its eligible employees and non-employee directors under two equity incentive plans: (i) the 2009 Long-Term Incentive Plan (the "2009 Plan") and (ii) the 2016 Long-Term Incentive Plan (the "2016 Plan"). No awards have been granted under the 2009 Plan since the 2016 Plan was approved by shareholders in 2016, and the remaining stock option award granted under the 2009 Plan expired during the three months ended March 31, 2022. Awards granted under the 2016 Plan may be in the form of stock options, restricted stock units and other forms of share-based incentives, including performance restricted stock units, stock appreciation rights and deferred stock rights. At the annual shareholders meeting on May 23, 2022, the Company’s shareholders approved an amendment to increase the total number of shares that may be issued under the 2016 Plan by 1.2 million, for a total of 4.9 million shares that are authorized for issuance under the 2016 Plan, of which approximately 1,100,000 shares were available for future grants as of March 31, 2023. Stock Options During the three months ended March 31, 2022, all remaining outstanding stock options expired. For each of the three months ended March 31, 2023 and 2022, the Company did not recognize any share-based compensation expense related to the stock option award. Restricted Stock Unit Awards For the three months ended March 31, 2023 and March 31, 2022, the Company recognized share-based compensation expense related to restricted stock unit awards of $0.9 million and $0.9 million, respectively. As of March 31, 2023, there was $10.0 million of unrecognized compensation costs, net of estimated forfeitures, related to restricted stock unit awards, which is expected to be recognized over a remaining weighted-average period of 3.1 years. Upon vesting, restricted stock units are generally net share-settled to cover the required withholding tax and the remaining amount is converted into an equivalent number of shares of common stock. A summary of the vesting activity of restricted stock unit awards, with the respective fair value of the awards, is as follows: Three months ended March 31, 2023 2022 Restricted stock awards vested 338 226 Fair value of awards vested $ 1,946 $ 1,502 A summary of the fully-vested common stock the Company issued to its six non-employee directors, in connection with its non-employee director compensation plan, is as follows: Three months ended March 31, 2023 2022 Awards issued 48 34 Grant date fair value of awards issued $ 275 $ 225 A summary of the Company's outstanding, non-vested restricted share units is as follows: Three months ended March 31, 2023 2022 Units Weighted Units Weighted Outstanding at beginning of period: 1,415 $ 6.66 1,208 $ 7.96 Granted 542 $ 8.50 675 $ 7.65 Released (338) $ 5.76 (226) $ 13.73 Forfeited (22) $ 7.82 (7) $ 10.50 Outstanding at end of period: 1,597 $ 7.44 1,650 $ 7.16 Performance Restricted Stock Units The Company maintains Performance Restricted Stock Units (PRSUs) that have been granted to select executives and senior officers whose ultimate payout is based on the Company’s performance over a one-year period based on specific metrics approved by the Compensation Committee of the Board of Directors of the Company. For 2022, the Compensation Committee utilized the same structure for the Company’s equity incentive compensation plan for its executive officers as 2021, and approved the new target awards for 2022. The three metrics were: 1. Free Cash Flow net cash provided by operating activities less purchases of property, plant, equipment and intangible assets and is subject to adjustments approved by the Compensation Committee. 2. Adjusted EBITDA defined as net income attributable to the Company 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 and, if applicable, certain special items which are noted. 3. Total Shareholder Return (TSR) measures the total return to shareholders of the Company during 2021 versus the total return to the shareholders of a predefined peer group of companies that provide inspection, testing, certification or similar industrial services. The return will be measured by the year over year percent change in share price. The share prices used to calculate the return are the average share price during the 20-trading day period ending on the initial measurement date (the last 20 trading days of 2021), compared to the average share price during the 20-trading day period ending on the final measurement date (the last 20 trading days of 2022). Any cash dividends or distributions paid in 2022 will be added to calculate the return to shareholders during the year. TSR is considered a market condition for which the fair value of PRSUs with this condition is determined using a Monte Carlo valuation model. Key assumptions in the Monte Carlo valuation model included: a. Expected Volatility. Expected volatility of the Company’s common stock at the date of grant was estimated based on a historical average volatility rate for the approximate 1-year performance period. b. Dividend Yield . The dividend yield assumption was based on historical and anticipated dividend payouts (assumed at zero). c. Risk-Free Interest Rate . The risk-free interest rate assumption was based on observed interest rates consistent with the approximate 1-year performance measurement period. For 2023, the Compensation Committee made changes to the Company's equity incentive compensation plan for its executive officers including modifying the metrics utilized, and approved the new target awards for 2023. The three metrics are: 1. Free Cash Flow net cash provided by operating activities less purchases of property, plant, equipment and intangible assets and is subject to adjustments approved by the Compensation Committee. 2. Adjusted EBITDA defined as net income attributable to the Company 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 and, if applicable, certain special items which are noted. 3. Revenue PRSUs are equity-classified and compensation costs are initially measured using the fair value of the underlying stock at the date of grant. Compensation costs related to the PRSUs are subsequently adjusted for changes in the expected outcomes of the performance conditions. Compensation cost related to the PRSUs with a market condition is not reversed if the market condition is not achieved, provided the employee requisite service has been rendered. PRSUs generally vest ratably on each of the first four A summary of the Company's PRSU activity is as follows: Three months ended March 31, 2023 2022 Units Weighted Units Weighted Outstanding at beginning of period: 280 $ 9.96 388 $ 10.07 Granted 282 $ 8.50 341 $ 6.55 Performance condition adjustments (32) $ 6.55 (56) $ 10.47 Released (64) $ 5.58 (17) $ 6.85 Forfeited (84) $ 6.95 — $ — Outstanding at end of period: 382 $ 9.12 656 $ 12.18 During the three months ended March 31, 2023 and March 31, 2022, the Compensation Committee approved the final calculation of the award metrics for calendar year 2022 and 2021, respectively. As a result, the calendar year 2023 PRSUs decreased by approximately 32,000 units as a result of the final calculation of award metrics. For the three months ended March 31, 2023 and March 31, 2022, the Company recognized aggregate share-based compensation expense related to the awards described above of approximately $0.7 million and $0.3 million, respectively. At March 31, 2023, there was $2.8 million of total unrecognized compensation costs related to approximately 382,000 non-vested PRSUs, which is expected to be recognized over a remaining weighted-average period of 2.0 years. |
Earnings (loss) per Share
Earnings (loss) per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings (loss) per Share | Earnings (loss) per Share Basic earnings (loss) per share is computed by dividing net loss by the weighted-average number of shares outstanding during the period. Diluted earnings per share is computed by dividing net loss by the sum of (1) the weighted-average number of shares of common stock outstanding during the period, and (2) the dilutive effect of assumed conversion of equity awards using the treasury stock method. With respect to the number of weighted-average shares outstanding (denominator), diluted shares reflects: (i) the exercise of options to acquire common stock to the extent that the options’ exercise prices are less than the average market price of common shares during the period and (ii) the pro forma vesting of restricted stock units. The following table sets forth the computations of basic and diluted loss per share: Three months ended March 31, 2023 2022 Basic loss per share Numerator: Net loss attributable to Mistras Group, Inc. $ (4,986) $ (5,363) Denominator: Weighted average common shares outstanding 30,021 29,634 Basic loss per share $ (0.17) $ (0.18) Diluted loss per share: Numerator: Net loss attributable to Mistras Group, Inc. $ (4,986) $ (5,363) Denominator: Weighted average common shares outstanding 30,021 29,634 Dilutive effect of restricted stock units outstanding (1) — — 30,021 29,634 Diluted loss per share $ (0.17) $ (0.18) _______________ (1) For the three months ended March 31, 2023 and 2022, 1,513,000 and 1,212,000 shares, respectively, related to restricted stock were excluded from the calculation of diluted EPS due to the net loss for the period. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions Acquisition-Related Expense In the course of its acquisition activities, the Company incurs costs in connection with due diligence, such as professional fees, and other expenses. Additionally, the Company adjusts the fair value of acquisition-related contingent consideration liabilities on a quarterly basis. These amounts are reported as Acquisition-related expense, net on the Unaudited Condensed Consolidated Statements of Loss and were as follows for the three months ended March 31, 2023 and 2022: Three months ended March 31, 2023 2022 Due diligence, professional fees and other transaction costs $ 3 $ 4 Adjustments to fair value of contingent consideration liabilities — 45 Acquisition-related expense, net $ 3 $ 49 The Company's contingent consideration liabilities are included in Accrued expenses and other current liabilities and Other long-term liabilities on the Condensed Consolidated Balance Sheets. |
Accounts Receivable, net
