Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __ to __

Commission file number 001-34481

Mistras Group, Inc.

(Exact name of registrant as specified in its charter)


Delaware		22-3341267
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

195 Clarksville Road
Princeton Junction,	New Jersey	08550
(Address of principal executive offices)		(Zip Code)

(609) 716-4000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

ý Yes o No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

ý Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller

reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ý No

As of October 30, 2024, the registrant had 31,010,375 shares of common stock outstanding.

Table of Contents

TABLE OF CONTENTS


			PAGE
PART I—FINANCIAL INFORMATION

	ITEM 1.	Financial Statements	1

		Unaudited Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023	1

		Unaudited Condensed Consolidated Statements of Income (Loss) for the three and nine months ended September 30, 2024 and September 30, 2023	2

		Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2024 and September 30, 2023	3

		Unaudited Condensed Consolidated Statements of Equity for the three and nine months ended September 30, 2024 and September 30, 2023	4

		Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and September 30, 2023	5

		Notes to Unaudited Condensed Consolidated Financial Statements	6

	ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

	ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	36

	ITEM 4	Controls and Procedures	36

PART II—OTHER INFORMATION

	ITEM 1.	Legal Proceedings	37

	ITEM 1.A.	Risk Factors	37

	ITEM 2.	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities	37

	ITEM 3.	Defaults Upon Senior Securities	37

	ITEM 4.	Mine Safety Disclosures	37

	ITEM 5.	Other Information	37

	ITEM 6.	Exhibits	38

SIGNATURES			39

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PART I—FINANCIAL INFORMATION

ITEM 1. Financial Statements

Mistras Group, Inc. and Subsidiaries

Unaudited Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)


	September 30, 2024		December 31, 2023
ASSETS
Current Assets
Cash and cash equivalents	$	20,360	$	17,646
Accounts receivable, net	144,104		132,847
Inventories	14,510		15,283

Prepaid expenses and other current assets	14,353		14,580
Total current assets	193,327		180,356
Property, plant and equipment, net	79,852		80,972
Intangible assets, net	41,504		43,994
Goodwill	185,872		187,354
Deferred income taxes	5,641		2,316
Other assets	45,485		39,784
Total assets	$	551,681	$	534,776
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	13,272	$	17,032
Accrued expenses and other current liabilities	85,623		84,331
Current portion of long-term debt	10,711		8,900
Current portion of finance lease obligations	4,594		5,159
Income taxes payable	964		1,101
Total current liabilities	115,164		116,523
Long-term debt, net of current portion	178,989		181,499
Obligations under finance leases, net of current portion	11,154		11,261
Deferred income taxes	3,781		2,552
Other long-term liabilities	37,050		32,438
Total liabilities	346,138		344,273
Commitments and contingencies (Note 14)
Equity
Preferred stock, 10,000,000 shares authorized	—		—
Common stock, $0.01 par value, 200,000,000 shares authorized, 31,006,864 and 30,597,633 shares issued and outstanding	385		305
Additional paid-in capital	250,016		247,165
Accumulated deficit	(15,177)		(28,942)
Accumulated other comprehensive loss	(30,020)		(28,336)
Total Mistras Group, Inc. stockholders’ equity	205,204		190,192
Non-controlling interests	339		311
Total equity	205,543		190,503
Total liabilities and equity	$	551,681	$	534,776

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

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Mistras Group, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Income (Loss)

(in thousands, except per share data)


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023

Revenue	$	182,694	$	179,354	$	556,909	$	523,399
Cost of revenue	122,392		118,812		377,570		355,304
Depreciation	5,725		6,160		17,556		17,914
Gross profit	54,577		54,382		161,783		150,181
Selling, general and administrative expenses	38,872		39,537		121,018		123,844

Reorganization and other costs	2,143		2,702		4,218		6,017

Goodwill impairment charges	—		13,799		—		13,799


Legal settlement and insurance recoveries, net	(868)		—		(808)		150
Research and engineering	241		438		816		1,428
Depreciation and amortization	2,331		2,588		7,170		7,556
Acquisition-related expense, net	—		—		1		5
Income (loss) from operations	11,858		(4,682)		29,368		(2,618)
Other income	(1,479)		—		(1,479)		—
Interest expense	4,303		4,167		13,145		12,093
Income (loss) before provision (benefit) for income taxes	9,034		(8,849)		17,702		(14,711)
Provision for income taxes	2,618		1,489		3,909		229
Net Income (Loss)	6,416		(10,338)		13,793		(14,940)
Less: net income (loss) attributable to noncontrolling interests, net of taxes	15		(40)		28		7
Net Income (Loss) attributable to Mistras Group, Inc.	$	6,401	$	(10,298)	$	13,765	$	(14,947)

Earnings (loss) per common share
Basic	$	0.21	$	(0.34)	$	0.45	$	(0.49)
Diluted	$	0.20	$	(0.34)	$	0.44	$	(0.49)
Weighted-average common shares outstanding:
Basic	31,002		30,402		30,895		30,277
Diluted	31,660		30,402		31,513		30,277

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

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Mistras Group, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)

(in thousands)


	Three months ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023

Net Income (loss)	$	6,416	$	(10,338)	$	13,793	$	(14,940)
Other comprehensive loss:
Foreign currency translation adjustments	4,161		(5,428)		(1,684)		(1,073)
Comprehensive Income (loss)	10,577		(15,766)		12,109		(16,013)
Less: net income (loss) attributable to noncontrolling interest	15		(40)		28		7

Comprehensive Income (loss) attributable to Mistras Group, Inc	$	10,562	$	(15,726)	$	12,081	$	(16,020)

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

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Mistras Group, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Equity

(in thousands)


	Three months ended
	Common Stock			Additional paid-in capital		Retained earnings (deficit)		Accumulated other comprehensive income (loss)		Total Mistras Group, Inc. Stockholders’ Equity		Noncontrolling Interest
	Shares	Amount												Total Equity

Balance at June 30, 2024	30,977	$	385	$	248,524	$	(21,578)	$	(34,181)	$	193,150	$	324	$	193,474
Net income	—	—		—		6,401		—		6,401		15		6,416
Other comprehensive loss, net of tax	—	—		—		—		4,161		4,161		—		4,161
Share-based compensation	—	—		1,492		—		—		1,492		—		1,492
Net settlement of restricted stock units	30	—		—		—		—		—		—		—

Balance at September 30, 2024	31,007	$	385	$	250,016	$	(15,177)	$	(30,020)	$	205,204	$	339	$	205,543

Balance at June 30, 2023	30,302	$	302	$	245,058	$	(16,138)	$	(29,035)	$	200,187	$	346	$	200,533
Net loss	—	—		—		(10,298)		—		(10,298)		(40)		(10,338)
Other comprehensive loss, net of tax	—	—		—		—		(5,428)		(5,428)		—		(5,428)
Share-based compensation	—	—		1,017		—		—		1,017		—		1,017
Net settlement of restricted stock units	51	—		—		—		—		—		—		—

Balance at September 30, 2023	30,353	$	302	$	246,075	$	(26,436)	$	(34,463)	$	185,478	$	306	$	185,784


	Nine months ended
	Common Stock			Additional paid-in capital		Retained earnings (deficit)		Accumulated other comprehensive income (loss)		Total Mistras Group, Inc. Stockholders’ Equity		Noncontrolling Interest
	Shares	Amount												Total Equity

Balance at December 31, 2023	30,598	$	305	$	247,165	$	(28,942)	$	(28,336)	$	190,192	$	311	$	190,503
Net income	—	—		—		13,765		—		13,765		28		13,793
Other comprehensive loss, net of tax	—	—		—		—		(1,684)		(1,684)		—		(1,684)
Share-based compensation	—	—		4,256		—		—		4,256		—		4,256
Net settlement of restricted stock units	409	80		(1,405)		—		—		(1,325)		—		(1,325)

Balance at September 30, 2024	31,007	$	385	$	250,016	$	(15,177)	$	(30,020)	$	205,204	$	339	$	205,543

Balance at December 31, 2022	29,895	$	298	$	243,031	$	(11,489)	$	(33,390)	$	198,450	$	299	$	198,749
Net loss	—	—		—		(14,947)		—		(14,947)		7		(14,940)
Other comprehensive loss, net of tax	—	—		—		—		(1,073)		(1,073)		—		(1,073)
Share-based compensation	—	—		3,985		—		—		3,985		—		3,985
Net settlement of restricted stock units	458	4		(941)		—		—		(937)		—		(937)


Balance at September 30, 2023	30,353	$	302	$	246,075	$	(26,436)	$	(34,463)	$	185,478	$	306	$	185,784

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

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Mistras Group, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)


	Nine months ended September 30,
	2024		2023

Cash flows from operating activities
Net income (loss)	$	13,793	$	(14,940)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization	24,726		25,470
Goodwill impairment charges	—		13,799
Deferred income taxes	(2,026)		816
Share-based compensation expense	4,256		3,985

Change in provision for doubtful accounts	681		346

Foreign currency (gain) loss	(23)		149


Other	(1,493)		(147)
Changes in operating assets and liabilities
Accounts receivable	(11,979)		(13,393)
Inventories	431		(2,425)
Prepaid expenses and other assets	(39)		(7,572)
Accounts payable	(3,583)		2,094
Accrued expenses and other liabilities	(138)		4,165
Income taxes payable	(135)		(725)
Payment of contingent consideration liability in excess of acquisition-date fair value	—		(938)
Net cash provided by operating activities	24,471		10,684
Cash flows from investing activities
Purchase of property, plant and equipment	(14,315)		(14,403)

Purchase of intangible assets	(3,832)		(1,868)

Proceeds from sale of equipment	995		1,101

Net cash used in investing activities	(17,152)		(15,170)
Cash flows from financing activities
Repayment of finance lease obligations	(4,183)		(3,812)

Repayment of long-term debt	(6,537)		(5,684)
Proceeds from revolver	53,500		66,110
Repayment of revolver	(47,701)		(57,851)


Taxes paid related to net share settlement of share-based awards	(1,326)		(602)

Net cash used in financing activities	(6,247)		(1,839)
Effect of exchange rate changes on cash and cash equivalents	1,642		(1,411)
Net change in cash and cash equivalents	2,714		(7,736)
Cash and cash equivalents at beginning of period	17,646		20,488
Cash and cash equivalents at end of period	$	20,360	$	12,752
Supplemental disclosure of cash paid
Interest, net	$	12,595	$	12,683
Income taxes, net of refunds	$	4,406	$	3,704
Noncash investing and financing
Equipment acquired through finance lease obligations	$	3,642	$	7,169

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

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Mistras Group, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(tabular dollars and shares in thousands, except per share data)

1. Description of Business and Basis of Presentation

Description of Business

Mistras Group, Inc., together with its subsidiaries (the "Company"), is a leading “one source” multinational provider of integrated technology-enabled asset protection solutions helping to maximize the safety and operational uptime for civilization’s most critical industrial and civil assets.

Backed by an innovative, data-driven asset protection portfolio, proprietary technologies, and decades-long legacy of industry leadership, the Company helps clients with asset-intensive infrastructure in the oil and gas, aerospace and defense, industrials, power generation and transmission (including alternative and renewable energy), other process industries and infrastructure, research and engineering and other industries towards achieving and maintaining operational excellence. By supporting these organizations that help fuel our vehicles and power our society; inspecting components that are trusted for commercial, defense, and space craft; and building real-time monitoring systems to help avoid catastrophic incidents, the Company helps the world at large.

The Company enhances value for its clients by integrating asset protection throughout supply chains and centralizing integrity data through a suite of Industrial Internet of Things ("IoT")-connected digital software and monitoring solutions, including OneSuite™, which serves as an ecosystem platform, pulling together all of the Company’s software and data services capabilities, for the benefit of its customers.

The Company’s core capabilities also include non-destructive testing (“NDT”) field inspections enhanced by advanced robotics, laboratory quality control, laboratory materials services, shop laboratory assurance testing, sensing technologies and NDT equipment, asset and mechanical integrity engineering services, and light mechanical maintenance and access services.

The Company has three operating segments. Our segments are as follows:

•North America This segment provides asset protection solutions predominantly in North America, with the largest concentration in the United States, followed by Canada, consisting primarily of NDT, inspection, mechanical and engineering services that are used to evaluate the safety, structural integrity and reliability of critical energy, industrial and public infrastructure and commercial aerospace components. Software, digital and data services are included in this segment.

•International. This segment offers services, products and systems similar to those of the other segments to select markets within Europe, the Middle East, Africa, Asia and South America, but not to customers in China and South Korea, which are served by the Products and Systems segment.

•Products and Systems. This segment designs, manufactures, sells, installs and services the Company’s asset protection products and systems, including equipment and instrumentation, predominantly in the United States.

Recent Developments

The Company provides products and services to countries throughout the Middle East, where lawfully permitted, and in accordance with United States regulations. We continue to monitor the on-going conflicts throughout the Middle East. These conflicts caused disruptions in the Company's European operations in 2023 with increased costs associated with higher energy costs, amongst others. These disruptions have largely subsided in 2024 and the Company will continue to monitor market conditions and respond accordingly.

