Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 01, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 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, $0.01 par value | |
Trading Symbol | MG | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 30,353,100 | |
Entity Central Index Key | 0001436126 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current Assets | ||
Cash and cash equivalents | $ 12,752 | $ 20,488 |
Accounts receivable, net | 136,363 | 123,657 |
Inventories | 15,780 | 13,556 |
Prepaid expenses and other current assets | 18,259 | 10,181 |
Total current assets | 183,154 | 167,882 |
Property, plant and equipment, net | 79,762 | 77,561 |
Intangible assets, net | 44,468 | 49,015 |
Goodwill | 185,519 | 199,635 |
Deferred income taxes | 2,229 | 779 |
Other assets | 41,558 | 40,032 |
Total assets | 536,690 | 534,904 |
Current Liabilities | ||
Accounts payable | 14,628 | 12,532 |
Accrued expenses and other current liabilities | 81,853 | 77,844 |
Current portion of long-term debt | 8,402 | 7,425 |
Current portion of finance lease obligations | 5,253 | 4,201 |
Income taxes payable | 1,025 | 1,726 |
Total current liabilities | 111,161 | 103,728 |
Long-term debt, net of current portion | 185,466 | 183,826 |
Obligations under finance leases, net of current portion | 12,375 | 10,045 |
Deferred income taxes | 8,542 | 6,283 |
Other long-term liabilities | 33,362 | 32,273 |
Total liabilities | 350,906 | 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, 30,353,100 and 29,895,487 shares issued and outstanding | 302 | 298 |
Additional paid-in capital | 246,075 | 243,031 |
Accumulated deficit | (26,436) | (11,489) |
Accumulated other comprehensive loss | (34,463) | (33,390) |
Total Mistras Group, Inc. stockholders’ equity | 185,478 | 198,450 |
Non-controlling interests | 306 | 299 |
Total equity | 185,784 | 198,749 |
Total liabilities and equity | $ 536,690 | $ 534,904 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 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) | 30,353,100 | 29,895,487 |
Common stock, shares outstanding (in shares) | 30,353,100 | 29,895,487 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenue | $ 179,354 | $ 178,462 | $ 523,399 | $ 519,155 |
Cost of revenue | 118,812 | 119,110 | 355,304 | 354,848 |
Depreciation | 6,160 | 5,568 | 17,914 | 17,074 |
Gross profit | 54,382 | 53,784 | 150,181 | 147,233 |
Selling, general and administrative expenses | 39,537 | 40,767 | 123,844 | 123,545 |
Bad debt provision for troubled customers, net of recoveries | 0 | 0 | 0 | 289 |
Reorganization and other costs | 2,702 | 130 | 6,017 | 65 |
Goodwill impairment charges | 13,799 | 0 | 13,799 | 0 |
Loss on Debt Modification | 0 | 693 | 0 | 693 |
Legal settlement and insurance recoveries, net | 0 | 0 | 150 | (994) |
Research and engineering | 438 | 450 | 1,428 | 1,523 |
Depreciation and amortization | 2,588 | 2,629 | 7,556 | 8,058 |
Acquisition-related expense, net | 0 | 1 | 5 | 63 |
Income (loss) from operations | (4,682) | 9,114 | (2,618) | 13,991 |
Interest expense | 4,167 | 2,735 | 12,093 | 6,790 |
Income (loss) before provision (benefit) for income taxes | (8,849) | 6,379 | (14,711) | 7,201 |
Provision for income taxes | 1,489 | 1,985 | 229 | 3,494 |
Net Income (Loss) | (10,338) | 4,394 | (14,940) | 3,707 |
Less: net income (loss) attributable to noncontrolling interests, net of taxes | (40) | 21 | 7 | 54 |
Net Income (Loss) attributable to Mistras Group, Inc. | $ (10,298) | $ 4,373 | $ (14,947) | $ 3,653 |
Earnings (loss) per common share | ||||
Basic (in dollars per share) | $ (0.34) | $ 0.15 | $ (0.49) | $ 0.12 |
Diluted (in dollars per share) | $ (0.34) | $ 0.14 | $ (0.49) | $ 0.12 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 30,402 | 29,965 | 30,277 | 29,879 |
Diluted (in shares) | 30,402 | 30,245 | 30,277 | 30,209 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (10,338) | $ 4,394 | $ (14,940) | $ 3,707 |
Other comprehensive loss: | ||||
Foreign currency translation adjustments | (5,428) | (12,995) | (1,073) | (20,971) |
Comprehensive Loss | (15,766) | (8,601) | (16,013) | (17,264) |
Less: net income attributable to noncontrolling interest | (40) | 21 | 7 | 54 |
Comprehensive loss attributable to Mistras Group, Inc | $ (15,726) | $ (8,622) | $ (16,020) | $ (17,318) |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands | Total | Total Mistras Group, Inc. Stockholders’ Equity | Common Stock | Additional paid-in capital | Retained earnings (deficit) | Accumulated other comprehensive income (loss) | Noncontrolling Interest |
Beginning balance (in shares) at Dec. 31, 2021 | 29,546 | ||||||
Beginning balance at Dec. 31, 2021 | $ 200,912 | $ 200,683 | $ 295 | $ 238,687 | $ (17,988) | $ (20,311) | $ 229 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 3,707 | 3,653 | 3,653 | 54 | |||
Other comprehensive loss, net of tax | (20,971) | (20,971) | (20,971) | ||||
Share-based compensation | 4,166 | 4,166 | 4,166 | ||||
Net settlements of restricted stock units (in shares) | 296 | ||||||
Net settlement of restricted stock units | (758) | (758) | $ 2 | (760) | |||
Ending balance (in shares) at Sep. 30, 2022 | 29,842 | ||||||
Ending balance at Sep. 30, 2022 | 187,056 | 186,773 | $ 297 | 242,093 | (14,335) | (41,282) | 283 |
Beginning balance (in shares) at Jun. 30, 2022 | 29,807 | ||||||
Beginning balance at Jun. 30, 2022 | 194,261 | 193,999 | $ 297 | 240,697 | (18,708) | (28,287) | 262 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | 4,394 | 4,373 | 4,373 | 21 | |||
Other comprehensive loss, net of tax | (12,995) | (12,995) | (12,995) | ||||
Share-based compensation | 1,396 | 1,396 | 1,396 | ||||
Net settlements of restricted stock units (in shares) | 35 | ||||||
Ending balance (in shares) at Sep. 30, 2022 | 29,842 | ||||||
Ending balance at Sep. 30, 2022 | 187,056 | 186,773 | $ 297 | 242,093 | (14,335) | (41,282) | 283 |
Beginning balance (in shares) at Dec. 31, 2022 | 29,895 | ||||||
Beginning balance at Dec. 31, 2022 | 198,749 | 198,450 | $ 298 | 243,031 | (11,489) | (33,390) | 299 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | (14,940) | (14,947) | (14,947) | 7 | |||
Other comprehensive loss, net of tax | (1,073) | (1,073) | (1,073) | ||||
Share-based compensation | 3,985 | 3,985 | 3,985 | ||||
Net settlements of restricted stock units (in shares) | 458 | ||||||
Net settlement of restricted stock units | (937) | (937) | $ 4 | (941) | |||
Ending balance (in shares) at Sep. 30, 2023 | 30,353 | ||||||
Ending balance at Sep. 30, 2023 | 185,784 | 185,478 | $ 302 | 246,075 | (26,436) | (34,463) | 306 |
Beginning balance (in shares) at Jun. 30, 2023 | 30,302 | ||||||
Beginning balance at Jun. 30, 2023 | 200,533 | 200,187 | $ 302 | 245,058 | (16,138) | (29,035) | 346 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income (loss) | (10,338) | (10,298) | (10,298) | (40) | |||
Other comprehensive loss, net of tax | (5,428) | (5,428) | (5,428) | ||||
Share-based compensation | 1,017 | 1,017 | 1,017 | ||||
Net settlements of restricted stock units (in shares) | 51 | ||||||
Ending balance (in shares) at Sep. 30, 2023 | 30,353 | ||||||
Ending balance at Sep. 30, 2023 | $ 185,784 | $ 185,478 | $ 302 | $ 246,075 | $ (26,436) | $ (34,463) | $ 306 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities | ||
Net income (loss) | $ (14,940) | $ 3,707 |
Adjustments to reconcile net loss to net cash provided by operating activities | ||
Depreciation and amortization | 25,470 | 25,132 |
Goodwill impairment charges | 13,799 | 0 |
Deferred income taxes | 816 | 1,790 |
Share-based compensation expense | 3,985 | 4,166 |
Bad debt provision for troubled customers, net of recoveries | 0 | 289 |
Change in provision for doubtful accounts | 346 | 0 |
Fair value adjustments to contingent consideration | 0 | 45 |
Foreign currency (gain) loss | 149 | (924) |
Payment of finance costs | 0 | (448) |
Other | (147) | 969 |
Changes in operating assets and liabilities | ||
Accounts receivable | (13,393) | (27,692) |
Inventories | (2,425) | (1,146) |
Prepaid expenses and other assets | (7,572) | 2,105 |
Accounts payable | 2,094 | 578 |
Accrued expenses and other liabilities | 4,165 | 2,539 |
Income taxes payable | (725) | (46) |
Payment of contingent consideration liability in excess of acquisition-date fair value | (938) | (533) |
Net cash provided by operating activities | 10,684 | 10,531 |
Cash flows from investing activities | ||
Purchase of property, plant and equipment | (14,403) | (9,050) |
Purchase of intangible assets | (1,868) | (580) |
Acquisition of business, net of cash acquired | 0 | 0 |
Proceeds from sale of equipment | 1,101 | 753 |
Net cash used in investing activities | (15,170) | (8,877) |
Cash flows from financing activities | ||
Repayment of finance lease obligations | (3,812) | (3,173) |
Proceeds from borrowings of long-term debt | 0 | 125,000 |
Repayment of long-term debt | (5,684) | (79,519) |
Proceeds from revolver | 66,110 | 168,000 |
Repayment of revolver | (57,851) | (213,750) |
Payment of financing costs | 0 | (148) |
Payment of contingent consideration for business acquisitions | 0 | (405) |
Taxes paid related to net share settlement of share-based awards | (602) | (758) |
Net cash used in financing activities | (1,839) | (4,753) |
Effect of exchange rate changes on cash and cash equivalents | (1,411) | (2,927) |
Net change in cash and cash equivalents | (7,736) | (6,026) |
Cash and cash equivalents at beginning of period | 20,488 | 24,110 |
Cash and cash equivalents at end of period | 12,752 | 18,084 |
Supplemental disclosure of cash paid | ||
Interest, net | 12,683 | 5,354 |
Income taxes, net of refunds | 3,704 | (3,764) |
Noncash investing and financing | ||
Equipment acquired through finance lease obligations | $ 7,169 | $ 3,373 |
Description of Business_and Bas