Accounts Receivable, net | 3 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable consisted of the following: March 31, 2023 December 31, 2022 Trade accounts receivable $ 124,066 $ 127,767 Allowance for credit losses (3,641) (4,110) Accounts receivable, net $ 120,425 $ 123,657 The Company had $21.6 million and $13.5 million of unbilled revenue accrued as of March 31, 2023 and December 31, 2022, respectively. These amounts are included in the trade accounts receivable balances above. Unbilled revenue is generally billed in the subsequent quarter to their revenue recognition. The Company considers unbilled receivables as short-term in nature as they are normally converted to trade receivables within 90 days, thus future changes in economic conditions will not have a significant effect on the credit loss estimate. The Company was contracted to perform inspections of welds on various pipeline projects in Texas for a customer. As of December 31, 2019, approximately $1.4 million of past due receivables were outstanding from this customer. The Company received notice from the customer in December 2019, alleging that the work performed was not in compliance with the contract. The Company filed a lawsuit to recover the $1.4 million and other amounts due to the Company and the customer filed a counterclaim, alleging breach of contract and seeking its damages. The Company recorded a full reserve for this receivable during 2019 and the status of this situation has not changed since 2019 through March 31, 2023. See Note 14- Commitments and Contingencies and Note 16 - Subsequent Events for additional details. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of the following (in thousands): March 31, 2023 December 31, 2022 Raw materials and consumable supplies $ 8,195 $ 7,745 Work in progress and finished goods 6,568 5,811 Inventories $ 14,763 $ 13,556 |
Property, Plant and Equipment,
Property, Plant and Equipment, net | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, net | Property, Plant and Equipment, net Property, plant and equipment consisted of the following: Useful Life (Years) March 31, 2023 December 31, 2022 Land $ 2,447 $ 2,529 Buildings and improvements 30-40 25,457 24,800 Office furniture and equipment 5-8 18,644 18,057 Machinery and equipment 5-7 257,227 251,282 303,775 296,668 Accumulated depreciation and amortization (224,959) (219,107) Property, plant and equipment, net $ 78,816 $ 77,561 Depreciation expense for the three months ended March 31, 2023 and 2022 was approximately $6.3 million and $6.6 million, respectively. |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill Changes in the carrying amount of goodwill by segment is shown below: North America International Products and Systems Total Balance at December 31, 2022 $ 185,710 $ 13,925 $ — $ 199,635 Foreign currency translation 80 241 321 Balance at March 31, 2023 $ 185,790 $ 14,166 $ — $ 199,956 The Company reviews goodwill for impairment on a reporting unit basis on October 1 of each year and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. The Company performed a quantitative annual impairment test as of October 1, 2022 and the Company did not identify any changes in circumstances that would indicate the carrying value of goodwill may not be recoverable. Additionally, through March 31, 2023, the Company did not identify any changes in circumstances that would indicate the carrying value of goodwill may not be recoverable. Significant adverse changes in future periods could negatively affect the Company's key assumptions and may result in future goodwill impairment charges which could be material. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2023 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible Assets | Intangible Assets The gross amount, accumulated amortization and net carrying amount of intangible assets were as follows: March 31, 2023 December 31, 2022 Useful Life Gross Amount Accumulated Amortization Net Carrying Amount Gross Amount Accumulated Amortization Net Carrying Amount Customer relationships 5-18 $ 110,094 $ (85,850) $ 24,244 $ 109,683 $ (84,130) $ 25,553 Software/Technology 3-15 51,570 (29,498) 22,072 51,028 (28,669) 22,359 Covenants not to compete 2-5 12,495 (12,429) 66 12,488 (12,416) 72 Other 2-12 10,406 (9,428) 978 10,389 (9,358) 1,031 Total $ 184,565 $ (137,205) $ 47,360 $ 183,588 $ (134,573) $ 49,015 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: March 31, 2023 December 31, 2022 Accrued salaries, wages and related employee benefits $ 25,855 $ 26,684 Contingent consideration, current portion — 937 Accrued workers’ compensation and health benefits 3,789 3,660 Deferred revenue 9,257 7,521 Pension accrual 2,519 2,519 Right-of-use liability - Operating 10,216 10,376 Other accrued expenses 25,491 26,147 Total $ 77,127 $ 77,844 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following: March 31, 2023 December 31, 2022 Senior credit facility $ 65,150 $ 65,250 Senior secured term loan, net of unamortized debt issuance costs of $0.5 million and $0.5 million, respectively 119,863 121,399 Other 4,331 4,602 Total debt 189,344 191,251 Less: Current portion (7,372) (7,425) Long-term debt, net of current portion $ 181,972 $ 183,826 Senior Credit Facility Prior to entering into the Credit Agreement (defined and described below), the Company had a credit agreement with its banking group (the "Prior Credit Agreement") which provided the Company with a $150 million revolving credit facility and a $100 million term loan. The Prior Credit Agreement was most recently amended on May 19, 2021 and had a maturity date of December 12, 2023. On August 1, 2022, the Company entered into a new credit agreement (the “Credit Agreement”) which replaced the Prior Credit Agreement and provides the Company with a $190 million 5-year committed revolving credit facility and a $125 million term loan with a balance of $120 million as of March 31, 2023. The Credit Agreement permits the Company to borrow up to $100 million in non-US dollar currencies and to use up to $20 million of the credit limit for the issuance of letters of credit. Both the revolving line of credit and the term loan under the Credit Agreement have a maturity date of July 30, 2027. The Credit Agreement has the following key terms, conditions and financial covenants: • Borrowings bear interest at Secured Overnight Financing Rate ("SOFR") plus a credit spread adjustment and applicable SOFR margin ranging from 1.25% to 2.75%, based upon our Total Consolidated Debt Leverage Ratio (defined below); under the Prior Credit Agreement, the margin was based upon the LIBOR margin. ◦ Total Consolidated Debt Leverage Ratio means the ratio of (a) Total Consolidated Debt to (b) EBITDA (as defined in the Credit Agreement) for the trailing four consecutive fiscal quarters. ◦ Total Consolidated Debt means all indebtedness (including subordinated debt) of the Company on a consolidated basis. • The Company has the benefit of the lowest SOFR margin if its Total Consolidated Debt Leverage Ratio is equal to or less than 1.25 to 1.0, and the margin increases as the ratio increases, to the maximum margin if the ratio is greater than 3.75 to 1.0. The Credit Agreement is secured by liens on substantially all the assets of the Company and certain of its U.S subsidiaries and is guaranteed by those U.S subsidiaries. • The Company has to maintain a Total Consolidated Debt Leverage Ratio of no more than 4.0 to 1.0 at the end of each quarter through June 30, 2023 and stepping down to a maximum permitted ratio of no more than 3.75 to 1.0 for the remainder of the term. • The Company has to maintain a Fixed Charge Coverage Ratio of 1.25 to 1.0 for the duration of the New Credit Agreement, as defined in the Credit Agreement. • The Credit Agreement limits the Company’s ability to, among other things, create liens, make investments, incur more indebtedness, merge or consolidate, make dispositions of property, pay dividends, make distributions to stockholders or repurchase our stock, enter into a new line of business, enter into transactions with affiliates and enter into burdensome agreements. • The Credit Agreement does not limit the Company’s ability to acquire other businesses or companies except that the acquired business or company must be in the Company's line of business, the Company must be in compliance with the financial covenants on a pro forma basis after taking into account the acquisition, and the Company must provide written notice at least five • Quarterly payments on the term loan of $1.56 million through June 30, 2024, then increasing to $2.34 million through June 30, 2025, and to $3.12 million for each quarterly payment thereafter through maturity. The Credit Agreement was accounted for as a modification and the Company expensed $0.8 million in unamortized capitalized debt issuance costs and fees during the three months ended September 30, 2022, which was included in selling, general and administrative expenses on the Consolidated Statements of Income (Loss). The Company incurred $1.6 million in financing costs for the Credit Agreement, of which $0.2 million of third party costs were expensed and included in selling, general and administrative expenses on the Consolidated Statements of Income (Loss) during the three months ended September 30, 2022. As of March 31, 2023, the Company had borrowings of $185.0 million and a total of $2.6 million of letters of credit outstanding under the Credit Agreement. The Company has capitalized costs associated with debt modifications of $1.4 million as of March 31, 2023, which is included in Other Assets on the Condensed Consolidated Balance Sheets and will be amortized into interest expense over the remaining term of the Credit Agreement through July 30, 2027. As of March 31, 2023, the Company was in compliance with the terms and covenants of the Credit Agreement. The Company continuously monitors compliance with the covenants contained in the Credit Agreement. Other debt The Company's other debt includes bank financing provided at the local subsidiary level used to support working capital requirements and fund capital expenditures. At March 31, 2023, there was an aggregate of approximately $4.3 million outstanding, payable at various times through 2030. Monthly payments range from $0.7 thousand to $16 thousand and interest rates range from 0.4% to 3.5%. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company performs fair value measurements in accordance with the guidance provided by ASC 820, Fair Value Measurements and Disclosures . ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It also establishes a three level hierarchy that prioritizes the inputs used to measure fair value. Financial instruments measured at fair value on a recurring basis The fair value of contingent consideration liabilities was estimated using a discounted cash flow technique with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in ASC 820. The significant inputs in the Level 3 measurement not supported by market activity include the probability assessments of expected future cash flows related to the acquisitions, appropriately discounted considering the uncertainties associated with the obligation, and as calculated in accordance with the terms of the applicable acquisition agreements. The following table represents the changes in the fair value of Level 3 contingent consideration: Three months ended March 31, 2023 2022 Beginning balance $ 938 $ 1,831 Payments (938) (938) Revaluation — 45 Ending balance $ — $ 938 Financial instruments not measured at fair value on a recurring basis The Company has evaluated current market conditions and borrower credit quality and has determined that the carrying value of its long-term debt approximates fair value. The fair value of the Company’s notes payable and finance lease obligations approximates their carrying amounts based on anticipated interest rates which management believes would currently be available to the Company for similar issuances of debt. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings and Government Investigations The Company is periodically involved in lawsuits, investigations and claims that arise in the ordinary course of business. The Company cannot predict with certainty the ultimate resolution of lawsuits, investigations and claims asserted against it. Except for possible losses from the matters described below, the Company does not believe that any currently pending or threatened legal proceeding to which the Company is or is likely to become a party will have a material adverse effect on its business, results of operations, cash flows or financial condition. The costs incurred by the Company to defend lawsuits, investigations and claims and amounts the Company pays to other parties because of these matters may be covered by insurance in some circumstances. Litigation and Commercial Claims The Company was contracted to perform inspections of welds on various pipeline projects in Texas for a customer. As of March 31, 2023, approximately $1.4 million of past due receivables were outstanding from this customer. The customer provided the Company with notice in December 2019, alleging that the Company’s inspection of 66 welds (out of approximately 16,000 welds inspected) were not in compliance with the contract, claimed approximately $7.6 million in damages, and requested that the Company pay these damages and any other damages incurred. The Company filed a lawsuit in the District Court of Bexar County, Texas, 37th Judicial District on December 17, 2019, in an action captioned Mistras Group, Inc. v. Epic Y-Grade Pipeline LP, to recover the $1.4 million and other amounts due to the Company. The customer filed a counterclaim on March 6, 2020, alleging breach of contract and seeking recovery of its alleged damages. The Company believes that any successful claim by the customer regarding the Company’s workmanship will be covered by insurance, subject to payment of a deductible. At this time, the Company is unable to determine whether it has any liability in connection with this matter and if so, the amount or range of any such liability. In the year ended December 31, 2022, the Company recorded a charge of $0.1 million for a potential loss from this matter. The Company recorded a reserve in the amount of $1.4 million during the twelve months ended December 31, 2019 for these past due receivables. See Note 16 - Subsequent Events , for updated information on this matter. Two proceedings have been filed in California Superior Court for the County of Los Angeles regarding alleged violations of the California Labor Code. Both cases are captioned Justin Price v. Mistras Group, Inc., one being a purported class action lawsuit on behalf of current and former Mistras employees in California, filed on June 10, 2020, and the other was filed on September 18, 2020, behalf of the State of California under the California Private Attorney General Act on the basis of the same alleged violations. The two cases was consolidated and requested payment of all damages, including unpaid wages, and various fines and penalties available under California law. On May 4, 2021, the Company agreed to a settlement of all claims in the cases, which was more formally documented pursuant to a settlement agreement completed October 5, 2021, as amended as of May 3, 2022. Pursuant to the settlement, the Company agreed to pay $2.3 million to resolve the allegations in these proceedings and to be responsible for the employer portion of payroll taxes on the amount of the settlement allocated to wages. The settlement as agreed upon by the parties received final court approval on September 26, 2022, and the Company paid the settlement proceeds and related payroll taxes to the claims administrator in the fourth quarter of 2022. The Company recorded expense of approximately $1.6 million during the three months ended March 31, 2021 related to this settlement, which is in addition to expense of $0.8 million the Company recorded during the three months ended December 31, 2020. Pension Related Contingencies Certain of Company’s subsidiaries had significant reductions in their unionized workers in 2018. The collective bargaining agreements for the employees of these subsidiaries required contributions for these employees to two national multi-employer pension funds. The reduction in employees resulted in the subsidiary incurring a complete withdrawal to one of the pension funds under the Employee Retirement Income Security Act of 1974 ("ERISA"), which was fully satisfied in 2019. The Company has determined that the subsidiary is likely to incur partial or complete withdrawal liability to the other pension fund. The balance of the estimated total amount of this potential liability as of March 31, 2023 is approximately $2.5 million, which were incurred in 2018 and 2019. Severance and labor disputes During December 2019, the Company executed an agreement to sell the rights of certain customer "staff leasing" contracts related to its German subsidiary for total consideration of approximately $0.1 million, effective January 1, 2020. No other assets or liabilities other than those employee benefits related to employees working on the customer contracts were included in the sale. As of March 31, 2023, the Company has approximately $0.1 million of accrued estimated severance payment obligations, which takes into account the Company's estimate with respect to the employees that have been or will be transitioned to the German subsidiaries' other customers. The $0.2 million of estimated obligations is net of $0.4 million in payments made and $1.0 million in reversals due to employees being transitioned to customer contracts. |
Segment Disclosure
Segment Disclosure | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Disclosure | Segment Disclosure As noted in Note 1 - Description of Business and Basis of Presentation , the Company updated the naming convention of one of our three operating segments and the updates are reflected below. Our three operating segments are: • North America. This segment provides asset protection solutions predominantly in North America, with the largest concentration in the United States, followed by Canada, consisting primarily of NDT, inspection, mechanical and engineering services that are used to evaluate the safety, structural integrity and reliability of critical energy, industrial and public infrastructure and commercial aerospace components. Software, digital and data services are included in this segment. • International. This segment offers services, products and systems similar to those of the other segments to select markets within Europe, the Middle East, Africa, Asia and South America, but not to customers in China and South Korea, which are served by the Products and Systems segment. • Products and Systems. This segment designs, manufactures, sells, installs and services the Company’s asset protection products and systems, including equipment and instrumentation, predominantly in the United States. Costs incurred for general corporate services, including finance, legal, and certain other costs that are provided to the segments are reported within Corporate and eliminations. Sales to the International segment from the Products and Systems segment and subsequent sales by the International segment of the same items are recorded and reflected in the operating performance of both segments. Additionally, engineering charges and royalty fees charged to the North America and International segments by the Products and Systems segment are reflected in the operating performance of each segment. The accounting policies of the reportable segments are the same as those described in Note 1 - Description of Business and Basis of Presentation . Segment income from operations is one of the primary performance measures used by the chief operating decision maker, to assess the performance of each segment and make resource allocation decisions. Certain general and administrative costs such as human resources, information technology and training are allocated to the segments. Segment income from operations excludes interest and other financial charges and income taxes. Corporate and other assets are comprised principally of cash, deposits, property, plant and equipment, domestic deferred taxes, deferred charges and other assets. Corporate loss from operations consists of administrative charges related to corporate personnel and other charges that cannot be readily identified for allocation to a particular segment. Selected consolidated financial information by segment for the periods shown was as follows: (with intercompany transactions eliminated in Corporate and eliminations) Three months ended March 31, 2023 2022 Revenue North America $ 136,932 $ 132,946 International 29,407 28,138 Products and Systems 3,739 2,936 Corporate and eliminations (2,062) (2,358) $ 168,016 $ 161,662 Three months ended March 31, 2023 2022 Gross profit North America $ 36,637 $ 30,526 International 7,367 8,190 Products and Systems 2,063 1,168 Corporate and eliminations 10 8 $ 46,077 $ 39,892 Income (loss) from operations by operating segment includes intercompany transactions, which are eliminated in Corporate and eliminations. Three months ended March 31, 2023 2022 Income (loss) from operations North America $ 9,378 $ 3,761 International (568) 284 Products and Systems 384 (582) Corporate and eliminations (11,024) (8,161) $ (1,830) $ (4,698) Three months ended March 31, 2023 2022 Depreciation and amortization North America $ 6,357 $ 6,593 International 1,859 2,058 Products and Systems 256 218 Corporate and eliminations (59) (62) $ 8,413 $ 8,807 March 31, 2023 December 31, 2022 Intangible assets, net North America $ 41,746 $ 43,260 International 4,117 4,422 Products and Systems 1,295 1,208 Corporate and eliminations 202 125 $ 47,360 $ 49,015 March 31, 2023 December 31, 2022 Total assets North America $ 394,280 $ 407,779 International 104,782 104,531 Products and Systems 13,415 12,408 Corporate and eliminations 18,342 10,186 $ 530,819 $ 534,904 Refer to Note 2 – Revenue , for revenue by geographic area for the three months ended March 31, 2023 and 2022. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On April 25, 2023, the Company settled the outstanding litigation described in Note 14- Commitments and Contingencies, Mistras Group, Inc. v. Epic Y-Grade Pipeline LP, pending in Texas state court. The lawsuit involves a claim against a customer for unpaid receivables and the customer’s counterclaim related to inspection of welds on various pipeline projects in Texas. The settlement will result in a payment by the Company of $0.3 million (which the Company estimates is significantly less than the cost of going to trial) and a release of its claim for $1.4 million of associated past due receivables which were fully reserved for in prior periods. The settlement is contingent on the parties executing a settlement agreement, which will include a release of all claims related to the matter and dismissal of the case with prejudice. |
Description of Business_and B_2
Description of Business and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Unaudited Condensed Consolidated Financial Statements contained in this report have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP") and Securities and Exchange Commission ("SEC") guidance allowing for reduced disclosure for interim periods. In the opinion of management, the Unaudited Condensed Consolidated Financial Statements include all adjustments, which are of a normal recurring nature, necessary for a fair presentation of the results for the interim periods of the years ending December 31, 2023 and December 31, 2022. Certain items included in these statements are based on management’s estimates. Actual results may differ from those estimates. The results of operations for any interim period are not necessarily indicative of the results expected for the year. The accompanying Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the notes to the Audited Consolidated Financial Statements contained in the Company's 2022 Annual Report on Form 10-K ("2022 Annual Report"). |
Principles of Consolidation | Principles of Consolidation The accompanying Unaudited Condensed Consolidated Financial Statements include the accounts of Mistras Group, Inc. as well as its wholly-owned subsidiaries, majority-owned subsidiaries and consolidated variable interest entities (VIE). For subsidiaries in which the Company’s ownership interest is less than 100%, the non-controlling interests are reported in stockholders’ equity in the accompanying Condensed Consolidated Balance Sheets. The non-controlling interests in net results, net of tax, is classified separately in the accompanying Unaudited Condensed Consolidated Statements of Loss. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations of companies acquired are included from the date of acquisition. |
Reclassification | Reclassification Certain amounts in prior periods have been reclassified to conform to the current year presentation. Such reclassifications did not have a material effect on the Company's financial condition or results of operations as previously reported. |
Income Taxes | Income Taxes As of March 31, 2023, management concluded that it is more likely than not that a substantial portion of the Company's deferred tax assets will be realized. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2020 and updated in January 2021, the FASB issued Accounting Standards Update ("ASU") 2020-04 and 2021-01, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The amendments provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The guidance provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another rate that is expected to be discontinued. The amendments in ASU 2020-04 are effective for all entities as of March 12, 2020 through December 31, 2024. The Company is currently evaluating applicable contracts and the available expedients provided by the new guidance. |
Revenue | Revenue The Company derives the majority of its revenue by providing services on a time and material basis, and are short-term in nature. The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers . Performance Obligations The Company provides highly integrated and bundled inspection services to its customers. The majority of the Company's contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and is, therefore, not distinct. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the Company's best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is a relative selling price based on price lists. Contract modifications are not routine in the performance of the Company's contracts. Generally, when contracts are modified, the modification is to account for changes in scope to the goods and services that are provided. In most instances, contract modifications are for goods or services that are distinct, and, therefore, are accounted for as a separate contract. The Company's performance obligations are satisfied over time as work progresses or at a point in time. The majority of the Company's revenue is recognized over time as work progresses for the Company's service deliverables, which includes providing testing, inspection and mechanical services to our customers. Revenue is recognized over time based on time and material incurred to date which best portrays the transfer of control to the customer. The Company also utilizes an available practical expedient that provides for revenue to be recognized in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date. Fixed fee arrangements are determined based on expected labor, material, and overhead to be consumed on fulfillment of such services. For these arrangements, revenue is recognized on a cost-to-cost method tracked on an input basis. The majority of our revenue recognized at a point in time is related to product sales when the customer obtains control of the asset, which is generally upon shipment to the customer. Contract costs include labor, material and overhead. The Company expects any significant remaining performance obligations to be satisfied within one year. Contract Estimates The majority of the Company's revenues are short-term in nature. The Company enters into master service agreements (MSAs) with customers that specify an overall framework and contract terms. The actual contracting to provide services or furnish products are triggered by a work order, purchase order, or some similar document issued pursuant to a MSA which sets forth the scope of services and/or identifies the products to be provided. From time-to-time, the Company may enter into longer-term contracts, which can range from several months to several years. Revenue on certain contracts is recognized as work is performed based on total costs incurred to date in relation to the total estimated costs for the performance of the contract at completion. This includes contract estimates of costs to be incurred for the performance of the contract. Cost estimation is based upon the professional knowledge and experience of the Company's project managers, engineers and financial professionals. Factors that are considered in estimating the work to be completed include the availability of materials, the effect of any delays in the Company's project performance and the recoverability of any claims. Whenever revisions of estimates, contract costs and/or contract values indicate that the contract costs will exceed estimated revenues, thus creating a loss, a provision for the total estimated loss is recorded in that period. Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on the Consolidated Balance Sheets. Amounts are generally billed as work progresses in accordance with agreed-upon contractual terms, generally at periodic intervals (e.g., weekly, bi-weekly or monthly). Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, the Company sometimes receives advances or deposits from its customers before revenue is recognized, resulting in contract liabilities. These assets and liabilities are aggregated on an individual contract basis and reported on the Consolidated Balance Sheets at the end of each reporting period within accounts receivable, net or accrued expenses and other current liabilities. |
Fair Value Measurements | Fair Value Measurements The Company performs fair value measurements in accordance with the guidance provided by ASC 820, Fair Value Measurements and Disclosures . ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It also establishes a three level hierarchy that prioritizes the inputs used to measure fair value. Financial instruments measured at fair value on a recurring basis The fair value of contingent consideration liabilities was estimated using a discounted cash flow technique with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in ASC 820. The significant inputs in the Level 3 measurement not supported by market activity include the probability assessments of expected Financial instruments not measured at fair value on a recurring basis The Company has evaluated current market conditions and borrower credit quality and has determined that the carrying value of its long-term debt approximates fair value. The fair value of the Company’s notes payable and finance lease obligations approximates their carrying amounts based on anticipated interest rates which management believes would currently be available to the Company for similar issuances of debt. |