Basis of Presentation

The Unaudited Condensed Consolidated Financial Statements contained in this report have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP") and Securities and Exchange Commission ("SEC") guidance allowing

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Mistras Group, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(tabular dollars and shares in thousands, except per share data)

for reduced disclosure for interim periods. In the opinion of management, the Unaudited Condensed Consolidated Financial Statements include all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the interim periods of the years ending December 31, 2024 and December 31, 2023.

Certain items included in these statements are based on management’s estimates. Actual results may differ from those estimates. The results of operations for any interim period are not necessarily indicative of the results expected for the year. The accompanying Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the notes to the Audited Consolidated Financial Statements contained in the Company’s 2023 Annual Report on Form 10-K ("2023 Annual Report").

Principles of Consolidation

The accompanying Unaudited Condensed Consolidated Financial Statements include the accounts of Mistras Group, Inc. as well as its wholly-owned subsidiaries, majority-owned subsidiaries and consolidated variable interest entities (VIE). For consolidated subsidiaries in which the Company’s ownership interest is less than 100%, the non-controlling interests are reported in stockholders’ equity in the accompanying Condensed Consolidated Balance Sheets. The non-controlling interests in net results, net of tax, is classified separately in the accompanying Unaudited Condensed Consolidated Statements of Income (Loss). All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations of companies acquired are included from the date of acquisition.

Reclassification

Certain amounts in prior periods have been reclassified to conform to the current year presentation. Such reclassifications did not have a material effect on the Company’s financial condition or results of operations as previously reported.

Significant Accounting Policies

The Company’s significant accounting policies are disclosed in Note 1–Summary of Significant Accounting Policies and Practices in the 2023 Annual Report. On an ongoing basis, the Company evaluates its estimates and assumptions, including among other things, those related to revenue recognition, long-lived assets, goodwill and acquisitions. Since the date of the 2023 Annual Report, there have been no material changes to the Company’s significant accounting policies.

Income Taxes

Income taxes are accounted for under the asset and liability method. We recognize deferred tax assets and liabilities at enacted income tax rates for the temporary differences between the financial reporting bases and the tax bases of our assets and liabilities. Any effects of changes in income tax rates or tax laws are included in the provision for income taxes in the period of enactment. Our net deferred tax assets primarily consist of net operating loss carryforwards, or NOLs. A valuation allowance is provided if it is more likely than not that some or all of a deferred income tax asset will not be realized. A current tax liability or asset is recognized for the estimated taxes payable or refundable on tax returns for the current and prior years.

As of September 30, 2024, management concluded that it is more likely than not that a substantial portion of the Company’s deferred tax assets will be realized.

We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution.

The Company’s effective income tax rate was approximately 29.0% and (16.8)% for the three months ended September 30, 2024 and 2023, respectively. The Company’s effective income tax rate was approximately 22.1% and (1.6)% for the nine months ended September 30, 2024 and 2023, respectively.

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Mistras Group, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(tabular dollars and shares in thousands, except per share data)

The effective income tax rate for the three months ended September 30, 2024 was higher than the statutory rate primarily due to the impact of permanent items in the period. The effective income tax rate for the three months ended September 30, 2023 was lower than the statutory rate due to the impact of permanent tax adjustments related to executive compensation and goodwill impairments.

The effective income tax rate for the nine months ended September 30, 2024 was higher than the statutory rate primarily due to the impact of permanent items. The effective income tax rate for the nine months ended September 30, 2023 was lower than the statutory rate due primarily to an unfavorable discrete item related to stock compensation.

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, Segment Reporting (Topic 280) to expand the disclosures about a public entity's reportable segments and address requests from investors for additional, more detailed information about a reportable segment's expenses. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We do not expect the impact of ASU 2023-07 to be material on our financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) to enhance the transparency and decision usefulness of income tax disclosures, primarily related to the rate reconciliation and income taxes paid disclosures. The new standard is effective for fiscal years beginning after December 15, 2024. We do not expect the impact of ASU 2023-09 to be material on our financial statements.

2. Revenue

The Company derives the majority of its revenue by providing services on a time and material basis, and are short-term in nature. The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers.

Performance Obligations

The Company provides highly integrated and bundled inspection services to its customers. The majority of the Company’s contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and is, therefore, not distinct. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the Company’s best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is a relative selling price based on price lists.

Contract modifications are not routine in the performance of the Company’s contracts. Generally, when contracts are modified, the modification is to account for changes in scope to the goods and services that are provided. In most instances, contract modifications are for goods or services that are distinct, and, therefore, are accounted for as a separate contract.

The Company’s performance obligations are satisfied over time as work progresses or at a point in time. The majority of the Company’s revenue is recognized over time as work progresses for the Company’s service deliverables, which includes providing testing, inspection and mechanical services to our customers. Revenue is recognized over time, based on time and material incurred to date which best portrays the transfer of control to the customer. The Company also utilizes an available practical expedient that provides for revenue to be recognized in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date. Fixed fee arrangements are determined based on expected labor, material, and overhead to be consumed on fulfillment of such services. For these arrangements, revenue is recognized on a cost-to-cost method tracked on an input basis.

The majority of our revenue recognized at a point in time is related to product sales when the customer obtains control of the asset, which is generally upon shipment to the customer. Contract costs include labor, material and overhead.

The Company expects any significant remaining performance obligations to be satisfied within one year.

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Mistras Group, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(tabular dollars and shares in thousands, except per share data)

Contract Estimates

The majority of the Company's revenues are short-term in nature. The Company enters into master service agreements ("MSA"s) with customers that specify an overall framework and contract terms. The actual contracting to provide services or furnish products are triggered by a work order, purchase order, or some similar document issued pursuant to a MSA which sets forth the scope of services and/or identifies the products to be provided. From time-to-time, the Company may enter into longer-term contracts, which can range from several months to several years. Revenue on certain contracts is recognized as work is performed based on total costs incurred to date in relation to the total estimated costs for the performance of the contract at completion. This includes contract estimates of costs to be incurred for the performance of the contract. Cost estimation is based upon the professional knowledge and experience of the Company's project managers, engineers and financial professionals. Factors that are considered in estimating the work to be completed include the availability of materials, the effect of any delays in the Company's project performance and the recoverability of any claims. Whenever revisions of estimates, contract costs and/or contract values indicate that the contract costs will exceed estimated revenues, thus creating a loss, a provision for the total estimated loss is recorded in that period.

Revenue by Category

The following series of tables present the Company’s disaggregated revenue:

Revenue by industry was as follows:


Three Months Ended September 30, 2024	North America		International		Products		Corp/Elim		Total
Oil & Gas	$	90,460	$	9,040	$	3	$	—	$	99,503
Aerospace & Defense	16,181		5,663		42		—		21,886
Industrials	12,285		6,749		478		—		19,512
Power Generation & Transmission	8,029		3,081		544		—		11,654
Other Process Industries	7,836		3,900		79		—		11,815
Infrastructure, Research & Engineering	5,189		2,744		797		—		8,730
Petrochemical	3,806		198		—		—		4,004
Other	6,059		2,287		1,333		(4,089)		5,590
Total	$	149,845	$	33,662	$	3,276	$	(4,089)	$	182,694


Three Months Ended September 30, 2023	North America		International		Products		Corp/Elim		Total
Oil & Gas	$	94,390	$	8,827	$	35	$	—	$	103,252
Aerospace & Defense	14,240		5,778		47		—		20,065
Industrials	10,325		6,018		310		—		16,653
Power Generation & Transmission	7,388		1,653		696		—		9,737
Other Process Industries	6,933		2,864		(5)		—		9,792
Infrastructure, Research & Engineering	6,042		2,383		1,070		—		9,495
Petrochemical	3,313		586		—		—		3,899
Other	6,183		2,871		676		(3,269)		6,461
Total	$	148,814	$	30,980	$	2,829	$	(3,269)	$	179,354

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Mistras Group, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(tabular dollars and shares in thousands, except per share data)


Nine Months Ended September 30, 2024	North America		International		Products		Corp/Elim		Total
Oil & Gas	$	289,843	$	31,841	$	240	$	—	$	321,924
Aerospace & Defense	48,152		18,092		100		—		66,344
Industrials	33,047		18,480		1,478		—		53,005
Power Generation & Transmission	18,953		6,017		1,569		—		26,539
Other Process Industries	26,132		12,337		155		—		38,624
Infrastructure, Research & Engineering	14,286		7,762		1,901		—		23,949
Petrochemical	11,467		900		—		—		12,367
Other	14,708		5,543		4,417		(10,511)		14,157
Total	$	456,588	$	100,972	$	9,860	$	(10,511)	$	556,909



Nine Months Ended September 30, 2023	North America		International		Products		Corp/Elim		Total
Oil & Gas	$	281,663	$	26,291	$	87	$	—	$	308,041
Aerospace & Defense	41,516		15,894		275		—		57,685
Industrials	30,693		18,274		1,336		—		50,303
Power Generation & Transmission	17,834		4,840		3,189		—		25,863
Other Process Industries	24,906		10,567		73		—		35,546
Infrastructure, Research & Engineering	12,696		6,547		2,759		—		22,002
Petrochemical	10,027		887		—		—		10,914
Other	11,960		7,364		2,178		(8,457)		13,045
Total	$	431,295	$	90,664	$	9,897	$	(8,457)	$	523,399

Revenue per key geographic location was as follows:


Three Months Ended September 30, 2024	North America		International		Products		Corp/Elim		Total
United States	$	124,194	$	402	$	1,658	$	(1,457)	$	124,797
Other Americas	25,108		2,008		107		(577)		26,646
Europe	343		29,458		850		(1,655)		28,996
Asia-Pacific	200		1,794		661		(400)		2,255
Total	$	149,845	$	33,662	$	3,276	$	(4,089)	$	182,694


Three Months Ended September 30, 2023	North America		International		Products		Corp/Elim		Total
United States	$	126,239	$	120	$	1,032	$	(849)	$	126,542
Other Americas	21,907		3,703		49		(1,659)		24,000
Europe	465		26,764		510		(701)		27,038
Asia-Pacific	203		393		1,238		(60)		1,774
Total	$	148,814	$	30,980	$	2,829	$	(3,269)	$	179,354

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Mistras Group, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(tabular dollars and shares in thousands, except per share data)


Nine Months Ended September 30, 2024	North America		International		Products		Corp/Elim		Total
United States	$	384,522	$	1,129	$	4,800	$	(3,181)	$	387,270
Other Americas	66,829		6,224		960		(3,602)		70,411
Europe	2,107		89,304		2,081		(3,116)		90,376
Asia-Pacific	3,130		4,315		2,019		(612)		8,852
Total	$	456,588	$	100,972	$	9,860	$	(10,511)	$	556,909



Nine Months Ended September 30, 2023	North America		International		Products		Corp/Elim		Total
United States	$	369,811	$	709	$	4,478	$	(1,718)	$	373,280
Other Americas	57,218		11,013		673		(3,565)		65,339
Europe	3,159		75,421		1,275		(2,693)		77,162
Asia-Pacific	1,107		3,521		3,471		(481)		7,618
Total	$	431,295	$	90,664	$	9,897	$	(8,457)	$	523,399

Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on the Consolidated Balance Sheets. Amounts are generally billed as work progresses in accordance with agreed-upon contractual terms, generally at periodic intervals (e.g., weekly, bi-weekly or monthly). Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, the Company sometimes receives advances or deposits from its customers before revenue is recognized, resulting in contract liabilities. These assets and liabilities are aggregated on an individual contract basis and reported on the Consolidated Balance Sheets at the end of each reporting period within accounts receivable, net or accrued expenses and other current liabilities.

Revenue recognized during the nine months ended September 30, 2024 and 2023 that was included in the contract liability balance at the beginning of such year was $6.2 million and $5.7 million, respectively, for each period. Changes in the contract asset and liability balances during these periods were not materially impacted by any other factors. The Company applies the practical expedient to expense incremental costs incurred related to obtaining a contract when the amortization period of the asset that the Company otherwise would have recognized is one year or less.

3. Share-Based Compensation

The Company grants share-based incentive awards to its eligible employees and non-employee directors under its 2016 Long-Term Incentive Plan (the "2016 Plan"). Awards granted under the 2016 Plan may be in the form of stock options, restricted stock units and other forms of share-based incentives, including performance-based restricted stock units, stock appreciation rights and deferred stock rights. At the annual shareholders meeting on May 14, 2024, the Company’s shareholders approved an amendment to the 2016 Plan, including an increase to the total number of shares that may be issued under the 2016 Plan by 1.3 million, for a total of 6.2 million shares that are authorized for issuance under the 2016 Plan, of which approximately 1,600,000 shares were available for future grants as of September 30, 2024.

Stock Options

On October 11, 2023, Mr. Stamatakis was granted an award of stock options to purchase 250,000 shares of common stock of the Company, with an exercise price of $5.36, the closing price of the Company's common stock as quoted on the New York Stock Exchange on the grant date (the "Options"). The Options were granted as an inducement for Mr. Stamatakis to accept the position of Interim President and CEO of the Company and were therefore granted outside the 2016 Plan, as permitted by the rules of the NYSE. The Options can be exercised any time after the grant date until its expiration date, which is the earlier of 10

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Mistras Group, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(tabular dollars and shares in thousands, except per share data)

years from the grant date or one year following the date Mr. Stamatakis is no longer serving as an officer, director or in any other capacity of the Company.