Description of Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation Description of Business Mistras Group, Inc., together with its 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, laboratory materials services, shop laboratory 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 the North America segment to more closely align to the geographical area in which the Services 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 During 2022, the Company experienced unfavorable foreign currency exchange impacts as it relates to the Company's European operations. 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-instatement of the savings plan employer match and increasing wages back to pre-pandemic amounts. During the third quarter of 2023, a triggering event was identified within the Company's reporting units within the International segment due to decreased gross margin in the current period as a result of inflationary pressures and rising energy costs which resulted in an impairment within the reporting unit of $13.8 million. Refer to Note 9- Goodwill . 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 statement 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 Income (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 Income taxes are accounted for under the asset and liability method. We recognize deferred tax assets and liabilities at enacted income tax rates for the temporary differences between the financial reporting bases and the tax bases of our assets and liabilities. Any effects of changes in income tax rates or tax laws are included in the provision for income taxes in the period of enactment. Our net deferred tax assets primarily consist of net operating loss carryforwards, or NOLs. A valuation allowance is provided if it is more likely than not that some or all of a deferred income tax asset will not be realized. A current tax liability or asset is recognized for the estimated taxes payable or refundable on tax returns for the current and prior years. As of September 30, 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 (16.8)% and 31.1% for the three months ended September 30, 2023 and 2022, respectively. The Company’s effective income tax rate was approximately (1.6)% and 48.5% for the nine months ended September 30, 2023 and 2022, respectively. The effective income tax rate for the three months ended September 30, 2023 was lower than the statutory rate primarily due to the impact of permanent tax adjustments related to executive compensation and goodwill impairments. The effective income tax rate for the three months ended September 30, 2022 was higher than the statutory rate primarily due to various permanent tax adjustments and a $0.1 million valuation allowance recorded on a foreign jurisdiction. The effective income tax rate for the nine months ended September 30, 2023 was lower than the statutory rate primarily due to the impact of permanent tax adjustments related to executive compensation and goodwill impairments. The effective income tax rate for the nine months ended September 30, 2022 was higher than the statutory rate due primarily to various permanent tax adjustments and a $0.9 million valuation allowance recorded during the period which was related to a foreign jurisdiction. 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 | 9 Months Ended |
Sep. 30, 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 September 30, 2023 North America International Products Corp/Elim Total Oil & Gas $ 94,390 $ 8,827 $ 35 $ — $ 103,252 Aerospace & Defense 14,240 5,778 47 — 20,065 Industrials 10,325 6,018 310 — 16,653 Power Generation & Transmission 7,388 1,653 696 — 9,737 Other Process Industries 6,933 2,864 (5) — 9,792 Infrastructure, Research & Engineering 6,042 2,383 1,070 — 9,495 Petrochemical 3,313 586 — — 3,899 Other 6,183 2,871 676 (3,269) 6,461 Total $ 148,814 $ 30,980 $ 2,829 $ (3,269) $ 179,354 Three Months Ended September 30, 2022 North America International Products Corp/Elim Total Oil & Gas $ 90,578 $ 6,418 $ 35 $ — $ 97,031 Aerospace & Defense 16,784 4,397 112 — 21,293 Industrials 9,728 5,834 436 — 15,998 Power Generation & Transmission 10,378 1,946 456 — 12,780 Other Process Industries 10,283 3,033 8 — 13,324 Infrastructure, Research & Engineering 4,936 1,784 1,150 — 7,870 Petrochemical 3,427 280 — — 3,707 Other 6,664 2,001 881 (3,087) 6,459 Total $ 152,778 $ 25,693 $ 3,078 $ (3,087) $ 178,462 Nine Months Ended September 30, 2023 North America International Products Corp/Elim Total Oil & Gas $ 281,663 $ 26,291 $ 87 $ — $ 308,041 Aerospace & Defense 41,516 15,894 275 — 57,685 Industrials 30,693 18,274 1,336 — 50,303 Power Generation & Transmission 17,834 4,840 3,189 — 25,863 Other Process Industries 24,906 10,567 73 — 35,546 Infrastructure, Research & Engineering 12,696 6,547 2,759 — 22,002 Petrochemical 10,027 887 — — 10,914 Other 11,960 7,364 2,178 (8,457) 13,045 Total $ 431,295 $ 90,664 $ 9,897 $ (8,457) $ 523,399 Nine Months Ended September 30, 2022 North America International Products Corp/Elim Total Oil & Gas $ 270,289 $ 22,018 $ 212 $ — $ 292,519 Aerospace & Defense 49,106 14,455 246 — 63,807 Industrials 28,529 17,868 1,271 — 47,668 Power Generation & Transmission 22,578 6,505 1,979 — 31,062 Other Process Industries 32,217 10,305 23 — 42,545 Infrastructure, Research & Engineering 10,625 6,016 2,489 — 19,130 Petrochemical 10,056 413 — — 10,469 Other 11,851 5,861 2,446 (8,203) 11,955 Total $ 435,251 $ 83,441 $ 8,666 $ (8,203) $ 519,155 Revenue per key geographic location was as follows: Three Months Ended September 30, 2023 North America International Products Corp/Elim Total United States $ 126,239 $ 120 $ 1,032 $ (849) $ 126,542 Other Americas 21,907 3,703 49 (1,659) 24,000 Europe 465 26,764 510 (701) 27,038 Asia-Pacific 203 393 1,238 (60) 1,774 Total $ 148,814 $ 30,980 $ 2,829 $ (3,269) $ 179,354 Three Months Ended September 30, 2022 North America International Products Corp/Elim Total United States $ 130,206 $ 240 $ 1,523 $ (1,098) $ 130,871 Other Americas 21,649 2,064 154 (1,274) 22,593 Europe 631 22,648 362 (622) 23,019 Asia-Pacific 292 741 1,039 (93) 1,979 Total $ 152,778 $ 25,693 $ 3,078 $ (3,087) $ 178,462 Nine Months Ended September 30, 2023 North America International Products Corp/Elim Total United States $ 369,811 $ 709 $ 4,478 $ (1,718) $ 373,280 Other Americas 57,218 11,013 673 (3,565) 65,339 Europe 3,159 75,421 1,275 (2,693) 77,162 Asia-Pacific 1,107 3,521 3,471 (481) 7,618 Total $ 431,295 $ 90,664 $ 9,897 $ (8,457) $ 523,399 Nine Months Ended September 30, 2022 North America International Products Corp/Elim Total United States $ 370,426 $ 747 $ 4,366 $ (2,319) $ 373,220 Other Americas 62,254 4,781 338 (2,988) 64,385 Europe 1,790 75,921 1,456 (2,501) 76,666 Asia-Pacific 781 1,992 2,506 (395) 4,884 Total $ 435,251 $ 83,441 $ 8,666 $ (8,203) $ 519,155 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. Revenue recognized during the nine months ended September 30, 2023 and 2022 that was included in the contract liability balance at the beginning of such year was $5.7 million and $4.0 million, respectively, for each period. Changes in the contract asset and liability balances during these periods were not materially impacted by any other factors. The Company applies the practical expedient to expense incremental costs incurred relating to obtaining a contract when the amortization period of the asset that the Company otherwise would have recognized is one year or less. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation The Company grants 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 1,300,000 shares were available for future grants as of September 30, 2023. Stock Options During the three months ended March 31, 2022, all remaining outstanding stock options expired. For each of the three and nine months ended September 30, 2023 and 2022, the Company did not recognize any share-based compensation expense related to stock option awards. Restricted Stock Unit Awards For the three months ended September 30, 2023 and September 30, 2022, the Company recognized share-based compensation expense related to restricted stock unit awards of $0.7 million and $0.9 million, respectively. For the nine months ended September 30, 2023 and 2022, the Company recognized share-based compensation expense related to restricted stock unit awards of $2.5 million and $2.8 million, respectively. As of September 30, 2023, there was $8.1 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 2.7 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: Nine months ended September 30, 2023 2022 Restricted stock awards vested 430 326 Fair value of awards vested $ 2,639 $ 2,164 A summary of the fully-vested common stock the Company issued to its non-employee directors, in connection with its non-employee director compensation, is as follows: Nine months ended September 30, 2023 2022 Awards issued 99 70 Grant date fair value of awards issued $ 550 $ 450 A summary of the Company’s outstanding, non-vested restricted share units is as follows: Nine months ended September 30, 2023 2022 Units Weighted Units Weighted Outstanding at beginning of period: 1,415 $ 7.96 1,208 $ 7.96 Granted 591 $ 8.37 675 $ 7.65 Vested (430) $ 6.14 (326) $ 10.03 Forfeited (120) $ 7.96 (42) $ 8.19 Outstanding at end of period: 1,456 $ 7.71 1,515 $ 7.37 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 may vary between zero and 200% of the target award, 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 performance metrics for the Company's PRSUs awarded in 2022 as it utilized for the 2021 PRSUs. The three metrics were: 1. Free Cash Flow defined as 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 were 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 used different performance metrics for PRSUs approved in that year. The three metrics are: 1. Free Cash Flow defined as 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 related to PRSUs with performance conditions are initially measured using the fair value of the underlying stock at the date of grant. Compensation costs related to the