Segment Reporting | Segment Disclosure As noted in Note 1 - Description of Business and Basis of Presentation , the Company updated the naming convention of one of our three operating segments and the updates are reflected below. Our three operating segments are: • North America. This segment provides asset protection solutions predominantly in North America, with the largest concentration in the United States, followed by Canada, consisting primarily of NDT, inspection, mechanical and engineering services that are used to evaluate the safety, structural integrity and reliability of critical energy, industrial and public infrastructure and commercial aerospace components. Software, digital and data services are included in this segment. • International. This segment offers services, products and systems similar to those of the other segments to select markets within Europe, the Middle East, Africa, Asia and South America, but not to customers in China and South Korea, which are served by the Products and Systems segment. • Products and Systems. This segment designs, manufactures, sells, installs and services the Company’s asset protection products and systems, including equipment and instrumentation, predominantly in the United States. Costs incurred for general corporate services, including finance, legal, and certain other costs that are provided to the segments are reported within Corporate and eliminations. Sales to the International segment from the Products and Systems segment and subsequent sales by the International segment of the same items are recorded and reflected in the operating performance of both segments. Additionally, engineering charges and royalty fees charged to the North America and International segments by the Products and Systems segment are reflected in the operating performance of each segment. The accounting policies of the reportable segments are the same as those described in Note 1 - Description of Business and Basis of Presentation . Segment income from operations is one of the primary performance measures used by the chief operating decision maker, to assess the performance of each segment and make resource allocation decisions. Certain general and administrative costs such as human resources, information technology and training are allocated to the segments. Segment income from operations excludes interest and other financial charges and income taxes. Corporate and other assets are comprised principally of cash, deposits, property, plant and equipment, domestic deferred taxes, deferred charges and other assets. Corporate loss from operations consists of administrative charges related to corporate personnel and other charges that cannot be readily identified for allocation to a particular segment. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregated Revenues | The following series of tables present the Company's disaggregated revenue: Revenue by industry was as follows: Three Months Ended March 31, 2023 North America International Products & Systems Corp/Elim Total Oil & Gas $ 89,773 $ 8,855 $ 37 $ — $ 98,665 Aerospace & Defense 13,611 4,980 11 — 18,602 Industrials 9,302 6,053 558 — 15,913 Power generation & Transmission 4,987 1,657 1,326 — 7,970 Other Process Industries 9,109 3,237 27 — 12,373 Infrastructure, Research & Engineering 2,483 2,136 1,142 — 5,761 Petrochemical 5,137 145 — — 5,282 Other 2,530 2,344 638 (2,062) 3,450 Total $ 136,932 $ 29,407 $ 3,739 $ (2,062) $ 168,016 Three Months Ended March 31, 2022 North America International Products & Systems Corp/Elim Total Oil & Gas $ 86,613 $ 7,572 $ 38 $ — $ 94,223 Aerospace & Defense 15,022 4,940 108 — 20,070 Industrials 9,007 5,528 502 — 15,037 Power generation & Transmission 3,822 2,562 845 — 7,229 Other Process Industries 10,293 3,518 1 — 13,812 Infrastructure, Research & Engineering 2,506 2,039 897 — 5,442 Petrochemical 3,045 78 — — 3,123 Other 2,638 1,901 545 (2,358) 2,726 Total $ 132,946 $ 28,138 $ 2,936 $ (2,358) $ 161,662 Revenue per key geographic location was as follows: Three Months Ended March 31, 2023 North America International Products & Systems Corp/Elim Total United States $ 120,600 $ 309 $ 1,801 $ (598) $ 122,112 Other Americas 14,270 3,489 326 (432) 17,653 Europe 1,412 24,183 261 (826) 25,030 Asia-Pacific 650 1,426 1,351 (206) 3,221 Total $ 136,932 $ 29,407 $ 3,739 $ (2,062) $ 168,016 Three Months Ended March 31, 2022 North America International Products & Sytems Corp/Elim Total United States $ 113,935 $ 173 $ 1,351 $ (655) $ 114,804 Other Americas 18,052 1,341 16 (609) 18,800 Europe 744 25,920 580 (924) 26,320 Asia-Pacific 215 704 989 (170) 1,738 Total $ 132,946 $ 28,138 $ 2,936 $ (2,358) $ 161,662 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Vesting Activity of Restricted Stock Unit Awards | A summary of the vesting activity of restricted stock unit awards, with the respective fair value of the awards, is as follows: Three months ended March 31, 2023 2022 Restricted stock awards vested 338 226 Fair value of awards vested $ 1,946 $ 1,502 |
Schedule of Fully-vested Common Stock Issued to Non-employee Directors | A summary of the fully-vested common stock the Company issued to its six non-employee directors, in connection with its non-employee director compensation plan, is as follows: Three months ended March 31, 2023 2022 Awards issued 48 34 Grant date fair value of awards issued $ 275 $ 225 |
Schedule of Company's Outstanding, Nonvested Restricted Share Units and Performance Restricted Stock Units | A summary of the Company's outstanding, non-vested restricted share units is as follows: Three months ended March 31, 2023 2022 Units Weighted Units Weighted Outstanding at beginning of period: 1,415 $ 6.66 1,208 $ 7.96 Granted 542 $ 8.50 675 $ 7.65 Released (338) $ 5.76 (226) $ 13.73 Forfeited (22) $ 7.82 (7) $ 10.50 Outstanding at end of period: 1,597 $ 7.44 1,650 $ 7.16 A summary of the Company's PRSU activity is as follows: Three months ended March 31, 2023 2022 Units Weighted Units Weighted Outstanding at beginning of period: 280 $ 9.96 388 $ 10.07 Granted 282 $ 8.50 341 $ 6.55 Performance condition adjustments (32) $ 6.55 (56) $ 10.47 Released (64) $ 5.58 (17) $ 6.85 Forfeited (84) $ 6.95 — $ — Outstanding at end of period: 382 $ 9.12 656 $ 12.18 |
Earnings (loss) per Share (Tabl
Earnings (loss) per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Computations of Basic and Diluted Earnings (Loss) per Share | The following table sets forth the computations of basic and diluted loss per share: Three months ended March 31, 2023 2022 Basic loss per share Numerator: Net loss attributable to Mistras Group, Inc. $ (4,986) $ (5,363) Denominator: Weighted average common shares outstanding 30,021 29,634 Basic loss per share $ (0.17) $ (0.18) Diluted loss per share: Numerator: Net loss attributable to Mistras Group, Inc. $ (4,986) $ (5,363) Denominator: Weighted average common shares outstanding 30,021 29,634 Dilutive effect of restricted stock units outstanding (1) — — 30,021 29,634 Diluted loss per share $ (0.17) $ (0.18) _______________ (1) For the three months ended March 31, 2023 and 2022, 1,513,000 and 1,212,000 shares, respectively, related to restricted stock were excluded from the calculation of diluted EPS due to the net loss for the period. |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Acquisition-related Expenses | These amounts are reported as Acquisition-related expense, net on the Unaudited Condensed Consolidated Statements of Loss and were as follows for the three months ended March 31, 2023 and 2022: Three months ended March 31, 2023 2022 Due diligence, professional fees and other transaction costs $ 3 $ 4 Adjustments to fair value of contingent consideration liabilities — 45 Acquisition-related expense, net $ 3 $ 49 |
Accounts Receivable, net (Table
Accounts Receivable, net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable, Net | Accounts receivable consisted of the following: March 31, 2023 December 31, 2022 Trade accounts receivable $ 124,066 $ 127,767 Allowance for credit losses (3,641) (4,110) Accounts receivable, net $ 120,425 $ 123,657 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventories consist of the following (in thousands): March 31, 2023 December 31, 2022 Raw materials and consumable supplies $ 8,195 $ 7,745 Work in progress and finished goods 6,568 5,811 Inventories $ 14,763 $ 13,556 |
Property, Plant and Equipment_2
Property, Plant and Equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment, Net | Property, plant and equipment consisted of the following: Useful Life (Years) March 31, 2023 December 31, 2022 Land $ 2,447 $ 2,529 Buildings and improvements 30-40 25,457 24,800 Office furniture and equipment 5-8 18,644 18,057 Machinery and equipment 5-7 257,227 251,282 303,775 296,668 Accumulated depreciation and amortization (224,959) (219,107) Property, plant and equipment, net $ 78,816 $ 77,561 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill | Changes in the carrying amount of goodwill by segment is shown below: North America International Products and Systems Total Balance at December 31, 2022 $ 185,710 $ 13,925 $ — $ 199,635 Foreign currency translation 80 241 321 Balance at March 31, 2023 $ 185,790 $ 14,166 $ — $ 199,956 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of Net Carrying Amount of Intangible Assets | The gross amount, accumulated amortization and net carrying amount of intangible assets were as follows: March 31, 2023 December 31, 2022 Useful Life Gross Amount Accumulated Amortization Net Carrying Amount Gross Amount Accumulated Amortization Net Carrying Amount Customer relationships 5-18 $ 110,094 $ (85,850) $ 24,244 $ 109,683 $ (84,130) $ 25,553 Software/Technology 3-15 51,570 (29,498) 22,072 51,028 (28,669) 22,359 Covenants not to compete 2-5 12,495 (12,429) 66 12,488 (12,416) 72 Other 2-12 10,406 (9,428) 978 10,389 (9,358) 1,031 Total $ 184,565 $ (137,205) $ 47,360 $ 183,588 $ (134,573) $ 49,015 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: March 31, 2023 December 31, 2022 Accrued salaries, wages and related employee benefits $ 25,855 $ 26,684 Contingent consideration, current portion — 937 Accrued workers’ compensation and health benefits 3,789 3,660 Deferred revenue 9,257 7,521 Pension accrual 2,519 2,519 Right-of-use liability - Operating 10,216 10,376 Other accrued expenses 25,491 26,147 Total $ 77,127 $ 77,844 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consisted of the following: March 31, 2023 December 31, 2022 Senior credit facility $ 65,150 $ 65,250 Senior secured term loan, net of unamortized debt issuance costs of $0.5 million and $0.5 million, respectively 119,863 121,399 Other 4,331 4,602 Total debt 189,344 191,251 Less: Current portion (7,372) (7,425) Long-term debt, net of current portion $ 181,972 $ 183,826 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Changes in Fair Value of Level 3 Contingent Consideration | The following table represents the changes in the fair value of Level 3 contingent consideration: Three months ended March 31, 2023 2022 Beginning balance $ 938 $ 1,831 Payments (938) (938) Revaluation — 45 Ending balance $ — $ 938 |