The following table sets forth a summary of the stock option activity, weighted-average exercise prices and options outstanding as of September 30, 2024 as follows:


	Nine months ended September 30,
	2024			2023
	Common Stock Options	Weighted Average Exercise Price		Common Stock Options	Weighted Average Exercise Price
Outstanding at beginning of year:	250	$	5.36	—	$	—
Granted	—	$	—	—	$	—
Exercised	—	$	—	—	$	—
Expired or forfeited	—	$	—	—	$	—
Outstanding at end of year:	250	$	5.36	—	$	—

The Company recognized all share-based compensation expense related to the stock options granted in the fourth quarter of 2023 when they were granted and no further unrecognized share-based compensation expense remains as of the end of the current period.

Stock Issuances to Non-Employee Directors

As part of its compensation program for non-employee directors, the Company makes semi-annual issuances of fully-vested common stock to its non-employee directors. A summary of the fully-vested common stock the Company issued to its non-employee directors, in connection with its non-employee director compensation, is as follows:


	Nine months ended September 30,
	2024		2023
Awards issued	60		99
Grant date fair value of awards issued	$	549	$	550

Restricted Stock Unit Awards

For the three months ended September 30, 2024 and September 30, 2023, the Company recognized share-based compensation expense related to restricted stock unit awards of $1.6 million and $0.7 million, respectively. For the nine months ended September 30, 2024 and 2023, the Company recognized share-based compensation expense related to restricted stock unit awards of $3.9 million and $2.5 million, respectively. As of September 30, 2024, there was $8.9 million of unrecognized compensation costs, net of estimated forfeitures, related to restricted stock unit awards, which is expected to be recognized over a remaining weighted-average period of 2.4 years. Upon vesting, restricted stock units are generally net share-settled to cover the required withholding tax and the remaining amount is converted into an equivalent number of shares of common stock.

A summary of the vesting activity of restricted stock unit awards, with the respective fair value of the awards, is as follows:


	Nine months ended September 30,
	2024		2023
Restricted stock awards vested	461		430
Fair value of awards vested	$	4,184	$	2,639

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Mistras Group, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(tabular dollars and shares in thousands, except per share data)

A summary of the Company’s outstanding, non-vested restricted share units is as follows:


	Nine months ended September 30,
	2024			2023
	Units	Weighted Average Grant-Date Fair Value		Units	Weighted Average Grant-Date Fair Value
Outstanding at beginning of period:	1,184	$	8.07	1,415	$	7.96
Granted	726	$	8.52	591	$	8.37
Vested	(461)	$	9.08	(430)	$	6.14
Forfeited	(179)	$	8.39	(120)	$	7.96
Outstanding at end of period:	1,270	$	8.39	1,456	$	7.71

Performance Restricted Stock Units

The Company maintains Performance Restricted Stock Units ("PRSUs") that have been granted to select executives and senior officers. The ultimate payout of these PRSUs may vary between zero and 200% of the target award, based on the Company’s performance over a one-year period based on specific metrics approved by the Compensation Committee of the Board of Directors of the Company.

For 2023, the Compensation Committee used the following three performance metrics for PRSUs approved in that year.

1.Free Cash Flow defined as net cash provided by operating activities less purchases of property, plant, equipment and intangible assets and is subject to adjustments approved by the Compensation Committee.

2.Adjusted EBITDA defined as net income attributable to the Company plus: interest expense, provision for income taxes, depreciation and amortization, share-based compensation expense and certain acquisition related costs (including transaction due diligence costs and adjustments to the fair value of contingent consideration), foreign exchange (gain) loss and, if applicable, certain special items which are noted.

3.Revenue

For PRSUs awarded in 2024, the Compensation Committee utilized the same metrics as 2023 PRSUs, but with revised performance goals.

PRSUs are equity-classified and compensation costs related to PRSUs with performance conditions are initially measured using the fair value of the underlying stock at the date of grant. Compensation costs related to the PRSUs with performance conditions are subsequently adjusted for changes in the expected outcomes of the performance conditions. Compensation cost related to the PRSUs with a market condition is not reversed if the market condition is not achieved, provided the employee requisite service has been rendered. Earned PRSUs generally vest ratably in four equal annual installments over the four years following completion of the performance period, for a total requisite service period of up to five years, and have no dividend rights.

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Notes to Unaudited Condensed Consolidated Financial Statements

(tabular dollars and shares in thousands, except per share data)

A summary of the Company’s PRSU activity is as follows:


	Nine months ended September 30,
	2024			2023
	Units	Weighted Average Grant-Date Fair Value		Units	Weighted Average Grant-Date Fair Value
Outstanding at beginning of period:	60	$	9.33	280	$	9.96
Granted	295	$	8.76	282	$	8.50
Performance condition adjustments	(187)	$	8.76	(314)	$	8.34
Vested	—	$	—	(64)	$	5.58
Forfeited	—	$	—	(84)	$	(6.95)
Outstanding at end of period:	168	$	9.18	100	$	9.83

Performance condition adjustments during the nine months ended September 30, 2024 decreased by approximately 187,000 units based on forecasted results for 2024 as compared to performance metrics determined by the Compensation Committee.

For the three months ended September 30, 2024 and September 30, 2023, the Company recognized aggregate share-based compensation expense related to the awards described above of approximately $0.0 million and $0.1 million, respectively. For the nine months ended September 30, 2024 and September 30, 2023, the Company recognized aggregate share-based compensation expense related to the awards described above of approximately $0.3 million and $0.6 million, respectively. At September 30, 2024, there was $0.9 million of total unrecognized compensation costs related to approximately 168,000 non-vested PRSUs, which is expected to be recognized over a remaining weighted-average period of 2.4 years.

4. Earnings (loss) per Share

Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares outstanding during the period. Diluted earnings per share is computed by dividing net income (loss) by the sum of (1) the weighted-average number of shares of common stock outstanding during the period, and (2) the dilutive effect of assumed conversion of equity awards using the treasury stock method. With respect to the number of weighted-average shares outstanding (denominator), diluted shares reflects: (i) the exercise of options to acquire common stock to the extent that the options’ exercise prices are less than the average market price of common shares during the period and (ii) the pro forma vesting of restricted stock units.

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Mistras Group, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(tabular dollars and shares in thousands, except per share data)

The following table sets forth the computations of basic and diluted earnings (loss) per share:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023

Basic earnings (loss) per share
Numerator:
Net income (loss) attributable to Mistras Group, Inc.	$	6,401	$	(10,298)	$	13,765	$	(14,947)
Denominator:
Weighted average common shares outstanding	31,002		30,402		30,895		30,277
Basic earnings (loss) per share	$	0.21	$	(0.34)	$	0.45	$	(0.49)

Diluted earnings (loss) per share:
Numerator:
Net income (loss) attributable to Mistras Group, Inc.	$	6,401	$	(10,298)	$	13,765	$	(14,947)
Denominator:
Weighted average common shares outstanding	31,002		30,402		30,895		30,277
Dilutive effect of stock options outstanding	120		—		103		—
Dilutive effect of restricted stock units outstanding (1)	538		—		515		—
	31,660		30,402		31,513		30,277
Diluted earnings (loss) per share	$	0.20	$	(0.34)	$	0.44	$	(0.49)

_______________

(1) For the three and nine months ended September 30, 2023, 1,508,255 and 926,224 shares related to restricted stock, respectively, were excluded from the calculation of diluted EPS due to the net loss for the period.

5. Acquisitions

Acquisition-Related Expense

In the course of its acquisition activities, the Company incurs costs in connection with due diligence, such as professional fees, and other expenses. Additionally, the Company adjusts the fair value of acquisition-related contingent consideration liabilities on a quarterly basis. These amounts are reported as Acquisition-related expense, net on the Unaudited Condensed Consolidated Statements of Income (Loss) and were as follows for the three and nine months ended September 30, 2024 and 2023:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Due diligence, professional fees and other transaction costs	$	—	$	—	$	1	$	5
Adjustments to fair value of contingent consideration liabilities	—		—		—		—
Acquisition-related expense, net	$	—	$	—	$	1	$	5

The Company's contingent consideration liabilities are included in Accrued expenses and other current liabilities and Other long-term liabilities on the Condensed Consolidated Balance Sheets.

6. Accounts Receivable, net

Accounts receivable consisted of the following:

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(tabular dollars and shares in thousands, except per share data)


	September 30, 2024		December 31, 2023

Trade accounts receivable	$	146,410	$	134,495
Allowance for credit losses	(2,306)		(1,648)
Accounts receivable, net	$	144,104	$	132,847

The Company had $30.3 million and $18.5 million of unbilled revenue accrued as of September 30, 2024 and December 31, 2023, respectively. These amounts are included in the trade accounts receivable balances above. Unbilled revenue is generally billed in the subsequent quarter to their revenue recognition. The Company considers unbilled receivables as short-term in nature as they are normally converted to trade receivables within 90 days, and thus future changes in economic conditions are unlikely to have a significant effect on the credit loss estimate.

7. Inventories

Inventories consisted of the following (in thousands):


	September 30, 2024		December 31, 2023

Raw materials	$	5,302	$	6,099
Work in progress	1,106		839
Finished goods	5,158		5,740
Consumable supplies	2,944		2,605
Inventories	$	14,510	$	15,283

8. Property, Plant and Equipment, net

Property, plant and equipment, net consisted of the following:


	Useful Life (Years)	September 30, 2024		December 31, 2023

Land		$	2,455	$	2,453
Buildings and improvements	30-40	26,419		26,663
Office furniture and equipment	5-8	17,512		21,334
Machinery and equipment	5-7	278,724		269,306
		325,110		319,756
Accumulated depreciation and amortization		(245,258)		(238,784)
Property, plant and equipment, net		$	79,852	$	80,972

Depreciation expense for the three months ended September 30, 2024 and 2023 was approximately $6.1 million and $6.6 million, respectively.

Depreciation expense for the nine months ended September 30, 2024 and 2023 was $18.9 million and $19.0 million, respectively.

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Notes to Unaudited Condensed Consolidated Financial Statements

(tabular dollars and shares in thousands, except per share data)

9. Goodwill

Changes in the carrying amount of goodwill by segment is shown below:


	North America		International		Products and Systems		Total
Balance at December 31, 2023	$	187,354	$	—	$	—	$	187,354
Foreign currency translation	(1,482)		—		—		(1,482)


Balance at September 30, 2024	$	185,872	$	—	$	—	$	185,872

The Company reviews goodwill for impairment on a reporting unit basis on October 1 of each year and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable.

During the third quarter of 2023, a triggering event was identified within the Company's reporting units within the International segment due to decreased gross margin in the current period as a result of inflationary pressures and rising energy costs impacting the International reporting units' operations. As a result, the Company performed an interim quantitative goodwill impairment test.

In performing the interim quantitative goodwill impairment test and consistent with prior practice, the Company determined the fair value of each of the reporting units using a combination of the income approach and the market approach by assessing each of these valuation methodologies based upon availability and relevance of comparable company data and determining the appropriate weighting.

Under the income approach, the fair value for each of the reporting units was determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. The Company used internal forecasts, updated for recent events, to estimate future cash flows using a terminal value calculation, which incorporates historical and forecasted trends, including an estimate of long-term future growth rates, based on the Company’s most recent views of the long-term outlook for each reporting unit. The Company's internal forecasts include assumptions about future profitability, including the expected demand for the Company’s goods and services. Due to the inherent uncertainties involved in making estimates and assumptions, actual results may differ from those assumed in the forecasts. The Company derived the discount rates using a capital asset pricing model and analyzing published rates for industries relevant to the reporting units to estimate the cost of equity financing. The Company used discount rates that are commensurate with the risks and uncertainties inherent in the respective businesses and in the Company's internally developed forecasts and which are updated for recent events. Increased interest rates in the current period increased the discount rate associated with the reporting units which contributed to an unfavorable decrease in the reporting units value.

The market approach valuation was derived from metrics of publicly traded companies or historically completed transactions of comparable businesses. The selection of comparable businesses was based on the markets in which the reporting units operate, considering risk profiles, size, geography, and diversity of products and services.

Based upon the results of the interim quantitative goodwill impairment test, the Company recorded an impairment charge of $13.8 million within the International reporting units. The impairment was calculated based on the difference between the estimated fair value and the carrying value of the reporting units. Any significant adverse changes in future periods to the Company’s internal forecasts or the external market conditions, if any, could reasonably be expected to negatively affect its key assumptions and may result in future goodwill impairment charges which could be material.

The Company performed a quantitative annual impairment test as of October 1, 2023 and the Company did not identify any changes in circumstances that would indicate the carrying value of goodwill may not be recoverable. Additionally, through September 30, 2024, the Company did not identify any changes in circumstances that would indicate the carrying value of goodwill may not be recoverable. Significant adverse changes in future periods could negatively affect the Company's key assumptions and may result in future goodwill impairment charges which could be material.