PRSUs with performance conditions 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. Earned PRSUs generally vest ratably on each of the first four A summary of the Company’s PRSU activity is as follows: Nine months ended September 30, 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 (314) $ 8.34 (269) $ 7.71 Vested (64) $ 5.58 (17) $ 6.85 Forfeited (84) $ (6.95) — $ — Outstanding at end of period: 100 $ 9.83 443 $ 9.74 During the nine months ended September 30, 2023, the Compensation Committee approved the final calculation of the award metrics for calendar year 2022. As a result, the calendar year 2023 PRSUs decreased by approximately 314,000 units during the nine months ended September 30, 2023 as a result of the final calculation of award metrics for 2022 awards and based on forecasted results for 2023 as compared to performance metrics determined by the Compensation Committee. For the three months ended September 30, 2023 and September 30, 2022, the Company recognized aggregate share-based compensation expense related to the awards described above of approximately $0.1 million and $0.3 million, respectively. For the nine months ended September 30, 2023 and September 30, 2022, the Company recognized aggregate share-based compensation expense related to the awards described above of approximately $0.6 million and $0.9 million, respectively. At September 30, 2023, there was $0.7 million of total unrecognized compensation costs related to approximately 100,000 non-vested PRSUs, which is expected to be recognized over a remaining weighted-average period of 1.0 year. |
Earnings (loss) per Share
Earnings (loss) per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings (loss) per Share | Earnings (loss) per Share Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares outstanding during the period. Diluted earnings per share is computed by dividing net income (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 earnings (loss) per share: Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Basic earnings (loss) per share Numerator: Net income (loss) attributable to Mistras Group, Inc. $ (10,298) $ 4,373 $ (14,947) $ 3,653 Denominator: Weighted average common shares outstanding 30,402 29,965 30,277 29,879 Basic earnings (loss) per share $ (0.34) $ 0.15 $ (0.49) $ 0.12 Diluted earnings (loss) per share: Numerator: Net income (loss) attributable to Mistras Group, Inc. $ (10,298) $ 4,373 $ (14,947) $ 3,653 Denominator: Weighted average common shares outstanding 30,402 29,965 30,277 29,879 Dilutive effect of restricted stock units outstanding (1) — 280 — 330 30,402 30,245 30,277 30,209 Diluted earnings (loss) per share $ (0.34) $ 0.14 $ (0.49) $ 0.12 _______________ (1) For the three and nine months ended September 30, 2023, 1,508,255 and 926,224 shares related to restricted stock, respectively, were excluded from the calculation of diluted EPS due to the net loss for the period. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 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 Income (Loss) and were as follows for the three and nine months ended September 30, 2023 and 2022: Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Due diligence, professional fees and other transaction costs $ — $ 1 $ 5 $ 18 Adjustments to fair value of contingent consideration liabilities — 45 Acquisition-related expense, net $ — $ 1 $ 5 $ 63 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 | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable consisted of the following: September 30, 2023 December 31, 2022 Trade accounts receivable $ 138,286 $ 127,767 Allowance for credit losses (1,923) (4,110) Accounts receivable, net $ 136,363 $ 123,657 The Company had $27.8 million and $13.5 million of unbilled revenue accrued as of September 30, 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. The parties agreed to a settlement in the quarter ending June 30, 2023 with releases executed in July 2023, whereby the Company released its claim for the $1.4 million of outstanding receivables. Accordingly, the receivable has been written off. See Note 14- Commitments and Contingencies for additional details. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventories consist of the following (in thousands): September 30, 2023 December 31, 2022 Raw materials and consumable supplies $ 8,694 $ 7,745 Work in progress and finished goods 7,086 5,811 Inventories $ 15,780 $ 13,556 |
Property, Plant and Equipment,
Property, Plant and Equipment, net | 9 Months Ended |
Sep. 30, 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) September 30, 2023 December 31, 2022 Land $ 2,438 $ 2,529 Buildings and improvements 30-40 25,671 24,800 Office furniture and equipment 5-8 21,318 18,057 Machinery and equipment 5-7 262,370 251,282 311,797 296,668 Accumulated depreciation and amortization (232,035) (219,107) Property, plant and equipment, net $ 79,762 $ 77,561 Depreciation expense for the three months ended September 30, 2023 and 2022 was approximately $6.6 million and $5.9 million, respectively. Depreciation expense for the nine months ended September 30, 2023 and 2022 was $19.0 million and $18.3 million, respectively. |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 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 (191) (126) — (317) Impairment charges — (13,799) — (13,799) Balance at 30, September 30, 2023 $ 185,519 $ — $ — $ 185,519 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. During the third quarter of 2023, a triggering event was identified within the Company's reporting units within the International segment due to decreased gross margin in the current period as a result of inflationary pressures and rising energy costs impacting the International reporting units' operations. As a result, the Company performed an interim quantitative goodwill impairment test. In performing the interim quantitative goodwill impairment test and consistent with prior practice, the Company determined the fair value of each of the reporting units using a combination of the income approach and the market approach by assessing each of these valuation methodologies based upon availability and relevance of comparable company data and determining the appropriate weighting. Under the income approach, the fair value for each of the reporting units was determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. The Company used internal forecasts, updated for recent events, to estimate future cash flows estimated using a terminal value calculation, which incorporates historical and forecasted trends, including an estimate of long-term future growth rates, based on the Company’s most recent views of the long-term outlook for each reporting unit. The internal forecasts include assumptions about future profitability, including the expected demand for the Company’s goods and services. Due to the inherent uncertainties involved in making estimates and assumptions, actual results may differ from those assumed in the forecasts. The Company derived the discount rates using a capital asset pricing model and analyzing published rates for industries relevant to the reporting units to estimate the cost of equity financing. The Company used discount rates that are commensurate with the risks and uncertainties inherent in the respective businesses and in the internally developed forecasts, updated for recent events. Increased interest rates in the current period increased the discount rate associated with the reporting units which contributed in an unfavorable decrease in the reporting units value. The market approach valuation was derived from metrics of publicly traded companies or historically completed transactions of comparable businesses. The selection of comparable businesses was based on the markets in which the reporting units operate, considering risk profiles, size, geography, and diversity of products and services. Based upon the results of the interim quantitative goodwill impairment test, the Company recorded an impairment charge of $13.8 million within the International reporting units. The impairment was calculated based on the difference between the estimated fair value and the carrying value of the reporting units and is included in Goodwill impairment charges on the condensed consolidated statements of income (loss) for the three and nine months ended September 30, 2023. Any significant adverse changes in future periods to the Company’s internal forecasts or the external market conditions, if any, could reasonably be expected to negatively affect its key assumptions and may result in future goodwill impairment charges which could be material. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 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: September 30, 2023 December 31, 2022 Useful Life Gross Amount Accumulated Amortization Net Carrying Amount Gross Amount Accumulated Amortization Net Carrying Amount Customer relationships 5-18 $ 109,409 $ (87,977) $ 21,432 $ 109,683 $ (84,130) $ 25,553 Software/Technology 3-15 53,199 (31,082) 22,117 51,028 (28,669) 22,359 Covenants not to compete 2-5 12,483 (12,429) 54 12,488 (12,416) 72 Other 2-12 10,379 (9,514) 865 10,389 (9,358) 1,031 Total $ 185,470 $ (141,002) $ 44,468 $ 183,588 $ (134,573) $ 49,015 Amortization expense for the three months ended September 30, 2023 and 2022 was approximately $2.2 million and $2.3 million, respectively. Amortization expense for the nine months ended September 30, 2023 and September 30, 2022 was $6.5 million and $6.9 million, respectively. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 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: September 30, 2023 December 31, 2022 Accrued salaries, wages and related employee benefits $ 27,749 $ 26,684 Contingent consideration, current portion — 937 Accrued workers’ compensation and health benefits 3,954 3,660 Deferred revenue 7,523 7,521 Pension accrual 2,458 2,519 Right-of-use liability - Operating 10,777 10,376 Other accrued expenses 29,392 26,147 Total $ 81,853 $ 77,844 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following: September 30, 2023 December 31, 2022 Senior credit facility $ 72,118 $ 65,250 Senior secured term loan, net of unamortized debt issuance costs of $0.4 million and $0.5 million, respectively 117,572 121,399 Other 4,178 4,602 Total debt 193,868 191,251 Less: Current portion (8,402) (7,425) Long-term debt, net of current portion $ 185,466 $ 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 $118 million as of September 30, 2023. The Credit Agreement permits the Company to borrow up to $100 million in non-U.S. 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 September 30, 2023, the Company had borrowings of $189.7 million and a total of $2.9 million of letters of credit outstanding under the Credit Agreement. The Company has capitalized costs associated with debt modifications of $1.2 million as of September 30, 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 September 30, 2023, the Company was in compliance with the terms of the Credit Agreement. The Company continuously monitors compliance with the covenants contained in its 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 September 30, 2023, there was an aggregate of approximately $4.2 million outstanding, payable at various times through 2030. Monthly payments range from $1.0 thousand to $18.0 thousand and interest rates range from 0.4% to 3.5%. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 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: Nine months ended September 30, 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 | 9 Months Ended |
Sep. 30, 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 September 30, 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. On April 25, 2023, the parties agreed to settle all claims, and in July 2023, the parties executed a settlement agreement. As part of the settlement, the Company paid $0.3 million in July 2023 (which the Company estimates is significantly less than the cost of going to trial) and released its claim of $1.4 million for associated past due receivables which were fully reserved for in prior periods. 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. Two proceedings were filed in California Superior Court for the County of Los Angeles regarding alleged violations of the California Labor Code. Both cases were 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, on behalf of the State of California under the California Private Attorney General Act on the basis of the same alleged violations. The two cases were consolidated and payment was demanded for 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 the 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 September 30, 2023 is approximately $2.5 million, which were incurred in 2018 and 2019. |
Segment Disclosure
Segment Disclosure | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Disclosure | Segment Disclosure The Company’s 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 September 30, Nine months ended September 30, 2023 2022 2023 2022 Revenue North America $ 148,814 $ 152,778 $ 431,295 $ 435,251 International 30,980 25,693 90,664 83,441 Products and Systems 2,829 3,078 9,897 8,666 Corporate and eliminations (3,269) (3,087) (8,457) (8,203) $ 179,354 $ 178,462 $ 523,399 $ 519,155 Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Gross profit North America $ 44,773 $ 44,869 $ 121,088 $ 118,348 International 8,481 7,694 24,247 25,324 Products and Systems 1,096 1,189 4,773 3,514 Corporate and eliminations 32 32 73 47 $ 54,382 $ 53,784 $ 150,181 $ 147,233 Income (loss) from operations by operating segment includes intercompany transactions, which are eliminated in Corporate and eliminations. Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Income (loss) from operations North America $ 18,004 $ 16,700 $ 39,719 $ 35,315 International (12,970) 814 (13,031) 2,678 Products and Systems (557) (333) (78) (1,334) Corporate and eliminations (9,159) (8,067) (29,228) (22,668) $ (4,682) $ 9,114 $ (2,618) $ 13,991 Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Depreciation and amortization North America $ 6,603 $ 6,168 $ 19,329 $ 18,927 International 1,915 1,858 5,663 5,835 Products and Systems 183 221 526 559 Corporate and eliminations 47 (50) (48) (189) $ 8,748 $ 8,197 $ 25,470 $ 25,132 September 30, 2023 December 31, 2022 Intangible assets, net North America $ 38,619 $ 43,260 International 3,265 4,422 Products and Systems 1,260 1,208 Corporate and eliminations 1,324 125 $ 44,468 $ 49,015 September 30, 2023 December 31, 2022 Total assets North America $ 414,190 $ 407,779 International 93,951 104,531 Products and Systems 13,557 12,408 Corporate and eliminations 14,992 10,186 $ 536,690 $ 534,904 Refer to Note 2 – Revenue , for revenue by geographic area for the three and nine months ended September 30, 2023 and 2022. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On October 9, 2023, Sotirios Vahaviolos retired as Executive Chairman of the Board (the “Board”) of Mistras Group, Inc., but remains employed as a Senior Advisor to the Chief Executive Officer. In addition, Dr. Vahaviolos continues to serve as a member of the Board and as Chairman Emeritus. On the same day, the Board elected Manuel N. Stamatakis to serve as Chairman of the Board to succeed Dr. Vahaviolos in that role. On October 9, 2023, the Board also approved the termination without cause of Dennis Bertolotti as the Company’s President and Chief Executive Officer. In connection with his termination as President and Chief Executive Officer, Mr. Bertolotti resigned as a director, effective immediately. The Board appointed Mr. Stamatakis to serve as interim President and Chief Executive Officer until a permanent President and Chief Executive Officer is appointed. The Company expects to record approximately $2.6 million during the fourth quarter of 2023 related to the termination. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net income (loss) attributable to Mistras Group, Inc. | $ (10,298) | $ 4,373 | $ (14,947) | $ 3,653 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Description of Business_and B_2
Description of Business and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 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 statement 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 Income (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 Income taxes are accounted for under the asset and liability method. We recognize deferred tax assets and liabilities at enacted income tax rates for the temporary differences between the financial reporting bases and the tax bases of our assets and liabilities. Any effects of changes in income tax rates or tax laws are included in the provision for income taxes in the period of enactment. Our net deferred tax assets primarily consist of net operating loss carryforwards, or NOLs. A valuation allowance is provided if it is more likely than not that some or all of a deferred income tax asset will not be realized. A current tax liability or asset is recognized for the estimated taxes payable or refundable on tax returns for the current and prior years. As of September 30, 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 (16.8)% and 31.1% for the three months ended September 30, 2023 and 2022, respectively. The Company’s effective income tax rate was approximately (1.6)% and 48.5% for the nine months ended September 30, 2023 and 2022, respectively. The effective income tax rate for the three months ended September 30, 2023 was lower than the statutory rate primarily due to the impact of permanent tax adjustments related to executive compensation and goodwill impairments. The effective income tax rate for the three months ended September 30, 2022 was higher than the statutory rate primarily due to various permanent tax adjustments and a $0.1 million valuation allowance recorded on a foreign jurisdiction. |
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. |
Earnings (loss) per Share | Earnings (loss) per Share Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares outstanding during the period. Diluted earnings per share is computed by dividing net income (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. |
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 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 Disclosure | Segment Disclosure The Company’s 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 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 2023 North America International Products Corp/Elim Total Oil & Gas $ 94,390 $ 8,827 $ 35 $ — $ 103,252 Aerospace & Defense 14,240 5,778 47 — 20,065 Industrials 10,325 6,018 310 — 16,653 Power Generation & Transmission 7,388 1,653 696 — 9,737 Other Process Industries 6,933 2,864 (5) — 9,792 Infrastructure, Research & Engineering 6,042 2,383 1,070 — 9,495 Petrochemical 3,313 586 — — 3,899 Other 6,183 2,871 676 (3,269) 6,461 Total $ 148,814 $ 30,980 $ 2,829 $ (3,269) $ 179,354 Three Months Ended September 30, 2022 North America International Products Corp/Elim Total Oil & Gas $ 90,578 $ 6,418 $ 35 $ — $ 97,031 Aerospace & Defense 16,784 4,397 112 — 21,293 Industrials 9,728 5,834 436 — 15,998 Power Generation & Transmission 10,378 1,946 456 — 12,780 Other Process Industries 10,283 3,033 8 — 13,324 Infrastructure, Research & Engineering 4,936 1,784 1,150 — 7,870 Petrochemical 3,427 280 — — 3,707 Other 6,664 2,001 881 (3,087) 6,459 Total $ 152,778 $ 25,693 $ 3,078 $ (3,087) $ 178,462 Nine Months Ended September 30, 2023 North America International Products Corp/Elim Total Oil & Gas $ 281,663 $ 26,291 $ 87 $ — $ 308,041 Aerospace & Defense 41,516 15,894 275 — 57,685 Industrials 30,693 18,274 1,336 — 50,303 Power Generation & Transmission 17,834 4,840 3,189 — 25,863 Other Process Industries 24,906 10,567 73 — 35,546 