Segment Disclosure (Tables)
Segment Disclosure (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Selected Consolidated Financial Information by Segment | Selected consolidated financial information by segment for the periods shown was as follows: (with intercompany transactions eliminated in Corporate and eliminations) Three months ended March 31, 2023 2022 Revenue North America $ 136,932 $ 132,946 International 29,407 28,138 Products and Systems 3,739 2,936 Corporate and eliminations (2,062) (2,358) $ 168,016 $ 161,662 Three months ended March 31, 2023 2022 Gross profit North America $ 36,637 $ 30,526 International 7,367 8,190 Products and Systems 2,063 1,168 Corporate and eliminations 10 8 $ 46,077 $ 39,892 Income (loss) from operations by operating segment includes intercompany transactions, which are eliminated in Corporate and eliminations. Three months ended March 31, 2023 2022 Income (loss) from operations North America $ 9,378 $ 3,761 International (568) 284 Products and Systems 384 (582) Corporate and eliminations (11,024) (8,161) $ (1,830) $ (4,698) Three months ended March 31, 2023 2022 Depreciation and amortization North America $ 6,357 $ 6,593 International 1,859 2,058 Products and Systems 256 218 Corporate and eliminations (59) (62) $ 8,413 $ 8,807 March 31, 2023 December 31, 2022 Intangible assets, net North America $ 41,746 $ 43,260 International 4,117 4,422 Products and Systems 1,295 1,208 Corporate and eliminations 202 125 $ 47,360 $ 49,015 March 31, 2023 December 31, 2022 Total assets North America $ 394,280 $ 407,779 International 104,782 104,531 Products and Systems 13,415 12,408 Corporate and eliminations 18,342 10,186 $ 530,819 $ 534,904 |
Description of Business_and B_3
Description of Business and Basis of Presentation (Details) - segment | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Accounting Policies [Abstract] | ||
Number of operating segments | 3 | |
Effective income tax rate | 15.60% | 19.30% |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue recognized that was included in contract liability balance at the beginning of the year | $ 3.1 | $ 2.2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, remaining performance obligation, expected timing of satisfaction period | 1 year |
Revenue - Disaggregated Revenue
Revenue - Disaggregated Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 168,016 | $ 161,662 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 122,112 | 114,804 |
Other Americas | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 17,653 | 18,800 |
Europe | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 25,030 | 26,320 |
Asia-Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 3,221 | 1,738 |
Oil & Gas | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 98,665 | 94,223 |
Aerospace & Defense | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 18,602 | 20,070 |
Industrials | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 15,913 | 15,037 |
Power generation & Transmission | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 7,970 | 7,229 |
Other Process Industries | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 12,373 | 13,812 |
Infrastructure, Research & Engineering | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 5,761 | 5,442 |
Petrochemical | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 5,282 | 3,123 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 3,450 | 2,726 |
Operating segments | North America | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 136,932 | 132,946 |
Operating segments | North America | United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 120,600 | 113,935 |
Operating segments | North America | Other Americas | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 14,270 | 18,052 |
Operating segments | North America | Europe | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 1,412 | 744 |
Operating segments | North America | Asia-Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 650 | 215 |
Operating segments | North America | Oil & Gas | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 89,773 | 86,613 |
Operating segments | North America | Aerospace & Defense | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 13,611 | 15,022 |
Operating segments | North America | Industrials | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 9,302 | 9,007 |
Operating segments | North America | Power generation & Transmission | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 4,987 | 3,822 |
Operating segments | North America | Other Process Industries | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 9,109 | 10,293 |
Operating segments | North America | Infrastructure, Research & Engineering | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 2,483 | 2,506 |
Operating segments | North America | Petrochemical | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 5,137 | 3,045 |
Operating segments | North America | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 2,530 | 2,638 |
Operating segments | International | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 29,407 | 28,138 |
Operating segments | International | United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 309 | 173 |
Operating segments | International | Other Americas | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 3,489 | 1,341 |
Operating segments | International | Europe | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 24,183 | 25,920 |
Operating segments | International | Asia-Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 1,426 | 704 |
Operating segments | International | Oil & Gas | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 8,855 | 7,572 |
Operating segments | International | Aerospace & Defense | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 4,980 | 4,940 |
Operating segments | International | Industrials | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 6,053 | 5,528 |
Operating segments | International | Power generation & Transmission | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 1,657 | 2,562 |
Operating segments | International | Other Process Industries | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 3,237 | 3,518 |
Operating segments | International | Infrastructure, Research & Engineering | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 2,136 | 2,039 |
Operating segments | International | Petrochemical | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 145 | 78 |
Operating segments | International | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 2,344 | 1,901 |
Operating segments | Products & Systems | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 3,739 | 2,936 |
Operating segments | Products & Systems | United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 1,801 | 1,351 |
Operating segments | Products & Systems | Other Americas | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 326 | 16 |
Operating segments | Products & Systems | Europe | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 261 | 580 |
Operating segments | Products & Systems | Asia-Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 1,351 | 989 |
Operating segments | Products & Systems | Oil & Gas | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 37 | 38 |
Operating segments | Products & Systems | Aerospace & Defense | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 11 | 108 |
Operating segments | Products & Systems | Industrials | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 558 | 502 |
Operating segments | Products & Systems | Power generation & Transmission | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 1,326 | 845 |
Operating segments | Products & Systems | Other Process Industries | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 27 | 1 |
Operating segments | Products & Systems | Infrastructure, Research & Engineering | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 1,142 | 897 |
Operating segments | Products & Systems | Petrochemical | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Operating segments | Products & Systems | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 638 | 545 |
Corp/Elim | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | (2,062) | (2,358) |
Corp/Elim | United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | (598) | (655) |
Corp/Elim | Other Americas | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | (432) | (609) |
Corp/Elim | Europe | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | (826) | (924) |
Corp/Elim | Asia-Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | (206) | (170) |
Corp/Elim | Oil & Gas | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Corp/Elim | Aerospace & Defense | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Corp/Elim | Industrials | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Corp/Elim | Power generation & Transmission | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Corp/Elim | Other Process Industries | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Corp/Elim | Infrastructure, Research & Engineering | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Corp/Elim | Petrochemical | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Corp/Elim | Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ (2,062) | $ (2,358) |