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Mistras Group, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(tabular dollars and shares in thousands, except per share data)

10. Intangible Assets

The gross amount, accumulated amortization and net carrying amount of intangible assets were as follows:


		September 30, 2024				December 31, 2023
	Useful Life (Years)	Gross Amount		Accumulated Amortization		Net Carrying Amount		Gross Amount		Accumulated Amortization		Net Carrying Amount

Customer relationships	5-18	$	110,240	$	(93,518)	$	16,722	$	110,780	$	(90,506)	$	20,274
Software/Technology	3-15	58,314		(34,329)		23,985		55,053		(32,230)		22,823
Covenants not to compete	2-5	12,511		(12,483)		28		12,536		(12,488)		48
Other	2-12	10,394		(9,625)		769		10,466		(9,617)		849
Total		$	191,459	$	(149,955)	$	41,504	$	188,835	$	(144,841)	$	43,994

Amortization expense for the three months ended September 30, 2024 and 2023 was approximately $1.9 million and $2.2 million, respectively.

Amortization expense for the nine months ended September 30, 2024 and 2023 was $5.8 million and $6.5 million, respectively.

11. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:


	September 30, 2024		December 31, 2023

Accrued salaries, wages and related employee benefits	$	28,061	$	27,372

Accrued workers’ compensation and health benefits	4,616		4,385
Deferred revenue	6,975		7,136
Pension accrual	2,458		2,458
Right-of-use liability - Operating	11,783		10,686
Other accrued expenses	31,730		32,294
Total	$	85,623	$	84,331

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Notes to Unaudited Condensed Consolidated Financial Statements

(tabular dollars and shares in thousands, except per share data)

12. Long-Term Debt

Long-term debt consisted of the following:


	September 30, 2024		December 31, 2023

Senior credit facility	$	76,949	$	71,150
Senior secured term loan, net of unamortized debt issuance costs of $0.3 million and $0.4 million, respectively	109,863		115,253

Other	2,888		3,996
Total debt	189,700		190,399
Less: Current portion	(10,711)		(8,900)
Long-term debt, net of current portion	$	178,989	$	181,499

Senior Credit Facility

On August 1, 2022, the Company entered into a new credit agreement (the “Credit Agreement”) which provides the Company with a $190 million 5-year committed revolving credit facility and a $125 million term loan with a balance of $109.9 million as of September 30, 2024. The Credit Agreement permits the Company to borrow up to $100 million in non-U.S. dollar currencies and to use up to $20 million of the credit limit for the issuance of letters of credit. Both the revolving line of credit and the term loan under the Credit Agreement have a maturity date of July 30, 2027.

The Credit Agreement has the following key terms, conditions and financial covenants:

•Borrowings bear interest at Secured Overnight Financing Rate ("SOFR") plus a credit spread adjustment and applicable SOFR margin ranging from 1.25% to 2.75%, based upon our Total Consolidated Debt Leverage Ratio (defined below); under the Prior Credit Agreement, the margin was based upon the LIBOR margin.

◦Total Consolidated Debt Leverage Ratio means the ratio of (a) Total Consolidated Debt to (b) EBITDA (as defined in the Credit Agreement) for the trailing four consecutive fiscal quarters.

◦Total Consolidated Debt means all indebtedness (including subordinated debt) of the Company on a consolidated basis.

•The Company has the benefit of the lowest SOFR margin if its Total Consolidated Debt Leverage Ratio is equal to or less than 1.25 to 1.0, and the margin increases as the ratio increases, to the maximum margin if the ratio is greater than 3.75 to 1.0. The Credit Agreement is secured by liens on substantially all the assets of the Company and certain of its U.S. subsidiaries and is guaranteed by those U.S. subsidiaries.

•The Company is required to maintain a Total Consolidated Debt Leverage Ratio of no more than 4.0 to 1.0 at the end of each quarter through June 30, 2023 and stepping down to a maximum permitted ratio of no more than 3.75 to 1.0 for the remainder of the term.

•The Company is required to maintain a Fixed Charge Coverage Ratio of 1.25 to 1.0 for the duration of the Credit Agreement, as defined in the Credit Agreement.

•The Credit Agreement limits the Company’s ability to, among other things, create liens, make investments, incur more indebtedness, merge or consolidate, make dispositions of property, pay dividends, make distributions to stockholders or repurchase our stock, enter into a new line of business, enter into transactions with affiliates and enter into burdensome agreements.

•The Credit Agreement does not limit the Company’s ability to acquire other businesses or companies except that the acquired business or company must be in the Company's line of business, the Company must be in compliance with

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Notes to Unaudited Condensed Consolidated Financial Statements

(tabular dollars and shares in thousands, except per share data)

the financial covenants on a pro forma basis after taking into account the acquisition, and the Company must provide written notice at least five business days prior to the date of an acquisition of $10 million or more.

•Quarterly payments on the term loan of $1.56 million through June 30, 2024, then increasing to $2.34 million through June 30, 2025, and to $3.12 million for each quarterly payment thereafter through maturity.

As of September 30, 2024, the Company had borrowings of $186.8 million and a total of $3.1 million of letters of credit outstanding under the Credit Agreement. The Company has capitalized costs associated with debt modifications of $0.9 million as of September 30, 2024, which is included in Other assets on the Condensed Consolidated Balance Sheets and will be amortized into interest expense over the remaining term of the Credit Agreement through July 30, 2027.

As of September 30, 2024, the Company was in compliance with the terms of the Credit Agreement. The Company continuously monitors compliance with the covenants contained in its Credit Agreement. The Company believes that it is probable that the Company will be able to comply with the financial covenants in the Credit Agreement and that sufficient credit remains available under the Credit Agreement to meet the Company's liquidity needs. However, such matters cannot be predicted with certainty.

Other debt

The Company’s other debt includes bank financing provided at the local subsidiary level used to support working capital requirements and fund capital expenditures. At September 30, 2024, there was an aggregate of approximately $2.9 million outstanding, payable at various times through 2030. Monthly payments range from $1.0 thousand to $16.1 thousand and interest rates range from 0.4% to 3.5%.

13. Fair Value Measurements

The Company performs fair value measurements in accordance with the guidance provided by ASC 820, Fair Value Measurements and Disclosures. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It also establishes a three level hierarchy that prioritizes the inputs used to measure fair value.

Financial instruments measured at fair value on a recurring basis

The fair value of contingent consideration liabilities was estimated using a discounted cash flow technique with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in ASC 820. The significant inputs in the Level 3 measurement not supported by market activity include the probability assessments of expected future cash flows related to the acquisitions, appropriately discounted considering the uncertainties associated with the obligation, and as calculated in accordance with the terms of the applicable acquisition agreements.

The following table represents the changes in the fair value of Level 3 contingent consideration:


	Nine months ended September 30,
	2024		2023
Beginning balance	$	—	$	938

Payments	—		(938)

Revaluation	—		—

Ending balance	$	—	$	—

Financial instruments not measured at fair value on a recurring basis

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Mistras Group, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(tabular dollars and shares in thousands, except per share data)

The Company has evaluated current market conditions and borrower credit quality and has determined that the carrying value of its long-term debt approximates fair value. The fair value of the Company’s notes payable and finance lease obligations approximates their carrying amounts based on anticipated interest rates which management believes would currently be available to the Company for similar issuances of debt.

14. Commitments and Contingencies

Legal Proceedings and Government Investigations

The Company is periodically involved in lawsuits, investigations and claims. While uncertainties exist with respect to the ultimate resolution of lawsuits, investigations and claims asserted against it, the Company, based on currently available information, does not believe that any currently pending or threatened legal proceeding to which the Company is a party, or is likely to become a party, including those proceedings identified in this Note 14, will have a material adverse effect on its business, results of operations, cash flows or financial condition. The costs incurred by the Company to defend lawsuits, investigations and claims and amounts the Company pays to other parties because of these matters may be covered by insurance in some circumstances.

Litigation and Commercial Claims

The Company and a subsidiary of the Company, Mistras Arizona Inspection Services LLC (“Mistras Arizona”), are subject to a lawsuit filed by the State of Arizona and the Arizona Department of Environmental Quality (collectively “DEQ”). The lawsuit, captioned State of Arizona v. Mistras Group, Inc., Mistras Arizona Inspection Services, LLC and Naiman Phoenix, Ltd., was originally filed on February 27, 2024, in the Superior Court of the State of Arizona for Maricopa County, CV 2024-003866 (the "DEQ Complaint"). The DEQ Complaint alleges various violations of Arizona environmental laws and regulations by the Company and Mistras Arizona in connection with the operation by Mistras Arizona of its testing facility in Phoenix, Arizona. The DEQ Complaint seeks, through injunctive relief, the closing of a chromic acid plating line at the testing facility, implementation of a site assessment plan approved by the DEQ, and corrective and remedial action to bring the testing facility into compliance with laws and regulations. In addition, the DEQ Complaint seeks unspecified penalties and costs.

The Superior Court held a hearing September 2024 regarding the DEQ’s request for a preliminary injunction. On October 23, 2024, the Superior Court issued a ruling, which declined to issue the preliminary injunction requested by the DEQ, but imposed the following conditions on the Company and Mistras Arizona unless and until modified by the Superior Court or entry of a final judgement: (1) the Company and Mistras Arizona are prohibited from releasing or permitting any release of chromic acid from the facility; (2) within a reasonable time, the Company and Mistras Arizona must complete improvements to the testing facility designed to prevent future discharges of chromium or chromic acid; (3) the Company must notify the DEQ upon completion of the improvement to enable the DEQ to conduct an inspection; and (4) the Company and Mistras Arizona are prohibited from engaging in any chrome plating operations at the testing facility until they notify the DEQ that the improvements have been completed. The DEQ may seek relief if it determines that the improvements are not sufficient to prevent discharges.

The Company intends to comply with the Superior Court's ruling. This matter is still in the relatively early stages, including as to factual and expert discovery. It is probable that remediation costs, fines and penalties may be imposed related to this lawsuit. However, the Company is unable to estimate the range of loss that it may incur.

In addition to the matters covered by the DEQ complaint on or about November 7, 2024, Mistras Arizona received notice from the Maricopa County Department of Air Quality for alleged violations of various regulations regarding air quality. This matter has been resolved with an immaterial fine paid.

In addition, Mistras Arizona’s operations in Phoenix are located at a leased site within the footprint of the Motorola 52nd Street Superfund Site (the “Motorola Site”). Mistras Arizona received a General Notice Letter from the US Environmental Protection Agency (the "EPA"), dated May 21, 2024, informing Mistras Arizona that the EPA has identified it as a potentially responsible party in relation to the Motorola Site.

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Mistras Group, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(tabular dollars and shares in thousands, except per share data)

Pension Related Contingencies

Certain of the Company’s subsidiaries had significant reductions in their unionized workers in 2018. The collective bargaining agreements for the employees of these subsidiaries required contributions for these employees to two national multi-employer pension funds. The reduction in employees resulted in one of the Company's subsidiaries incurring a complete withdrawal to one of the pension funds under the Employee Retirement Income Security Act of 1974 ("ERISA"), which was fully satisfied in 2019. The Company has determined that the subsidiary is likely to incur partial or complete withdrawal liability to the other pension fund. The balance of the estimated total amount of this potential liability as of September 30, 2024 is approximately $2.5 million, which were incurred in 2018 and 2019.

15. Segment Disclosure

The Company’s three operating segments are:

•North America. This segment provides asset protection solutions predominantly in North America, with the largest concentration in the United States, followed by Canada, consisting primarily of NDT, inspection, mechanical and engineering services that are used to evaluate the safety, structural integrity and reliability of critical energy, industrial and public infrastructure and commercial aerospace components. Software, digital and data services are included in this segment.

Costs incurred for general corporate services, including finance, legal, and certain other costs that are provided to the segments are reported within Corporate and eliminations. Sales to the International segment from the Products and Systems segment and subsequent sales by the International segment of the same items are recorded and reflected in the operating performance of both segments. Additionally, engineering charges and royalty fees charged to the North America and International segments by the Products and Systems segment are reflected in the operating performance of each segment.

The accounting policies of the reportable segments are the same as those described in Note 1-Description of Business and Basis of Presentation. Segment income from operations is one of the primary performance measures used by the chief operating decision maker, to assess the performance of each segment and make resource allocation decisions. Certain general and administrative costs such as human resources, information technology and training are allocated to the segments. Segment income from operations excludes interest and other financial charges and income taxes. Corporate and other assets are comprised principally of cash, deposits, property, plant and equipment, domestic deferred taxes, deferred charges and other assets. Corporate loss from operations consists of administrative charges related to corporate personnel and other charges that cannot be readily identified for allocation to a particular segment.

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Mistras Group, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(tabular dollars and shares in thousands, except per share data)

Selected consolidated financial information by segment for the periods shown was as follows: (with intercompany transactions eliminated in Corporate and eliminations)


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Revenue
North America	$	149,845	$	148,814	$	456,588	$	431,295
International	33,662		30,980		100,972		90,664
Products and Systems	3,276		2,829		9,860		9,897
Corporate and eliminations	(4,089)		(3,269)		(10,511)		(8,457)
	$	182,694	$	179,354	$	556,909	$	523,399


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Gross profit
North America	$	42,487	$	44,773	$	126,813	$	121,088
International	10,139		8,481		29,667		24,247
Products and Systems	1,933		1,096		5,233		4,773
Corporate and eliminations	18		32		70		73
	$	54,577	$	54,382	$	161,783	$	150,181

Income (loss) from operations by operating segment includes intercompany transactions, which are eliminated in Corporate and eliminations.