Infrastructure, Research & Engineering 12,696 6,547 2,759 — 22,002 Petrochemical 10,027 887 — — 10,914 Other 11,960 7,364 2,178 (8,457) 13,045 Total $ 431,295 $ 90,664 $ 9,897 $ (8,457) $ 523,399 Nine Months Ended September 30, 2022 North America International Products Corp/Elim Total Oil & Gas $ 270,289 $ 22,018 $ 212 $ — $ 292,519 Aerospace & Defense 49,106 14,455 246 — 63,807 Industrials 28,529 17,868 1,271 — 47,668 Power Generation & Transmission 22,578 6,505 1,979 — 31,062 Other Process Industries 32,217 10,305 23 — 42,545 Infrastructure, Research & Engineering 10,625 6,016 2,489 — 19,130 Petrochemical 10,056 413 — — 10,469 Other 11,851 5,861 2,446 (8,203) 11,955 Total $ 435,251 $ 83,441 $ 8,666 $ (8,203) $ 519,155 Revenue per key geographic location was as follows: Three Months Ended September 30, 2023 North America International Products Corp/Elim Total United States $ 126,239 $ 120 $ 1,032 $ (849) $ 126,542 Other Americas 21,907 3,703 49 (1,659) 24,000 Europe 465 26,764 510 (701) 27,038 Asia-Pacific 203 393 1,238 (60) 1,774 Total $ 148,814 $ 30,980 $ 2,829 $ (3,269) $ 179,354 Three Months Ended September 30, 2022 North America International Products Corp/Elim Total United States $ 130,206 $ 240 $ 1,523 $ (1,098) $ 130,871 Other Americas 21,649 2,064 154 (1,274) 22,593 Europe 631 22,648 362 (622) 23,019 Asia-Pacific 292 741 1,039 (93) 1,979 Total $ 152,778 $ 25,693 $ 3,078 $ (3,087) $ 178,462 Nine Months Ended September 30, 2023 North America International Products Corp/Elim Total United States $ 369,811 $ 709 $ 4,478 $ (1,718) $ 373,280 Other Americas 57,218 11,013 673 (3,565) 65,339 Europe 3,159 75,421 1,275 (2,693) 77,162 Asia-Pacific 1,107 3,521 3,471 (481) 7,618 Total $ 431,295 $ 90,664 $ 9,897 $ (8,457) $ 523,399 Nine Months Ended September 30, 2022 North America International Products Corp/Elim Total United States $ 370,426 $ 747 $ 4,366 $ (2,319) $ 373,220 Other Americas 62,254 4,781 338 (2,988) 64,385 Europe 1,790 75,921 1,456 (2,501) 76,666 Asia-Pacific 781 1,992 2,506 (395) 4,884 Total $ 435,251 $ 83,441 $ 8,666 $ (8,203) $ 519,155 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 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: Nine months ended September 30, 2023 2022 Restricted stock awards vested 430 326 Fair value of awards vested $ 2,639 $ 2,164 |
Schedule of Fully-vested Common Stock Issued to Non-employee Directors | A summary of the fully-vested common stock the Company issued to its non-employee directors, in connection with its non-employee director compensation, is as follows: Nine months ended September 30, 2023 2022 Awards issued 99 70 Grant date fair value of awards issued $ 550 $ 450 |
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: Nine months ended September 30, 2023 2022 Units Weighted Units Weighted Outstanding at beginning of period: 1,415 $ 7.96 1,208 $ 7.96 Granted 591 $ 8.37 675 $ 7.65 Vested (430) $ 6.14 (326) $ 10.03 Forfeited (120) $ 7.96 (42) $ 8.19 Outstanding at end of period: 1,456 $ 7.71 1,515 $ 7.37 A summary of the Company’s PRSU activity is as follows: Nine months ended September 30, 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 (314) $ 8.34 (269) $ 7.71 Vested (64) $ 5.58 (17) $ 6.85 Forfeited (84) $ (6.95) — $ — Outstanding at end of period: 100 $ 9.83 443 $ 9.74 |
Earnings (loss) per Share (Tabl
Earnings (loss) per Share (Tables) | 9 Months Ended |
Sep. 30, 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 earnings (loss) per share: Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Basic earnings (loss) per share Numerator: Net income (loss) attributable to Mistras Group, Inc. $ (10,298) $ 4,373 $ (14,947) $ 3,653 Denominator: Weighted average common shares outstanding 30,402 29,965 30,277 29,879 Basic earnings (loss) per share $ (0.34) $ 0.15 $ (0.49) $ 0.12 Diluted earnings (loss) per share: Numerator: Net income (loss) attributable to Mistras Group, Inc. $ (10,298) $ 4,373 $ (14,947) $ 3,653 Denominator: Weighted average common shares outstanding 30,402 29,965 30,277 29,879 Dilutive effect of restricted stock units outstanding (1) — 280 — 330 30,402 30,245 30,277 30,209 Diluted earnings (loss) per share $ (0.34) $ 0.14 $ (0.49) $ 0.12 _______________ (1) For the three and nine months ended September 30, 2023, 1,508,255 and 926,224 shares related to restricted stock, respectively, were excluded from the calculation of diluted EPS due to the net loss for the period. |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Acquisition-related Expense | These amounts are reported as Acquisition-related expense, net on the Unaudited Condensed Consolidated Statements of Income (Loss) and were as follows for the three and nine months ended September 30, 2023 and 2022: Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Due diligence, professional fees and other transaction costs $ — $ 1 $ 5 $ 18 Adjustments to fair value of contingent consideration liabilities — 45 Acquisition-related expense, net $ — $ 1 $ 5 $ 63 |
Accounts Receivable, net (Table
Accounts Receivable, net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable, Net | Accounts receivable consisted of the following: September 30, 2023 December 31, 2022 Trade accounts receivable $ 138,286 $ 127,767 Allowance for credit losses (1,923) (4,110) Accounts receivable, net $ 136,363 $ 123,657 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories consist of the following (in thousands): September 30, 2023 December 31, 2022 Raw materials and consumable supplies $ 8,694 $ 7,745 Work in progress and finished goods 7,086 5,811 Inventories $ 15,780 $ 13,556 |
Property, Plant and Equipment_2
Property, Plant and Equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment, net | Property, plant and equipment consisted of the following: Useful Life (Years) September 30, 2023 December 31, 2022 Land $ 2,438 $ 2,529 Buildings and improvements 30-40 25,671 24,800 Office furniture and equipment 5-8 21,318 18,057 Machinery and equipment 5-7 262,370 251,282 311,797 296,668 Accumulated depreciation and amortization (232,035) (219,107) Property, plant and equipment, net $ 79,762 $ 77,561 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 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 (191) (126) — (317) Impairment charges — (13,799) — (13,799) Balance at 30, September 30, 2023 $ 185,519 $ — $ — $ 185,519 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 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: September 30, 2023 December 31, 2022 Useful Life Gross Amount Accumulated Amortization Net Carrying Amount Gross Amount Accumulated Amortization Net Carrying Amount Customer relationships 5-18 $ 109,409 $ (87,977) $ 21,432 $ 109,683 $ (84,130) $ 25,553 Software/Technology 3-15 53,199 (31,082) 22,117 51,028 (28,669) 22,359 Covenants not to compete 2-5 12,483 (12,429) 54 12,488 (12,416) 72 Other 2-12 10,379 (9,514) 865 10,389 (9,358) 1,031 Total $ 185,470 $ (141,002) $ 44,468 $ 183,588 $ (134,573) $ 49,015 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: September 30, 2023 December 31, 2022 Accrued salaries, wages and related employee benefits $ 27,749 $ 26,684 Contingent consideration, current portion — 937 Accrued workers’ compensation and health benefits 3,954 3,660 Deferred revenue 7,523 7,521 Pension accrual 2,458 2,519 Right-of-use liability - Operating 10,777 10,376 Other accrued expenses 29,392 26,147 Total $ 81,853 $ 77,844 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consisted of the following: September 30, 2023 December 31, 2022 Senior credit facility $ 72,118 $ 65,250 Senior secured term loan, net of unamortized debt issuance costs of $0.4 million and $0.5 million, respectively 117,572 121,399 Other 4,178 4,602 Total debt 193,868 191,251 Less: Current portion (8,402) (7,425) Long-term debt, net of current portion $ 185,466 $ 183,826 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 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: Nine months ended September 30, 2023 2022 Beginning balance $ 938 $ 1,831 Payments (938) (938) Revaluation — 45 Ending balance $ — $ 938 |
Segment Disclosure (Tables)
Segment Disclosure (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, Nine months ended September 30, 2023 2022 2023 2022 Revenue North America $ 148,814 $ 152,778 $ 431,295 $ 435,251 International 30,980 25,693 90,664 83,441 Products and Systems 2,829 3,078 9,897 8,666 Corporate and eliminations (3,269) (3,087) (8,457) (8,203) $ 179,354 $ 178,462 $ 523,399 $ 519,155 Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Gross profit North America $ 44,773 $ 44,869 $ 121,088 $ 118,348 International 8,481 7,694 24,247 25,324 Products and Systems 1,096 1,189 4,773 3,514 Corporate and eliminations 32 32 73 47 $ 54,382 $ 53,784 $ 150,181 $ 147,233 Income (loss) from operations by operating segment includes intercompany transactions, which are eliminated in Corporate and eliminations. Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Income (loss) from operations North America $ 18,004 $ 16,700 $ 39,719 $ 35,315 International (12,970) 814 (13,031) 2,678 Products and Systems (557) (333) (78) (1,334) Corporate and eliminations (9,159) (8,067) (29,228) (22,668) $ (4,682) $ 9,114 $ (2,618) $ 13,991 Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Depreciation and amortization North America $ 6,603 $ 6,168 $ 19,329 $ 18,927 International 1,915 1,858 5,663 5,835 Products and Systems 183 221 526 559 Corporate and eliminations 47 (50) (48) (189) $ 8,748 $ 8,197 $ 25,470 $ 25,132 September 30, 2023 December 31, 2022 Intangible assets, net North America $ 38,619 $ 43,260 International 3,265 4,422 Products and Systems 1,260 1,208 Corporate and eliminations 1,324 125 $ 44,468 $ 49,015 September 30, 2023 December 31, 2022 Total assets North America $ 414,190 $ 407,779 International 93,951 104,531 Products and Systems 13,557 12,408 Corporate and eliminations 14,992 10,186 $ 536,690 $ 534,904 |
Description of Business_and B_3
