Leading technical services provider Mistras Group, Inc. (MG) recently announced that its adjusted EBITDA (earnings before interest, tax, depreciation and amortization) for fiscal year ended May 31, 2013 is likely to be less than its expectations due to challenging macroeconomic environments in both Europe and Brazil, and lower gross margins in some operating segments. However, its fiscal revenues are expected to be in sync with its latest guidance.
Based upon preliminary results, Mistras currently expects an adjusted EBITDA of $68 million, well below its latest guidance range of $75 million – $80 million. Revenues are expected to be $529 million in fiscal 2013, representing a year-over-year increase of 21% and near the midpoint of the guidance range of $525 million – $535 million.
The company has attributed the sharp fall in adjusted EBITDA to a 7% decline in organic revenue in the fourth quarter in the International segment as project activity and product shipments were below expectations. Overall gross margin of the company declined approximately 250 basis points due to a below-par performance in the International and Service segments.
For fiscal 2014, Mistras anticipates adjusted EBITDA to be in the range of $74 million to $80 million on revenues of $570 million to $600 million. The company is likely to provide further update on fiscal 2014 outlook when it reports its fourth quarter and fiscal 2013 results around Aug 8.
With a broad portfolio of services and technology-enabled asset protection solutions, Mistras helps diverse companies in the industry to evaluate the structural integrity of energy, industrial and public infrastructure. These enable the customers to extend the useful life of their assets, improve productivity and profitability, comply with government safety and environmental regulations and enhance risk management operational decisions.
Mistras currently has a Zacks Rank #3 (Hold). Some other companies in the industry worth reckoning include Booz Allen Hamilton Holding Corporation (BAH), MAXIMUS, Inc. (MMS) and Rollins Inc. (ROL), each carrying a Zacks Rank #2 (Buy).
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