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Income (loss) from operations
North America	$	17,455	$	18,004	$	49,742	$	39,719
International	1,778		(12,970)		4,548		(13,031)
Products and Systems	670		(557)		1,479		(78)
Corporate and eliminations	(8,045)		(9,159)		(26,401)		(29,228)
	$	11,858	$	(4,682)	$	29,368	$	(2,618)


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Depreciation and amortization
North America	$	5,843	$	6,603	$	18,191	$	19,329
International	1,940		1,915		5,763		5,663
Products and Systems	193		183		526		526
Corporate and eliminations	80		47		246		(48)
	$	8,056	$	8,748	$	24,726	$	25,470

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Mistras Group, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(tabular dollars and shares in thousands, except per share data)


	September 30, 2024		December 31, 2023
Intangible assets, net
North America	$	33,162	$	37,622
International	1,822		2,998
Products and Systems	1,040		1,168
Corporate and eliminations	5,480		2,206
	$	41,504	$	43,994


	September 30, 2024		December 31, 2023
Total assets
North America	$	413,878	$	402,782
International	104,063		99,398
Products and Systems	12,253		13,259
Corporate and eliminations	21,487		19,337
	$	551,681	$	534,776

Refer to Note 2–Revenue, for revenue by geographic area for the three and nine months ended September 30, 2024 and 2023.

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Mistras Group, Inc. and Subsidiaries

Management's Discussion and Analysis of Financial Condition and Results of Operations

(tabular dollars are in thousands)

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis (“MD&A”) provides a discussion of our results of operations and financial position for the three and nine months ended September 30, 2024 and 2023. The MD&A should be read together with our Unaudited Condensed Consolidated Financial Statements and related notes included in Item 1 in this Quarterly Report on Form 10-Q (the "Quarterly Report") and our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2023, (“2023 Annual Report”). Unless otherwise specified or the context otherwise requires, “Mistras,” “the Company,” “we,” “us” and “our” refer to Mistras Group, Inc. and its consolidated subsidiaries. The MD&A includes the following sections:

•Forward-Looking Statements

•Overview

•Note about Non-GAAP Measures

•Consolidated Results of Operations

•Liquidity and Capital Resources

•Critical Accounting Policies and Estimates

Forward-Looking Statements

This Quarterly Report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934 (“Exchange Act”). Such forward-looking statements include those that express plans, anticipation, intent, contingency, goals, targets or future development and/or otherwise are not statements of historical fact. These forward-looking statements are based on our current expectations and projections about future events and they are subject to risks and uncertainties known and unknown that could cause actual results and developments to differ materially from those expressed or implied in such statements.

In some cases, you can identify forward-looking statements by terminology, such as “goals,” or “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “may,” “could,” “should,” “would,” “predicts,” “appears,” “projects,” or the negative of such terms or other similar expressions. You are urged not to place undue reliance on any such forward-looking statements, any of which may turn out to be wrong due to inaccurate assumptions, various risks, uncertainties or other factors known and unknown. Factors that could cause or contribute to differences in results and outcomes from those in our forward-looking statements include, without limitation, those discussed in the “Business—Forward-Looking Statements,” and “Risk Factors” sections of our 2023 Annual Report as well as those discussed in this Quarterly Report and in our other filings with the SEC. In addition, there are various developments discussed below which could create risks and uncertainty about our business, results of operations or liquidity.

Overview

We are a leading "one source" multinational provider of integrated technology-enabled asset protection solutions, helping to maximize the safety and operational uptime for civilization’s most critical industrial and civil assets.

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Management's Discussion and Analysis of Financial Condition and Results of Operations

(tabular dollars are in thousands)

OneSuite™, which serves as an ecosystem platform, pulling together all of the Company’s software and data services capabilities, for the benefit of its customers.

The Company’s core capabilities also include non-destructive testing (“NDT”) field inspections enhanced by advanced robotics, laboratory quality control and assurance testing, sensing technologies and NDT equipment, asset and mechanical integrity engineering services, and light mechanical maintenance and access services.

Our operations consist of three reportable segments: North America, International, and Products and Systems.

•North America provides asset protection solutions predominantly in North America, with the largest concentration in the United States, followed by Canada, consisting primarily of NDT, inspection, mechanical and engineering services that are used to evaluate the structural integrity and reliability of critical energy, industrial and public infrastructure and commercial aerospace components. Software, digital and data services are included in this segment.

•International offers services, products and systems similar to those of the other segments to select markets within Europe, the Middle East, Africa, Asia and South America, but not to customers in China and South Korea, which are served by the Products and Systems segment.

•Products and Systems designs, manufactures, sells, installs and services the Company’s asset protection products and systems, including equipment and instrumentation, predominantly in the United States.

Given the role our solutions play in enhancing the safe and efficient operation of infrastructure, we have historically provided a majority of our solutions to our customers on a regular, recurring basis. We perform these services largely at our customers’ facilities, while primarily servicing our aerospace customers at our network of state-of-the-art, in-house laboratories. These solutions typically include NDT and inspection services, and can also include a wide range of mechanical services, including heat tracing, pre-inspection insulation stripping, coating applications, re-insulation, engineering assessments and long-term condition-monitoring. Under this business model, many customers outsource their inspection to us on a “run and maintain” basis. We have established long-term relationships as a critical solutions provider to many of the leading companies with asset-intensive infrastructure in our target markets. These markets include companies in the oil and gas, aerospace and defense, industrials, power generation and transmission (including alternative and renewable energy), other process industries and infrastructure, research and engineering and other industries.

We have focused on providing our advanced asset protection solutions to our customers using proprietary, technology-enabled software and testing instruments, including those developed by our Products and Systems segment. We have made numerous acquisitions in an effort to grow our base of experienced, certified personnel, expand our service lines and technical capabilities, increase our geographical reach, complement our existing offerings, and leverage our fixed costs. We have increased our capabilities and the size of our customer base through the development of applied technologies and managed support services, organic growth and the integration of acquired companies. These acquisitions have provided us with additional service lines, technologies, resources and customers which we believe will enhance our advantages over our competition.

We believe long-term growth can be realized in our target markets. Our level of business and financial results are impacted by world-wide macro- and micro-economic conditions generally, as well as those within our target markets. Among other things, we expect the timing of our oil and gas customers inspection spend to be impacted by oil price fluctuations.

We have continued providing our customers with an innovative asset protection software ecosystem through our MISTRAS OneSuite platform. The software platform offers functions of MISTRAS' popular software and services brands as integrated apps on a cloud environment. OneSuite serves as a single access portal for customers' data activities and provides access to 90 plus applications being offered on one centralized platform.

Recent Developments

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Mistras Group, Inc. and Subsidiaries

Management's Discussion and Analysis of Financial Condition and Results of Operations

(tabular dollars are in thousands)

costs, amongst others. These disruptions have largely subsided in 2024 and the Company will continue to monitor market conditions and respond accordingly.

Our cash position and liquidity remains strong. As of September 30, 2024, the cash balance was approximately $20.4 million, and with our Credit Agreement, provides us with significant liquidity.

In April 2021, the Biden Administration announced aggressive initiatives to battle climate change, which includes a significant reduction in the use of fossil fuels and a transition to electric vehicles and increased use of alternative energy. Any legislation or regulations that may be adopted to implement these measures may negatively impact our customers in the oil and gas market over the long-term, which presently is our largest market, although this initiative will likely benefit the alternative energy market, such as wind energy, for which we provide products and services. At this time, it is difficult to determine the magnitude and timing of the impact that climate change initiatives and legislation, if any, will have on these markets and the resulting impact on our business and operational results.

The Company is currently unable to predict with certainty the overall impact that the factors discussed above and the effect of inflationary pressures may have on its business, results of operations or liquidity or in other ways which the Company cannot yet determine. The Company’s European operations are currently experiencing higher energy costs, among other increased costs, due in part to the Russian-Ukrainian war and the conflict in the Middle East between Israel and Hamas. The Company will continue to monitor market conditions and respond accordingly.

Note About Non-GAAP Measures

The Company prepares its consolidated financial statements in accordance with U.S. generally accepted accounting principles ("GAAP"). In this MD&A under the heading "Income (loss) from Operations", the non-GAAP financial performance measure "Income (loss) from operations before special items” is used for each of our three operating segments, the Corporate segment and the "Total Company", with tables reconciling the measure to a financial measure under GAAP. This presentation excludes from "Income (loss) from Operations" (a) transaction expenses related to acquisitions, such as professional fees and due diligence costs, (b) the net changes in the fair value of acquisition-related contingent consideration liabilities, (c) impairment charges, (d) reorganization and other costs, which includes items such as severance, labor relations matters and asset and lease termination costs and (e) other special items. These adjustments have been excluded from the GAAP measure because these expenses and credits are not related to our or any individual segment's core business operations. The acquisition related costs and special items can be a net expense or credit in any given period. Our management uses this non-GAAP measure as a measure of operating performance and liquidity to assist in comparing performance from period to period on a consistent basis, as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations. We believe investors and other users of our financial statements benefit from the presentation of this non-GAAP measure in evaluating our performance. Income (loss) before special items excludes the identified adjustments, which provides additional tools to compare our core business operating performance on a consistent basis and measure underlying trends and results in our business. Income (loss) before special items is not used to determine incentive compensation for executives or employees, nor is it a replacement for the reported GAAP financial performance and/or necessarily comparable to the non-GAAP financial measures of other companies. Any measure that eliminates the foregoing items has material limitations as a performance or liquidity measure and should not be considered alternatives to net income (loss) or any other measures derived in accordance with GAAP. Because Income (loss) from operations before special items may not be calculated in the same manner by all companies, this measure may not be comparable to other similarly titled measures used by other companies.

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Mistras Group, Inc. and Subsidiaries

Management's Discussion and Analysis of Financial Condition and Results of Operations

(tabular dollars are in thousands)

Results of Operations

Condensed consolidated results of operations for the three and nine months ended September 30, 2024 and 2023 were as follows:


	Three months ended September 30,						Nine months ended September 30,
	2024			2023			2024			2023
Revenues	$	182,694		$	179,354		$	556,909		$	523,399
Gross profit	54,577			54,382			161,783			150,181
Gross profit as a % of Revenue	29.9		%	30.3		%	29.1		%	28.7		%
Total operating expenses	42,719			59,064			132,415			152,799
Operating expenses as a % of Revenue	23.4		%	32.9		%	23.8		%	29.2		%
Income (loss) from operations	11,858			(4,682)			29,368			(2,618)
Income from Operations as a % of Revenue	6.5		%	(2.6)		%	5.3		%	(0.5)		%
Other Income	(1,479)			—			(1,479)			—
Interest expense	4,303			4,167			13,145			12,093
Income (loss) before provision (benefit) for income taxes	9,034			(8,849)			17,702			(14,711)
Provision (benefit) for income taxes	2,618			1,489			3,909			229
Net Income (loss)	6,416			(10,338)			13,793			(14,940)
Less: Net income (loss) attributable to non-controlling interests, net of taxes	15			(40)			28			7
Net Income (loss) attributable to Mistras Group, Inc.	$	6,401		$	(10,298)		$	13,765		$	(14,947)

Revenue

Revenue was $182.7 million for the three months ended September 30, 2024, an increase of $3.3 million, or 1.9%, compared with the three months ended September 30, 2023. Revenue for the nine months ended September 30, 2024 was $556.9 million, an increase of $33.5 million, or 6.4%, compared with the nine months ended September 30, 2023.

Revenue by segment for the three and nine months ended September 30, 2024 and 2023 was as follows:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023

Revenue
North America	$	149,845	$	148,814	$	456,588	$	431,295
International	33,662		30,980		100,972		90,664
Products and Systems	3,276		2,829		9,860		9,897
Corporate and eliminations	(4,089)		(3,269)		(10,511)		(8,457)
	$	182,694	$	179,354	$	556,909	$	523,399

Three Months

In the three months ended September 30, 2024, total revenue increased 1.9% versus the prior year comparable period due to increased sales volume and price increases as compared to the prior period. North America segment revenue increased 0.7% due to an increase in sales volume in our aerospace and defense, industrials and power generation & transmission end markets, amongst others. International segment revenue increased 8.7%, due predominantly to growth in our other process industries and

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Mistras Group, Inc. and Subsidiaries

Management's Discussion and Analysis of Financial Condition and Results of Operations

(tabular dollars are in thousands)

power generation and transmission end markets. Products and Systems segment revenue increased 15.8%, due to increased sales volume as compared to the prior period.

Oil and gas customer revenue comprised approximately 54% and 58% of total revenue for the three months ended September 30, 2024 and 2023, respectively. Aerospace and defense customer revenue comprised approximately 12% and 11% of total revenue for the three months ended September 30, 2024 and 2023, respectively. The Company’s top ten customers comprised approximately 35% of total revenue for the three months ended September 30, 2024, as compared to 36% for the three months ended September 30, 2023, with no customer accounting for 10% or more of total revenue in either three-month period.