Share-Based Compensation - Equi
Share-Based Compensation - Equity Incentive Plans (Details) | 3 Months Ended | ||
May 23, 2022 shares | Mar. 31, 2023 USD ($) plan shares | Mar. 31, 2022 USD ($) shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of equity incentive plans | plan | 2 | ||
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Recognized share-based compensation expense (benefit) | $ | $ 0 | $ 0 | |
2009 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total number of shares authorized for issuance (in shares) | 0 | ||
2016 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total number of shares authorized for issuance (in shares) | 4,900,000 | ||
Number of awards that may be granted (in shares) | 1,100,000 | ||
Increase in total number of shares authorized for issuance (in shares) | 1,200,000 |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Stock Unit Awards - Narrative (Details) - Restricted Stock Unit Awards - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Recognized share-based compensation expense (benefit) | $ 0.9 | $ 0.9 |
Unrecognized compensation cost, net of estimated forfeitures | $ 10 | |
Weighted-average period over which unrecognized compensation cost is expected to be recognized (years) | 3 years 1 month 6 days |
Share-Based Compensation - Vest
Share-Based Compensation - Vesting Activity of Restricted Stock Unit Awards (Details) - Restricted Stock Unit Awards - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock awards vested (in shares) | 338 | 226 |
Fair value of awards vested | $ 1,946 | $ 1,502 |
Share-Based Compensation - Full
Share-Based Compensation - Fully-vested Common Stock Issued to Non-employee Directors (Details) - Common Stock - Non-employee Directors shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 USD ($) director shares | Mar. 31, 2022 USD ($) shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of non-employee directors to whom fully vested common stock is granted | director | 6 | |
Awards issued (in shares) | shares | 48 | 34 |
Grant date fair value of awards issued | $ | $ 275 | $ 225 |
Share-Based Compensation - Re_2
Share-Based Compensation - Restricted Stock Units Awards - Activity (Details) - Restricted Stock Unit Awards - $ / shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Restricted Stock Units Awards (Units) | ||
Outstanding at beginning of period (in shares) | 1,415 | 1,208 |
Granted (in shares) | 542 | 675 |
Released (in shares) | (338) | (226) |
Forfeited (in shares) | (22) | (7) |
Outstanding at end of period (in shares) | 1,597 | 1,650 |
Weighted Average Grant-Date Fair Value (in dollars per share) | ||
Outstanding at the beginning of period (in dollars per share) | $ 6.66 | $ 7.96 |
Granted (in dollars per share) | 8.50 | 7.65 |
Released (in dollars per share) | 5.76 | 13.73 |
Forfeited (in dollars per share) | 7.82 | 10.50 |
Outstanding at end of period (in dollars per share) | $ 7.44 | $ 7.16 |
Share-Based Compensation - Perf
Share-Based Compensation - Performance Restricted Stock Units - Narrative (Details) - PRSUs shares in Thousands, $ in Millions | 3 Months Ended | |||
Mar. 31, 2023 USD ($) metric shares | Mar. 31, 2022 USD ($) shares | Dec. 31, 2022 shares | Dec. 31, 2021 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of units increased (decreased) during the period (in shares) | shares | 32 | |||
Recognized share-based compensation expense (benefit) | $ | $ 0.7 | $ 0.3 | ||
Unrecognized compensation cost | $ | $ 2.8 | |||
Nonvested shares outstanding (in shares) | shares | 382 | 656 | 280 | 388 |
Weighted-average period over which unrecognized compensation cost is expected to be recognized (years) | 2 years | |||
Executive and Senior Officers | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance period (years) | 1 year | |||
Vesting period | 4 years | |||
Requisite service period | 5 years | |||
Executive Officers | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance period (years) | 1 year | |||
Number of performance award metrics | metric | 3 | |||
Average share price trading period | 20 days | |||
Last days trading period | 20 days | |||
Dividend yield | 0% |
Share-Based Compensation - Pe_2
Share-Based Compensation - Performance Restricted Stock Units - Activity (Details) - PRSUs - $ / shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Performance Restricted Stock (Units) | ||
Outstanding at beginning of period (in shares) | 280 | 388 |
Granted (in shares) | 282 | 341 |
Performance condition adjustments (in shares) | (32) | (56) |
Released (in shares) | (64) | (17) |
Forfeited (in shares) | (84) | 0 |
Outstanding at end of period (in shares) | 382 | 656 |
Weighted Average Grant-Date Fair Value (in dollars per share) | ||
Outstanding at the beginning of period (in dollars per share) | $ 9.96 | $ 10.07 |
Granted (in dollars per share) | 8.50 | 6.55 |
Performance condition adjustments (in dollars per share) | 6.55 | 10.47 |
Released (in dollars per share) | 5.58 | 6.85 |
Forfeited (in dollars per share) | 6.95 | 0 |
Outstanding at end of period (in dollars per share) | $ 9.12 | $ 12.18 |
Earnings (loss) per Share (Deta
Earnings (loss) per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Basic loss per share | ||
Net loss attributable to Mistras Group, Inc. | $ (4,986) | $ (5,363) |
Denominator: | ||
Weighted-average common shares outstanding (in shares) | 30,021 | 29,634 |
Basic loss per share (in dollars per share) | $ (0.17) | $ (0.18) |
Denominator: | ||
Weighted-average common shares outstanding (in shares) | 30,021 | 29,634 |
Dilutive effect of restricted stock units outstanding (in shares) | 0 | 0 |
Weighted-average common shares outstanding, diluted (in shares) | 30,021 | 29,634 |
Diluted loss per share (in dollars per share) | $ (0.17) | $ (0.18) |
Restricted Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares excluded from computation of diluted EPS due to net loss for the period (in shares) | 1,513 | 1,212 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | ||
Due diligence, professional fees and other transaction costs | $ 3 | $ 4 |
Adjustments to fair value of contingent consideration liabilities | 0 | 45 |
Acquisition-related expense, net | $ 3 | $ 49 |
Accounts Receivable, net - Summ
Accounts Receivable, net - Summary (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Receivables [Abstract] | ||
Trade accounts receivable | $ 124,066 | $ 127,767 |
Allowance for credit losses | (3,641) | (4,110) |
Accounts receivable, net | $ 120,425 | $ 123,657 |
Accounts Receivable, net - Narr
Accounts Receivable, net - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Dec. 31, 2019 | Mar. 31, 2023 | Dec. 31, 2022 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Unbilled revenues accrued | $ 21,600 | $ 13,500 | |
Past due receivables outstanding | $ 120,425 | $ 123,657 | |
Texas Customer | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Past due receivables outstanding | $ 1,400 | ||
Amount of damages claimed | $ 1,400 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials and consumable supplies | $ 8,195 | $ 7,745 |
Work in progress and finished goods | 6,568 | 5,811 |
Inventories | $ 14,763 | $ 13,556 |
Property, Plant and Equipment_3
Property, Plant and Equipment, net (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Property, Plant and Equipment, net | |||
Property, plant and equipment, gross | $ 303,775 | $ 296,668 | |
Accumulated depreciation and amortization | (224,959) | (219,107) | |
Property, plant and equipment, net | 78,816 | 77,561 | |
Depreciation and amortization expense | 6,300 | $ 6,600 | |
Land | |||
Property, Plant and Equipment, net | |||
Property, plant and equipment, gross | 2,447 | 2,529 | |
Buildings and improvements | |||
Property, Plant and Equipment, net | |||
Property, plant and equipment, gross | $ 25,457 | 24,800 | |
Buildings and improvements | Minimum | |||
Property, Plant and Equipment, net | |||
Useful Life (Years) | 30 years | ||
Buildings and improvements | Maximum | |||
Property, Plant and Equipment, net | |||
Useful Life (Years) | 40 years | ||
Office furniture and equipment | |||
Property, Plant and Equipment, net | |||
Property, plant and equipment, gross | $ 18,644 | 18,057 | |
Office furniture and equipment | Minimum | |||
Property, Plant and Equipment, net | |||
Useful Life (Years) | 5 years | ||
Office furniture and equipment | Maximum | |||
Property, Plant and Equipment, net | |||
Useful Life (Years) | 8 years | ||
Machinery and equipment | |||
Property, Plant and Equipment, net | |||
Property, plant and equipment, gross | $ 257,227 | $ 251,282 | |
Machinery and equipment | Minimum | |||
Property, Plant and Equipment, net | |||
Useful Life (Years) | 5 years | ||
Machinery and equipment | Maximum | |||
Property, Plant and Equipment, net | |||
Useful Life (Years) | 7 years |
Goodwill - Changes in Carrying
Goodwill - Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Balance at December 31, 2022 | $ 199,635 |
Foreign currency translation | 321 |
Balance at March 31, 2023 | 199,956 |
North America | |
Goodwill [Roll Forward] | |
Balance at December 31, 2022 | 185,710 |
Foreign currency translation | 80 |
Balance at March 31, 2023 | 185,790 |
International | |
Goodwill [Roll Forward] | |
Balance at December 31, 2022 | 13,925 |
Foreign currency translation | 241 |
Balance at March 31, 2023 | 14,166 |
Products and Systems | |
Goodwill [Roll Forward] | |
Balance at December 31, 2022 | 0 |
Foreign currency translation | |
Balance at March 31, 2023 | $ 0 |
Intangible Assets - Summary (De
Intangible Assets - Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | $ 184,565 | $ 183,588 | |
Accumulated Amortization | (137,205) | (134,573) | |
Net Carrying Amount | 47,360 | 49,015 | |
Amortization expense of intangibles | 2,100 | $ 2,400 | |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | 110,094 | 109,683 | |
Accumulated Amortization | (85,850) | (84,130) | |
Net Carrying Amount | $ 24,244 | 25,553 | |
Customer relationships | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life (Years) | 5 years | ||
Customer relationships | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life (Years) | 18 years | ||
Software/Technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | $ 51,570 | 51,028 | |
Accumulated Amortization | (29,498) | (28,669) | |
Net Carrying Amount | $ 22,072 | 22,359 | |
