Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
May. 31, 2015 | Aug. 01, 2015 | Nov. 30, 2014 | |
Document and Entity Information | |||
Entity Registrant Name | Mistras Group, Inc. | ||
Entity Central Index Key | 1,436,126 | ||
Document Type | 10-K | ||
Document Period End Date | May 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --05-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 294.1 | ||
Entity Common Stock, Shares Outstanding | 28,703,320 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | May. 31, 2015 | May. 31, 2014 |
Current Assets | ||
Cash and cash equivalents | $ 10,555 | $ 10,020 |
Accounts receivable, net | 133,228 | 137,824 |
Inventories | 10,841 | 11,376 |
Deferred income taxes | 5,144 | 3,283 |
Prepaid expenses and other current assets | 11,698 | 12,626 |
Total current assets | 171,466 | 175,129 |
Property, plant and equipment, net | 79,256 | 77,811 |
Intangible assets, net | 51,276 | 57,875 |
Goodwill | 166,414 | 130,516 |
Deferred income taxes | 1,208 | 1,344 |
Other assets | 2,107 | 1,297 |
Total Assets | 471,727 | 443,972 |
Current Liabilities | ||
Accounts payable | 10,529 | 14,978 |
Accrued expenses and other current liabilities | 55,914 | 54,650 |
Current portion of long-term debt | 17,902 | 8,058 |
Current portion of capital lease obligations | 8,646 | 7,251 |
Income taxes payable | 532 | 1,854 |
Total current liabilities | 93,523 | 86,791 |
Long-term debt, net of current portion | 95,557 | 68,590 |
Obligations under capital leases, net of current portion | 10,717 | 13,664 |
Deferred income taxes | 16,984 | 15,521 |
Other long-term liabilities | 9,934 | 17,014 |
Total Liabilities | $ 226,715 | $ 201,580 |
Commitments and contingencies | ||
Equity | ||
Preferred stock, 10,000,000 shares authorized | $ 0 | $ 0 |
Common stock, $0.01 par value, 200,000,000 shares authorized, 28,703,320 and 28,455,781 shares issued and outstanding as of May 31, 2015 and May 31, 2014, respectively | 287 | 284 |
Additional paid-in capital | 208,064 | 201,831 |
Retained earnings | 57,581 | 41,500 |
Accumulated other comprehensive loss | (21,113) | (1,511) |
Total Mistras Group, Inc. stockholders’ equity | 244,819 | 242,104 |
Noncontrolling interests | 193 | 288 |
Total Equity | 245,012 | 242,392 |
Total Liabilities and Equity | $ 471,727 | $ 443,972 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | May. 31, 2015 | May. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 28,703,320 | 28,455,781 |
Common stock, shares outstanding | 28,703,320 | 28,455,781 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Income Statement [Abstract] | |||
Revenue | $ 711,252 | $ 623,447 | $ 529,282 |
Cost of revenue | 506,281 | 432,695 | 363,045 |
Depreciation | 20,238 | 17,809 | 17,866 |
Gross profit | 184,733 | 172,943 | 148,371 |
Selling, general and administrative expenses | 143,978 | 123,690 | 101,792 |
Research and engineering | 2,521 | 2,995 | 2,447 |
Depreciation and amortization | 13,048 | 10,620 | 8,781 |
Acquisition-related (income) expense, net | (5,167) | (2,657) | (2,141) |
Goodwill impairment | 0 | 0 | 9,938 |
Income from operations | 30,353 | 38,295 | 27,554 |
Interest expense | 4,622 | 3,192 | 3,288 |
Income before provision for income taxes | 25,731 | 35,103 | 24,266 |
Provision for income taxes | 9,740 | 12,528 | 12,627 |
Net income | 15,991 | 22,575 | 11,639 |
Less: net loss (income) attributable to noncontrolling interests, net of taxes | 90 | (57) | 7 |
Net income attributable to Mistras Group, Inc. | $ 16,081 | $ 22,518 | $ 11,646 |
Earnings per common share | |||
Basic (in dollars per share) | $ 0.56 | $ 0.79 | $ 0.41 |
Diluted (in dollars per share) | $ 0.54 | $ 0.77 | $ 0.40 |
Weighted average common shares outstanding: | |||
Basic | 28,613 | 28,365 | 28,141 |
Diluted | 29,590 | 29,324 | 29,106 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 15,991 | $ 22,575 | $ 11,639 |
Other comprehensive (loss) income: | |||
Foreign currency translation adjustments | (19,602) | 2,941 | (1,407) |
Comprehensive (loss) income | (3,611) | 25,516 | 10,232 |
Less: net income (loss) attributable to noncontrolling interests | 90 | (57) | 7 |
Foreign currency translation adjustments | 5 | (4) | 2 |
Comprehensive (loss) income attributable to Mistras Group, Inc. | $ (3,516) | $ 25,455 | $ 10,241 |
Consolidated Statements of Equi
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 (accumulated deficit) | Accumulated other comprehensive income (loss) | Noncontrolling Interest |
Balance at May. 31, 2012 | $ 193,248 | $ 193,012 | $ 280 | $ 188,443 | $ 7,336 | $ (3,047) | $ 236 |
Balance (in shares) at May. 31, 2012 | 28,026 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 11,639 | 11,646 | 11,646 | (7) | |||
Other comprehensive (income) loss, net of tax | (1,407) | (1,405) | (1,405) | (2) | |||
Share-based payments | 6,285 | 6,285 | 6,285 | ||||
Share-based payments (in shares) | 15 | ||||||
Net settlement on vesting of restricted stock units | (809) | (809) | $ 1 | (810) | |||
Net settlement on vesting of restricted stock units (in shares) | 85 | ||||||
Excess tax benefit from share-based payment compensation | 495 | 495 | 495 | ||||
Exercise of stock options | 829 | 829 | $ 1 | 828 | |||
Exercise of stock options (in shares) | 85 | ||||||
Balance at May. 31, 2013 | 210,280 | 210,053 | $ 282 | 195,241 | 18,982 | (4,452) | 227 |
Balance (in shares) at May. 31, 2013 | 28,211 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 22,575 | 22,518 | 22,518 | 57 | |||
Other comprehensive (income) loss, net of tax | 2,945 | 2,941 | 2,941 | 4 | |||
Share-based payments | 6,261 | 6,261 | 6,261 | ||||
Share-based payments (in shares) | 19 | ||||||
Net settlement on vesting of restricted stock units | (1,006) | (1,006) | $ 1 | (1,007) | |||
Net settlement on vesting of restricted stock units (in shares) | 123 | ||||||
Excess tax benefit from share-based payment compensation | 340 | 340 | 340 | ||||
Exercise of stock options | 997 | 997 | $ 1 | 996 | |||
Exercise of stock options (in shares) | 103 | ||||||
Balance at May. 31, 2014 | 242,392 | 242,104 | $ 284 | 201,831 | 41,500 | (1,511) | 288 |
Balance (in shares) at May. 31, 2014 | 28,456 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 15,991 | 16,081 | 16,081 | (90) | |||
Other comprehensive (income) loss, net of tax | (19,607) | (19,602) | (19,602) | (5) | |||
Share-based payments | 6,579 | 6,579 | 6,579 | ||||
Share-based payments (in shares) | 21 | ||||||
Net settlement on vesting of restricted stock units | (1,481) | (1,481) | $ 2 | (1,483) | |||
Net settlement on vesting of restricted stock units (in shares) | 161 | ||||||
Excess tax benefit from share-based payment compensation | 388 | 388 | 388 | ||||
Exercise of stock options | 750 | 750 | $ 1 | 749 | |||
Exercise of stock options (in shares) | 65 | ||||||
Balance at May. 31, 2015 | $ 245,012 | $ 244,819 | $ 287 | $ 208,064 | $ 57,581 | $ (21,113) | $ 193 |
Balance (in shares) at May. 31, 2015 | 28,703 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Cash flows from operating activities | |||
Net income | $ 15,991 | $ 22,575 | $ 11,639 |
Adjustments to reconcile net income to net cash provided by operating activities | |||
Depreciation and amortization | 33,286 | 28,429 | 26,647 |
Deferred income taxes | (1,745) | (621) | (1,732) |
Share-based compensation expense | 6,579 | 6,261 | 6,285 |
Goodwill impairment | 0 | 0 | 9,938 |
Charges associated with the exit of foreign operations | 2,516 | 0 | 0 |
Fair value adjustments to contingent consideration | (5,382) | (3,937) | (3,727) |
Other | 1,647 | 617 | 472 |
Changes in operating assets and liabilities, net of effect of acquisitions | |||
Accounts receivable | 3,982 | (23,857) | 4,772 |
Inventories | 388 | 1,203 | 525 |
Prepaid expenses and other current assets | (288) | (4,059) | (1,042) |
Other assets | (821) | 36 | 462 |
Accounts payable | (6,281) | 6,125 | (5,478) |
Accrued expenses and other liabilities | 2,500 | 4,532 | (3,832) |
Income taxes payable | (1,748) | (431) | (1,426) |
Net cash provided by operating activities | 50,624 | 36,873 | 43,503 |
Cash flows from investing activities | |||
Purchase of property, plant and equipment | (15,104) | (16,871) | (12,530) |
Purchase of intangible assets | (866) | (708) | (993) |
Acquisition of businesses, net of cash acquired | (34,967) | (21,924) | (33,122) |
Proceeds from sale of equipment | 996 | 1,498 | 1,166 |
Net cash used in investing activities | (49,941) | (38,005) | (45,479) |
Cash flows from financing activities | |||
Repayment of capital lease obligations | (8,653) | (8,139) | (6,972) |
Repayment of long-term debt | (9,224) | (8,830) | (5,075) |
Net borrowings from revolver | 21,914 | 21,580 | 14,568 |
Payment of contingent consideration for business acquisitions | (3,213) | (1,678) | (1,892) |
Taxes paid related to net share settlement of equity awards | (1,481) | (1,007) | (809) |
Excess tax benefit from share-based payment compensation | 388 | 340 | 495 |
Proceeds from the exercise of stock options | 750 | 996 | 829 |
Net cash provided by financing activities | 481 | 3,262 | 1,144 |
Effect of exchange rate changes on cash and cash equivalents | (629) | 88 | 224 |
Net change in cash and cash equivalents | 535 | 2,218 | (608) |
Cash and cash equivalents: | |||
Beginning of period | 10,020 | 7,802 | 8,410 |
End of period | 10,555 | 10,020 | 7,802 |
Supplemental disclosure of cash paid | |||
Interest | 4,504 | 3,271 | 3,144 |
Income taxes | 13,243 | 12,920 | 15,639 |
Noncash investing and financing | |||
Equipment acquired through capital lease obligations | 8,031 | 11,031 | 3,886 |
Issuance of notes payable and other debt obligations primarily related to acquisitions | $ 20,480 | $ 336 | $ 7,715 |
Description of Business and Bas
Description of Business and Basis of Presentation | 12 Months Ended |
May. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation Description of Business Mistras Group, Inc. and subsidiaries (the Company) is a leading “one source” global provider of technology-enabled asset protection solutions used to evaluate the structural integrity and reliability of critical energy, industrial and public infrastructure. The Company combines industry-leading products and technologies, expertise in mechanical integrity (MI) and non-destructive testing (NDT) services and proprietary data analysis software to deliver a comprehensive portfolio of customized solutions, ranging from routine inspections to complex, plant-wide asset integrity assessments and management. These mission critical solutions enhance customers’ ability to extend the useful life of their assets, increase productivity, minimize repair costs, comply with governmental safety and environmental regulations, manage risk and avoid catastrophic disasters. The Company serves a global customer base of companies with asset-intensive infrastructure, including companies in the oil and gas, fossil and nuclear power, alternative and renewable energy, public infrastructure, chemicals, commercial aerospace and defense, transportation, primary metals and metalworking, pharmaceutical/biotechnology and food processing industries and research and engineering institutions. Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of Mistras Group, Inc. and its wholly and majority-owned subsidiaries. For subsidiaries in which the Company’s ownership interest is less than 100%, the noncontrolling interests are reported in stockholders’ equity in the accompanying consolidated balance sheets. The noncontrolling interests in net income, net of tax, is classified separately in the accompanying consolidated statements of income. All significant intercompany accounts and transactions have been eliminated in consolidation. Mistras Group, Inc.’s and its subsidiaries’ fiscal years end on May 31 except for the subsidiaries in the International segment, which end on April 30. Accordingly, the Company’s International segment subsidiaries are consolidated on a one -month lag. Therefore, in the quarter and year of acquisition, results of acquired subsidiaries in the International segment are generally included in consolidated results for one less month than the actual number of months from the acquisition date to the end of the reporting period. As discussed in Note 7 - Acquisitions and Dispositions , during the lag period in fiscal 2015, the Company sold an international subsidiary, and decided to sell two additional international subsidiaries. Management does not believe that any additional events occurred during the one-month lag period that would have a material effect on the Company’s consolidated financial statements. Reference to a fiscal year means the fiscal year ended May 31. Reclassifications 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
May. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Revenue Recognition Revenue is generally recognized when persuasive evidence of an arrangement exists, services have been rendered or products have been delivered, the fee is fixed or determinable, and collectability is reasonably assured. The following revenue recognition policies define the manner in which we account for specific transaction types: Services Revenue is primarily derived from providing services on a time and material basis. Service arrangements generally consist of inspection professionals working under contract for a fixed period of time or on a specific customer project. Revenue is generally recognized when the service is performed in accordance with terms of each customer arrangement, upon completion of the earnings process and when collection is reasonably assured. At the end of any reporting period, revenue is accrued for services that have been earned which have not yet been billed. Reimbursable costs, including those related to travel and out-of-pocket expenses, are included in revenue, and equivalent amounts of reimbursable costs are included in cost of services. Products and Systems Sales of products and systems are recorded when the sales price is fixed and determinable and the risks and rewards of ownership are transferred (generally upon shipment) and when collectability is reasonably assured. These arrangements occasionally contain multiple elements or deliverables, such as hardware software (that is essential to the functionality of the hardware) and related services. The Company recognizes revenue for delivered elements as separate units of accounting, when the delivered elements have standalone value, uncertainties regarding customer acceptance are resolved and there are no refund or return rights for the delivered elements. The Company establishes the selling prices for each deliverable based on its, vendor-specific objective evidence (“VSOE”), if available, third-party evidence, if VSOE is not available, or estimated selling price (“ESP”) if neither VSOE nor third-party evidence is available. The Company establishes VSOE of selling price using the price charged for a deliverable when sold separately and, in rare instances, using the price established by management having the relevant authority. Third-party evidence of selling price is established by evaluating largely similar and interchangeable competitor products or services in standalone sales to similarly situated customers. The Company determines ESP, by considering Internal factors such as margin objectives, pricing practices and controls, customer segment pricing strategies and the product life cycle. Consideration is also given to market conditions such as competitor pricing strategies and Industry technology life cycles. When determining ESP, the Company applies management judgment to establish margin objectives and pricing strategies and to evaluate market conditions and product life cycles. Changes in the aforementioned factors may result in a different allocation of revenue to the deliverables in multiple element arrangements and therefore may change the pattern and timing of revenue recognition for these elements, but will not change the total revenue recognized for the arrangement. A portion of the Company’s revenue is generated from engineering and manufacturing of custom products under long-term contracts that may last from several months to several years, depending on the contract. Revenues from long-term contracts are recognized on the percentage-of-completion method of accounting. Under the percentage-of-completion method of accounting revenues are recognized as work is performed. The percentage of completion at any point in time is generally based on total costs or total labor dollars incurred to date in relation to the total estimated costs or total labor dollars estimated at completion. The percentage of completion is then applied to the total contract revenue to determine the amount of revenue to be recognized in the period. Application of the percentage-of-completion method of accounting requires the use of estimates of costs to be incurred for the performance of the contract. Contract costs include all direct materials, direct labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs, and all costs associated with operation of equipment. The cost estimation process is based upon the professional knowledge and experience of our engineers, project managers and financial professionals. Factors that are considered in estimating the work to be completed include the availability and productivity of labor, the nature and complexity of the work to be performed, the effect of change orders, the availability of materials, the effect of any delays in our project performance and the recoverability of any claims. Whenever revisions of estimated contract costs and 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. Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles requires that the Company make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and liabilities at the date of financial statements. The accounting policies that the Company believes require more significant estimates and assumptions include: revenue recognition, valuations of accounts receivable, long lived assets, goodwill, and deferred tax assets and uncertain tax positions. The Company bases its estimates and assumptions on historical experience, known or expected trends and various other assumptions that it believes to be reasonable. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates, which may cause the Company’s future results to be significantly affected. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Accounts Receivable Accounts receivable are stated net of an allowance for doubtful accounts and sales allowances. Outstanding accounts receivable balances are reviewed periodically, and allowances are provided at such time that management believes it is probable that such balances will not be collected within a reasonable period of time. The Company extends credit to its customers based upon credit evaluations in the normal course of business, primarily with 30-day terms. Bad debts are provided for based on historical experience and management’s evaluation of outstanding accounts receivable. Accounts are generally written off when they are deemed uncollectible. No customer accounted for 10% or more of our accounts receivable in fiscal 2015 or 2014. Inventories Inventories are stated at the lower of cost, as determined by using the first-in, first-out method, or market. Work in process and finished goods inventory include material, direct labor, variable costs and overhead. Software Costs Costs that are related to the conceptual formulation and design of licensed software are expensed as research and engineering. For software the Company licenses to customers, the Company capitalizes costs that are incurred between the date technological feasibility has been established and the date that the product becomes available for sale. Capitalized amounts are amortized over three years , which is the estimated life of the related software. The Company performs periodic reviews to ensure that unamortized program costs remain recoverable from future revenues. Costs to support or service these licensed programs are expensed as the costs are incurred. The Company capitalizes certain costs that are incurred to purchase or to create and implement internal-use software, which includes software coding, installation and testing. Capitalized costs are amortized on a straight-line basis over three years, the estimated useful life of the software. Property, Plant and Equipment Property, plant and equipment are recorded at cost. Depreciation of property, plant and equipment is computed utilizing the straight-line method over the estimated useful lives of the assets. Amortization of leasehold improvements is computed utilizing the straight-line method over the shorter of the remaining lease term or estimated useful life. Repairs and maintenance costs are expensed as incurred. Goodwill Goodwill represents the excess of the purchase price of acquired businesses over the fair values attributed to underlying net tangible assets and identifiable intangible assets. We test the carrying value of goodwill for impairment at a “reporting unit” level (which for the Company in fiscal 2015 is represented by (i) our Services segment, (ii) our Products and Systems segment, and (iii) the European component, (iv) Brazilian component and (v) the Russian component of our International segment), using a two-step approach, annually as of March 1, or whenever an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. If the fair value of a reporting unit is less than its carrying value, this is an indicator that the goodwill assigned to that reporting unit may be impaired. In this case, a second step is performed to allocate the fair value of the reporting unit to the assets and liabilities of the reporting unit as if it had just been acquired in a business combination, and as if the purchase price was equivalent to the fair value of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to its assets and liabilities is referred to as the implied fair value of goodwill. The implied fair value of the reporting unit’s goodwill is then compared to the actual carrying value of goodwill. If the implied fair value is less than the carrying value, we would be required to recognize an impairment loss for that excess. We consider the income and market approaches to estimating the fair value of our reporting units, which requires significant judgment in evaluation of, among other things, economic and industry trends, estimated future cash flows, discount rates and other factors. For the 2015 evaluation of goodwill for the Services reporting unit, the Company performed a qualitative assessment based upon macro-economic conditions, industry and market conditions and overall financial performance, and concluded that the fair value of the Services reporting unit was substantially in excess of its carrying value. Impairment of Long-lived Assets The Company reviews the recoverability of its long-lived assets on a periodic basis in order to identify indicators of a possible impairment. The assessment for potential impairment is based primarily on the Company’s ability to recover the carrying value of its long-lived assets from expected future undiscounted cash flows. If the total expected future undiscounted cash flows are less than the carrying amount of the assets, a loss is recognized for the difference between fair value (computed based upon the expected future discounted cash flows) and the carrying value of the assets. Shipping and Handling Costs Shipping and handling costs are included in cost of revenues. Taxes Collected from Customers Taxes collected from customers and remitted to governmental authorities are presented in the consolidated statements of income on a net basis. Research and Engineering Research and product development costs are expensed as incurred. Advertising, Promotions and Marketing The costs for advertising, promotion and marketing programs are expensed as incurred and are included in selling, general and administrative expenses. Advertising expense was approximately $2.2 million , $1.8 million and $1.7 million for fiscal 2015 , 2014 and 2013 , respectively. Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and other financial current assets and liabilities approximate fair value based on the short-term nature of the items. The carrying value of long-term debt approximates fair value due to the variable-rate structure of the debt. The fair value of the Company’s notes payable and capital lease obligations approximate their carrying amounts as those obligations bear interest at rates which management believes would currently be available to the Company for similar obligations. Foreign Currency Translation The financial position and results of operations of the Company’s foreign subsidiaries are measured using their functional currencies, which, is their local currency. Assets and liabilities of foreign subsidiaries are translated into the U.S. Dollar at the exchange rates in effect at the balance sheet date. Income and expenses are translated at the average exchange rate during the period. Translation gains and losses are reported as a component of other comprehensive income for the period and included in accumulated other comprehensive income within stockholders’ equity. Foreign currency (gains) and losses arising from transactions denominated in currencies other than the functional currency are included in net income reported in SG&A expenses and were approximately $1.5 million , $0.1 million and $0.1 million in fiscal 2015 , 2014 and 2013 , respectively. Derivative Financial Instruments The Company recognizes its derivatives as either assets or liabilities, measures those instruments at fair value and recognizes the changes in fair value of the derivative in net income or other comprehensive income, as appropriate. As of May 31, 2015 and 2014 , the Company had no outstanding interest rate swap contracts. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. At times, cash deposits may exceed the limits insured by the Federal Deposit Insurance Corporation. The Company believes it is not exposed to any significant credit risk or risk of nonperformance of financial institutions. No customer accounted for 10% or more of our accounts receivable in fiscal 2015 or 2014. The Company had one customer which accounted for 11% of revenues for fiscal 2013 . Accounts receivable from this customer was approximately 9% of total accounts receivable, net, at May 31, 2013. Our relationship with this customer comprised of separate contracts for non-destructive testing and inspection services with multiple affiliated entities within their broad organization. These contracts are typically negotiated locally with the specific location, are of varying lengths, have different start and end dates and differ in terms of the scope of work and nature of services provided. Most contracts are based on time and materials. Self-Insurance The Company is self-insured for certain losses relating to workers’ compensation and health benefits claims. The Company maintains third-party excess insurance coverage for all workers compensation and health benefit claims in excess of approximately $0.3 million to reduce its exposure from such claims. Self-insured losses are accrued when it is probable that an uninsured claim has been incurred but not reported and the amount of the loss can be reasonably estimated at the balance sheet date. Share-based Compensation We measure the value of services received from employees and directors in exchange for an award of an equity instrument based on the grant-date fair value of the award. The computed value is recognized as a non-cash cost on a straight-line basis over the period the individual provides services, which is typically the vesting period of the award with the exception of awards containing an internal performance measure which is recognized on a straight-line basis over the vesting period subject to the probability of meeting the performance requirements and adjusted for the number of shares expected to be earned. As share-based compensation expense is based on awards ultimately expected to vest, the amount of expense has been reduced for estimated forfeitures. The cost of these awards is recorded in selling, general and administrative expense in the company’s consolidated statements of income. There were no stock options granted in fiscal 2015 , 2014 or 2013 . In fiscal 2015 and 2014, the company granted performance restricted stock units containing service, performance and market conditions to the Company’s executive and certain other senior officers. These units have requisite service periods of three years and have no dividend rights. The performance condition is compounded annual growth rate for adjusted earnings per share, as defined in the plan agreement, which accounts for 75% of the awards. The grant-date fair value was used to value the awards related to the performance condition. The market condition is a relative total shareholder return (“TSR”) which accounts for 25% of the awards. The following table presents the assumptions used in a Monte Carlo simulation model to value the TSR components of the grants issued in fiscal 2015 and 2014: Fiscal 2015 Fiscal 2014 Dividend yield 0.0 % 0.0 % Expected volatility 34 % 38 % Risk-free interest rate 0.75 % 0.70 % Expected term (years) 2.9 2.6 Income Taxes Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry-forwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. 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. Financial accounting standards prescribe a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. These standards also provide guidance on de-recognition, measurement, and classification of amounts relating to uncertain tax positions, accounting for and disclosure of interest and penalties, accounting in interim periods and disclosures required. Interest and penalties related to unrecognized tax positions are recognized as incurred within “provision for income taxes” in the consolidated statements of income. |
Earnings per Share
Earnings per Share | 12 Months Ended |
May. 31, 2015 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share Basic earnings per share is computed by dividing net income attributable to common shareholders by the weighted average number of shares outstanding during the period. Diluted earnings per share is computed by dividing net income attributable to common shareholders 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) only 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 per share: For the year ended May 31, 2015 2014 2013 Basic earnings per share Numerator: Net income attributable to Mistras Group, Inc. $ 16,081 $ 22,518 $ 11,646 Denominator Weighted average common shares outstanding 28,613 28,365 28,141 Basic earnings per share $ 0.56 $ 0.79 $ 0.41 Diluted earnings per share: Numerator: Net income attributable to Mistras Group, Inc. $ 16,081 $ 22,518 $ 11,646 Denominator Weighted average common shares outstanding 28,613 28,365 28,141 Dilutive effect of stock options outstanding 719 775 804 Dilutive effect of restricted stock units outstanding 258 184 161 29,590 29,324 29,106 Diluted earnings per share $ 0.54 $ 0.77 $ 0.40 The following potential common shares were excluded from the computation of diluted earnings per share, as the effect would have been anti-dilutive: For the year ended May 31, 2015 2014 2013 Potential common stock attributable to stock options outstanding 6 5 5 Potential common stock attributable to performance awards outstanding 1 121 — Total 7 126 5 |
Accounts Receivable, net
Accounts Receivable, net | 12 Months Ended |
May. 31, 2015 | |
Receivables [Abstract] | |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable consist of the following: May 31, 2015 2014 Trade accounts receivable $ 136,208 $ 140,120 Allowance for doubtful accounts (2,980 ) (2,296 ) Accounts receivable, net $ 133,228 $ 137,824 The Company had $15.0 million and $16.9 million of unbilled revenues accrued as of May 31, 2015 and 2014 , respectively. Unbilled revenues as of May 31, 2015 are expected to be billed in the first quarter fiscal 2016 . |
Inventories
Inventories | 12 Months Ended |
May. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of the following: May 31, 2015 2014 Raw materials $ 4,194 $ 3,663 Work in progress 1,604 2,069 Finished goods 3,178 3,462 Services-related consumable supplies 1,865 2,182 Inventory $ 10,841 $ 11,376 |
Property, Plant and Equipment,
Property, Plant and Equipment, net | 12 Months Ended |
May. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, net | Property, Plant and Equipment, net Property, plant and equipment consist of the following: May 31, Useful Life 2015 2014 (Years) Land $ 1,856 $ 1,938 Building and improvements 30-40 17,712 22,983 Office furniture and equipment 5-8 8,084 7,169 Machinery and equipment 5-7 162,612 144,798 190,264 176,888 Accumulated depreciation and amortization (111,008 ) (99,077 ) Property, plant and equipment, net $ 79,256 $ 77,811 Depreciation expense was approximately $22.2 million , $19.2 million and $18.9 million for the years ended May 31, 2015 , 2014 and 2013 , respectively. |
Acquisitions and Dispositions
Acquisitions and Dispositions | 12 Months Ended |
May. 31, 2015 | |
Business Combinations [Abstract] | |
Acquisitions and Dispositions | Acquisitions and Dispositions Acquisitions During fiscal 2015 , the Company completed the acquisition of four companies. One of the acquired companies is located in the U.S. and provides maintenance and inspection services primarily on offshore platforms. This acquisition expanded the service offerings within the Services segment, allowing the Company to provide services to the upstream operations of its customers. The Company also purchased a group of asset protection businesses located in Quebec, Canada and an asset inspection business in Florida to complement service offerings within the Company’s Services segment and continue its market expansion strategy. The Company’s International Segment completed an acquisition of an asset inspection business located in the United Kingdom. In these acquisitions, the Company acquired 100% of the common stock or certain assets of each acquiree in exchange for aggregate consideration of approximately $35.8 million in cash and $20.5 million in notes payable over two years. The Company accounted for such transactions in accordance with the acquisition method of accounting for business combinations. In addition to the cash consideration related to these acquisitions, the Company accrued a liability of approximately $2.3 million , which represents the estimated fair value of contingent consideration expected to be payable in the event that the acquired companies achieve specific performance metrics during various periods over the next three years of operations. The estimated total potential contingent consideration for these acquisitions ranges from zero to $3.2 million as of May 31, 2015 . During fiscal 2014 , the Company completed the acquisition of six companies. Five of these companies complemented the service offerings within the Services segment. The other company, located in Russia, was intended to complement the service offerings within the International segment and to continue its market expansion strategy. This company was subsequent sold (see Dispositions below). In these acquisitions, the Company acquired 100% of the common stock or certain assets of each acquiree in exchange for aggregate consideration of approximately $22.3 million in cash and accounted for such transactions in accordance with the acquisition method of accounting for business combinations. In addition to the cash consideration related to these acquisitions, the Company accrued a liability of approximately $4.0 million , which represented the estimated fair value of contingent consideration expected to be payable in the event that the acquired companies achieve specific performance metrics during various periods over the next three years of operations. Assets and liabilities of the acquired businesses were included in the consolidated balance sheets as of May 31, 2015 based on their estimated fair value on the date of acquisition as determined in a purchase price allocation, using available information and making assumptions management believes are reasonable. The results of operations of each of the acquisitions completed in fiscal 2014 are included in each respective operating segment’s results of operations from the date of acquisition. The Company’s allocation of purchase price for these acquisitions is included in the table below. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed and any subsequent adjustments made during the fiscal year ended May 31, 2015: 2015 2014 Number of entities 4 6 Cash paid $ 35,755 $ 22,272 Subordinated notes issued 20,505 — Contingent consideration 2,255 3,967 Consideration paid $ 58,515 $ 26,239 Current net assets 2,770 3,133 Debt and other long-term liabilities (5,889 ) (2,226 ) Property, plant and equipment 7,395 1,566 Deferred tax liability (2,467 ) (2,248 ) Intangibles 10,394 12,993 Goodwill 46,312 13,021 Net assets acquired $ 58,515 $ 26,239 The amortization period for intangible assets acquired ranges from two to twelve years . The Company recorded $46.3 million and $13.0 million of goodwill in connection with its fiscal 2015 and 2014 acquisitions, respectively, reflecting the strategic fit and revenue and earnings growth potential of these businesses. The goodwill recorded in fiscal 2015 and 2014 relates primarily to the acquisition of the common stock of the acquiree, which is generally not deductible for tax purposes. We are continuing our review of our fair value estimate of assets acquired and liabilities assumed for one entity acquired in fiscal 2015 disclosed above. This process will conclude as soon as we finalize information regarding facts and circumstances that existed as of the acquisition date. Goodwill and intangibles for this one entity totaled $3.1 million and $1.3 million , respectively. This measurement period will not exceed one year from the acquisition date. Revenue included in the consolidated statement of operations for fiscal 2015 from these acquisitions for the period subsequent to the closing of each transaction was approximately $50.6 million . Aggregate income from operations included in the consolidated statement of operations for fiscal 2015 from these acquisitions for the period subsequent to the closing of each transaction was approximately $0.8 million . As these acquisitions are not significant to the Company’s fiscal 2015 results, no unaudited pro forma financial information has been included in this report. Dispositions On May 22, 2015, the Company completed the sale of one of its Russian subsidiaries and recognized a loss of $0.4 million . The Company also recognized impairment charges of $ 2.1 million related to the expected sales of its other subsidiary in Russia, as well as its subsidiary in Japan (which sales were completed after May 31, 2015). Aggregate charges associated with the exit of these three foreign operations was approximately $2.5 million and is included within selling, general and administrative expenses on the consolidated income statement. In the aggregate, the assets and liabilities of these subsidiaries represent 0.6% and 0.3% of consolidated assets and liabilities, respectively, and are included in their natural classifications on the consolidated balance sheets. In aggregate, the operating loss of these subsidiaries for the year ended May 31, 2015 was $0.9 million . Acquisition-Related expense In the course of its acquisition activities, the Company incurs costs in connection with due diligence, professional fees, and other expenses. Additionally, the Company adjusts the fair value of certain acquisition-related contingent consideration liabilities on a quarterly basis. These amounts are recorded as acquisition-related expense, net, on the consolidated statements of income and were as follows for fiscal 2015 , 2014 and 2013 : For the year ended May 31, 2015 2014 2013 Due diligence, professional fees and other transaction costs $ 215 $ 1,280 $ 1,586 Adjustments to fair value of contingent consideration liabilities $ (5,382 ) $ (3,937 ) $ (3,727 ) Acquisition-related expense, net $ (5,167 ) $ (2,657 ) $ (2,141 ) The Company’s contingent consideration liabilities are recorded on the balance sheet in accrued expenses and other liabilities. |