Nine months

In the nine months ended September 30, 2024, total revenue increased 6.4% versus the comparable prior period. The increase was due predominantly to increased sales volume as compared to the prior period. Our North America segment revenue increased 5.9% due primarily to increased sales volume in our oil and gas and aerospace and defense end markets. International segment revenue increased 11.4% due mainly to increased turnaround activity in oil and gas end market and increased sales volume in our aerospace and defense end market. Products and Systems segment revenue decreased 0.4% due to decreased sales volumes most notably within the power generation and transmission end market, amongst others, as compared to the prior period.

Oil and gas customer revenue comprised approximately 58% and 59% of total revenue for the nine months ended September 30, 2024 and 2023, respectively. Aerospace and defense customer revenue comprised approximately 12% and 11% of total revenue for the nine months ended September 30, 2024 and 2023, respectively. The Company’s top ten customers comprised approximately 36% of total revenue for the nine months ended September 30, 2024, as compared to 35% for the nine months ended September 30, 2023, with no customer accounting for 10% or more of total revenue in either nine-month period.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023

Oil and Gas Revenue by sub-category
Upstream	$	43,835	$	38,041	$	127,951	$	116,941
Midstream	21,545		26,215		68,229		74,739
Downstream	34,123		38,996		125,744		116,361
Total	$	99,503	$	103,252	$	321,924	$	308,041

Oil and gas upstream customer revenue increased approximately $11.0 million, or 9.4%, for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, and $5.8 million, or 15.2%, for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, due to increased exploration operations and market share gains compared to the prior period.

Midstream customer revenues decreased approximately $6.5 million, or (8.7)%, for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, and $4.7 million, or (17.8)%, for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, due to primarily to decreased pipe inspection services as compared to the prior period.

Downstream customer revenue increased $9.4 million, or 8.1%, for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, and $(4.9) million, or (12.5)%, for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, due to increased sales volume at customer refineries and increased customer turnarounds.

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Mistras Group, Inc. and Subsidiaries

Management's Discussion and Analysis of Financial Condition and Results of Operations

(tabular dollars are in thousands)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023

Revenue by type
Field Services	$	127,246	$	122,717	$	388,129	$	348,501
Shop Laboratories	15,014		14,840		49,147		42,216
Data Analytical Solutions	17,876		17,997		51,757		52,916
Other	22,558		23,800		67,876		79,766
Total	$	182,694	$	179,354	$	556,909	$	523,399

Field Services revenues are comprised of revenue derived primarily by technicians performing asset inspections and maintenance services for our customers at locations other than Mistras properties. Field Services revenue increased by $39.6 million for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, and increased $4.5 million, for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. The increase in both periods was due to increased sales volume in our power generation and transmission end market in our North America and International segments.

Shop Laboratories revenues are comprised of quality assurance inspections of components and materials at our Mistras in house laboratory facilities. Shop Laboratories revenues increased by $6.9 million for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, and increased $0.2 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. Shop Laboratories revenues increased in both periods as compared to the prior year periods due to increased sales volume related to our aerospace and defense end market.

Data Analytical Solutions revenues are comprised of revenue derived from data software sales & subscriptions, implementation services and analytics that offer insights and recommendations to improve asset integrity. Data Analytical Solutions revenue is derived from work performed by Mistras employees in our facilities, or at customer locations, using our proprietary portfolio of software applications. Data Analytical Solutions revenue decreased by $1.2 million for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, and decreased $0.1 million, for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 due primarily to decreased sales volume within PCMS, Onstream and other Data Analytical Solutions offerings within our North America segment for the three months ended September 30, 2024 and decreased sales volume for the same offerings for the nine months ended September 30, 2024.

Other revenues are comprised of locations that perform both asset inspection services and testing of components and materials at in house Mistras laboratories. Other revenues decreased by $11.9 million for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, and decreased $1.2 million, for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. Other revenues decreased in both periods primarily due to decreased sales in our other end markets within the North America and International segments.

Gross Profit

Gross profit increased by $0.2 million, or 0.4%, in the three months ended September 30, 2024 versus the prior year comparable period, on an increase in revenue of 1.9%.

Gross profit increased by $11.6 million, or 7.7%, in the nine months ended September 30, 2024 on an increase in revenue of 6.4%.

Gross profit by segment for the three and nine months ended September 30, 2024 and 2023 was as follows:

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Management's Discussion and Analysis of Financial Condition and Results of Operations

(tabular dollars are in thousands)

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Management's Discussion and Analysis of Financial Condition and Results of Operations

(tabular dollars are in thousands)


	Three months ended September 30,						Nine months ended September 30,
	2024			2023			2024			2023

Gross profit
North America	$	42,487		$	44,773		$	126,813		$	121,088
% of segment revenue	28.4		%	30.1		%	27.8		%	28.1		%
International	10,139			8,481			29,667			24,247
% of segment revenue	30.1		%	27.4		%	29.4		%	26.7		%
Products and Systems	1,933			1,096			5,233			4,773
% of segment revenue	59.0		%	38.7		%	53.1		%	48.2		%
Corporate and eliminations	18			32			70			73
	$	54,577		$	54,382		$	161,783		$	150,181
% of total revenue	29.9		%	30.3		%	29.1		%	28.7		%

Three Months

Gross profit margin was 29.9% and 30.3% for the three-month periods ended September 30, 2024 and 2023, respectively. North America segment realized a decrease of (1.7)% in gross profit margin to 28.4% during the three months ended September 30, 2024. This was primarily due to higher healthcare claims expense which was offset by growth in our higher margin end markets, as compared to the prior year period. International segment realized an increase of 2.7% in gross profit margin to 30.1% during the three months ended September 30, 2024, due primarily to improved operating leverage and the implementation of strategic price increases. Products and Systems segment realized an increase of 20.3% in gross profit margin to 59.0% during the three months ended September 30, 2024 due to favorable sales mix.

Nine months

Gross profit margin was 29.1% and 28.7% for the nine months ended September 30, 2024 and 2023, respectively. North America segment gross profit margin decreased 0.3% to 27.8% due to unfavorable sales mix and higher healthcare claims for the nine months ended September 30, 2024, as compared to the prior year period. International segment gross profit margin increased 2.7% to 29.4% due to lower inflationary costs and the implementation of strategic price increases during the nine months ended September 30, 2024, as compared to the prior year period. Products and Systems segment gross profit margin increased 4.9% during the nine months ended September 30, 2024, as compared to the prior year period, due to unfavorable sales mix.

Table of Contents

Mistras Group, Inc. and Subsidiaries

Management's Discussion and Analysis of Financial Condition and Results of Operations

(tabular dollars are in thousands)

Operating Expenses

Operating expenses for the three and nine months ended September 30, 2024 and 2023 was as follows:


	Three months ended September 30,						Nine months ended September 30,
	2024			2023			2024			2023

Operating Expenses
Selling, general and administrative expenses	$	38,872		$	39,537		$	121,018		$	123,844


Reorganization and other costs	2,143			2,702			4,218			6,017

Goodwill impairment charges	—			13,799			—			13,799
Research and engineering	241			438			816			1,428
Depreciation and amortization	2,331			2,588			7,170			7,556

Legal settlement and insurance recoveries, net	(868)			—			(808)			150
Acquisition-related expense, net	—			—			1			5
	$	42,719		$	59,064		$	132,415		$	152,799
% of total revenue	23.4		%	32.9		%	23.8		%	29.2		%

Three months

Total operating expenses decreased $16.3 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, due predominantly to a goodwill impairment occurring in the prior year period. Selling, general and administrative expenses decreased $0.7 million during the three months ended September 30, 2024 compared to the three months ended September 30, 2023, due predominantly to reductions occurring in the prior year period. Depreciation and amortization decreased $0.3 million during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. During the three months ended September 30, 2024, $2.1 million of reorganization and other related costs were incurred, which were a result of the Company's on-going efficiency and productivity initiatives.

Nine months

Operating expenses decreased $20.4 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 due predominantly to reductions occurring in the prior year period. Selling, general, and administrative expenses decreased $2.8 million during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, due primarily to reductions occurring in the prior year period. Reorganization and other costs for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 decreased $1.8 million due to reduced professional fees and restructuring charges associated with changes in the Company's organizational structure. Depreciation and amortization decreased $0.4 million during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Table of Contents

Mistras Group, Inc. and Subsidiaries

Management's Discussion and Analysis of Financial Condition and Results of Operations

(tabular dollars are in thousands)

Income (loss) from Operations

The following table shows a reconciliation of the income (loss) from operations to income (loss) before special items for each of our three segments, Corporate and Eliminations and the Company in total:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023

North America:
Income from operations (GAAP)	$	17,455	$	18,004	$	49,742	$	39,719



Reorganization and other costs	835		35		927		574
Legal settlement and insurance recoveries, net	(868)		—		(808)		150

Income from operations before special items (non-GAAP)	$	17,422	$	18,039	$	49,861	$	40,443
International:
Income (loss) from operations (GAAP)	$	1,778	$	(12,970)	$	4,548	$	(13,031)

Goodwill Impairment charges	—		13,799		—		13,799
Reorganization and other costs, net	147		33		410		228

Income from operations before special items (non-GAAP)	$	1,925	$	862	$	4,958	$	996
Products and Systems:
Income (loss) from operations (GAAP)	$	670	$	(557)	$	1,479	$	(78)

Reorganization and other costs	182		189		184		189
Income (loss) from operations before special items (non-GAAP)	$	852	$	(368)	$	1,663	$	111
Corporate and Eliminations:
Loss from operations (GAAP)	$	(8,045)	$	(9,159)	$	(26,401)	$	(29,228)

Reorganization and other costs	979		2,445		2,697		5,026
Acquisition-related expense, net	—		—		1		5

Loss from operations before special items (non-GAAP)	$	(7,066)	$	(6,714)	$	(23,703)	$	(24,197)
Total Company:
Income (loss) from operations (GAAP)	$	11,858	$	(4,682)	$	29,368	$	(2,618)

Goodwill Impairment charges	—		13,799		—		13,799


Reorganization and other costs	2,143		2,702		4,218		6,017

Legal settlement and insurance recoveries, net	(868)		—		(808)		150
Acquisition-related expense, net	—		—		1		5
Income from operations before special items (non-GAAP)	$	13,133	$	11,819	$	32,779	$	17,353

See section Note About Non-GAAP Measures in this Quarterly Report on Form 10-Q for an explanation of the use of non-GAAP measurements.

Table of Contents

Mistras Group, Inc. and Subsidiaries

Management's Discussion and Analysis of Financial Condition and Results of Operations

(tabular dollars are in thousands)

Three Months

For the three months ended September 30, 2024, income from operations (GAAP) increased $16.5 million compared to the three months ended September 30, 2023, while income from operations before special items (non-GAAP) increased $1.3 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. As a percentage of revenue, income from operations before special items increased by 60 basis points to 7.2% in the three months ended September 30, 2024 from 6.6% in the three months ended September 30, 2023.

Nine months

For the nine months ended September 30, 2024, income from operations (GAAP) increased $32.0 million, compared to the nine months ended September 30, 2023, while income from operations before special items (non-GAAP) increased $15.4 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. As a percentage of revenue, income from operations before special items increased by 260 basis points to 5.9% in the nine months ended September 30, 2024 from 3.3% in the nine months ended September 30, 2023. During the nine months ended September 30, 2024, the Company experienced overall organic growth as well as decreased reorganization costs.

Interest Expense

Interest expense was approximately $4.3 million and $4.2 million for the three months ended September 30, 2024 and 2023, respectively. Interest expense was approximately $13.1 million and $12.1 million for the nine months ended September 30, 2024 and 2023, respectively. The increase in interest expense for the three and nine months ended September 30, 2024 compared to the prior year period was due to an increase in the interest rates.

Income Taxes

Our effective income tax rate was approximately 29.0% and (16.8)% for the three months ended September 30, 2024 and 2023, respectively. Our effective income tax rate was approximately 22.1% and (1.6)% for the nine months ended September 30, 2024 and 2023, respectively.

The effective income tax rate for the nine months ended September 30, 2024 was higher than the statutory rate due primarily to the impact of permanent items. The effective income tax rate for the nine months ended September 30, 2023 was lower than the statutory rate due primarily to an unfavorable discrete item related to stock compensation.

Income tax expense varies as a function of pre-tax income and the level of non-deductible expenses, such as certain amounts of meals and entertainment expense, valuation allowances, and other permanent differences. It is also affected by discrete items that may occur in any given year but are not consistent from year to year. Our effective income tax rate may fluctuate over the next few years due to many variables including the amount and future geographic distribution of our pre-tax income, changes resulting from our acquisition strategy, and increases or decreases in our permanent differences.