Description of Business and Basis of Presentation - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) segment | Sep. 30, 2022 USD ($) | |
Tax Credit Carryforward [Line Items] | ||||
Number of operating segments | segment | 3 | |||
Effective income tax rate | (16.80%) | 31.10% | (1.60%) | 48.50% |
Goodwill impairment charges | $ 13,799 | $ 0 | $ 13,799 | $ 0 |
Foreign Tax Authority | ||||
Tax Credit Carryforward [Line Items] | ||||
Valuation allowance recorded during the period related to deferred tax assets | $ 100 | $ 900 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 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 | $ 5.7 | $ 4 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | ||
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 Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 179,354 | $ 178,462 | $ 523,399 | $ 519,155 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 126,542 | 130,871 | 373,280 | 373,220 |
Other Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 24,000 | 22,593 | 65,339 | 64,385 |
Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 27,038 | 23,019 | 77,162 | 76,666 |
Asia-Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,774 | 1,979 | 7,618 | 4,884 |
Oil & Gas | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 103,252 | 97,031 | 308,041 | 292,519 |
Aerospace & Defense | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 20,065 | 21,293 | 57,685 | 63,807 |
Industrials | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 16,653 | 15,998 | 50,303 | 47,668 |
Power Generation & Transmission | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 9,737 | 12,780 | 25,863 | 31,062 |
Other Process Industries | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 9,792 | 13,324 | 35,546 | 42,545 |
Infrastructure, Research & Engineering | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 9,495 | 7,870 | 22,002 | 19,130 |
Petrochemical | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,899 | 3,707 | 10,914 | 10,469 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 6,461 | 6,459 | 13,045 | 11,955 |
Operating segments | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 148,814 | 152,778 | 431,295 | 435,251 |
Operating segments | North America | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 126,239 | 130,206 | 369,811 | 370,426 |
Operating segments | North America | Other Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 21,907 | 21,649 | 57,218 | 62,254 |
Operating segments | North America | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 465 | 631 | 3,159 | 1,790 |
Operating segments | North America | Asia-Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 203 | 292 | 1,107 | 781 |
Operating segments | North America | Oil & Gas | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 94,390 | 90,578 | 281,663 | 270,289 |
Operating segments | North America | Aerospace & Defense | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 14,240 | 16,784 | 41,516 | 49,106 |
Operating segments | North America | Industrials | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 10,325 | 9,728 | 30,693 | 28,529 |
Operating segments | North America | Power Generation & Transmission | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 7,388 | 10,378 | 17,834 | 22,578 |
Operating segments | North America | Other Process Industries | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 6,933 | 10,283 | 24,906 | 32,217 |
Operating segments | North America | Infrastructure, Research & Engineering | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 6,042 | 4,936 | 12,696 | 10,625 |
Operating segments | North America | Petrochemical | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,313 | 3,427 | 10,027 | 10,056 |
Operating segments | North America | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 6,183 | 6,664 | 11,960 | 11,851 |
Operating segments | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 30,980 | 25,693 | 90,664 | 83,441 |
Operating segments | International | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 120 | 240 | 709 | 747 |
Operating segments | International | Other Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,703 | 2,064 | 11,013 | 4,781 |
Operating segments | International | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 26,764 | 22,648 | 75,421 | 75,921 |
Operating segments | International | Asia-Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 393 | 741 | 3,521 | 1,992 |
Operating segments | International | Oil & Gas | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 8,827 | 6,418 | 26,291 | 22,018 |
Operating segments | International | Aerospace & Defense | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 5,778 | 4,397 | 15,894 | 14,455 |
Operating segments | International | Industrials | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 6,018 | 5,834 | 18,274 | 17,868 |
Operating segments | International | Power Generation & Transmission | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,653 | 1,946 | 4,840 | 6,505 |
Operating segments | International | Other Process Industries | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,864 | 3,033 | 10,567 | 10,305 |
Operating segments | International | Infrastructure, Research & Engineering | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,383 | 1,784 | 6,547 | 6,016 |
Operating segments | International | Petrochemical | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 586 | 280 | 887 | 413 |
Operating segments | International | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,871 | 2,001 | 7,364 | 5,861 |
Operating segments | Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,829 | 3,078 | 9,897 | 8,666 |
Operating segments | Products | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,032 | 1,523 | 4,478 | 4,366 |
Operating segments | Products | Other Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 49 | 154 | 673 | 338 |
Operating segments | Products | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 510 | 362 | 1,275 | 1,456 |
Operating segments | Products | Asia-Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,238 | 1,039 | 3,471 | 2,506 |
Operating segments | Products | Oil & Gas | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 35 | 35 | 87 | 212 |
Operating segments | Products | Aerospace & Defense | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 47 | 112 | 275 | 246 |
Operating segments | Products | Industrials | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 310 | 436 | 1,336 | 1,271 |
Operating segments | Products | Power Generation & Transmission | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 696 | 456 | 3,189 | 1,979 |
Operating segments | Products | Other Process Industries | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | (5) | 8 | 73 | 23 |
Operating segments | Products | Infrastructure, Research & Engineering | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,070 | 1,150 | 2,759 | 2,489 |
Operating segments | Products | Petrochemical | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Operating segments | Products | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 676 | 881 | 2,178 | 2,446 |
Corp/Elim | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | (3,269) | (3,087) | (8,457) | (8,203) |
Corp/Elim | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | (849) | (1,098) | (1,718) | (2,319) |
Corp/Elim | Other Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | (1,659) | (1,274) | (3,565) | (2,988) |
Corp/Elim | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | (701) | (622) | (2,693) | (2,501) |
Corp/Elim | Asia-Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | (60) | (93) | (481) | (395) |
Corp/Elim | Oil & Gas | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Corp/Elim | Aerospace & Defense | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Corp/Elim | Industrials | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Corp/Elim | Power Generation & Transmission | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Corp/Elim | Other Process Industries | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Corp/Elim | Infrastructure, Research & Engineering | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Corp/Elim | Petrochemical | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Corp/Elim | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ (3,269) | $ (3,087) | $ (8,457) | $ (8,203) |
Share-Based Compensation - Equi
Share-Based Compensation - Equity Incentive Plans (Details) | 9 Months Ended | |
May 23, 2022 shares | Sep. 30, 2023 plan shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of equity incentive plans | plan | 2 | |
2009 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of awards that may be granted (in shares) | 0 | |
2016 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of awards that may be granted (in shares) | 1,300,000 | |
Increase in total number of shares authorized for issuance (in shares) | 1,200,000 | |
Total number of shares authorized for issuance (in shares) | 4,900,000 |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Options (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Recognized share-based compensation expense | $ 0 | $ 0 | $ 0 | $ 0 |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Stock Unit Awards - Narrative (Details) - Restricted Stock Unit Awards - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Recognized share-based compensation expense (benefit) | $ 0.7 | $ 0.9 | $ 2.5 | $ 2.8 |
Unrecognized compensation cost, net of estimated forfeitures | $ 8.1 | $ 8.1 | ||
Weighted-average period over which unrecognized compensation cost is expected to be recognized (years) | 2 years 8 months 12 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 | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock awards vested (in shares) | 430 | 326 |
Fair value of awards vested | $ 2,639 | $ 2,164 |