Software/Technology | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life (Years) | 3 years | ||
Software/Technology | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life (Years) | 15 years | ||
Covenants not to compete | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | $ 12,495 | 12,488 | |
Accumulated Amortization | (12,429) | (12,416) | |
Net Carrying Amount | $ 66 | 72 | |
Covenants not to compete | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life (Years) | 2 years | ||
Covenants not to compete | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life (Years) | 5 years | ||
Other | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | $ 10,406 | 10,389 | |
Accumulated Amortization | (9,428) | (9,358) | |
Net Carrying Amount | $ 978 | $ 1,031 | |
Other | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life (Years) | 2 years | ||
Other | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life (Years) | 12 years |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued salaries, wages and related employee benefits | $ 25,855 | $ 26,684 |
Contingent consideration, current portion | 0 | 937 |
Accrued workers’ compensation and health benefits | 3,789 | 3,660 |
Deferred revenue | 9,257 | 7,521 |
Pension accrual | 2,519 | 2,519 |
Right-of-use liability - Operating | 10,216 | 10,376 |
Other accrued expenses | 25,491 | 26,147 |
Total | $ 77,127 | $ 77,844 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Total debt | $ 189,344 | $ 191,251 |
Less: Current portion | (7,372) | (7,425) |
Long-term debt, net of current portion | 181,972 | 183,826 |
Senior credit facility | ||
Debt Instrument [Line Items] | ||
Total debt | 65,150 | 65,250 |
Senior credit facility | Senior Secured Term Loan | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | 500 | 500 |
Total debt | 119,863 | 121,399 |
Other | ||
Debt Instrument [Line Items] | ||
Total debt | $ 4,331 | $ 4,602 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) | 3 Months Ended | ||||
Aug. 01, 2022 USD ($) | Mar. 31, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | May 19, 2021 USD ($) | |
Debt Instrument [Line Items] | |||||
Debt outstanding | $ 189,344,000 | $ 191,251,000 | |||
Line of Credit | The Credit Agreement, JP Morgan Chase Bank | |||||
Debt Instrument [Line Items] | |||||
Lowest available margin applicable | 1.25 | ||||
Maximum margin, if greater than | 3.75 | ||||
Fixed charge coverage ratio | 1.25 | ||||
Number of business days written notice is required | 5 days | ||||
Minimum amount for threshold of business acquisition | $ 10,000,000 | ||||
Line of Credit | The Credit Agreement, JP Morgan Chase Bank | Quarter ending March 31, 2022 | |||||
Debt Instrument [Line Items] | |||||
Total consolidated debt leverage ratio | 4 | ||||
Line of Credit | The Credit Agreement, JP Morgan Chase Bank | End of each quarter subsequent to March 31, 2022 | |||||
Debt Instrument [Line Items] | |||||
Total consolidated debt leverage ratio | 3.75 | ||||
Line of Credit | The Credit Agreement, JP Morgan Chase Bank | Debt Covenant Period Three | |||||
Debt Instrument [Line Items] | |||||
Debt periodic payments | $ 1,560,000 | ||||
Line of Credit | The Credit Agreement, JP Morgan Chase Bank | Debt Covenant Period Four | |||||
Debt Instrument [Line Items] | |||||
Debt periodic payments | 2,340,000 | ||||
Line of Credit | The Credit Agreement, JP Morgan Chase Bank | Debt Covenant Period Five | |||||
Debt Instrument [Line Items] | |||||
Debt periodic payments | $ 3,120,000 | ||||
Line of Credit | The Credit Agreement, JP Morgan Chase Bank | Variable Rate Component | Maximum | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||
Debt Instrument [Line Items] | |||||
Margin rate (as a percent) | 2.75% | ||||
Line of Credit | The Credit Agreement, JP Morgan Chase Bank | Variable Rate Component | Minimum | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||
Debt Instrument [Line Items] | |||||
Margin rate (as a percent) | 1.25% | ||||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Debt outstanding | 65,150,000 | 65,250,000 | |||
Outstanding borrowings | 185,000,000 | ||||
Outstanding letters of credit | 2,600,000 | ||||
Capitalized costs associated with debt modifications | 1,400,000 | ||||
Revolving Credit Facility | Senior Secured Term Loan A Facility | |||||
Debt Instrument [Line Items] | |||||
Debt outstanding | 119,863,000 | 121,399,000 | |||
Revolving Credit Facility | Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Capitalized unamortized debt issuance costs | $ 800,000 | ||||
Financing costs incurred | 1,600,000 | ||||
Third party debt issuance costs expensed | $ 200,000 | ||||
Other | |||||
Debt Instrument [Line Items] | |||||
Debt outstanding | 4,331,000 | $ 4,602,000 | |||
Other | Maximum | |||||
Debt Instrument [Line Items] | |||||
Debt periodic payments | $ 16,000 | ||||
Interest rate | 3.50% | ||||
Other | Minimum | |||||
Debt Instrument [Line Items] | |||||
Debt periodic payments | $ 700 | ||||
Interest rate | 0.40% | ||||
Revolving Credit Facility | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 150,000,000 | ||||
Revolving Credit Facility | Line of Credit | The Credit Agreement, JP Morgan Chase Bank | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 190,000,000 | ||||
Debt term (in years) | 5 years | ||||
Maximum borrowing capacity in non-U.S. Dollar currencies | $ 100,000,000 | ||||
Secured Debt | Line of Credit | The Credit Agreement, JP Morgan Chase Bank | |||||
Debt Instrument [Line Items] | |||||
Face amount of loan | 125,000,000 | $ 100,000,000 | |||
Letter of Credit | Line of Credit | The Credit Agreement, JP Morgan Chase Bank | |||||
Debt Instrument [Line Items] | |||||
Maximum amount available for the issuance of letters of credit | $ 20,000,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Level 3 - Contingent Consideration - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Fair Value Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation Calculation [Roll Forward] | ||
Beginning balance | $ 938 | $ 1,831 |
Payments | (938) | (938) |
Revaluation | 0 | 45 |
Ending balance | $ 0 | $ 938 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Oct. 05, 2021 USD ($) | Dec. 31, 2019 USD ($) weld | Mar. 31, 2023 USD ($) claim | Mar. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2022 USD ($) | Jan. 01, 2020 USD ($) | |
Litigation | |||||||
Accounts receivable, net | $ 120,425 | $ 123,657 | |||||
Allowance for credit losses | 3,641 | 4,110 | |||||
Pension plan withdrawal, potential liability | 2,519 | 2,519 | |||||
Texas Customer | |||||||
Litigation | |||||||
Accounts receivable, net | $ 1,400 | ||||||
Amount of damages claimed | 1,400 | ||||||
Litigation and Commercial Claims | Various Pipeline Projects for Texas Customer | |||||||
Litigation | |||||||
Amount of damages claimed | $ 7,600 | ||||||
Litigation and Commercial Claims | Texas Customer | |||||||
Litigation | |||||||
Accounts receivable, net | $ 1,400 | ||||||
Number or welds not in compliance | weld | 66 | ||||||
Number of welds inspected (over) | weld | 16,000 | ||||||
Allowance for credit losses | $ 1,400 | ||||||
Litigation and Commercial Claims | Texas Customer | Various Pipeline Projects for Texas Customer | |||||||
Litigation | |||||||
Amount of damages claimed | $ 1,400 | ||||||
Contingency charges | $ 100 | ||||||
Class Action | |||||||
Litigation | |||||||
Contingency charges | $ 1,600 | $ 800 | |||||
Number of proceedings | claim | 2 | ||||||
Number of consolidated cases | claim | 2 | ||||||
Settlement liability | $ 2,300 | ||||||
Class Action on Behalf of Employees | |||||||
Litigation | |||||||
Number of proceedings | claim | 1 | ||||||
Class Action on Behalf of State of California | |||||||
Litigation | |||||||
Number of proceedings | claim | 1 | ||||||
Pension Related Contingencies | |||||||
Litigation | |||||||
Pension plan withdrawal, potential liability | $ 2,500 | ||||||
Severance and Labor Disputes | Foreign Subsidiary | Right to Customer Contracts | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Germany | |||||||
Litigation | |||||||
Contingency charges | 100 | ||||||
Consideration received on sale of subsidiary | $ 100 | ||||||
Estimated severance obligations | 200 | ||||||
Payments of severance obligations | 400 | ||||||
Reversal of severance obligations | $ 1,000 |
Segment Disclosure (Details)
Segment Disclosure (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 USD ($) segment | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Segment Reporting [Abstract] | |||
Number of operating segments | segment | 3 | ||
Financial information by segment | |||
Revenue | $ 168,016 | $ 161,662 | |
Gross profit | 46,077 | 39,892 | |
Income (loss) from operations | (1,830) | (4,698) | |
Depreciation and amortization | 8,413 | 8,807 | |
Intangible assets, net | 47,360 | $ 49,015 | |
Total assets | 530,819 | 534,904 | |
Operating segments | North America | |||
Financial information by segment | |||
Revenue | 136,932 | 132,946 | |
Gross profit | 36,637 | 30,526 | |
Income (loss) from operations | 9,378 | 3,761 | |
Depreciation and amortization | 6,357 | 6,593 | |
Intangible assets, net | 41,746 | 43,260 | |
Total assets | 394,280 | 407,779 | |
Operating segments | International | |||
Financial information by segment | |||
Revenue | 29,407 | 28,138 | |
Gross profit | 7,367 | 8,190 | |
Income (loss) from operations | (568) | 284 | |
Depreciation and amortization | 1,859 | 2,058 | |
Intangible assets, net | 4,117 | 4,422 | |
Total assets | 104,782 | 104,531 | |
Operating segments | Products and Systems | |||
Financial information by segment | |||
Revenue | 3,739 | 2,936 | |
Gross profit | 2,063 | 1,168 | |
Income (loss) from operations | 384 | (582) | |
Depreciation and amortization | 256 | 218 | |
Intangible assets, net | 1,295 | 1,208 | |
Total assets | 13,415 | 12,408 | |
Corporate and eliminations | |||
Financial information by segment | |||
Revenue | (2,062) | (2,358) | |
Gross profit | 10 | 8 | |
Income (loss) from operations | (11,024) | (8,161) | |
Depreciation and amortization | (59) | $ (62) | |
Intangible assets, net | 202 | 125 | |
Total assets | $ 18,342 | $ 10,186 |
Subsequent Events (Details)
Subsequent Events (Details) - Litigation and Commercial Claims - Subsequent Event - Various Pipeline Projects for Texas Customer - Texas Customer $ in Millions | Apr. 25, 2023 USD ($) |
Subsequent Event [Line Items] | |
Settlement liability | $ 0.3 |
Damages no longer sought | $ 1.4 |