Table of Contents

Mistras Group, Inc. and Subsidiaries

Management's Discussion and Analysis of Financial Condition and Results of Operations

(tabular dollars are in thousands)

Liquidity and Capital Resources

Cash flows are summarized in the table below:


	Nine months ended September 30,
	2024		2023

Net cash provided by (used in):
Operating activities	$	24,471	$	10,684
Investing activities	(17,152)		(15,170)
Financing activities	(6,247)		(1,839)
Effect of exchange rate changes on cash	1,642		(1,411)
Net change in cash and cash equivalents	$	2,714	$	(7,736)

Cash Flows from Operating Activities

During the nine months ended September 30, 2024, net cash provided by operating activities was $24.5 million, representing a year-on-year increase of $13.8 million, or 129%. The increase was primarily related to reduced net working capital, as well as improved operating results, in the current period.

Cash Flows from Investing Activities

During the nine months ended September 30, 2024, net cash used in investing activities was $17.2 million, compared to $15.2 million net cash used in investing activities for the nine months ended September 30, 2023. The change was primarily attributable to purchase of intangible assets during the current period as compared to the prior period.

Cash Flows from Financing Activities

Net cash used in financing activities was $6.2 million for the nine months ended September 30, 2024, compared to net cash used in financing activities of $1.8 million for the nine months ended September 30, 2023. This was a result of higher net repayments of debt of $3.7 million during the nine months ended September 30, 2024, as compared to the prior year period.

Effect of Exchange Rate Changes on Cash and Cash Equivalents

The effect of exchange rate changes on our cash and cash equivalents was an increase of $1.6 million in the nine months ended September 30, 2024, compared to a decrease of $1.4 million for the nine months ended September 30, 2023. The primary driver of the change was foreign currency fluctuations related to the Euro and the US Dollar.

Cash Balance and Credit Facility Borrowings

As of September 30, 2024, we had cash and cash equivalents totaling $20.4 million and $109.9 million of unused commitments under our Credit Agreement with borrowings of $186.8 million and $3.1 million of letters of credit outstanding. We finance operations primarily through our existing cash balances, cash collected from operations, bank borrowings and capital lease financing. We believe these sources are sufficient to fund our operations for the foreseeable future.

As of September 30, 2024, we were in compliance with the terms of the Credit Agreement and will continuously monitor our compliance with the covenants contained in the Credit Agreement.

The terms of our Credit Agreement are described in Note 12-Long-Term Debt of the Notes to the Unaudited Condensed Consolidated Financial Statements, under the heading "Senior Credit Facility".

Table of Contents

Contractual Obligations

There have been no significant increases in our contractual obligations and outstanding indebtedness as disclosed in the 2023 Annual Report.

Off-balance Sheet Arrangements

During the nine months ended September 30, 2024, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies and Estimates

There have been no significant changes to our critical accounting policies and estimates from the information provided in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in the 2023 Annual Report.

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no significant changes to our quantitative and qualitative disclosures about market risk as discussed in Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risk,” included in the 2023 Annual Report.

ITEM 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) under the Exchange Act, our management carried out an evaluation, under the supervision and with the participation of our President and Chief Executive Officer and our Senior Executive Vice President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls (as defined in Rule 13a-15(e) of the Exchange Act) and procedures. Based upon that evaluation, our President and Chief Executive Officer and our Senior Executive Vice President and Chief Financial Officer concluded that, as of September 30, 2024, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended September 30, 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

PART II—OTHER INFORMATION

ITEM 1. Legal Proceedings

See Note 14-Commitments and Contingencies to the Notes to Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report for a description of our legal proceedings. There have been no material developments with regard to any matters disclosed under Part I, Item 3 "Legal Proceedings" in our 2023 Annual Report, except as disclosed herein under Note 14-Commitments and Contingencies to the Notes to the Unaudited Consolidated Financial Statements.

ITEM 1.A. Risk Factors

In addition to the other information set forth in this Quarterly Report, you should carefully consider the risk factors discussed under the “Risk Factors” section included in our 2023 Annual Report. There have been no material changes to the risk factors previously disclosed in the 2023 Annual Report.

ITEM 2. Unregistered Sale of Equity Securities and Use of Proceeds

(a) Sales of Unregistered Securities

None.

(b) Use of Proceeds from Public Offering of Common Stock

None.

ITEM 3. Defaults Upon Senior Securities

None.

ITEM 4. Mine Safety Disclosures

Not applicable.

ITEM 5. Other Information

During the three months ended September 30, 2024, none of the Company's directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K promulgated by the SEC).

Table of Contents

ITEM 6. Exhibits


Exhibit No.						Description







10.1						Mistras Group, Inc. Updated Executive Severance Plan (filed as exhibit 10.1 to Current Report on Form 8-K filed on September 18, 2024, and incorporated herein by reference)

31.1						Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

31.2						Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

32.1						Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS						Inline XBRL Instance Document

101.SCH						Inline XBRL Schema Document

101.CAL						Inline XBRL Calculation Linkbase Document

101.LAB						Inline XBRL Labels Linkbase Document

101.PRE						Inline XBRL Presentation Linkbase Document

101.DEF						Inline XBRL Definition Linkbase Document

104						Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

_________________

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			MISTRAS GROUP, INC.

			By:			/s/ Edward J. Prajzner
						Edward J. Prajzner
						Senior Executive Vice President and Chief Financial Officer
						(Principal Financial Officer and Principal Accounting Officer)

Date: November 4, 2024

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13A-14(a) OF THE SECURITIES

EXCHANGE ACT OF 1934

I, Manuel N. Stamatakis, certify that:

1.I have reviewed this report on Form 10-Q of Mistras Group, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 4, 2024


			/s/ Manuel N. Stamatakis
			Manuel N. Stamatakis
			Chairman and Interim President and Chief Executive Officer
			(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13A-14(a) OF THE SECURITIES

EXCHANGE ACT OF 1934

I, Edward J. Prajzner, certify that:

1.I have reviewed this report on Form 10-Q of Mistras Group, Inc.;

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 4, 2024


			/s/ Edward J. Prajzner
			Edward J. Prajzner
			Senior Executive Vice President and Chief Financial Officer
			(Principal Financial Officer and Principal Accounting Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Each of the undersigned hereby certifies, for the purposes of section 1350 of chapter 63 of title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in his capacity as an officer of Mistras Group, Inc. (the “Company”), that, to his knowledge, the Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2024 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. This written statement is being furnished to the Securities and Exchange Commission as an exhibit to the Report.

Dated: November 4, 2024


			/s/ Manuel N. Stamatakis
			Manuel N. Stamatakis
			Chairman and Interim President and Chief Executive Officer
			(Principal Executive Officer)

			/s/ Edward J. Prajzner
			Edward J. Prajzner
			Senior Executive Vice President and Chief Financial Officer
			(Principal Financial Officer and Principal Accounting Officer)

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2024	Oct. 30, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Entity File Number	001-34481
Entity Registrant Name	Mistras Group, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	22-3341267
Entity Address, Address Line One	195 Clarksville Road
Entity Address, City or Town	Princeton Junction,
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	08550
City Area Code	609
Local Phone Number	716-4000
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	MG
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		31,010,375
Entity Central Index Key	0001436126
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3

Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Current Assets
Cash and cash equivalents	$ 20,360	$ 17,646
Accounts receivable, net	144,104	132,847
Inventories	14,510	15,283
Prepaid expenses and other current assets	14,353	14,580
Total current assets	193,327	180,356
Property, plant and equipment, net	79,852	80,972
Intangible assets, net	41,504	43,994
Goodwill	185,872	187,354
Deferred income taxes	5,641	2,316
Other assets	45,485	39,784
Total assets	551,681	534,776
Current Liabilities
Accounts payable	13,272	17,032
Accrued expenses and other current liabilities	85,623	84,331
Current portion of long-term debt	10,711	8,900
Current portion of finance lease obligations	4,594	5,159
Income taxes payable	964	1,101
Total current liabilities	115,164	116,523
Long-term debt, net of current portion	178,989	181,499
Obligations under finance leases, net of current portion	11,154	11,261
Deferred income taxes	3,781	2,552
Other long-term liabilities	37,050	32,438
Total liabilities	346,138	344,273
Commitments and contingencies (Note 14)
Equity
Preferred stock, 10,000,000 shares authorized	0	0
Common stock, $0.01 par value, 200,000,000 shares authorized, 31,006,864 and 30,597,633 shares issued and outstanding	385	305
Additional paid-in capital	250,016	247,165
Accumulated deficit	(15,177)	(28,942)
Accumulated other comprehensive loss	(30,020)	(28,336)
Total Mistras Group, Inc. stockholders’ equity	205,204	190,192
Non-controlling interests	339	311
Total equity	205,543	190,503
Total liabilities and equity	$ 551,681	$ 534,776

Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	200,000,000	200,000,000
Common stock, shares issued (in shares)	31,006,864	30,597,633
Common stock, shares outstanding (in shares)	31,006,864	30,597,633

Unaudited Condensed Consolidated Statements of Income (Loss) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Statement [Abstract]
Revenue	$ 182,694	$ 179,354	$ 556,909	$ 523,399
Cost of revenue	122,392	118,812	377,570	355,304
Depreciation	5,725	6,160	17,556	17,914
Gross profit	54,577	54,382	161,783	150,181
Selling, general and administrative expenses	38,872	39,537	121,018	123,844
Reorganization and other costs	2,143	2,702	4,218	6,017
Goodwill impairment charges	0	13,799	0	13,799
Legal settlement and insurance recoveries, net	(868)	0	(808)	150
Research and engineering	241	438	816	1,428
Depreciation and amortization	2,331	2,588	7,170	7,556
Acquisition-related expense, net	0	0	1	5
Income (loss) from operations	11,858	(4,682)	29,368	(2,618)
Other income	(1,479)	0	(1,479)	0
Interest expense	4,303	4,167	13,145	12,093
Income (loss) before provision (benefit) for income taxes	9,034	(8,849)	17,702	(14,711)
Provision for income taxes	2,618	1,489	3,909	229
Net Income (Loss)	6,416	(10,338)	13,793	(14,940)
Less: net income (loss) attributable to noncontrolling interests, net of taxes	15	(40)	28	7
Net Income (Loss) attributable to Mistras Group, Inc.	$ 6,401	$ (10,298)	$ 13,765	$ (14,947)
Earnings (loss) per common share
Basic (in dollars per share)	$ 0.21	$ (0.34)	$ 0.45	$ (0.49)
Diluted (in dollars per share)	$ 0.20	$ (0.34)	$ 0.44	$ (0.49)
Weighted-average common shares outstanding:
Basic (in shares)	31,002	30,402	30,895	30,277
Diluted (in shares)	31,660	30,402	31,513	30,277

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 6,416	$ (10,338)	$ 13,793	$ (14,940)
Other comprehensive loss:
Foreign currency translation adjustments	4,161	(5,428)	(1,684)	(1,073)
Comprehensive Income (loss)	10,577	(15,766)	12,109	(16,013)
Less: net income (loss) attributable to noncontrolling interest	15	(40)	28	7
Comprehensive Income (loss) attributable to Mistras Group, Inc	$ 10,562	$ (15,726)	$ 12,081	$ (16,020)

Unaudited Condensed Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands	Total	Total Mistras Group, Inc. Stockholders’ Equity	Common Stock	Additional paid-in capital	Retained earnings (deficit)	Accumulated other comprehensive income (loss)	Noncontrolling Interest
Beginning balance (in shares) at Dec. 31, 2022			29,895
Beginning balance at Dec. 31, 2022	$ 198,749	$ 198,450	$ 298	$ 243,031	$ (11,489)	$ (33,390)	$ 299
Increase (Decrease) in Stockholders' Equity
Net income (loss)	(14,940)	(14,947)			(14,947)		7
Other comprehensive income (loss), net of tax	(1,073)	(1,073)				(1,073)
Share-based compensation	3,985	3,985		3,985
Net settlement of restricted stock units (in shares)			458
Net settlement of restricted stock units	937	937	$ (4)	941
Ending balance (in shares) at Sep. 30, 2023			30,353
Ending balance at Sep. 30, 2023	185,784	185,478	$ 302	246,075	(26,436)	(34,463)	306
Beginning balance (in shares) at Jun. 30, 2023			30,302
Beginning balance at Jun. 30, 2023	200,533	200,187	$ 302	245,058	(16,138)	(29,035)	346
Increase (Decrease) in Stockholders' Equity
Net income (loss)	(10,338)	(10,298)			(10,298)		(40)
Other comprehensive income (loss), net of tax	(5,428)	(5,428)				(5,428)
Share-based compensation	1,017	1,017		1,017
Net settlement of restricted stock units (in shares)			51
Ending balance (in shares) at Sep. 30, 2023			30,353
Ending balance at Sep. 30, 2023	185,784	185,478	$ 302	246,075	(26,436)	(34,463)	306
Beginning balance (in shares) at Dec. 31, 2023			30,598
Beginning balance at Dec. 31, 2023	190,503	190,192	$ 305	247,165	(28,942)	(28,336)	311
Increase (Decrease) in Stockholders' Equity
Net income (loss)	13,793	13,765			13,765		28
Other comprehensive income (loss), net of tax	(1,684)	(1,684)				(1,684)
Share-based compensation	4,256	4,256		4,256
Net settlement of restricted stock units (in shares)			409
Net settlement of restricted stock units	1,325	1,325	$ (80)	1,405
Ending balance (in shares) at Sep. 30, 2024			31,007
Ending balance at Sep. 30, 2024	205,543	205,204	$ 385	250,016	(15,177)	(30,020)	339
Beginning balance (in shares) at Jun. 30, 2024			30,977
Beginning balance at Jun. 30, 2024	193,474	193,150	$ 385	248,524	(21,578)	(34,181)	324
Increase (Decrease) in Stockholders' Equity
Net income (loss)	6,416	6,401			6,401		15
Other comprehensive income (loss), net of tax	4,161	4,161				4,161
Share-based compensation	1,492	1,492		1,492
Net settlement of restricted stock units (in shares)			30
Ending balance (in shares) at Sep. 30, 2024			31,007
Ending balance at Sep. 30, 2024	$ 205,543	$ 205,204	$ 385	$ 250,016	$ (15,177)	$ (30,020)	$ 339