Share-Based Compensation - Full
Share-Based Compensation - Fully-vested Common Stock Issued to Non-employee Directors (Details) - Common Stock - Non-employee Directors - USD ($) shares in Thousands, $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards issued (in shares) | 99 | 70 |
Grant date fair value of awards issued | $ 550 | $ 450 |
Share-Based Compensation - Re_2
Share-Based Compensation - Restricted Stock Units Awards - Activity (Details) - Restricted Stock Unit Awards - $ / shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Restricted Stock Units Awards (Units) | ||
Outstanding at beginning of period (in shares) | 1,415 | 1,208 |
Granted (in shares) | 591 | 675 |
Vested (in shares) | (430) | (326) |
Forfeited (in shares) | (120) | (42) |
Outstanding at end of period (in shares) | 1,456 | 1,515 |
Weighted Average Grant-Date Fair Value (in dollars per share) | ||
Outstanding at the beginning of period (in dollars per share) | $ 7.96 | $ 7.96 |
Granted (in dollars per share) | 8.37 | 7.65 |
Vested (in dollars per share) | 6.14 | 10.03 |
Forfeited (in dollars per share) | 7.96 | 8.19 |
Outstanding at end of period (in dollars per share) | $ 7.71 | $ 7.37 |
Share-Based Compensation - Perf
Share-Based Compensation - Performance Restricted Stock Units - Narrative (Details) - PRSUs shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 USD ($) shares | Sep. 30, 2022 USD ($) shares | Sep. 30, 2023 USD ($) metric shares | Sep. 30, 2022 USD ($) metric 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 | 314 | |||||
Recognized share-based compensation expense (benefit) | $ | $ 0.1 | $ 0.3 | $ 0.6 | $ 0.9 | ||
Unrecognized compensation cost | $ | $ 0.7 | $ 0.7 | ||||
Nonvested shares outstanding (in shares) | shares | 100 | 443 | 100 | 443 | 280 | 388 |
Weighted-average period over which unrecognized compensation cost is expected to be recognized (years) | 1 year | |||||
Executive and Senior Officers | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Performance period (years) | 1 year | |||||
Award vesting period | 4 years | |||||
Requisite service period | 5 years | |||||
Executive and Senior Officers | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Target award percentage | 0% | 0% | ||||
Executive and Senior Officers | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Target award percentage | 200% | 200% | ||||
Executive and Senior Officers | Anniversary 1 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting percentage (ratably on each of the first four anniversary date) | 25% | |||||
Executive and Senior Officers | Anniversary 2 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting percentage (ratably on each of the first four anniversary date) | 25% | |||||
Executive and Senior Officers | Anniversary 3 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting percentage (ratably on each of the first four anniversary date) | 25% | |||||
Executive and Senior Officers | Anniversary 4 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting percentage (ratably on each of the first four anniversary date) | 25% | |||||
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 | 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 | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Performance Restricted Stock (Units) | ||
Outstanding at beginning of period (in shares) | 280 | 388 |
Granted (in shares) | 282 | 341 |
Performance condition adjustments (in shares) | (314) | (269) |
Vested (in shares) | (64) | (17) |
Forfeited (in shares) | (84) | 0 |
Outstanding at end of period (in shares) | 100 | 443 |
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) | 8.34 | 7.71 |
Vested (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) | $ 9.83 | $ 9.74 |
Earnings (loss) per Share (Deta
Earnings (loss) per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Basic earnings (loss) per share | ||||
Net income (loss) attributable to Mistras Group, Inc. | $ (10,298) | $ 4,373 | $ (14,947) | $ 3,653 |
Denominator: | ||||
Weighted average common shares outstanding, basic (in shares) | 30,402,000 | 29,965,000 | 30,277,000 | 29,879,000 |
Basic earnings (loss) per share (in dollars per share) | $ (0.34) | $ 0.15 | $ (0.49) | $ 0.12 |
Denominator: | ||||
Weighted average common shares outstanding, basic (in shares) | 30,402,000 | 29,965,000 | 30,277,000 | 29,879,000 |
Dilutive effect of restricted stock units outstanding (in shares) | 0 | 280,000 | 0 | 330,000 |
Weighted average common shares outstanding, diluted (in shares) | 30,402,000 | 30,245,000 | 30,277,000 | 30,209,000 |
Diluted earnings (loss) per share (in dollars per share) | $ (0.34) | $ 0.14 | $ (0.49) | $ 0.12 |
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 income (loss) for the period (in shares) | 1,508,255 | 926,224 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | ||||
Due diligence, professional fees and other transaction costs | $ 0 | $ 1 | $ 5 | $ 18 |
Adjustments to fair value of contingent consideration liabilities | 0 | 45 | ||
Acquisition-related expense, net | $ 0 | $ 1 | $ 5 | $ 63 |
Accounts Receivable, net - Sche
Accounts Receivable, net - Schedule of Accounts Receivable, net (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Receivables [Abstract] | ||
Trade accounts receivable | $ 138,286 | $ 127,767 |
Allowance for credit losses | (1,923) | (4,110) |
Accounts receivable, net | $ 136,363 | $ 123,657 |
Accounts Receivable, net - Narr
Accounts Receivable, net - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2019 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Unbilled revenues accrued | $ 27,800 | $ 27,800 | $ 13,500 | |||
Past due receivables outstanding | 136,363 | 136,363 | $ 123,657 | |||
Bad debt provision for troubled customers, net of recoveries | $ 0 | $ 0 | $ 0 | $ 289 | ||
Texas Customer | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Past due receivables outstanding | $ 1,400 | |||||
Amount of damages claimed | 1,400 | |||||
Texas Customer | Litigation and Commercial Claims | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Bad debt provision for troubled customers, net of recoveries | $ 1,400 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials and consumable supplies | $ 8,694 | $ 7,745 |
Work in progress and finished goods | 7,086 | 5,811 |
Inventories | $ 15,780 | $ 13,556 |
Property, Plant and Equipment_3
Property, Plant and Equipment, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Property, Plant and Equipment, net | |||||
Property, plant and equipment, gross | $ 311,797 | $ 311,797 | $ 296,668 | ||
Accumulated depreciation and amortization | (232,035) | (232,035) | (219,107) | ||
Property, plant and equipment, net | 79,762 | 79,762 | 77,561 | ||
Depreciation expense | 6,600 | $ 5,900 | 19,000 | $ 18,300 | |
Land | |||||
Property, Plant and Equipment, net | |||||
Property, plant and equipment, gross | 2,438 | 2,438 | 2,529 | ||
Buildings and improvements | |||||
Property, Plant and Equipment, net | |||||
Property, plant and equipment, gross | $ 25,671 | $ 25,671 | 24,800 | ||
Buildings and improvements | Minimum | |||||
Property, Plant and Equipment, net | |||||
Useful Life (Years) | 30 years | 30 years | |||
Buildings and improvements | Maximum | |||||
Property, Plant and Equipment, net | |||||
Useful Life (Years) | 40 years | 40 years | |||
Office furniture and equipment | |||||
Property, Plant and Equipment, net | |||||
Property, plant and equipment, gross | $ 21,318 | $ 21,318 | 18,057 | ||
Office furniture and equipment | Minimum | |||||
Property, Plant and Equipment, net | |||||
Useful Life (Years) | 5 years | 5 years | |||
Office furniture and equipment | Maximum | |||||
Property, Plant and Equipment, net | |||||
Useful Life (Years) | 8 years | 8 years | |||
Machinery and equipment | |||||
Property, Plant and Equipment, net | |||||
Property, plant and equipment, gross | $ 262,370 | $ 262,370 | $ 251,282 | ||
Machinery and equipment | Minimum | |||||
Property, Plant and Equipment, net | |||||
Useful Life (Years) | 5 years | 5 years | |||
Machinery and equipment | Maximum | |||||
Property, Plant and Equipment, net | |||||
Useful Life (Years) | 7 years | 7 years |
Goodwill - Changes in Carrying
Goodwill - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Goodwill [Roll Forward] | ||||
Beginning balance | $ 199,635 | |||
Foreign currency translation | (317) | |||
Goodwill impairment charges | $ 13,799 | $ 0 | 13,799 | $ 0 |
Ending balance | 185,519 | 185,519 | ||
North America | ||||
Goodwill [Roll Forward] | ||||
Beginning balance | 185,710 | |||
Foreign currency translation | (191) | |||
Goodwill impairment charges | 0 | |||
Ending balance | 185,519 | 185,519 | ||
International | ||||
Goodwill [Roll Forward] | ||||
Beginning balance | 13,925 | |||
Foreign currency translation | (126) | |||
Goodwill impairment charges | 13,799 | |||
Ending balance | 0 | 0 | ||
Products and Systems | ||||
Goodwill [Roll Forward] | ||||
Beginning balance | 0 | |||
Foreign currency translation | 0 | |||
Goodwill impairment charges | 0 | |||
Ending balance | $ 0 | $ 0 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Amount | $ 185,470 | $ 185,470 | $ 183,588 | ||
Accumulated Amortization | (141,002) | (141,002) | (134,573) | ||
Net Carrying Amount | 44,468 | 44,468 | 49,015 | ||
Amortization expense of intangibles | 2,200 | $ 2,300 | 6,500 | $ 6,900 | |
Customer relationships | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Amount | 109,409 | 109,409 | 109,683 | ||
Accumulated Amortization | (87,977) | (87,977) | (84,130) | ||
Net Carrying Amount | $ 21,432 | $ 21,432 | 25,553 | ||
Customer relationships | Minimum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Useful Life (Years) | 5 years | 5 years | |||
Customer relationships | Maximum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Useful Life (Years) | 18 years | 18 years | |||
Software/Technology | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Amount | $ 53,199 | $ 53,199 | 51,028 | ||