Goodwill
Goodwill | 12 Months Ended |
May. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The changes in the carrying amount of goodwill by segment is shown below: Services International Products Total Balance at May 31, 2013 $ 61,285 $ 40,788 $ 13,197 $ 115,270 Goodwill acquired during the year 15,558 232 — 15,790 Adjustments to preliminary purchase price allocations (2,769 ) 440 — (2,329 ) Foreign currency translation (307 ) 2,092 — 1,785 Balance at May 31, 2014 $ 73,767 $ 43,552 $ 13,197 $ 130,516 Goodwill acquired during the year 41,986 1,480 — 43,466 Adjustments to preliminary purchase price allocations 3,529 (367 ) — 3,162 Foreign currency translation (2,003 ) (8,727 ) — (10,730 ) Balance at May 31, 2015 $ 117,279 $ 35,938 $ 13,197 $ 166,414 In the fourth quarter of fiscal 2013 , as a result of a contraction in the Brazil economy, the Company experienced reduced demand for inspection services and a decline in recent and projected operating results. As a result of the completion of step one of the impairment analysis, the Company concluded that, as of March 1, 2013, the fair value of the Brazil reporting unit was below its respective carrying value and the step two analysis was performed. As a result, the Company recorded a goodwill impairment charge in the amount of $9.9 million in fiscal 2013 , within its International segment, which also represents the Company's cumulative impairment charge as of May 31, 2015. |
Intangible Assets
Intangible Assets | 12 Months Ended |
May. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets The gross carrying amount and accumulated amortization of intangible assets are as follows: May 31, 2015 2014 Useful Life (Years) Gross Amount Accumulated Amortization Net Carrying Amount Gross Amount Accumulated Amortization Net Carrying Amount Customer relationships 5-12 $ 81,101 $ (41,009 ) $ 40,092 $ 82,395 $ (34,636 ) $ 47,759 Software/Technology 3-15 15,738 (10,290 ) 5,448 15,328 (9,172 ) 6,156 Covenants not to compete 2-5 11,678 (8,605 ) 3,073 9,471 (7,882 ) 1,589 Other 2-5 6,910 (4,247 ) 2,663 5,869 (3,498 ) 2,371 Total $ 115,427 $ (64,151 ) $ 51,276 $ 113,063 $ (55,188 ) $ 57,875 Amortization expense for the years ended May 31, 2015 , 2014 and 2013 was approximately $11.1 million , $9.2 million and $7.7 million , respectively, including amortization of software/technology for the years ended May 31, 2015 , 2014 and 2013 of $0.9 million , $0.9 million and $0.6 million , respectively. Amortization expense in each of the five years and thereafter subsequent to May 31, 2015 related to the Company’s intangible assets is expected to be as follows: Expected Amortization Expense 2016 $ 10,137 2017 8,460 2018 6,583 2019 5,519 2020 4,708 Thereafter 15,869 Total $ 51,276 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
May. 31, 2015 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following: May 31, 2015 2014 Accrued salaries, wages and related employee benefits $ 26,053 $ 26,236 Contingent consideration 3,543 4,778 Accrued worker compensation and health benefits 3,630 3,661 Deferred revenues 3,841 2,659 Other accrued expenses 18,847 17,316 Total accrued expenses and other current liabilities $ 55,914 $ 54,650 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
May. 31, 2015 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consists of the following: May 31, 2015 2014 Senior credit facility $ 83,062 $ 61,148 Notes payable 24,933 10,512 Other 5,464 4,988 Total debt 113,459 76,648 Less: Current portion (17,902 ) (8,058 ) Long-term debt, net of current portion $ 95,557 $ 68,590 Senior Credit Facility On October 31, 2014, the Company entered into a Third Amendment and Modification Agreement (the “Amendment”), to its revolving line of credit, the Third Amended and Restated Credit Agreement (“Credit Agreement”), dated December 21, 2011, with Bank of America, N.A., as agent for the lenders and a lender, and JPMorgan Chase Bank, N.A., Keybank, National Association and TD Bank, N.A., as lenders. The Amendment increased the Company’s revolving line of credit from $125.0 million to $175.0 million and provides that under certain circumstances the line of credit can be increased to $225.0 million . The Company may continue to borrow up to $30.0 million in non-U.S. Dollar currencies and use up to $10.0 million of the credit limit for the issuance of letters of credit. The Amendment also extended the original maturity date of the Credit Agreement from December 20, 2016 to October 30, 2019. As of May 31, 2015 , the Company had borrowings of $83.1 million and a total of $4.2 million of letters of credit outstanding under the Credit Agreement. The Company capitalized $0.7 million of costs associated with this debt modification. Loans under the Credit Agreement bear interest at LIBOR plus an applicable LIBOR margin ranging from 1% to 1.75% , or a base rate less a margin of 1.25% to 0.375% , at the option of the Company, based upon the Company’s Funded Debt Leverage Ratio. Funded Debt Leverage Ratio is generally the ratio of (1) all outstanding indebtedness for borrowed money and other interest-bearing indebtedness as of the date of determination to (2) EBITDA (which is (a) net income, less (b) income (or plus loss) from discontinued operations and extraordinary items, plus (c) income tax expenses, plus (d) interest expense, plus (e) depreciation, depletion, and amortization (including non-cash loss on retirement of assets), plus (f) stock compensation expense, less (g) cash expense related to stock compensation, plus or minus certain other adjustments) for the period of four consecutive fiscal quarters immediately preceding the date of determination. The Company has the benefit of the lowest margin if its Funded Debt Leverage Ratio is equal to or less than 0.5 to 1, and the margin increases as the ratio increases, to the maximum margin if the ratio is greater than 2.0 to 1. The Company will also bear additional costs for market disruption, regulatory changes effecting the lenders’ funding costs, and default pricing of an additional 2% interest rate margin on any amounts not paid when due. Amounts borrowed under the Credit Agreement are secured by liens on substantially all of the assets of the Company. The Credit Agreement contains financial covenants requiring that the Company maintain a Funded Debt Leverage Ratio of no greater than 3.25 to 1 and an Interest Coverage Ratio of at least 3.0 to 1. Interest Coverage Ratio means the ratio, as of any date of determination, of (a) EBITDA for the 12 month period immediately preceding the date of determination, to (b) all interest, premium payments, debt discount, fees, charges and related expenses of the Company and its subsidiaries in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, paid during the 12 month period immediately preceding the date of determination. The Credit Agreement also 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 and make distributions to stockholders, 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, if the acquired business is a separate subsidiary, in certain circumstances the lenders will receive the benefit of a guaranty of the subsidiary and liens on its assets and a pledge of its stock. As of May 31, 2015 , the Company was in compliance with the terms of the Credit Agreement, and will continuously monitor its compliance with the covenants contained in its credit agreement. Notes Payable and Other Debt In connection with certain of its acquisitions through fiscal 2015 , the Company issued subordinated notes payable to the sellers. The maturity of the notes that remain outstanding range from two to five years from the date of acquisition with stated interest rates ranging from 0% to 4% . The Company has discounted these obligations to reflect a 2% to 4% market interest. Unamortized discount on the notes was de minimis as of May 31, 2015 and 2014 . Amortization is recorded as interest expense in the consolidated statements of income. 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 capital lease obligations approximates their carrying amounts based on anticipated interest rates which management believes would currently be available to the Company for similar issues of debt. Scheduled principal payments due under all borrowing agreements in each of the five years and thereafter subsequent to May 31, 2015 are as follows: 2016 $ 17,902 2017 11,251 2018 722 2019 83,335 2020 249 Thereafter — Total $ 113,459 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
May. 31, 2015 | |
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. The three levels of the hierarchy are defined as follows: Level 1 — Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 — Observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability and inputs derived principally from or corroborated by observable market data. Level 3 — Unobservable inputs reflecting the Company’s own assumptions about inputs that market participants would use in pricing the asset or liability based on the best information available. In accordance with the fair value hierarchy described above, the following table shows the fair value of the Company’s financial liabilities that are required to be remeasured at fair value on a recurring basis: May 31, 2015 Level 1 Level 2 Level 3 Total Liabilities: Contingent consideration $ — $ — $ 6,411 $ 6,411 Total Liabilities $ — $ — $ 6,411 $ 6,411 May 31, 2014 Level 1 Level 2 Level 3 Total Liabilities: Contingent consideration $ — $ — $ 14,145 $ 14,145 Total Liabilities $ — $ — $ 14,145 $ 14,145 The fair value of contingent consideration liabilities that was classified as Level 3 in the table above 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 acquisition agreements. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
May. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation The Company has share-based incentive awards outstanding to our eligible employees and Directors under two employee stock ownership plans: (i) the 2007 Stock Option Plan (the 2007 Plan), and (ii) the 2009 Long-Term Incentive Plan (the 2009 Plan). No further awards may be granted under the 2007 Plan, although awards granted under the 2007 Plan remain outstanding in accordance with their terms. Awards granted under the 2009 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. The 2009 Plan allows for the grant of awards of up to approximately 2,286,000 shares of common stock, of which approximately 640,000 shares were available for future grants as of May 31, 2015 . As of May 31, 2015 , there was an aggregate of approximately 2,287,000 stock options outstanding and approximately 1,101,000 unvested restricted stock units outstanding under the 2009 Plan and the 2007 Plan. Stock Options For the fiscal years ended May 31, 2015 , 2014 and 2013 , the Company recognized share-based compensation expense related to stock option awards of less than $0.1 million , $0.7 million and $3.1 million , respectively. As of May 31, 2015 , there was less than $0.1 million of unrecognized compensation costs, net of estimated forfeitures, related to stock option awards, which are expected to be recognized over a remaining weighted average period of 0.8 years . Cash proceeds from, and the intrinsic value of stock options exercised during the years ended May 31, 2015 , 2014 and 2013 were as follows: For the year ended May 31, 2015 2014 2013 Cash proceeds from options exercised $ 750 $ 996 $ 829 Aggregate intrinsic value of options exercised 563 1,247 1,012 A summary of the stock option activity, weighted average exercise prices, options outstanding and exercisable as of May 31, 2015 is as follows (in thousands, except per share amounts): For the year ended May 31, 2015 2014 2013 Common Stock Options Weighted Average Exercise Price Common Stock Options Weighted Average Exercise Price Common Stock Options Weighted Average Exercise Price Outstanding at beginning of year: 2,352 $ 13.09 2,464 $ 12.93 2,549 $ 12.82 Granted — $ — — $ — — $ — Exercised (65 ) $ 11.54 (103 ) $ 9.67 (85 ) $ 9.66 Expired or forfeited — $ — (9 ) $ 10.03 — $ — Outstanding at end of year: 2,287 $ 13.13 2,352 $ 13.09 2,464 $ 12.93 For the year ended May 31, 2015 Options Outstanding Options Exercisable Range of Exercise Prices Total Options Outstanding Weighted Average Remaining Life (Years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $6.15-$11.54 192 3.4 $ 9.31 192 $ 9.31 $13.46-$22.35 2,095 4.2 $ 13.48 2,093 $ 13.48 2,287 2,285 Aggregate Intrinsic Value $ 12,321 $ 12,321 Restricted Stock Unit Awards The Company recognized approximately $4.7 million , $4.0 million and $2.9 million in share-based compensation expense related to restricted stock unit awards during the fiscal years ended May 31, 2015 , 2014 and 2013 , respectively. As of May 31, 2015 , there were approximately $7.6 million of unrecognized compensation costs, net of estimated forfeitures, related to restricted stock unit awards, which are expected to be recognized over a remaining weighted average period of 2.1 years . During the years ended May 31, 2015 , 2014 and 2013 , the Company granted approximately 21,000 , 19,000 and 13,000 shares, respectively, of fully-vested common stock to its five non-employee directors, in connection with its non-employee director compensation plan. These shares had a grant date fair value of approximately $0.4 million , $0.4 million and $0.3 million , respectively, which is included in the share-based compensation expense recorded during the years ended May 31, 2015 and 2014 . During the years ended May 31, 2015 , 2014 and 2013 , approximately 232,000 , 178,000 and 123,000 restricted stock units vested. The fair value of these units was $5.2 million , $3.3 million and $1.9 million , respectively. Upon vesting, restricted stock units are generally net share-settled to cover the required minimum withholding tax and the remaining amount is converted into an equivalent number of shares of common stock. Performance Restricted Stock Units In fiscal 2015 , the company granted performance restricted stock units to its executive and certain other senior officers. These units have requisite service periods of three years and have no dividend rights. Compensation expense related to performance restricted stock units was $0.4 million for the year ended May 31, 2015 . At May 31, 2015 , there was $1.4 million of total unrecognized compensation costs related to approximately 115,000 nonvested performance restricted stock units. These costs are expected to be recognized over a weighted-average period of approximately 2.3 years . The actual payout of these units will vary based on the Company’s performance over the three -year period (based on pre-established targets) and a market condition modifier based on total shareholder return (TSR) compared to an industry peer group. Compensation cost is initially measured assuming that the target performance condition will be achieved. However, compensation cost related to the performance condition is adjusted for subsequent changes in the expected outcome of the performance condition. Compensation cost related to the TSR condition is fixed at the measurement date, and not subsequently adjusted. In fiscal 2014 , the company granted performance restricted stock units to its executive and certain other senior officers. These units have requisite service periods of three years and have no dividend rights. Compensation expense related to performance restricted stock units was $1.1 million and $1.2 million for the years ended May 31, 2015 and 2014 . At May 31, 2015 , there was $2.1 million of total unrecognized compensation costs related to approximately 423,000 nonvested performance restricted stock units. These costs are expected to be recognized over a weighted-average period of approximately 1.3 years . The actual payout of these units will vary based on the Company’s performance over one , two and three -year periods (based on pre-established targets) and a market condition modifier based on TSR compared to an industry peer group. Compensation cost is initially measured assuming that the target performance condition will be achieved. However, compensation cost related to the performance condition is adjusted for subsequent changes in the expected outcome of the performance condition. Compensation cost related to the TSR condition is fixed at the measurement date, and not subsequently adjusted. The one -year performance condition of the fiscal 2014 awards was not achieved. The one -year market condition of the fiscal 2014 awards was achieved and will payout at 170% of target once the requisite service period is complete. |
Income Taxes
Income Taxes | 12 Months Ended |
May. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income before provision for income taxes is as follows: For the year ended May 31, 2015 2014 2013 Income before provision for income taxes from: U.S. operations $ 26,893 $ 25,433 $ 29,573 Foreign operations (1,162 ) 9,670 (5,307 ) Earnings before income taxes $ 25,731 $ 35,103 $ 24,266 The provision for income taxes consists of the following: For the year ended May 31, 2015 2014 2013 Current Federal $ 8,489 $ 8,836 $ 9,035 States and local 1,177 1,689 1,673 Foreign 1,493 2,484 3,118 Reserve for uncertain tax positions (48 ) 59 206 Total current 11,111 13,068 14,032 Deferred Federal (145 ) (53 ) 5 States and local (126 ) 395 134 Foreign (2,416 ) (967 ) 246 Total deferred (2,687 ) (625 ) 385 Net change in valuation allowance 1,316 85 (1,790 ) Net deferred (1,371 ) (540 ) (1,405 ) Provision for income taxes $ 9,740 $ 12,528 $ 12,627 The provision for income taxes differs from the amount computed by applying the statutory federal tax rate to income tax as follows: For the year ended May 31, 2015 2014 2013 Federal tax at statutory rate $ 9,006 35.0 % $ 12,286 35.0 % $ 8,493 35.0 % State taxes, net of federal benefit 683 2.7 % 1,355 3.9 % 1,174 4.8 % Foreign tax (517 ) (2.0 )% (1,868 ) (5.3 )% 1,744 7.2 % Contingent consideration (914 ) (3.6 )% 24 0.1 % (1,156 ) (4.8 )% Permanent differences 196 0.8 % 531 1.5 % 498 2.1 % Goodwill impairment — — % — — % 3,478 14.3 % Other (30 ) (0.1 )% 115 0.3 % 186 0.8 % Change in valuation allowance 1,316 5.1 % 85 0.2 % (1,790 ) (7.4 )% Total provision for income taxes $ 9,740 37.9 % $ 12,528 35.7 % $ 12,627 52.0 % Deferred income tax attributes resulting from differences between financial accounting amounts and income tax basis of assets and liabilities are as follows: May 31, 2015 2014 Deferred income tax assets Allowance for doubtful accounts $ 1,036 $ 777 Inventory 796 726 Intangible assets 1,254 3,316 Accrued expenses 3,455 2,580 Net operating loss carryforward 4,738 3,745 Capital lease obligation 379 44 Deferred stock based compensation 6,241 5,739 Other 370 108 Deferred income tax assets 18,269 17,035 Valuation allowance (3,238 ) (2,553 ) Net deferred income tax assets 15,031 14,482 Deferred income tax liabilities Property and equipment (8,214 ) (6,821 ) Goodwill (10,728 ) (9,423 ) Intangible assets (6,677 ) (9,057 ) Other (44 ) (80 ) Deferred income tax liabilities (25,663 ) (25,381 ) Net deferred income taxes $ (10,632 ) $ (10,899 ) Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. Evidence used includes information about the Company’s current financial position and results of operations for the current and preceding years, as well as available information about future years, the reversal of deferred tax liabilities and tax planning strategies. On the basis of this evaluation, as of May 31, 2015 , a valuation allowance of $3.2 million has been recorded to reduce the deferred tax assets to an amount that will more likely than not be realized. As of May 31, 2015 , the Company has available Federal net operating losses of approximately $0.3 million with expiration dates starting in fiscal 2028, and state net operating losses of $3.2 million with expiration dates starting in fiscal 2016. In addition, the company has net operating losses in certain foreign jurisdictions of approximately $14.3 million some of which have unlimited life and others expire beginning in fiscal 2019. The following table summarizes the changes in the Company’s gross unrecognized tax benefits, excluding interest and penalties: For the year ended May 31, 2015 2014 Balance at June 1 $ 1,016 $ 1,061 Additions for tax positions related to the current fiscal year 30 36 Additions for tax positions related to prior years — — Decreases for tax positions related to prior years (1 ) (10 ) Current year acquisitions — 63 Impact of foreign exchange fluctuation (112 ) (52 ) Settlements (50 ) (48 ) Reductions related to the expiration of statutes of limitations (120 ) (34 ) Balance at May 31 $ 763 $ 1,016 The Company has recorded the unrecognized tax benefits in other long-term liabilities in the consolidated balance sheets. As of May 31, 2015 and 2014 , there were approximately $1.1 million and $1.4 million of unrecognized tax benefits, respectively, including penalties and interest that if recognized would favorably affect the effective tax rate. Interest and penalties related to unrecognized tax benefits are recorded in income tax expense and are not significant for the years ending May 31, 2015 and 2014 . The Company anticipates a decrease to its unrecognized tax benefits of approximately $0.1 million excluding interest and penalties within the next 12 months. The Company is subject to taxation in the United States and various states and foreign jurisdictions. The Company is no longer subject to U.S. federal income tax examinations for years ending before May 31, 2012 and generally is no longer subject to state, local or foreign income tax examinations by tax authorities for years ending before May 31, 2011. The Company has not recognized U.S. taxes on the earnings of its undistributed international subsidiaries since it intends to indefinitely reinvest the earnings outside the United States. Net (loss) income of foreign subsidiaries was $(0.8) million and $8.0 million for fiscal 2015 and 2014 , respectively. We have recognized no deferred tax liability for the remittance of such earnings to the U.S. since it is our intention to utilize those earnings in the foreign operations. Determination of the amount of any unrecognized deferred income tax liability on this temporary difference is not practicable because of the complexities of the hypothetical calculation. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
May. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans The Company provides a 401(k) savings plan for eligible U.S. based employees. Employee contributions are discretionary up to the IRS limits each year and catch up contributions are allowed for employees 50 years of age or older. Under the 401(k) plan, employees become eligible to participate on the first day of the month after six months of continuous service. Under this plan, the Company matches 50% of the employee’s contributions up to 6% of the employee’s annual compensation, as defined by the plan. There is a five -year vesting schedule for the Company match. The Company’s contribution to the plan was $2.8 million , $2.5 million and $2.3 million for the years ended May 31, 2015 , 2014 and 2013 , respectively. The Company participates with other employers in contributing to a union plan, which covers certain U.S. based union employees. The plan is not administered by the Company and contributions are determined in accordance with provisions of a collective bargaining agreement. The Company’s contributions to the plan were $0.2 million , $0.1 million and $0.1 million for the years ended May 31, 2015 , 2014 and 2013 . The Company has benefit plans covering certain employees in selected foreign countries. Amounts charged to expense under these plans were not significant in any year. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
May. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company leases its headquarters under a operating lease from a shareholder and officer of the Company. On August 1, 2014 the Company extended its lease at its headquarters requiring monthly payments through October 2024. Total rent payments made during fiscal 2015 were approximately $0.9 million . See Note 18 — Commitments and Contingencies for further detail related to operating leases. The Company has a lease for office space located in France, which is partly owned by a shareholder and officer, requiring monthly payments through January 2016. Total rent payments made during fiscal 2015 were approximately $0.3 million . The Company has a lease for office space located in Brazil, which is partly owned by a shareholder and officer, requiring monthly payments through fiscal 2024. Total rent payments made during fiscal 2015 were approximately $0.1 million . |
Obligations under Capital Lease
Obligations under Capital Leases | 12 Months Ended |
May. 31, 2015 | |
Leases [Abstract] | |
Obligations under Capital Leases | Obligations under Capital Leases The Company leases certain office space, and service equipment under capital leases, requiring monthly payments ranging from less than $1 thousand to $69 thousand , including effective interest rates that range from approximately 1% to 7% expiring through May 2022. The net book value of assets under capital lease obligations was $19.9 million and $18.1 million at May 31, 2015 and 2014 , respectively. Scheduled future minimum lease payments subsequent to May 31, 2015 are as follows: 2016 $ 8,216 2017 6,076 2018 4,094 2019 1,807 2020 285 Thereafter 114 Total minimum lease payments 20,592 Less: amount representing interest (1,229 ) Present value of minimum lease payments 19,363 Less: current portion of obligations under capital leases (8,646 ) Obligations under capital leases, net of current portion $ 10,717 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
May. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Leases The Company is party to various noncancelable lease agreements, primarily for its international and domestic office and lab space. Future minimum lease payments under noncancelable operating leases in each of the five years and thereafter subsequent to May 31, 2015 are as follows: 2016 $ 8,766 2017 6,291 2018 5,527 2019 4,916 2020 3,639 Thereafter 9,544 Total $ 38,683 Total rent expense was $10.6 million , $9.5 million and $7.2 million for the years ended May 31, 2015 , 2014 and 2013 , respectively. Litigation and Government Investigations The Company is subject to periodic lawsuits, investigations and claims that arise in the ordinary course of business. Although the Company cannot predict with certainty the ultimate resolution of lawsuits, investigations and claims asserted against it, the Company does not believe that any currently pending legal proceeding to which the Company is a party will have a material adverse effect on its business, results of operations, cash flows or financial condition, except for the proceedings described below for which the Company is currently unable to determine the likely outcome or reasonably estimate the amount or range of potential liability estimate. The costs of defense and amounts that may be recovered against the Company in such matters may be covered by insurance, except that the primary claims set forth in the two purported class action cases in California are excluded from insurance coverage. Litigation and Commercial Claims In April 2015, two separate lawsuits were filed in California as purported class action lawsuits on behalf of current and former Mistras employees. The cases are David Kruger v Mistras Group, Inc. , pending in the U.S. District Court for the Eastern District of California and Edgar Viceral v Mistras Group, et al , pending in the U.S. District Court for the Northern District of California. Both cases were originally filed in California state court and were removed to the respective U.S. District Courts for the districts in which the state court cases were filed. Both cases allege violations of California statutes primarily from the California Labor Code; the Viceral case also seeks to proceed as a collective action under the U.S. Fair Labor Standards Act. Both cases are predicated on claims for allegedly missed rest and meal periods, inaccurate wage statements, and failure to pay all wages due, as well as related unfair business practices. Both cases are requesting payment of all damages, including unpaid wages, and various fines and penalties available under California law. Both matters are in the preliminary stages. Counsel for the plaintiffs in these cases have notified the Company that they intend to dismiss the Kruger case without prejudice and amend the complaint in the Viceral case to include the plaintiffs in the Kruger case and add any claims in the Kruger complaint that are not included in the Viceral complaint. The Company is currently unable to determine the likely outcome or reasonably estimate the amount or range of potential liability, if any, related to these matters, and accordingly, has not established any reserves for these matters. During fiscal 2012 and 2013, the Company performed radiography work on the construction of pipeline projects in the U.S. The Company has received notice that the owner of the pipeline projects contends that certain of the x-ray images the Company’s technicians prepared regarding the project did not meet the code quality interpretation standards required by API (American Petroleum Institute) 1103. The projects owner is claiming damages as a result of the alleged quality defects of the Company’s x-ray images. No lawsuit has been filed at this time. The Company is currently unable to determine the likely outcome or reasonably estimate the amount or range of potential liability related to this matter, and accordingly, has not established any reserves for this matter. Government Investigations In May 2015, the Company received a notice from the U.S. Environmental Protection Agency (“EPA”) that it had a preliminary assessment performed at a leased facility the Company operates in Cudahy, California. Based upon the preliminary assessment, the EPA would like to conduct an investigation of the site, which would include taking groundwater and soil samples. The purpose of the investigation is to determine whether any hazardous materials were released from the facility. The Company has been informed that certain hazardous materials and pollutants have been found in the ground water in the general vicinity of the site and the EPA is attempting to ascertain the origination or source of these materials and pollutants. Given the historic industrial use of the site, the EPA determined that the site of the Cudahy facility should be examined, along with numerous other sites in the vicinity. At this time, the Company is unable to determine whether it has any liability in connection with this matter and if so, the amount or range of any such liability, and accordingly, has not established any reserves for this matter. In January 2012, the Company received notice of a governmental investigation concerning an environmental incident which occurred in February 2011 outside on the premises of the Cudahy facility. No human injury or property damage was reported or appears to have been caused as a result of this incident. While management cannot predict the ultimate outcome of this matter, based on its internal investigation to date, the Company does not believe the outcome will have a material effect on its financial condition or results of operations. To the Company’s knowledge, this matter has been dormant since fiscal 2012. Acquisition-related contingencies The Company is liable for contingent consideration in connection with certain of its acquisitions. As of May 31, 2015 , total potential acquisition-related contingent consideration ranged from zero to $19.4 million and would be payable upon the achievement of specific performance metrics by certain of the acquired companies over the next three years of operations. See Note 7 - Acquisitions for further discussion of the Company’s acquisitions. |
Segment Disclosure
Segment Disclosure | 12 Months Ended |
May. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment Disclosure | Segment Disclosure The Company’s three operating segments are: • Services. This segment provides asset protection solutions predominantly in North America with the largest concentration in the United States along with a growing Canadian services business, consisting primarily of non-destructive testing, and inspection and engineering services that are used to evaluate the structural integrity and reliability of critical energy, industrial and public infrastructure. • 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. • International. This segment offers services, products and systems similar to those of the Company’s other segments to global markets, in 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. Costs incurred for general corporate services, including accounting, audit, 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 Services and International segments by the Products and Systems segment are reflected in the operating performance of each segment. All such intersegment transactions are eliminated in the Company’s consolidated financial reporting. The accounting policies of the reportable segments are the same as those described in Note 2 — Summary of Significant Accounting Policies . Segment income from operations is determined based on internal performance measures used by the Chief Executive Officer, who is the chief operating decision maker, to assess the performance of each business in a given period and to make decisions as to resource allocations. In connection with that assessment, the Chief Executive Officer may exclude matters such as charges for share-based compensation and certain other acquisition-related charges and balances, technology and product development costs, certain gains and losses from dispositions, and litigation settlements or other charges. Certain general and administrative costs such as human resources, information technology and training are allocated to the segments. Segment income from operations also 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 financial information by segment for the periods shown was as follows (intercompany transactions are eliminated in Corporate and eliminations): For the year ended May 31, 2015 2014 2013 Revenues Services $ 540,224 $ 443,229 $ 380,851 International 146,953 161,395 126,840 Products and Systems 31,255 33,544 33,301 Corporate and eliminations (7,180 ) (14,721 ) (11,710 ) $ 711,252 $ 623,447 $ 529,282 For the year ended May 31, 2015 2014 2013 Gross profit Services $ 135,201 $ 114,182 $ 98,907 International 34,572 44,893 32,319 Products and Systems 14,314 14,495 16,947 Corporate and eliminations 646 (627 ) 198 $ 184,733 $ 172,943 $ 148,371 For the year ended May 31, 2015 2014 2013 Income from operations Services $ 49,142 $ 43,221 $ 40,325 International (575 ) 10,238 (8,246 ) Products and Systems 2,461 2,552 7,286 Corporate and eliminations (20,675 ) (17,716 ) (11,811 ) $ 30,353 $ 38,295 $ 27,554 For the year ended May 31, 2015 2014 2013 Depreciation and amortization Services $ 22,268 $ 17,794 $ 18,296 International 8,451 8,065 6,200 Products and Systems 2,426 2,373 2,229 Corporate and eliminations 141 197 (78 ) $ 33,286 $ 28,429 $ 26,647 May 31, 2015 2014 Intangible assets, net Services $ 24,598 $ 22,440 International 19,482 26,898 Products and Systems 7,004 8,310 Corporate and eliminations 192 227 $ 51,276 $ 57,875 May 31, 2015 2014 Total assets Services $ 307,328 $ 249,378 International 126,643 155,571 Products and Systems 37,999 38,041 Corporate and eliminations (243 ) 982 $ 471,727 $ 443,972 Revenue and long-lived assets by geographic area was as follows: For the year ended May 31, 2015 2014 2013 Revenue United States $ 491,818 $ 403,001 $ 347,423 Other Americas 68,628 55,120 55,379 Europe 137,071 143,931 106,416 Asia-Pacific 13,735 21,395 20,064 $ 711,252 $ 623,447 $ 529,282 May 31, 2015 2014 Long-lived assets United States $ 190,997 $ 141,447 Other Americas 31,558 33,515 Europe 73,744 90,194 Asia-Pacific 647 1,046 $ 296,946 $ 266,202 |
Selected Quarterly Financial In
Selected Quarterly Financial Information (unaudited) | 12 Months Ended |
May. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Information (unaudited) | Selected Quarterly Financial Information (unaudited) The following is a summary of the quarterly results of operations for the years ended May 31, 2015 and 2014 : Fiscal quarter ended May 31, February 28, November 30, 2014 August 31, 2014 May 31, February 28, November 30, 2013 August 31, 2014 Revenues $ 174,686 $ 163,100 $ 206,893 $ 166,573 $ 179,127 $ 151,727 $ 156,755 $ 135,838 Gross Profit 44,966 38,734 59,039 41,994 46,389 39,300 47,977 39,277 Income from operations 4,627 3,870 18,192 3,664 10,468 3,000 15,252 9,575 Net income attributable to Mistras Group, Inc. $ 2,171 $ 1,817 $ 10,427 $ 1,666 $ 6,419 $ 1,201 $ 9,257 $ 5,641 Earnings per common share: Basic 0.08 0.06 0.36 0.06 0.23 0.04 0.33 0.20 Diluted 0.07 0.06 0.35 0.06 0.22 0.04 0.32 0.19 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
May. 31, 2015 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of Mistras Group, Inc. and its wholly and majority-owned subsidiaries. For subsidiaries in which the Company’s ownership interest is less than 100%, the noncontrolling interests are reported in stockholders’ equity in the accompanying consolidated balance sheets. The noncontrolling interests in net income, net of tax, is classified separately in the accompanying consolidated statements of income. All significant intercompany accounts and transactions have been eliminated in consolidation. Mistras Group, Inc.’s and its subsidiaries’ fiscal years end on May 31 except for the subsidiaries in the International segment, which end on April 30. Accordingly, the Company’s International segment subsidiaries are consolidated on a one -month lag. Therefore, in the quarter and year of acquisition, results of acquired subsidiaries in the International segment are generally included in consolidated results for one less month than the actual number of months from the acquisition date to the end of the reporting period. As discussed in Note 7 - Acquisitions and Dispositions , during the lag period in fiscal 2015, the Company sold an international subsidiary, and decided to sell two additional international subsidiaries. Management does not believe that any additional events occurred during the one-month lag period that would have a material effect on the Company’s consolidated financial statements. Reference to a fiscal year means the fiscal year ended May 31. |
Reclassifications | Reclassifications 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. |
Revenue Recognition | Revenue Recognition Revenue is generally recognized when persuasive evidence of an arrangement exists, services have been rendered or products have been delivered, the fee is fixed or determinable, and collectability is reasonably assured. The following revenue recognition policies define the manner in which we account for specific transaction types: Services Revenue is primarily derived from providing services on a time and material basis. Service arrangements generally consist of inspection professionals working under contract for a fixed period of time or on a specific customer project. Revenue is generally recognized when the service is performed in accordance with terms of each customer arrangement, upon completion of the earnings process and when collection is reasonably assured. At the end of any reporting period, revenue is accrued for services that have been earned which have not yet been billed. Reimbursable costs, including those related to travel and out-of-pocket expenses, are included in revenue, and equivalent amounts of reimbursable costs are included in cost of services. Products and Systems Sales of products and systems are recorded when the sales price is fixed and determinable and the risks and rewards of ownership are transferred (generally upon shipment) and when collectability is reasonably assured. These arrangements occasionally contain multiple elements or deliverables, such as hardware software (that is essential to the functionality of the hardware) and related services. The Company recognizes revenue for delivered elements as separate units of accounting, when the delivered elements have standalone value, uncertainties regarding customer acceptance are resolved and there are no refund or return rights for the delivered elements. The Company establishes the selling prices for each deliverable based on its, vendor-specific objective evidence (“VSOE”), if available, third-party evidence, if VSOE is not available, or estimated selling price (“ESP”) if neither VSOE nor third-party evidence is available. The Company establishes VSOE of selling price using the price charged for a deliverable when sold separately and, in rare instances, using the price established by management having the relevant authority. Third-party evidence of selling price is established by evaluating largely similar and interchangeable competitor products or services in standalone sales to similarly situated customers. The Company determines ESP, by considering Internal factors such as margin objectives, pricing practices and controls, customer segment pricing strategies and the product life cycle. Consideration is also given to market conditions such as competitor pricing strategies and Industry technology life cycles. When determining ESP, the Company applies management judgment to establish margin objectives and pricing strategies and to evaluate market conditions and product life cycles. Changes in the aforementioned factors may result in a different allocation of revenue to the deliverables in multiple element arrangements and therefore may change the pattern and timing of revenue recognition for these elements, but will not change the total revenue recognized for the arrangement. A portion of the Company’s revenue is generated from engineering and manufacturing of custom products under long-term contracts that may last from several months to several years, depending on the contract. Revenues from long-term contracts are recognized on the percentage-of-completion method of accounting. Under the percentage-of-completion method of accounting revenues are recognized as work is performed. The percentage of completion at any point in time is generally based on total costs or total labor dollars incurred to date in relation to the total estimated costs or total labor dollars estimated at completion. The percentage of completion is then applied to the total contract revenue to determine the amount of revenue to be recognized in the period. Application of the percentage-of-completion method of accounting requires the use of estimates of costs to be incurred for the performance of the contract. Contract costs include all direct materials, direct labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs, and all costs associated with operation of equipment. The cost estimation process is based upon the professional knowledge and experience of our engineers, project managers and financial professionals. Factors that are considered in estimating the work to be completed include the availability and productivity of labor, the nature and complexity of the work to be performed, the effect of change orders, the availability of materials, the effect of any delays in our project performance and the recoverability of any claims. Whenever revisions of estimated contract costs and 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. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles requires that the Company make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and liabilities at the date of financial statements. The accounting policies that the Company believes require more significant estimates and assumptions include: revenue recognition, valuations of accounts receivable, long lived assets, goodwill, and deferred tax assets and uncertain tax positions. The Company bases its estimates and assumptions on historical experience, known or expected trends and various other assumptions that it believes to be reasonable. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates, which may cause the Company’s future results to be significantly affected. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. |
Accounts Receivable | Accounts Receivable Accounts receivable are stated net of an allowance for doubtful accounts and sales allowances. Outstanding accounts receivable balances are reviewed periodically, and allowances are provided at such time that management believes it is probable that such balances will not be collected within a reasonable period of time. The Company extends credit to its customers based upon credit evaluations in the normal course of business, primarily with 30-day terms. Bad debts are provided for based on historical experience and management’s evaluation of outstanding accounts receivable. Accounts are generally written off when they are deemed uncollectible. |
Inventories | Inventories Inventories are stated at the lower of cost, as determined by using the first-in, first-out method, or market. Work in process and finished goods inventory include material, direct labor, variable costs and overhead. |
Software Costs | Software Costs Costs that are related to the conceptual formulation and design of licensed software are expensed as research and engineering. For software the Company licenses to customers, the Company capitalizes costs that are incurred between the date technological feasibility has been established and the date that the product becomes available for sale. Capitalized amounts are amortized over three years , which is the estimated life of the related software. The Company performs periodic reviews to ensure that unamortized program costs remain recoverable from future revenues. Costs to support or service these licensed programs are expensed as the costs are incurred. The Company capitalizes certain costs that are incurred to purchase or to create and implement internal-use software, which includes software coding, installation and testing. Capitalized costs are amortized on a straight-line basis over three years, the estimated useful life of the software. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are recorded at cost. Depreciation of property, plant and equipment is computed utilizing the straight-line method over the estimated useful lives of the assets. Amortization of leasehold improvements is computed utilizing the straight-line method over the shorter of the remaining lease term or estimated useful life. Repairs and maintenance costs are expensed as incurred. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price of acquired businesses over the fair values attributed to underlying net tangible assets and identifiable intangible assets. We test the carrying value of goodwill for impairment at a “reporting unit” level (which for the Company in fiscal 2015 is represented by (i) our Services segment, (ii) our Products and Systems segment, and (iii) the European component, (iv) Brazilian component and (v) the Russian component of our International segment), using a two-step approach, annually as of March 1, or whenever an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. If the fair value of a reporting unit is less than its carrying value, this is an indicator that the goodwill assigned to that reporting unit may be impaired. In this case, a second step is performed to allocate the fair value of the reporting unit to the assets and liabilities of the reporting unit as if it had just been acquired in a business combination, and as if the purchase price was equivalent to the fair value of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to its assets and liabilities is referred to as the implied fair value of goodwill. The implied fair value of the reporting unit’s goodwill is then compared to the actual carrying value of goodwill. If the implied fair value is less than the carrying value, we would be required to recognize an impairment loss for that excess. We consider the income and market approaches to estimating the fair value of our reporting units, which requires significant judgment in evaluation of, among other things, economic and industry trends, estimated future cash flows, discount rates and other factors. For the 2015 evaluation of goodwill for the Services reporting unit, the Company performed a qualitative assessment based upon macro-economic conditions, industry and market conditions and overall financial performance, and concluded that the fair value of the Services reporting unit was substantially in excess of its carrying value. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets The Company reviews the recoverability of its long-lived assets on a periodic basis in order to identify indicators of a possible impairment. The assessment for potential impairment is based primarily on the Company’s ability to recover the carrying value of its long-lived assets from expected future undiscounted cash flows. If the total expected future undiscounted cash flows are less than the carrying amount of the assets, a loss is recognized for the difference between fair value (computed based upon the expected future discounted cash flows) and the carrying value of the assets. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs are included in cost of revenues. |
Taxes Collected from Customers | Taxes Collected from Customers Taxes collected from customers and remitted to governmental authorities are presented in the consolidated statements of income on a net basis. |
Research and Engineering | Research and Engineering Research and product development costs are expensed as incurred. |
Advertising, Promotions and Marketing | Advertising, Promotions and Marketing The costs for advertising, promotion and marketing programs are expensed as incurred and are included in selling, general and administrative expenses. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and other financial current assets and liabilities approximate fair value based on the short-term nature of the items. The carrying value of long-term debt approximates fair value due to the variable-rate structure of the debt. The fair value of the Company’s notes payable and capital lease obligations approximate their carrying amounts as those obligations bear interest at rates which management believes would currently be available to the Company for similar obligations. |
Foreign Currency Translation | Foreign Currency Translation The financial position and results of operations of the Company’s foreign subsidiaries are measured using their functional currencies, which, is their local currency. Assets and liabilities of foreign subsidiaries are translated into the U.S. Dollar at the exchange rates in effect at the balance sheet date. Income and expenses are translated at the average exchange rate during the period. Translation gains and losses are reported as a component of other comprehensive income for the period and included in accumulated other comprehensive income within stockholders’ equity. |
Derivative Financial Instruments | Derivative Financial Instruments The Company recognizes its derivatives as either assets or liabilities, measures those instruments at fair value and recognizes the changes in fair value of the derivative in net income or other comprehensive income, as appropriate. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. At times, cash deposits may exceed the limits insured by the Federal Deposit Insurance Corporation. The Company believes it is not exposed to any significant credit risk or risk of nonperformance of financial institutions. No customer accounted for 10% or more of our accounts receivable in fiscal 2015 or 2014. The Company had one customer which accounted for 11% of revenues for fiscal 2013 . Accounts receivable from this customer was approximately 9% of total accounts receivable, net, at May 31, 2013. Our relationship with this customer comprised of separate contracts for non-destructive testing and inspection services with multiple affiliated entities within their broad organization. These contracts are typically negotiated locally with the specific location, are of varying lengths, have different start and end dates and differ in terms of the scope of work and nature of services provided. Most contracts are based on time and materials. |
Self-Insurance | Self-Insurance The Company is self-insured for certain losses relating to workers’ compensation and health benefits claims. The Company maintains third-party excess insurance coverage for all workers compensation and health benefit claims in excess of approximately $0.3 million to reduce its exposure from such claims. Self-insured losses are accrued when it is probable that an uninsured claim has been incurred but not reported and the amount of the loss can be reasonably estimated at the balance sheet date. |
Share-based Compensation | Share-based Compensation We measure the value of services received from employees and directors in exchange for an award of an equity instrument based on the grant-date fair value of the award. The computed value is recognized as a non-cash cost on a straight-line basis over the period the individual provides services, which is typically the vesting period of the award with the exception of awards containing an internal performance measure which is recognized on a straight-line basis over the vesting period subject to the probability of meeting the performance requirements and adjusted for the number of shares expected to be earned. As share-based compensation expense is based on awards ultimately expected to vest, the amount of expense has been reduced for estimated forfeitures. The cost of these awards is recorded in selling, general and administrative expense in the company’s consolidated statements of income. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry-forwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. 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. Financial accounting standards prescribe a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. These standards also provide guidance on de-recognition, measurement, and classification of amounts relating to uncertain tax positions, accounting for and disclosure of interest and penalties, accounting in interim periods and disclosures required. Interest and penalties related to unrecognized tax positions are recognized as incurred within “provision for income taxes” in the consolidated statements of income. |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
May. 31, 2015 | |
Accounting Policies [Abstract] | |
Schedule of assumptions used in valuing the awards granted | The following table presents the assumptions used in a Monte Carlo simulation model to value the TSR components of the grants issued in fiscal 2015 and 2014: Fiscal 2015 Fiscal 2014 Dividend yield 0.0 % 0.0 % Expected volatility 34 % 38 % Risk-free interest rate 0.75 % 0.70 % Expected term (years) 2.9 2.6 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