Accumulated Amortization | (31,082) | (31,082) | (28,669) | ||
Net Carrying Amount | $ 22,117 | $ 22,117 | 22,359 | ||
Software/Technology | Minimum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Useful Life (Years) | 3 years | 3 years | |||
Software/Technology | Maximum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Useful Life (Years) | 15 years | 15 years | |||
Covenants not to compete | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Amount | $ 12,483 | $ 12,483 | 12,488 | ||
Accumulated Amortization | (12,429) | (12,429) | (12,416) | ||
Net Carrying Amount | $ 54 | $ 54 | 72 | ||
Covenants not to compete | Minimum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Useful Life (Years) | 2 years | 2 years | |||
Covenants not to compete | Maximum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Useful Life (Years) | 5 years | 5 years | |||
Other | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Amount | $ 10,379 | $ 10,379 | 10,389 | ||
Accumulated Amortization | (9,514) | (9,514) | (9,358) | ||
Net Carrying Amount | $ 865 | $ 865 | $ 1,031 | ||
Other | Minimum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Useful Life (Years) | 2 years | 2 years | |||
Other | Maximum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Useful Life (Years) | 12 years | 12 years |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued salaries, wages and related employee benefits | $ 27,749 | $ 26,684 |
Contingent consideration, current portion | 0 | 937 |
Accrued workers’ compensation and health benefits | 3,954 | 3,660 |
Deferred revenue | 7,523 | 7,521 |
Pension accrual | 2,458 | 2,519 |
Right-of-use liability - Operating | 10,777 | 10,376 |
Other accrued expenses | 29,392 | 26,147 |
Total | $ 81,853 | $ 77,844 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Total debt | $ 193,868 | $ 191,251 |
Less: Current portion | (8,402) | (7,425) |
Long-term debt, net of current portion | 185,466 | 183,826 |
Senior credit facility | ||
Debt Instrument [Line Items] | ||
Total debt | 72,118 | 65,250 |
Senior credit facility | Senior Secured Term Loan | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | 400 | 500 |
Total debt | 117,572 | 121,399 |
Other | ||
Debt Instrument [Line Items] | ||
Total debt | $ 4,178 | $ 4,602 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||||
Aug. 01, 2022 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | May 19, 2021 USD ($) | |
Debt Instrument [Line Items] | ||||||
Debt outstanding | $ 193,868,000 | $ 191,251,000 | ||||
Finance costs incurred | 0 | $ 148,000 | ||||
Line of Credit | Prior Credit Agreement | Senior credit facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 150,000,000 | |||||
Line of Credit | Prior Credit Agreement | Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Term loan | $ 100,000,000 | |||||
Line of Credit | Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Consolidated debt ratio (less than) | 1.25 | |||||
Consolidated debt ratio (greater than) | 3.75 | |||||
Fixed charge coverage ratio | 1.25 | |||||
Number of days, written notice required prior to an acquisition | 5 days | |||||
Amount of acquisition requiring written notice | $ 10,000,000 | |||||
Line of Credit | Credit Agreement | Senior credit facility | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 190,000,000 | |||||
Term of credit facility | 5 years | |||||
Debt outstanding | 118,000,000 | |||||
Maximum borrowing capacity in non-U.S. Dollar currencies | $ 100,000,000 | |||||
Line of Credit | Credit Agreement | Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Term loan | 125,000,000 | |||||
Line of Credit | Credit Agreement | Letter of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Maximum amount available for the issuance of letters of credit | $ 20,000,000 | |||||
Line of Credit | Credit Agreement | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum | Variable Rate Component | ||||||
Debt Instrument [Line Items] | ||||||
SOFR margin range | 1.25% | |||||
Line of Credit | Credit Agreement | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum | Variable Rate Component | ||||||
Debt Instrument [Line Items] | ||||||
SOFR margin range | 2.75% | |||||
Line of Credit | Credit Agreement | Through June 30, 2023 | ||||||
Debt Instrument [Line Items] | ||||||
Total consolidated debt leverage ratio | 4 | |||||
Line of Credit | Credit Agreement | After June 30, 2023 | ||||||
Debt Instrument [Line Items] | ||||||
Total consolidated debt leverage ratio | 3.75 | |||||
Line of Credit | Credit Agreement | Through June 30, 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Debt periodic payments | $ 1,560,000 | |||||
Line of Credit | Credit Agreement | Through June 30, 2025 | ||||||
Debt Instrument [Line Items] | ||||||
Debt periodic payments | 2,340,000 | |||||
Line of Credit | Credit Agreement | After June 30, 2025 | ||||||
Debt Instrument [Line Items] | ||||||
Debt periodic payments | $ 3,120,000 | |||||
Senior credit facility | ||||||
Debt Instrument [Line Items] | ||||||
Debt outstanding | 72,118,000 | 65,250,000 | ||||
Outstanding borrowings | 189,700,000 | |||||
Outstanding letters of credit | 2,900,000 | |||||
Capitalized costs associated with debt modifications | 1,200,000 | |||||
Senior credit facility | Credit Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Capitalized unamortized issuance cost | $ 800,000 | |||||
Finance costs incurred | 1,600,000 | |||||
Expensed finance costs | $ 200,000 | |||||
Other | ||||||
Debt Instrument [Line Items] | ||||||
Debt outstanding | 4,178,000 | $ 4,602,000 | ||||
Other | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Debt periodic payments | $ 1,000 | |||||
Interest rate | 0.40% | |||||
Other | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Debt periodic payments | $ 18,000 | |||||
Interest rate | 3.50% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Level 3 - Contingent Consideration - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 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 | 9 Months Ended | 12 Months Ended | ||||||
Apr. 25, 2023 USD ($) | May 04, 2021 USD ($) | Dec. 31, 2019 USD ($) weld | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Mar. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Sep. 30, 2023 USD ($) claim | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Litigation | ||||||||||
Accounts receivable, net | $ 136,363 | $ 136,363 | $ 123,657 | |||||||
Contingency charges | 0 | $ 0 | 150 | $ (994) | ||||||
Reserve for past due receivables | 1,923 | 1,923 | 4,110 | |||||||
Pension accrual | 2,458 | 2,458 | 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 | Various Pipeline Projects for Texas Customer | ||||||||||
Litigation | ||||||||||
Accounts receivable, net | 1,400 | $ 1,400 | ||||||||
Number or welds not in compliance | weld | 66 | |||||||||
Number of welds inspected (over) | weld | 16,000 | |||||||||
Amount of damages claimed | $ 1,400 | |||||||||
Amount awarded to other party | $ 300 | |||||||||
Release of claim on receivables | $ 1,400 | |||||||||
Contingency charges | $ 100 | |||||||||
Reserve for past due receivables | $ 1,400 | |||||||||
Class Action | ||||||||||
Litigation | ||||||||||
Amount awarded to other party | $ 2,300 | |||||||||
Contingency charges | $ 1,600 | $ 800 | ||||||||
Number of proceedings | claim | 2 | |||||||||
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 accrual | $ 2,500 | $ 2,500 |
Segment Disclosure (Details)
Segment Disclosure (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) segment | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Segment Reporting [Abstract] | |||||
Number of operating segments | segment | 3 | ||||
Financial information by segment | |||||
Revenue | $ 179,354 | $ 178,462 | $ 523,399 | $ 519,155 | |
Gross profit | 54,382 | 53,784 | 150,181 | 147,233 | |
Income (loss) from operations | (4,682) | 9,114 | (2,618) | 13,991 | |
Depreciation and amortization | 8,748 | 8,197 | 25,470 | 25,132 | |
Intangible assets, net | 44,468 | 44,468 | $ 49,015 | ||
Total assets | 536,690 | 536,690 | 534,904 | ||
Operating segments | North America | |||||
Financial information by segment | |||||
Revenue | 148,814 | 152,778 | 431,295 | 435,251 | |
Gross profit | 44,773 | 44,869 | 121,088 | 118,348 | |
Income (loss) from operations | 18,004 | 16,700 | 39,719 | 35,315 | |
Depreciation and amortization | 6,603 | 6,168 | 19,329 | 18,927 | |
Intangible assets, net | 38,619 | 38,619 | 43,260 | ||
Total assets | 414,190 | 414,190 | 407,779 | ||
Operating segments | International | |||||
Financial information by segment | |||||
Revenue | 30,980 | 25,693 | 90,664 | 83,441 | |
Gross profit | 8,481 | 7,694 | 24,247 | 25,324 | |
Income (loss) from operations | (12,970) | 814 | (13,031) | 2,678 | |
Depreciation and amortization | 1,915 | 1,858 | 5,663 | 5,835 | |
Intangible assets, net | 3,265 | 3,265 | 4,422 | ||
Total assets | 93,951 | 93,951 | 104,531 | ||
Operating segments | Products and Systems | |||||
Financial information by segment | |||||
Revenue | 2,829 | 3,078 | 9,897 | 8,666 | |
Gross profit | 1,096 | 1,189 | 4,773 | 3,514 | |
Income (loss) from operations | (557) | (333) | (78) | (1,334) | |
Depreciation and amortization | 183 | 221 | 526 | 559 | |
Intangible assets, net | 1,260 | 1,260 | 1,208 | ||
Total assets | 13,557 | 13,557 | 12,408 | ||
Corporate and eliminations | |||||
Financial information by segment | |||||
Revenue | (3,269) | (3,087) | (8,457) | (8,203) | |
Gross profit | 32 | 32 | 73 | 47 | |
Income (loss) from operations | (9,159) | (8,067) | (29,228) | (22,668) | |
Depreciation and amortization | 47 | $ (50) | (48) | $ (189) | |
Intangible assets, net | 1,324 | 1,324 | 125 | ||
Total assets | $ 14,992 | $ 14,992 | $ 10,186 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2023 USD ($) | |
Subsequent Event | Chief Executive Officer | Forecast | |
Subsequent Event [Line Items] | |
Expense related to termination of executive officer | $ 2.6 |