May. 31, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of computations of basic and diluted earnings per share | The following table sets forth the computations of basic and diluted earnings per share: For the year ended May 31, 2015 2014 2013 Basic earnings per share Numerator: Net income attributable to Mistras Group, Inc. $ 16,081 $ 22,518 $ 11,646 Denominator Weighted average common shares outstanding 28,613 28,365 28,141 Basic earnings per share $ 0.56 $ 0.79 $ 0.41 Diluted earnings per share: Numerator: Net income attributable to Mistras Group, Inc. $ 16,081 $ 22,518 $ 11,646 Denominator Weighted average common shares outstanding 28,613 28,365 28,141 Dilutive effect of stock options outstanding 719 775 804 Dilutive effect of restricted stock units outstanding 258 184 161 29,590 29,324 29,106 Diluted earnings per share $ 0.54 $ 0.77 $ 0.40 |
Schedule of potential common shares that were excluded from the computation of diluted earnings per share | The following potential common shares were excluded from the computation of diluted earnings per share, as the effect would have been anti-dilutive: For the year ended May 31, 2015 2014 2013 Potential common stock attributable to stock options outstanding 6 5 5 Potential common stock attributable to performance awards outstanding 1 121 — Total 7 126 5 |
Accounts Receivable, net (Table
Accounts Receivable, net (Tables) | 12 Months Ended |
May. 31, 2015 | |
Receivables [Abstract] | |
Schedule of accounts receivable | Accounts receivable consist of the following: May 31, 2015 2014 Trade accounts receivable $ 136,208 $ 140,120 Allowance for doubtful accounts (2,980 ) (2,296 ) Accounts receivable, net $ 133,228 $ 137,824 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
May. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories consist of the following: May 31, 2015 2014 Raw materials $ 4,194 $ 3,663 Work in progress 1,604 2,069 Finished goods 3,178 3,462 Services-related consumable supplies 1,865 2,182 Inventory $ 10,841 $ 11,376 |
Property, Plant and Equipment33
Property, Plant and Equipment, net (Tables) | 12 Months Ended |
May. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, plant and equipment | Property, plant and equipment consist of the following: May 31, Useful Life 2015 2014 (Years) Land $ 1,856 $ 1,938 Building and improvements 30-40 17,712 22,983 Office furniture and equipment 5-8 8,084 7,169 Machinery and equipment 5-7 162,612 144,798 190,264 176,888 Accumulated depreciation and amortization (111,008 ) (99,077 ) Property, plant and equipment, net $ 79,256 $ 77,811 |
Acquisitions and Dispositions (
Acquisitions and Dispositions (Tables) | 12 Months Ended |
May. 31, 2015 | |
Business Combinations [Abstract] | |
Summary of estimated fair value of assets acquired and liabilities assumed at the date of acquisition | The following table summarizes the estimated fair value of the assets acquired and liabilities assumed and any subsequent adjustments made during the fiscal year ended May 31, 2015: 2015 2014 Number of entities 4 6 Cash paid $ 35,755 $ 22,272 Subordinated notes issued 20,505 — Contingent consideration 2,255 3,967 Consideration paid $ 58,515 $ 26,239 Current net assets 2,770 3,133 Debt and other long-term liabilities (5,889 ) (2,226 ) Property, plant and equipment 7,395 1,566 Deferred tax liability (2,467 ) (2,248 ) Intangibles 10,394 12,993 Goodwill 46,312 13,021 Net assets acquired $ 58,515 $ 26,239 |
Schedule of acquisition-related expense, net | In the course of its acquisition activities, the Company incurs costs in connection with due diligence, professional fees, and other expenses. Additionally, the Company adjusts the fair value of certain acquisition-related contingent consideration liabilities on a quarterly basis. These amounts are recorded as acquisition-related expense, net, on the consolidated statements of income and were as follows for fiscal 2015 , 2014 and 2013 : For the year ended May 31, 2015 2014 2013 Due diligence, professional fees and other transaction costs $ 215 $ 1,280 $ 1,586 Adjustments to fair value of contingent consideration liabilities $ (5,382 ) $ (3,937 ) $ (3,727 ) Acquisition-related expense, net $ (5,167 ) $ (2,657 ) $ (2,141 ) |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
May. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in carrying amount of goodwill by segment | The changes in the carrying amount of goodwill by segment is shown below: Services International Products Total Balance at May 31, 2013 $ 61,285 $ 40,788 $ 13,197 $ 115,270 Goodwill acquired during the year 15,558 232 — 15,790 Adjustments to preliminary purchase price allocations (2,769 ) 440 — (2,329 ) Foreign currency translation (307 ) 2,092 — 1,785 Balance at May 31, 2014 $ 73,767 $ 43,552 $ 13,197 $ 130,516 Goodwill acquired during the year 41,986 1,480 — 43,466 Adjustments to preliminary purchase price allocations 3,529 (367 ) — 3,162 Foreign currency translation (2,003 ) (8,727 ) — (10,730 ) Balance at May 31, 2015 $ 117,279 $ 35,938 $ 13,197 $ 166,414 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
May. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of gross amount and accumulated amortization of intangible assets | The gross carrying amount and accumulated amortization of intangible assets are as follows: May 31, 2015 2014 Useful Life (Years) Gross Amount Accumulated Amortization Net Carrying Amount Gross Amount Accumulated Amortization Net Carrying Amount Customer relationships 5-12 $ 81,101 $ (41,009 ) $ 40,092 $ 82,395 $ (34,636 ) $ 47,759 Software/Technology 3-15 15,738 (10,290 ) 5,448 15,328 (9,172 ) 6,156 Covenants not to compete 2-5 11,678 (8,605 ) 3,073 9,471 (7,882 ) 1,589 Other 2-5 6,910 (4,247 ) 2,663 5,869 (3,498 ) 2,371 Total $ 115,427 $ (64,151 ) $ 51,276 $ 113,063 $ (55,188 ) $ 57,875 |
Schedule of expected amortization expense of intangible assets | Amortization expense in each of the five years and thereafter subsequent to May 31, 2015 related to the Company’s intangible assets is expected to be as follows: Expected Amortization Expense 2016 $ 10,137 2017 8,460 2018 6,583 2019 5,519 2020 4,708 Thereafter 15,869 Total $ 51,276 |
Accrued Expenses and Other Cu37
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
May. 31, 2015 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities consist of the following: May 31, 2015 2014 Accrued salaries, wages and related employee benefits $ 26,053 $ 26,236 Contingent consideration 3,543 4,778 Accrued worker compensation and health benefits 3,630 3,661 Deferred revenues 3,841 2,659 Other accrued expenses 18,847 17,316 Total accrued expenses and other current liabilities $ 55,914 $ 54,650 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
May. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt consists of the following: May 31, 2015 2014 Senior credit facility $ 83,062 $ 61,148 Notes payable 24,933 10,512 Other 5,464 4,988 Total debt 113,459 76,648 Less: Current portion (17,902 ) (8,058 ) Long-term debt, net of current portion $ 95,557 $ 68,590 |
Schedule of principal payments due under all borrowing agreements | Scheduled principal payments due under all borrowing agreements in each of the five years and thereafter subsequent to May 31, 2015 are as follows: 2016 $ 17,902 2017 11,251 2018 722 2019 83,335 2020 249 Thereafter — Total $ 113,459 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
May. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of the Company's financial liabilities that are required to be remeasured at fair value on a recurring basis | In accordance with the fair value hierarchy described above, the following table shows the fair value of the Company’s financial liabilities that are required to be remeasured at fair value on a recurring basis: May 31, 2015 Level 1 Level 2 Level 3 Total Liabilities: Contingent consideration $ — $ — $ 6,411 $ 6,411 Total Liabilities $ — $ — $ 6,411 $ 6,411 May 31, 2014 Level 1 Level 2 Level 3 Total Liabilities: Contingent consideration $ — $ — $ 14,145 $ 14,145 Total Liabilities $ — $ — $ 14,145 $ 14,145 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
May. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of cash proceeds from, and the intrinsic value of, stock options exercised | Cash proceeds from, and the intrinsic value of stock options exercised during the years ended May 31, 2015 , 2014 and 2013 were as follows: For the year ended May 31, 2015 2014 2013 Cash proceeds from options exercised $ 750 $ 996 $ 829 Aggregate intrinsic value of options exercised 563 1,247 1,012 |
Summary of stock option activity, weighted average exercise prices, options outstanding and exercisable | A summary of the stock option activity, weighted average exercise prices, options outstanding and exercisable as of May 31, 2015 is as follows (in thousands, except per share amounts): For the year ended May 31, 2015 2014 2013 Common Stock Options Weighted Average Exercise Price Common Stock Options Weighted Average Exercise Price Common Stock Options Weighted Average Exercise Price Outstanding at beginning of year: 2,352 $ 13.09 2,464 $ 12.93 2,549 $ 12.82 Granted — $ — — $ — — $ — Exercised (65 ) $ 11.54 (103 ) $ 9.67 (85 ) $ 9.66 Expired or forfeited — $ — (9 ) $ 10.03 — $ — Outstanding at end of year: 2,287 $ 13.13 2,352 $ 13.09 2,464 $ 12.93 |
Schedule of information concerning outstanding and exercisable options | For the year ended May 31, 2015 Options Outstanding Options Exercisable Range of Exercise Prices Total Options Outstanding Weighted Average Remaining Life (Years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $6.15-$11.54 192 3.4 $ 9.31 192 $ 9.31 $13.46-$22.35 2,095 4.2 $ 13.48 2,093 $ 13.48 2,287 2,285 Aggregate Intrinsic Value $ 12,321 $ 12,321 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
May. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of income before provision for income taxes | Income before provision for income taxes is as follows: For the year ended May 31, 2015 2014 2013 Income before provision for income taxes from: U.S. operations $ 26,893 $ 25,433 $ 29,573 Foreign operations (1,162 ) 9,670 (5,307 ) Earnings before income taxes $ 25,731 $ 35,103 $ 24,266 The |
Schedule of provision for income taxes | The provision for income taxes consists of the following: For the year ended May 31, 2015 2014 2013 Current Federal $ 8,489 $ 8,836 $ 9,035 States and local 1,177 1,689 1,673 Foreign 1,493 2,484 3,118 Reserve for uncertain tax positions (48 ) 59 206 Total current 11,111 13,068 14,032 Deferred Federal (145 ) (53 ) 5 States and local (126 ) 395 134 Foreign (2,416 ) (967 ) 246 Total deferred (2,687 ) (625 ) 385 Net change in valuation allowance 1,316 85 (1,790 ) Net deferred (1,371 ) (540 ) (1,405 ) Provision for income taxes $ 9,740 $ 12,528 $ 12,627 |
Schedule of provision for income taxes computed by applying the statutory federal tax rate | The provision for income taxes differs from the amount computed by applying the statutory federal tax rate to income tax as follows: For the year ended May 31, 2015 2014 2013 Federal tax at statutory rate $ 9,006 35.0 % $ 12,286 35.0 % $ 8,493 35.0 % State taxes, net of federal benefit 683 2.7 % 1,355 3.9 % 1,174 4.8 % Foreign tax (517 ) (2.0 )% (1,868 ) (5.3 )% 1,744 7.2 % Contingent consideration (914 ) (3.6 )% 24 0.1 % (1,156 ) (4.8 )% Permanent differences 196 0.8 % 531 1.5 % 498 2.1 % Goodwill impairment — — % — — % 3,478 14.3 % Other (30 ) (0.1 )% 115 0.3 % 186 0.8 % Change in valuation allowance 1,316 5.1 % 85 0.2 % (1,790 ) (7.4 )% Total provision for income taxes $ 9,740 37.9 % $ 12,528 35.7 % $ 12,627 52.0 % |
Schedule of deferred income tax assets and liabilities | Deferred income tax attributes resulting from differences between financial accounting amounts and income tax basis of assets and liabilities are as follows: May 31, 2015 2014 Deferred income tax assets Allowance for doubtful accounts $ 1,036 $ 777 Inventory 796 726 Intangible assets 1,254 3,316 Accrued expenses 3,455 2,580 Net operating loss carryforward 4,738 3,745 Capital lease obligation 379 44 Deferred stock based compensation 6,241 5,739 Other 370 108 Deferred income tax assets 18,269 17,035 Valuation allowance (3,238 ) (2,553 ) Net deferred income tax assets 15,031 14,482 Deferred income tax liabilities Property and equipment (8,214 ) (6,821 ) Goodwill (10,728 ) (9,423 ) Intangible assets (6,677 ) (9,057 ) Other (44 ) (80 ) Deferred income tax liabilities (25,663 ) (25,381 ) Net deferred income taxes $ (10,632 ) $ (10,899 ) |
Summary of changes in Company's gross unrecognized tax benefits, excluding interest and penalties | The following table summarizes the changes in the Company’s gross unrecognized tax benefits, excluding interest and penalties: For the year ended May 31, 2015 2014 Balance at June 1 $ 1,016 $ 1,061 Additions for tax positions related to the current fiscal year 30 36 Additions for tax positions related to prior years — — Decreases for tax positions related to prior years (1 ) (10 ) Current year acquisitions — 63 Impact of foreign exchange fluctuation (112 ) (52 ) Settlements (50 ) (48 ) Reductions related to the expiration of statutes of limitations (120 ) (34 ) Balance at May 31 $ 763 $ 1,016 |
Obligations under Capital Lea42
Obligations under Capital Leases (Tables) | 12 Months Ended |
May. 31, 2015 | |
Leases [Abstract] | |
Scheduled future minimum lease payments | Scheduled future minimum lease payments subsequent to May 31, 2015 are as follows: 2016 $ 8,216 2017 6,076 2018 4,094 2019 1,807 2020 285 Thereafter 114 Total minimum lease payments 20,592 Less: amount representing interest (1,229 ) Present value of minimum lease payments 19,363 Less: current portion of obligations under capital leases (8,646 ) Obligations under capital leases, net of current portion $ 10,717 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
May. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments under noncancelable operating leases | Future minimum lease payments under noncancelable operating leases in each of the five years and thereafter subsequent to May 31, 2015 are as follows: 2016 $ 8,766 2017 6,291 2018 5,527 2019 4,916 2020 3,639 Thereafter 9,544 Total $ 38,683 |
Segment Disclosure (Tables)
Segment Disclosure (Tables) | 12 Months Ended |
May. 31, 2015 | |
Segment Reporting [Abstract] | |
Schedule of financial information by segment | Selected financial information by segment for the periods shown was as follows (intercompany transactions are eliminated in Corporate and eliminations): For the year ended May 31, 2015 2014 2013 Revenues Services $ 540,224 $ 443,229 $ 380,851 International 146,953 161,395 126,840 Products and Systems 31,255 33,544 33,301 Corporate and eliminations (7,180 ) (14,721 ) (11,710 ) $ 711,252 $ 623,447 $ 529,282 For the year ended May 31, 2015 2014 2013 Gross profit Services $ 135,201 $ 114,182 $ 98,907 International 34,572 44,893 32,319 Products and Systems 14,314 14,495 16,947 Corporate and eliminations 646 (627 ) 198 $ 184,733 $ 172,943 $ 148,371 For the year ended May 31, 2015 2014 2013 Income from operations Services $ 49,142 $ 43,221 $ 40,325 International (575 ) 10,238 (8,246 ) Products and Systems 2,461 2,552 7,286 Corporate and eliminations (20,675 ) (17,716 ) (11,811 ) $ 30,353 $ 38,295 $ 27,554 For the year ended May 31, 2015 2014 2013 Depreciation and amortization Services $ 22,268 $ 17,794 $ 18,296 International 8,451 8,065 6,200 Products and Systems 2,426 2,373 2,229 Corporate and eliminations 141 197 (78 ) $ 33,286 $ 28,429 $ 26,647 May 31, 2015 2014 Intangible assets, net Services $ 24,598 $ 22,440 International 19,482 26,898 Products and Systems 7,004 8,310 Corporate and eliminations 192 227 $ 51,276 $ 57,875 May 31, 2015 2014 Total assets Services $ 307,328 $ 249,378 International 126,643 155,571 Products and Systems 37,999 38,041 Corporate and eliminations (243 ) 982 $ 471,727 $ 443,972 |
Schedule of revenue and long-lived assets by geographic area | Revenue and long-lived assets by geographic area was as follows: For the year ended May 31, 2015 2014 2013 Revenue United States $ 491,818 $ 403,001 $ 347,423 Other Americas 68,628 55,120 55,379 Europe 137,071 143,931 106,416 Asia-Pacific 13,735 21,395 20,064 $ 711,252 $ 623,447 $ 529,282 May 31, 2015 2014 Long-lived assets United States $ 190,997 $ 141,447 Other Americas 31,558 33,515 Europe 73,744 90,194 Asia-Pacific 647 1,046 $ 296,946 $ 266,202 |
Selected Quarterly Financial 45
Selected Quarterly Financial Information (unaudited) (Tables) | 12 Months Ended |
May. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of the quarterly results of operations | The following is a summary of the quarterly results of operations for the years ended May 31, 2015 and 2014 : Fiscal quarter ended May 31, February 28, November 30, 2014 August 31, 2014 May 31, February 28, November 30, 2013 August 31, 2014 Revenues $ 174,686 $ 163,100 $ 206,893 $ 166,573 $ 179,127 $ 151,727 $ 156,755 $ 135,838 Gross Profit 44,966 38,734 59,039 41,994 46,389 39,300 47,977 39,277 Income from operations 4,627 3,870 18,192 3,664 10,468 3,000 15,252 9,575 Net income attributable to Mistras Group, Inc. $ 2,171 $ 1,817 $ 10,427 $ 1,666 $ 6,419 $ 1,201 $ 9,257 $ 5,641 Earnings per common share: Basic 0.08 0.06 0.36 0.06 0.23 0.04 0.33 0.20 Diluted 0.07 0.06 0.35 0.06 0.22 0.04 0.32 0.19 |
Description of Business and B46
Description of Business and Basis of Presentation (Details) - 12 months ended May. 31, 2015 | mosubsidiary |
Principles of Consolidation | |
Difference of period between the consolidation of International segment subsidiaries | 1 month |
Number of months less than the actual number of months from the acquisition date for which results of international segment subsidiaries are included in consolidation | 1 |
Disposal Of Foreign Subsidiaries | Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | International | |
Principles of Consolidation | |
Number of additional subsidiaries for sale | subsidiary | 2 |
Summary of Significant Accoun47
Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Advertising, Promotions and Marketing | |||
Advertising expense | $ 2,200,000 | $ 1,800,000 | $ 1,700,000 |
Foreign Currency Translation | |||
Foreign currency transaction (gains) losses | 1,500,000 | 100,000 | $ 100,000 |
Derivative Financial Instruments | |||
Outstanding interest rate swap contracts | $ 0 | $ 0 | |
Software/Technology | |||
Software Costs | |||
Estimated useful Life | 3 years |
Summary of Significant Accoun48
Summary of Significant Accounting Policies (Details 2) $ in Millions | 12 Months Ended | |
May. 31, 2015USD ($) | May. 31, 2013customer | |
Self-Insurance | ||
Minimum Amount of workers compensation and health benefit claims for which third-party excess insurance coverage maintained | $ 0.3 | |
Customer concentration risk | ||
Concentration of Credit Risk | ||
Number of customers | customer | 1 | |
Revenues | Customer concentration risk | BP | ||
Concentration of Credit Risk | ||
Percentage of concentration risk | 11.00% | |
Accounts receivable, net | Customer concentration risk | BP | ||
Concentration of Credit Risk | ||
Percentage of concentration risk | 9.00% |
Summary of Significant Accoun49
Summary of Significant Accounting Policies (Details 3) - shares | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Share-based compensation | |||
Stock options granted (in shares) | 0 | 0 | 0 |
Performance restricted stock units | Executives and senior officers | |||
Share-based compensation | |||
Requisite service period | 3 years | 3 years | |
Performance condition accounts to grant awards (as a percent) | 75.00% | 75.00% | |
Market condition accounts to grant award (as a percent) | 25.00% | 25.00% | |
Assumptions used in valuing awards granted | |||
Dividend yield (as a percent) | 0.00% | 0.00% | |
Expected volatility (as a percent) | 34.00% | 38.00% | |
Risk-free interest rate (as a percent) | 0.75% | 0.70% | |
Expected term | 2 years 10 months 24 days | 2 years 7 months 6 days |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
May. 31, 2015 | Feb. 28, 2015 | Nov. 30, 2014 | Aug. 31, 2014 | May. 31, 2014 | Feb. 28, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Basic earnings per share | |||||||||||
Net income attributable to Mistras Group, Inc. | $ 2,171 | $ 1,817 | $ 10,427 | $ 1,666 | $ 6,419 | $ 1,201 | $ 9,257 | $ 5,641 | $ 16,081 | $ 22,518 | $ 11,646 |
Denominator | |||||||||||
Weighted average common shares outstanding | 28,613 | 28,365 | 28,141 | ||||||||
Basic earnings per share (in dollars per share) | $ 0.08 | $ 0.06 | $ 0.36 | $ 0.06 | $ 0.23 | $ 0.04 | $ 0.33 | $ 0.20 | $ 0.56 | $ 0.79 | $ 0.41 |
Denominator | |||||||||||
Weighted average common shares outstanding | 28,613 | 28,365 | 28,141 | ||||||||
Dilutive effect of stock options outstanding | 719 | 775 | 804 | ||||||||
Dilutive effect of restricted stock units outstanding | 258 | 184 | 161 | ||||||||
Weighted average common shares outstanding, diluted | 29,590 | 29,324 | 29,106 | ||||||||
Diluted earnings per share (in dollars per share) | $ 0.07 | $ 0.06 | $ 0.35 | $ 0.06 | $ 0.22 | $ 0.04 | $ 0.32 | $ 0.19 | $ 0.54 | $ 0.77 | $ 0.40 |
Earnings per share | |||||||||||
Total shares | 7 | 126 | 5 | ||||||||
Potential common stock attributable to stock options outstanding | |||||||||||
Earnings per share | |||||||||||
Total shares | 6 | 5 | 5 | ||||||||
Potential common stock attributable to performance awards outstanding | |||||||||||
Earnings per share | |||||||||||
Total shares | 1 | 121 | 0 |
Accounts Receivable, net (Detai
Accounts Receivable, net (Details) - USD ($) $ in Thousands | May. 31, 2015 | May. 31, 2014 |
Receivables [Abstract] | ||
Trade accounts receivable | $ 136,208 | $ 140,120 |
Allowance for doubtful accounts | (2,980) | (2,296) |
Accounts receivable, net | 133,228 | 137,824 |
Accrued unbilled revenues | $ 15,000 | $ 16,900 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | May. 31, 2015 | May. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 4,194 | $ 3,663 |
Work in progress | 1,604 | 2,069 |
Finished goods | 3,178 | 3,462 |
Services-related consumable supplies | 1,865 | 2,182 |
Inventory | $ 10,841 | $ 11,376 |
Property, Plant and Equipment53
Property, Plant and Equipment, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Property, Plant and Equipment, net | |||
Property, plant and equipment, gross | $ 190,264 | $ 176,888 | |
Accumulated depreciation and amortization | (111,008) | (99,077) | |
Property, plant and equipment, net | 79,256 | 77,811 | |
Depreciation expense | 22,200 | 19,200 | $ 18,900 |
Land | |||
Property, Plant and Equipment, net | |||
Property, plant and equipment, gross | 1,856 | 1,938 | |
Building and improvements | |||
Property, Plant and Equipment, net | |||
Property, plant and equipment, gross | $ 17,712 | 22,983 | |
Building and improvements | Minimum | |||
Property, Plant and Equipment, net | |||
Useful Life | 30 years | ||
Building and improvements | Maximum | |||
Property, Plant and Equipment, net | |||
Useful Life | 40 years | ||
Office furniture and equipment | |||
Property, Plant and Equipment, net | |||
Property, plant and equipment, gross | $ 8,084 | 7,169 | |
Office furniture and equipment | Minimum | |||
Property, Plant and Equipment, net | |||
Useful Life | 5 years | ||
Office furniture and equipment | Maximum | |||
Property, Plant and Equipment, net | |||
Useful Life | 8 years | ||
Machinery and equipment | |||
Property, Plant and Equipment, net | |||
Property, plant and equipment, gross | $ 162,612 | $ 144,798 | |
Machinery and equipment | Minimum | |||
Property, Plant and Equipment, net | |||
Useful Life | 5 years | ||
Machinery and equipment | Maximum | |||
Property, Plant and Equipment, net | |||
Useful Life | 7 years |
Acquisitions and Dispositions -
Acquisitions and Dispositions - Acquisitions Narrative (Details) | 12 Months Ended | |
May. 31, 2015USD ($)Entity | May. 31, 2014USD ($)Entity | |
Business Acquisition [Line Items] | ||
Subordinated notes issued | $ 20,505,000 | |
Period over which potential acquisition-related contingent consideration would be payable | 3 years | |
Goodwill acquired during the year | $ 43,466,000 | $ 15,790,000 |
Revenues | 50,600,000 | |
Aggregate income from operations | $ 800,000 | |
Acquisitions in Fiscal 2015 | ||
Business Acquisition [Line Items] | ||
Number of entities | Entity | 4 | |
Percentage of common stock acquired | 100.00% | |
Cash paid | $ 35,755,000 | |
Subordinated notes issued | $ 20,480,000 | |
Debt intrument, term | 2 years | |
Contingent consideration | $ 2,255,000 | |
Period over which potential acquisition-related contingent consideration would be payable | 3 years | |
Potential acquisition-related contingent consideration, low end of range | $ 0 | |
Potential acquisition-related contingent consideration, high end of range | 3,168,326 | |
Goodwill acquired during the year | 46,312,000 | |
Intangibles | $ 10,394,000 | |
Acquisitions in Fiscal 2014 | ||
Business Acquisition [Line Items] | ||
Number of entities | Entity | 6 | |
Cash paid | $ 22,272,000 | |
Subordinated notes issued | 0 | |
Contingent consideration | 3,967,000 | |
Goodwill acquired during the year | 13,021,000 | |
Intangibles | 12,993,000 | |
One Entity Acquired in Fiscal 2015 | ||
Business Acquisition [Line Items] | ||
Number of entities | Entity | 1 | |
Goodwill acquired during the year | $ 3,100,000 | |
Intangibles | $ 1,300,000 | |
Maximum fair value measurement period from the acquisition date | 1 year | |
United States | Acquisitions in Fiscal 2015 | ||
Business Acquisition [Line Items] | ||
Number of entities | Entity | 1 | |
Services | ||
Business Acquisition [Line Items] | ||
Goodwill acquired during the year | $ 41,986,000 | $ 15,558,000 |
Services | Acquisitions in Fiscal 2014 | ||
Business Acquisition [Line Items] | ||
Number of entities | Entity | 5 | |
Minimum | Acquisitions in Fiscal 2014 | ||
Business Acquisition [Line Items] | ||
Amortization period of intangible assets acquired | 2 years | |
Maximum | Acquisitions in Fiscal 2014 | ||
Business Acquisition [Line Items] | ||
Amortization period of intangible assets acquired | 12 years |
Acquisitions and Dispositions55
Acquisitions and Dispositions - Estimated Fair Value of the Assets Acquired and Liabilities Assumed (Details) $ in Thousands | 12 Months Ended | ||
May. 31, 2015USD ($)Entity | May. 31, 2014USD ($)Entity | May. 31, 2013USD ($) | |
Consideration transferred: | |||
Subordinated notes issued | $ 20,505 | ||
Estimated fair value of the assets acquired and liabilities assumed | |||
Goodwill | $ 166,414 | $ 130,516 | $ 115,270 |
Acquisitions in Fiscal 2015 | |||
Consideration transferred: | |||
Number of entities | Entity | 4 | ||
Cash paid | $ 35,755 | ||
Subordinated notes issued | 20,480 | ||
Contingent consideration | 2,255 | ||
Consideration paid | 58,515 | ||
Estimated fair value of the assets acquired and liabilities assumed | |||
Current net assets | 2,770 | ||
Debt and other long-term liabilities | (5,889) | ||
Property, plant and equipment | 7,395 | ||
Deferred tax liability | (2,467) | ||
Intangibles | 10,394 | ||
Goodwill | 46,312 | ||
Net assets acquired | $ 58,515 | ||
Acquisitions in Fiscal 2014 | |||
Consideration transferred: | |||
Number of entities | Entity | 6 | ||
Cash paid | $ 22,272 | ||
Subordinated notes issued | 0 | ||
Contingent consideration | 3,967 | ||
Consideration paid | 26,239 | ||
Estimated fair value of the assets acquired and liabilities assumed | |||
Current net assets | 3,133 | ||
Debt and other long-term liabilities | (2,226) | ||
Property, plant and equipment | 1,566 | ||
Deferred tax liability | (2,248) | ||
Intangibles | 12,993 | ||
Goodwill | 13,021 | ||
Net assets acquired | $ 26,239 |
Acquisitions and Dispositions56
Acquisitions and Dispositions - Dispositions Narrative (Details) $ in Thousands | May. 22, 2015USD ($)subsidiary | May. 31, 2015USD ($)subsidiary | May. 31, 2014USD ($) | May. 31, 2013USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Charges associated with the exit of foreign operations | $ 2,516 | $ 0 | $ 0 | |
International | Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | Disposal Of Foreign Subsidiaries | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of foreign subsidiaries sold and held-for-sale | subsidiary | 3 | |||
Disposal group, percentage of assets to consolidated assets | 0.60% | |||
Disposal group, percentage of liabilities to consolidated liabilities | 0.30% | |||
Disposal group, aggregate operating loss | $ 900 | |||
Russia | International | Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | Disposal Of Foreign Subsidiaries | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of subsidiaries sold | subsidiary | 1 | |||
Charges associated with the exit of foreign operations | $ (400) | |||
Russia And Japan | International | Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | Expected Disposal Of Foreign Subsidiaries | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Charges associated with the exit of foreign operations | $ (2,500) | |||
Impairment charges on subsidiaries held-for-sale | $ 2,100 |
Acquisitions and Dispositions57
Acquisitions and Dispositions - Acquisition-Relate Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Business Acquisition [Line Items] | |||
Adjustments to fair value of contingent consideration liabilities | $ (5,382) | $ (3,937) | $ (3,727) |
Acquisition-related expense, net | (5,167) | (2,657) | (2,141) |
Acquisitions in Fiscal 2015 | |||
Business Acquisition [Line Items] | |||
Due diligence, professional fees and other transaction costs | 215 | ||
Adjustments to fair value of contingent consideration liabilities | (5,382) | ||
Acquisition-related expense, net | $ (5,167) | ||
Acquisitions in Fiscal 2014 | |||
Business Acquisition [Line Items] | |||
Due diligence, professional fees and other transaction costs | 1,280 | ||
Adjustments to fair value of contingent consideration liabilities | (3,937) | ||
Acquisition-related expense, net | $ (2,657) | ||
Acquisitions in Fiscal 2013 | |||
Business Acquisition [Line Items] | |||
Due diligence, professional fees and other transaction costs | 1,586 | ||
Adjustments to fair value of contingent consideration liabilities | (3,727) | ||
Acquisition-related expense, net | $ (2,141) |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Changes in the carrying amount of goodwill | |||
Balance at the beginning of the period | $ 130,516 | $ 115,270 | |
Goodwill acquired during the year | 43,466 | 15,790 | |
Adjustments to preliminary purchase price allocations | 3,162 | (2,329) | |
Foreign currency translation | (10,730) | 1,785 | |
Balance at the end of the period | 166,414 | 130,516 | $ 115,270 |
Goodwill impairment | 0 | 0 | 9,938 |
Goodwill, cumulative impairment charge | 9,900 | ||
Brazil | |||
Changes in the carrying amount of goodwill | |||
Goodwill impairment | 9,900 | ||
Services | |||
Changes in the carrying amount of goodwill | |||
Balance at the beginning of the period | 73,767 | 61,285 | |
Goodwill acquired during the year | 41,986 | 15,558 | |
Adjustments to preliminary purchase price allocations | 3,529 | (2,769) | |
Foreign currency translation | (2,003) | (307) | |
Balance at the end of the period | 117,279 | 73,767 | 61,285 |
International | |||
Changes in the carrying amount of goodwill | |||
Balance at the beginning of the period | 43,552 | 40,788 | |
Goodwill acquired during the year | 1,480 | 232 | |
Adjustments to preliminary purchase price allocations | (367) | 440 | |
Foreign currency translation | (8,727) | 2,092 | |
Balance at the end of the period | 35,938 | 43,552 | 40,788 |
Products | |||
Changes in the carrying amount of goodwill | |||
Balance at the beginning of the period | 13,197 | 13,197 | |
Adjustments to preliminary purchase price allocations | 0 | ||
Balance at the end of the period | $ 13,197 | $ 13,197 | $ 13,197 |
Intangible Assets - Gross Carry
Intangible Assets - Gross Carrying Amount and Accumulated Amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Intangible assets | |||
Gross Amount | $ 115,427 | $ 113,063 | |
Accumulated Amortization | (64,151) | (55,188) | |
Net Carrying Amount | 51,276 | 57,875 | |
Amortization expense | 11,100 | 9,200 | $ 7,700 |
Customer relationships | |||
Intangible assets | |||
Gross Amount | 81,101 | 82,395 | |
Accumulated Amortization | (41,009) | (34,636) | |
Net Carrying Amount | $ 40,092 | 47,759 | |
Customer relationships | Minimum | |||
Intangible assets | |||
Useful Life (Years) | 5 years | ||
Customer relationships | Maximum | |||
Intangible assets | |||
Useful Life (Years) | 12 years | ||
Software/Technology | |||
Intangible assets | |||
Useful Life (Years) | 3 years | ||
Gross Amount | $ 15,738 | 15,328 | |
Accumulated Amortization | (10,290) | (9,172) | |
Net Carrying Amount | 5,448 | 6,156 | |
Amortization expense | $ 900 | 900 | $ 600 |
Software/Technology | Minimum | |||
Intangible assets | |||
Useful Life (Years) | 3 years | ||
Software/Technology | Maximum | |||
Intangible assets | |||
Useful Life (Years) | 15 years | ||
Covenants not to compete | |||
Intangible assets | |||
Gross Amount | $ 11,678 | 9,471 | |
Accumulated Amortization | (8,605) | (7,882) | |
Net Carrying Amount | $ 3,073 | 1,589 | |
Covenants not to compete | Minimum | |||
Intangible assets | |||
Useful Life (Years) | 2 years | ||
Covenants not to compete | Maximum | |||
Intangible assets | |||
Useful Life (Years) | 5 years | ||
Other | |||
Intangible assets | |||
Gross Amount | $ 6,910 | 5,869 | |
Accumulated Amortization | (4,247) | (3,498) | |
Net Carrying Amount | $ 2,663 | $ 2,371 | |
Other | Minimum | |||
Intangible assets | |||
Useful Life (Years) | 2 years | ||
Other | Maximum | |||
Intangible assets | |||
Useful Life (Years) | 5 years |
Intangible Assets - Expected Am
Intangible Assets - Expected Amortization Expense (Details) - USD ($) $ in Thousands | May. 31, 2015 | May. 31, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,016 | $ 10,137 | |
2,017 | 8,460 | |
2,018 | 6,583 | |
2,019 | 5,519 | |
2,020 | 4,708 | |
Thereafter | 15,869 | |
Net Carrying Amount | $ 51,276 | $ 57,875 |
Accrued Expenses and Other Cu61
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | May. 31, 2015 | May. 31, 2014 |
Payables and Accruals [Abstract] | ||
Accrued salaries, wages and related employee benefits | $ 26,053 | $ 26,236 |
Contingent consideration | 3,543 | 4,778 |
Accrued worker compensation and health benefits | 3,630 | 3,661 |
Deferred revenues | 3,841 | 2,659 |
Other accrued expenses | 18,847 | 17,316 |
Total accrued expenses and other current liabilities | $ 55,914 | $ 54,650 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | May. 31, 2015 | May. 31, 2014 |
Debt Instrument [Line Items] | ||
Total debt | $ 113,459 | $ 76,648 |
Less: Current portion | (17,902) | (8,058) |
Long-term debt, net of current portion | 95,557 | 68,590 |
Senior credit facility | ||
Debt Instrument [Line Items] | ||
Total debt | 83,062 | 61,148 |
Notes payable | ||
Debt Instrument [Line Items] | ||
Total debt | 24,933 | 10,512 |
Other | ||
Debt Instrument [Line Items] | ||
Total debt | $ 5,464 | $ 4,988 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) | 12 Months Ended | ||
May. 31, 2015USD ($)Quarter | Oct. 31, 2014USD ($) | Oct. 30, 2014USD ($) | |
Senior credit facility | |||
Long-Term Debt | |||
Maximum borrowing capacity | $ 175,000,000 | $ 125,000,000 | |
Higher borrowing capacity option | 225,000,000 | ||
Maximum borrowing capacity in non-U.S. Dollar currencies | 30,000,000 | ||
Maximum amount available for the issuance of letters of credit | 10,000,000 | ||
Long-term Line of Credit | $ 83,100,000 | ||
Outstanding letters of credit | $ 4,200,000 | ||
Capitalized debt modification costs | $ 700,000 | ||
Number of consecutive fiscal quarters used for calculating Funded Debt Leverage Ratio | Quarter | 4 | ||
Funded Debt Leverage Ratio at which the entity will bear the maximum interest rate margin | 2 | ||
Additional interest rate margin if Funded Debt Leverage Ratio exceeds threshold (as a percent) | 2.00% | ||
Preceding period used for calculating Interest Coverage Ratio | 12 months | ||
Senior credit facility | Minimum | |||
Long-Term Debt | |||
Interest Coverage Ratio | 3 | ||
Senior credit facility | Maximum | |||
Long-Term Debt | |||
Funded Debt Leverage Ratio at which the entity will have the benefit of lowest interest margin | 0.5 | ||
Funded Debt Leverage Ratio for additional interest payment | 3.25 | ||
Senior credit facility | LIBOR | |||
Long-Term Debt | |||
Reference rate, description | LIBOR | ||
Senior credit facility | LIBOR | Minimum | |||
Long-Term Debt | |||
Margin (as a percent) | 1.00% | ||
Senior credit facility | LIBOR | Maximum | |||
Long-Term Debt | |||
Margin (as a percent) | 1.75% | ||
Senior credit facility | Base rate | |||
Long-Term Debt | |||
Reference rate, description | base rate | ||
Senior credit facility | Base rate | Minimum | |||
Long-Term Debt | |||
Margin (as a percent) | (1.25%) | ||
Senior credit facility | Base rate | Maximum | |||
Long-Term Debt | |||
Margin (as a percent) | (0.375%) | ||
Notes payable | |||
Long-Term Debt | |||
Interest rate, minimum (as a percent) | 0.00% | ||
Interest rate, maximum (as a percent) | 4.00% | ||
Notes payable | Minimum | |||
Long-Term Debt | |||
Maturity term from the date of acquisition | 2 years | ||
Market interest rate (as a percent) | 2.00% | ||
Notes payable | Maximum | |||
Long-Term Debt | |||
Maturity term from the date of acquisition | 5 years | ||
Market interest rate (as a percent) | 4.00% |
Long-Term Debt - Principal Paym
Long-Term Debt - Principal Payments Due Under All Borrowing Agreements (Details) - USD ($) $ in Thousands | May. 31, 2015 | May. 31, 2014 |
Debt Disclosure [Abstract] | ||
2,016 | $ 17,902 | |
2,017 | 11,251 | |
2,018 | 722 | |
2,019 | 83,335 | |
2,020 | 249 | |
Thereafter | 0 | |
Total debt | $ 113,459 | $ 76,648 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring basis - USD ($) $ in Thousands | May. 31, 2015 | May. 31, 2014 |
Liabilities: | ||
Contingent consideration | $ 6,411 | $ 14,145 |
Total Liabilities | 6,411 | 14,145 |
Level 3 | ||
Liabilities: | ||
Contingent consideration | 6,411 | 14,145 |
Total Liabilities | $ 6,411 | $ 14,145 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) $ in Thousands | 12 Months Ended | |||
May. 31, 2015USD ($)Planshares | May. 31, 2014USD ($)shares | May. 31, 2013USD ($)shares | May. 31, 2012shares | |
Share-based compensation | ||||
Number of employee stock ownership plans | Plan | 2 | |||
Stock option awards | ||||
Share-based compensation | ||||
Stock options outstanding (in shares) | 2,287,000 | 2,352,000 | 2,464,000 | 2,549,000 |
Recognized share-based compensation expense | $ | $ 100 | $ 700 | $ 3,100 | |
Weighted-average period over which unrecognized compensation cost is expected to be recognized | 9 months 23 days | |||
Additional disclosures | ||||
Cash proceeds from options exercised | $ | $ 750 | 996 | 829 | |
Aggregate intrinsic value of options exercised | $ | 563 | 1,247 | 1,012 | |
Stock option awards | Maximum | ||||
Share-based compensation | ||||
Unrecognized compensation costs, net of estimated forfeitures, related to stock option awards | $ | $ 100 | |||
Restricted stock unit awards | ||||
Share-based compensation | ||||
Unvested restricted stock units outstanding (in shares) | 1,101,000 | |||
Recognized share-based compensation expense | $ | $ 4,700 | $ 4,000 | $ 2,900 | |
Weighted-average period over which unrecognized compensation cost is expected to be recognized | 2 years 1 month 3 days | |||
2007 Plan | ||||
Share-based compensation | ||||
Number of awards that may be granted (in shares) | 0 | |||
2009 Plan | ||||
Share-based compensation | ||||
Number of awards that may be granted (in shares) | 640,000 | |||
Number of shares authorized for grants | 2,286,000 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Stock Option Activity and Weighted Average Exercise Prices (Details) - $ / shares | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Common Stock Options (shares) | |||
Granted | 0 | 0 | 0 |
Stock option awards | |||
Common Stock Options (shares) | |||
Outstanding at beginning of year: | 2,352,000 | 2,464,000 | 2,549,000 |
Granted | 0 | 0 | |
Exercised | (65,000) | (103,000) | (85,000) |
Expired or forfeited | 0 | (9,000) | 0 |
Outstanding at end of year: | 2,287,000 | 2,352,000 | 2,464,000 |
Weighted Average Exercise Price (in dollar per share) | |||
Outstanding at beginning of year: | $ 13.09 | $ 12.93 | $ 12.82 |
Granted | 0 | 0 | |
Exercised | 11.54 | 9.67 | 9.66 |
Expired or forfeited | 0 | 10.03 | 0 |
Outstanding at end of year: | $ 13.13 | $ 13.09 | $ 12.93 |
Share-Based Compensation - Su68
Share-Based Compensation - Summary of Options Outstanding and Exercisable (Details) - May. 31, 2015 - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Total |
Options Outstanding | |
Total Options Outstanding (in shares) | 2,287 |
Options Exercisable | |
Number Exercisable (in shares) | 2,285 |
Aggregate Intrinsic Value | |
Options Outstanding (in dollars) | $ 12,321 |
Options Exercisable (in dollars) | $ 12,321 |
$6.15-$11.54 | |
Options Outstanding | |
Total Options Outstanding (in shares) | 192 |
Weighted Average Remaining Life (Years) | 3 years 4 months 11 days |
Weighted Average Exercise Price (in dollars per share) | $ 9.31 |
Options Exercisable | |
Number Exercisable (in shares) | 192 |
Weighted Average Exercise Price (in dollars per share) | $ 9.31 |
Aggregate Intrinsic Value | |
Range of Exercise Prices, Lower Limit | 6.15 |
Range of Exercise Prices, Upper Limit | $ 11.54 |
$13.46-$22.35 | |
Options Outstanding | |
Total Options Outstanding (in shares) | 2,095 |
Weighted Average Remaining Life (Years) | 4 years 2 months 30 days |
Weighted Average Exercise Price (in dollars per share) | $ 13.48 |
Options Exercisable | |
Number Exercisable (in shares) | 2,093 |
Weighted Average Exercise Price (in dollars per share) | $ 13.48 |
Aggregate Intrinsic Value | |
Range of Exercise Prices, Lower Limit | 13.46 |
Range of Exercise Prices, Upper Limit | $ 22.35 |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Stock Units Awards (Details) shares in Thousands, $ in Millions | 12 Months Ended | ||
May. 31, 2015USD ($)Directorshares | May. 31, 2014USD ($)Directorshares | May. 31, 2013USD ($)Directorshares | |
Non-employee directors | |||
Share-based compensation | |||
Number of fully vested common stock granted | shares | 21 | 19 | 13 |
Number of non-employee directors to whom fully vested common stock is granted | Director | 5 | 5 | 5 |
Fair value of shares vested | $ 0.4 | $ 0.4 | $ 0.3 |
Restricted stock unit awards | |||
Share-based compensation | |||
Recognized share-based compensation expense | 4.7 | $ 4 | $ 2.9 |
Unrecognized compensation cost, net of estimated forfeitures, related to restricted stock unit awards | $ 7.6 | ||
Unvested restricted stock units outstanding (in shares) | shares | 1,101 | ||
Weighted-average period over which unrecognized compensation cost is expected to be recognized | 2 years 1 month 3 days | ||
Shares vested | shares | 232 | 178 | 123 |
Fair value of shares vested | $ 5.2 | $ 3.3 | $ 1.9 |
Fiscal 2015 Grants | Performance restricted stock units | |||
Share-based compensation | |||
Requisite service period | 3 years | ||
Recognized share-based compensation expense | $ 0.4 | ||
Unrecognized compensation cost, net of estimated forfeitures, related to restricted stock unit awards | $ 1.4 | ||
Unvested restricted stock units outstanding (in shares) | shares | 115 | ||
Weighted-average period over which unrecognized compensation cost is expected to be recognized | 2 years 3 months 8 days | ||
Performance period | 3 years | ||
Fiscal 2014 Grants | |||
Share-based compensation | |||
Payout for the fiscal 2014 market condition awards, percentage of target | 170.00% | ||
Fiscal 2014 Grants | Performance restricted stock units | |||
Share-based compensation | |||
Requisite service period | 3 years | ||
Recognized share-based compensation expense | $ 1.1 | $ 1.2 | |
Unrecognized compensation cost, net of estimated forfeitures, related to restricted stock unit awards | $ 2.1 | ||
Unvested restricted stock units outstanding (in shares) | shares | 423 | ||
Weighted-average period over which unrecognized compensation cost is expected to be recognized | 1 year 3 months 8 days | ||
Fiscal 2014 Grants | Performance Restricted Stock Units with one year EPS performance condition | |||
Share-based compensation | |||
Performance period | 1 year | ||
Fiscal 2014 Grants | Performance Restricted Stock Units with two year EPS performance condition | |||
Share-based compensation | |||
Performance period | 2 years | ||
Fiscal 2014 Grants | Performance Restricted Stock Units with three year EPS performance condition | |||
Share-based compensation | |||
Performance period | 3 years |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Income before provision for income taxes from: | |||
U.S. operations | $ 26,893 | $ 25,433 | $ 29,573 |
Foreign operations | (1,162) | 9,670 | (5,307) |
Income before provision for income taxes | 25,731 | 35,103 | 24,266 |
Current | |||
Federal | 8,489 | 8,836 | 9,035 |
States and local | 1,177 | 1,689 | 1,673 |
Foreign | 1,493 | 2,484 | 3,118 |
Reserve for uncertain tax positions | (48) | 59 | 206 |
Total current | 11,111 | 13,068 | 14,032 |
Deferred | |||
Federal | (145) | (53) | 5 |
States and local | (126) | 395 | 134 |
Foreign | (2,416) | (967) | 246 |
Total deferred | (2,687) | (625) | 385 |
Net change in valuation allowance | 1,316 | 85 | (1,790) |
Net deferred | (1,371) | (540) | (1,405) |
Provision for income taxes | 9,740 | 12,528 | 12,627 |
Reconciliation of income tax expense at the statutory rate to the effective income tax expense | |||
Federal tax at statutory rate | 9,006 | 12,286 | 8,493 |
State taxes, net of federal benefit | 683 | 1,355 | 1,174 |
Foreign tax | (517) | (1,868) | 1,744 |
Contingent consideration | (914) | 24 | (1,156) |
Permanent differences | 196 | 531 | 498 |
Goodwill impairment | 0 | 0 | 3,478 |
Other | (30) | 115 | 186 |
Change in valuation allowance | 1,316 | 85 | (1,790) |
Provision for income taxes | $ 9,740 | $ 12,528 | $ 12,627 |
Reconciliation of the federal income tax expense (as a percent) | |||
Federal tax at statutory rate | 35.00% | 35.00% | 35.00% |
State taxes, net of federal benefit | 2.70% | 3.90% | 4.80% |
Foreign tax | (2.00%) | (5.30%) | 7.20% |
Contingent consideration | (3.60%) | 0.10% | (4.80%) |
Permanent differences | 0.80% | 1.50% | 2.10% |
Goodwill impairment | 0.00% | 0.00% | 14.30% |
Other | (0.10%) | 0.30% | 0.80% |
Change in valuation allowance | 5.10% | 0.20% | (7.40%) |
Total provision for income taxes | 37.90% | 35.70% | 52.00% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | 12 Months Ended | |
May. 31, 2015 | May. 31, 2014 | |
Deferred income tax assets | ||
Allowance for doubtful accounts | $ 1,036,000 | $ 777,000 |
Inventory | 796,000 | 726,000 |
Intangible assets | 1,254,000 | 3,316,000 |
Accrued expenses | 3,455,000 | 2,580,000 |
Net operating loss carryforward | 4,738,000 | 3,745,000 |
Capital lease obligation | 379,000 | 44,000 |
Deferred stock based compensation | 6,241,000 | 5,739,000 |
Other | 370,000 | 108,000 |
Deferred income tax assets | 18,269,000 | 17,035,000 |
Valuation allowance | (3,238,000) | (2,553,000) |
Net deferred income tax assets | 15,031,000 | 14,482,000 |
Deferred income tax liabilities | ||
Property and equipment | (8,214,000) | (6,821,000) |
Goodwill | (10,728,000) | (9,423,000) |
Intangible assets | (6,677,000) | (9,057,000) |
Other | (44,000) | (80,000) |
Deferred income tax liabilities | (25,663,000) | (25,381,000) |
Net deferred income taxes | (10,632,000) | (10,899,000) |
Changes in company's gross unrecognized tax benefits, excluding interest and penalties | ||
Balance at June 1 | 1,016,000 | 1,061,000 |
Additions for tax positions related to the current fiscal year | 30,000 | 36,000 |
Additions for tax positions related to prior years | 0 | 0 |
Decreases for tax positions related to prior years | (1,000) | (10,000) |
Current year acquisitions | 0 | 63,000 |
Impact of foreign exchange fluctuation | (112,000) | (52,000) |
Settlements | (50,000) | (48,000) |
Reductions related to the expiration of statutes of limitations | (120,000) | (34,000) |
Balance at May 31 | 763,000 | 1,016,000 |
Unrecognized tax benefits including penalties and interest, that would affect the effective tax rate, if recognized | 1,100,000 | 1,400,000 |
Anticipated decrease in unrecognized tax benefits, excluding interest and penalties within the next 12 months | 100,000 | |
Net income (loss) of foreign subsidiaries | (800,000) | $ 8,000,000 |
Deferred tax liability recognized for the remittance of undistributed international earnings | 0 | |
State | Expiration date starting in fiscal 2026 | ||
Income taxes | ||
Net operating losses | 300,000 | |
State | Expiration date starting in fiscal 2015 | ||
Income taxes | ||
Net operating losses | 3,200,000 | |
Foreign Country | ||
Income taxes | ||
Net operating losses | $ 14,300,000 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
401(k) savings plan | |||
Minimum age for employees to contribute catch up contributions under IRS limits | 50 years | ||
Continuous service period required for eligibility of employees to participate under the plan | 6 months | ||
Company match amount of employee contributions matched up to 6% of annual compensation (as a percent) | 50.00% | ||
Vesting period for employer matching contribution | 5 years | ||
Contribution under 401(k) savings plan | $ 2.8 | $ 2.5 | $ 2.3 |
Maximum | |||
Defined Contribution Plan | |||
Percentage of employee's annual compensation for which the company contributes a matching contribution | 6.00% |
Employee Benefit Plans (Detai73
Employee Benefit Plans (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Compensation and Retirement Disclosure [Abstract] | |||
Amount of employers contribution to the union plan | $ 0.2 | $ 0.1 | $ 0.1 |
Related Party Transactions (Det
Related Party Transactions (Details) - Shareholder and officer $ in Millions | 12 Months Ended |
May. 31, 2015USD ($) | |
Related Party Transactions | |
Total rent payments | $ 0.9 |
France | |
Related Party Transactions | |
Total rent payments | 0.3 |
Brazil | |
Related Party Transactions | |
Total rent payments | $ 0.1 |
Obligations under Capital Lea75
Obligations under Capital Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May. 31, 2015 | May. 31, 2014 | |
Obligations under capital leases | ||
Net book value of assets under capital lease | $ 19,900 | $ 18,100 |
Future minimum lease payments | ||
2,015 | 8,216 | |
2,016 | 6,076 | |
2,017 | 4,094 | |
2,018 | 1,807 | |
2,019 | 285 | |
Thereafter | 114 | |
Total minimum lease payments | 20,592 | |
Less: amount representing interest | (1,229) | |
Present value of minimum lease payments | 19,363 | |
Less: current portion of obligations under capital leases | (8,646) | (7,251) |
Obligations under capital leases, net of current portion | 10,717 | $ 13,664 |
Minimum | ||
Obligations under capital leases | ||
Required monthly payments | $ 1 | |
Effective interest rate (as a percent) | 1.00% | |
Maximum | ||
Obligations under capital leases | ||
Required monthly payments | $ 69 | |
Effective interest rate (as a percent) | 7.30% |
Commitments and Contingencies76
Commitments and Contingencies (Details) | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2015Claim | May. 31, 2015USD ($)Claim | May. 31, 2014USD ($) | May. 31, 2013USD ($) | |
Future minimum lease payments | ||||
2,016 | $ 8,766,000 | |||
2,017 | 6,291,000 | |||
2,018 | 5,527,000 | |||
2,019 | 4,916,000 | |||
2,020 | 3,639,000 | |||
Thereafter | 9,544,000 | |||
Total | 38,683,000 | |||
Total rent expense | $ 10,600,000 | $ 9,500,000 | $ 7,200,000 | |
Litigation | ||||
Period over which potential acquisition-related contingent consideration would be payable | 3 years | |||
Lawsuits on behalf of current and former employees | ||||
Litigation | ||||
Number of claims filed | Claim | 2 | |||
Lawsuits for alleged quality defects | ||||
Litigation | ||||
Number of claims filed | Claim | 0 | |||
Acquisition-related contingencies | ||||
Litigation | ||||
Potential acquisition-related contingent consideration, low end of range | $ 0 | |||
Potential acquisition-related contingent consideration, high end of range | $ 19,400,000 |
Segment Disclosure (Details)
Segment Disclosure (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
May. 31, 2015USD ($) | Feb. 28, 2015USD ($) | Nov. 30, 2014USD ($) | Aug. 31, 2014USD ($) | May. 31, 2014USD ($) | Feb. 28, 2014USD ($) | Nov. 30, 2013USD ($) | Aug. 31, 2013USD ($) | May. 31, 2015USD ($)Operating_Segment | May. 31, 2014USD ($) | May. 31, 2013USD ($) | |
Segment Reporting [Abstract] | |||||||||||
Number of operating segments | Operating_Segment | 3 | ||||||||||
Financial information by segment | |||||||||||
Revenue | $ 174,686 | $ 163,100 | $ 206,893 | $ 166,573 | $ 179,127 | $ 151,727 | $ 156,755 | $ 135,838 | $ 711,252 | $ 623,447 | $ 529,282 |
Gross Profit | 44,966 | 38,734 | 59,039 | 41,994 | 46,389 | 39,300 | 47,977 | 39,277 | 184,733 | 172,943 | 148,371 |
Income from operations | 4,627 | $ 3,870 | $ 18,192 | $ 3,664 | 10,468 | $ 3,000 | $ 15,252 | $ 9,575 | 30,353 | 38,295 | 27,554 |
Depreciation and amortization | 33,286 | 28,429 | 26,647 | ||||||||
Intangible assets, net | 51,276 | 57,875 | 51,276 | 57,875 | |||||||
Total assets | 471,727 | 443,972 | 471,727 | 443,972 | |||||||
Operating segments | Services | |||||||||||
Financial information by segment | |||||||||||
Revenue | 540,224 | 443,229 | 380,851 | ||||||||
Gross Profit | 135,201 | 114,182 | 98,907 | ||||||||
Income from operations | 49,142 | 43,221 | 40,325 | ||||||||
Depreciation and amortization | 22,268 | 17,794 | 18,296 | ||||||||
Intangible assets, net | 24,598 | 22,440 | 24,598 | 22,440 | |||||||
Total assets | 307,328 | 249,378 | 307,328 | 249,378 | |||||||
Operating segments | International | |||||||||||
Financial information by segment | |||||||||||
Revenue | 146,953 | 161,395 | 126,840 | ||||||||
Gross Profit | 34,572 | 44,893 | 32,319 | ||||||||
Income from operations | (575) | 10,238 | (8,246) | ||||||||
Depreciation and amortization | 8,451 | 8,065 | 6,200 | ||||||||
Intangible assets, net | 19,482 | 26,898 | 19,482 | 26,898 | |||||||
Total assets | 126,643 | 155,571 | 126,643 | 155,571 | |||||||
Operating segments | Products and Systems | |||||||||||
Financial information by segment | |||||||||||
Revenue | 31,255 | 33,544 | 33,301 | ||||||||
Gross Profit | 14,314 | 14,495 | 16,947 | ||||||||
Income from operations | 2,461 | 2,552 | 7,286 | ||||||||
Depreciation and amortization | 2,426 | 2,373 | 2,229 | ||||||||
Intangible assets, net | 7,004 | 8,310 | 7,004 | 8,310 | |||||||
Total assets | 37,999 | 38,041 | 37,999 | 38,041 | |||||||
Corporate and eliminations | |||||||||||
Financial information by segment | |||||||||||
Revenue | (7,180) | (14,721) | (11,710) | ||||||||
Gross Profit | 646 | (627) | 198 | ||||||||
Income from operations | (20,675) | (17,716) | (11,811) | ||||||||
Depreciation and amortization | 141 | 197 | $ (78) | ||||||||
Intangible assets, net | 192 | 227 | 192 | 227 | |||||||
Total assets | $ (243) | $ 982 | $ (243) | $ 982 |
Segment Disclosure (Details 2)
Segment Disclosure (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
May. 31, 2015 | Feb. 28, 2015 | Nov. 30, 2014 | Aug. 31, 2014 | May. 31, 2014 | Feb. 28, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Revenue and long-lived assets by geographic area | |||||||||||
Revenue | $ 174,686 | $ 163,100 | $ 206,893 | $ 166,573 | $ 179,127 | $ 151,727 | $ 156,755 | $ 135,838 | $ 711,252 | $ 623,447 | $ 529,282 |
Long-lived assets | 296,946 | 266,202 | 296,946 | 266,202 | |||||||
United States | |||||||||||
Revenue and long-lived assets by geographic area | |||||||||||
Revenue | 491,818 | 403,001 | 347,423 | ||||||||
Long-lived assets | 190,997 | 141,447 | 190,997 | 141,447 | |||||||
Other Americas | |||||||||||
Revenue and long-lived assets by geographic area | |||||||||||
Revenue | 68,628 | 55,120 | 55,379 | ||||||||
Long-lived assets | 31,558 | 33,515 | 31,558 | 33,515 | |||||||
Europe | |||||||||||
Revenue and long-lived assets by geographic area | |||||||||||
Revenue | 137,071 | 143,931 | 106,416 | ||||||||
Long-lived assets | 73,744 | 90,194 | 73,744 | 90,194 | |||||||
Asia-Pacific | |||||||||||
Revenue and long-lived assets by geographic area | |||||||||||
Revenue | 13,735 | 21,395 | $ 20,064 | ||||||||
Long-lived assets | $ 647 | $ 1,046 | $ 647 | $ 1,046 |
Selected Quarterly Financial 79
Selected Quarterly Financial Information (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
May. 31, 2015 | Feb. 28, 2015 | Nov. 30, 2014 | Aug. 31, 2014 | May. 31, 2014 | Feb. 28, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | May. 31, 2015 | May. 31, 2014 | May. 31, 2013 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 174,686 | $ 163,100 | $ 206,893 | $ 166,573 | $ 179,127 | $ 151,727 | $ 156,755 | $ 135,838 | $ 711,252 | $ 623,447 | $ 529,282 |
Gross Profit | 44,966 | 38,734 | 59,039 | 41,994 | 46,389 | 39,300 | 47,977 | 39,277 | 184,733 | 172,943 | 148,371 |
Income from operations | 4,627 | 3,870 | 18,192 | 3,664 | 10,468 | 3,000 | 15,252 | 9,575 | 30,353 | 38,295 | 27,554 |
Net income attributable to Mistras Group, Inc. | $ 2,171 | $ 1,817 | $ 10,427 | $ 1,666 | $ 6,419 | $ 1,201 | $ 9,257 | $ 5,641 | $ 16,081 | $ 22,518 | $ 11,646 |
Earnings per common share: | |||||||||||
Basic (in dollars per share) | $ 0.08 | $ 0.06 | $ 0.36 | $ 0.06 | $ 0.23 | $ 0.04 | $ 0.33 | $ 0.20 | $ 0.56 | $ 0.79 | $ 0.41 |
Diluted (in dollars per share) | $ 0.07 | $ 0.06 | $ 0.35 | $ 0.06 | $ 0.22 | $ 0.04 | $ 0.32 | $ 0.19 | $ 0.54 | $ 0.77 | $ 0.40 |