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Cash flows from operating activities
Net income	$ 13,793	$ (14,940)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization	24,726	25,470
Goodwill impairment charges	0	13,799
Deferred income taxes	(2,026)	816
Share-based compensation expense	4,256	3,985
Change in provision for doubtful accounts	681	346
Foreign currency (gain) loss	(23)	149
Other	(1,493)	(147)
Changes in operating assets and liabilities
Accounts receivable	(11,979)	(13,393)
Inventories	431	(2,425)
Prepaid expenses and other assets	(39)	(7,572)
Accounts payable	(3,583)	2,094
Accrued expenses and other liabilities	(138)	4,165
Income taxes payable	(135)	(725)
Payment of contingent consideration liability in excess of acquisition-date fair value	0	(938)
Net cash provided by operating activities	24,471	10,684
Cash flows from investing activities
Purchase of property, plant and equipment	(14,315)	(14,403)
Purchase of intangible assets	(3,832)	(1,868)
Proceeds from sale of equipment	995	1,101
Net cash used in investing activities	(17,152)	(15,170)
Cash flows from financing activities
Repayment of finance lease obligations	(4,183)	(3,812)
Repayment of long-term debt	(6,537)	(5,684)
Proceeds from revolver	53,500	66,110
Repayment of revolver	(47,701)	(57,851)
Taxes paid related to net share settlement of share-based awards	(1,326)	(602)
Net cash used in financing activities	(6,247)	(1,839)
Effect of exchange rate changes on cash and cash equivalents	1,642	(1,411)
Net change in cash and cash equivalents	2,714	(7,736)
Cash and cash equivalents at beginning of period	17,646	20,488
Cash and cash equivalents at end of period	20,360	12,752
Supplemental disclosure of cash paid
Interest, net	12,595	12,683
Income taxes, net of refunds	4,406	3,704
Noncash investing and financing
Equipment acquired through finance lease obligations	$ 3,642	$ 7,169

Description of Business and Basis of Presentation	9 Months Ended
Description of Business and Basis of Presentation	Sep. 30, 2024
Accounting Policies [Abstract]
Description of Business and Basis of Presentation	Description of Business and Basis of Presentation Description of Business Mistras Group, Inc., together with its subsidiaries (the "Company"), is a leading “one source” multinational provider of integrated technology-enabled asset protection solutions helping to maximize the safety and operational uptime for civilization’s most critical industrial and civil assets. Backed by an innovative, data-driven asset protection portfolio, proprietary technologies, and decades-long legacy of industry leadership, the Company helps clients with asset-intensive infrastructure in the oil and gas, aerospace and defense, industrials, power generation and transmission (including alternative and renewable energy), other process industries and infrastructure, research and engineering and other industries towards achieving and maintaining operational excellence. By supporting these organizations that help fuel our vehicles and power our society; inspecting components that are trusted for commercial, defense, and space craft; and building real-time monitoring systems to help avoid catastrophic incidents, the Company helps the world at large. The Company enhances value for its clients by integrating asset protection throughout supply chains and centralizing integrity data through a suite of Industrial Internet of Things ("IoT")-connected digital software and monitoring solutions, including OneSuite™, which serves as an ecosystem platform, pulling together all of the Company’s software and data services capabilities, for the benefit of its customers. The Company’s core capabilities also include non-destructive testing (“NDT”) field inspections enhanced by advanced robotics, laboratory quality control, laboratory materials services, shop laboratory assurance testing, sensing technologies and NDT equipment, asset and mechanical integrity engineering services, and light mechanical maintenance and access services. The Company has three operating segments. Our segments are as follows: •North America This segment provides asset protection solutions predominantly in North America, with the largest concentration in the United States, followed by Canada, consisting primarily of NDT, inspection, mechanical and engineering services that are used to evaluate the safety, structural integrity and reliability of critical energy, industrial and public infrastructure and commercial aerospace components. Software, digital and data services are included in this segment. •International. This segment offers services, products and systems similar to those of the other segments to select markets within Europe, the Middle East, Africa, Asia and South America, but not to customers in China and South Korea, which are served by the Products and Systems segment. •Products and Systems. This segment designs, manufactures, sells, installs and services the Company’s asset protection products and systems, including equipment and instrumentation, predominantly in the United States. Recent Developments The Company provides products and services to countries throughout the Middle East, where lawfully permitted, and in accordance with United States regulations. We continue to monitor the on-going conflicts throughout the Middle East. These conflicts caused disruptions in the Company's European operations in 2023 with increased costs associated with higher energy costs, amongst others. These disruptions have largely subsided in 2024 and the Company will continue to monitor market conditions and respond accordingly. Basis of Presentation The Unaudited Condensed Consolidated Financial Statements contained in this report have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP") and Securities and Exchange Commission ("SEC") guidance allowing for reduced disclosure for interim periods. In the opinion of management, the Unaudited Condensed Consolidated Financial Statements include all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the interim periods of the years ending December 31, 2024 and December 31, 2023. Certain items included in these statements are based on management’s estimates. Actual results may differ from those estimates. The results of operations for any interim period are not necessarily indicative of the results expected for the year. The accompanying Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the notes to the Audited Consolidated Financial Statements contained in the Company’s 2023 Annual Report on Form 10-K ("2023 Annual Report"). Principles of Consolidation The accompanying Unaudited Condensed Consolidated Financial Statements include the accounts of Mistras Group, Inc. as well as its wholly-owned subsidiaries, majority-owned subsidiaries and consolidated variable interest entities (VIE). For consolidated subsidiaries in which the Company’s ownership interest is less than 100%, the non-controlling interests are reported in stockholders’ equity in the accompanying Condensed Consolidated Balance Sheets. The non-controlling interests in net results, net of tax, is classified separately in the accompanying Unaudited Condensed Consolidated Statements of Income (Loss). All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations of companies acquired are included from the date of acquisition. Reclassification Certain amounts in prior periods have been reclassified to conform to the current year presentation. Such reclassifications did not have a material effect on the Company’s financial condition or results of operations as previously reported. Significant Accounting Policies The Company’s significant accounting policies are disclosed in Note 1–Summary of Significant Accounting Policies and Practices in the 2023 Annual Report. On an ongoing basis, the Company evaluates its estimates and assumptions, including among other things, those related to revenue recognition, long-lived assets, goodwill and acquisitions. Since the date of the 2023 Annual Report, there have been no material changes to the Company’s significant accounting policies. Income Taxes Income taxes are accounted for under the asset and liability method. We recognize deferred tax assets and liabilities at enacted income tax rates for the temporary differences between the financial reporting bases and the tax bases of our assets and liabilities. Any effects of changes in income tax rates or tax laws are included in the provision for income taxes in the period of enactment. Our net deferred tax assets primarily consist of net operating loss carryforwards, or NOLs. A valuation allowance is provided if it is more likely than not that some or all of a deferred income tax asset will not be realized. A current tax liability or asset is recognized for the estimated taxes payable or refundable on tax returns for the current and prior years. As of September 30, 2024, management concluded that it is more likely than not that a substantial portion of the Company’s deferred tax assets will be realized. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company’s effective income tax rate was approximately 29.0% and (16.8)% for the three months ended September 30, 2024 and 2023, respectively. The Company’s effective income tax rate was approximately 22.1% and (1.6)% for the nine months ended September 30, 2024 and 2023, respectively. The effective income tax rate for the three months ended September 30, 2024 was higher than the statutory rate primarily due to the impact of permanent items in the period. The effective income tax rate for the three months ended September 30, 2023 was lower than the statutory rate due to the impact of permanent tax adjustments related to executive compensation and goodwill impairments. The effective income tax rate for the nine months ended September 30, 2024 was higher than the statutory rate primarily due to the impact of permanent items. The effective income tax rate for the nine months ended September 30, 2023 was lower than the statutory rate due primarily to an unfavorable discrete item related to stock compensation. Recent Accounting Pronouncements In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, Segment Reporting (Topic 280) to expand the disclosures about a public entity's reportable segments and address requests from investors for additional, more detailed information about a reportable segment's expenses. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We do not expect the impact of ASU 2023-07 to be material on our financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) to enhance the transparency and decision usefulness of income tax disclosures, primarily related to the rate reconciliation and income taxes paid disclosures. The new standard is effective for fiscal years beginning after December 15, 2024. We do not expect the impact of ASU 2023-09 to be material on our financial statements.

Revenue

9 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

Revenue

Performance Obligations

The Company expects any significant remaining performance obligations to be satisfied within one year.

Contract Estimates

Revenue by Category

The following series of tables present the Company’s disaggregated revenue:

Revenue by industry was as follows:


Three Months Ended September 30, 2024	North America		International		Products		Corp/Elim		Total
Oil & Gas	$	90,460	$	9,040	$	3	$	—	$	99,503
Aerospace & Defense	16,181		5,663		42		—		21,886
Industrials	12,285		6,749		478		—		19,512
Power Generation & Transmission	8,029		3,081		544		—		11,654
Other Process Industries	7,836		3,900		79		—		11,815
Infrastructure, Research & Engineering	5,189		2,744		797		—		8,730
Petrochemical	3,806		198		—		—		4,004
Other	6,059		2,287		1,333		(4,089)		5,590
Total	$	149,845	$	33,662	$	3,276	$	(4,089)	$	182,694


Three Months Ended September 30, 2023	North America		International		Products		Corp/Elim		Total
Oil & Gas	$	94,390	$	8,827	$	35	$	—	$	103,252
Aerospace & Defense	14,240		5,778		47		—		20,065
Industrials	10,325		6,018		310		—		16,653
Power Generation & Transmission	7,388		1,653		696		—		9,737
Other Process Industries	6,933		2,864		(5)		—		9,792
Infrastructure, Research & Engineering	6,042		2,383		1,070		—		9,495
Petrochemical	3,313		586		—		—		3,899
Other	6,183		2,871		676		(3,269)		6,461
Total	$	148,814	$	30,980	$	2,829	$	(3,269)	$	179,354


Nine Months Ended September 30, 2024	North America		International		Products		Corp/Elim		Total
Oil & Gas	$	289,843	$	31,841	$	240	$	—	$	321,924
Aerospace & Defense	48,152		18,092		100		—		66,344
Industrials	33,047		18,480		1,478		—		53,005
Power Generation & Transmission	18,953		6,017		1,569		—		26,539
Other Process Industries	26,132		12,337		155		—		38,624
Infrastructure, Research & Engineering	14,286		7,762		1,901		—		23,949
Petrochemical	11,467		900		—		—		12,367
Other	14,708		5,543		4,417		(10,511)		14,157
Total	$	456,588	$	100,972	$	9,860	$	(10,511)	$	556,909



Nine Months Ended September 30, 2023	North America		International		Products		Corp/Elim		Total
Oil & Gas	$	281,663	$	26,291	$	87	$	—	$	308,041
Aerospace & Defense	41,516		15,894		275		—		57,685
Industrials	30,693		18,274		1,336		—		50,303
Power Generation & Transmission	17,834		4,840		3,189		—		25,863
Other Process Industries	24,906		10,567		73		—		35,546
Infrastructure, Research & Engineering	12,696		6,547		2,759		—		22,002
Petrochemical	10,027		887		—		—		10,914
Other	11,960		7,364		2,178		(8,457)		13,045
Total	$	431,295	$	90,664	$	9,897	$	(8,457)	$	523,399

Revenue per key geographic location was as follows:


Three Months Ended September 30, 2024	North America		International		Products		Corp/Elim		Total
United States	$	124,194	$	402	$	1,658	$	(1,457)	$	124,797
Other Americas	25,108		2,008		107		(577)		26,646
Europe	343		29,458		850		(1,655)		28,996
Asia-Pacific	200		1,794		661		(400)		2,255
Total	$	149,845	$	33,662	$	3,276	$	(4,089)	$	182,694


Three Months Ended September 30, 2023	North America		International		Products		Corp/Elim		Total
United States	$	126,239	$	120	$	1,032	$	(849)	$	126,542
Other Americas	21,907		3,703		49		(1,659)		24,000
Europe	465		26,764		510		(701)		27,038
Asia-Pacific	203		393		1,238		(60)		1,774
Total	$	148,814	$	30,980	$	2,829	$	(3,269)	$	179,354


Nine Months Ended September 30, 2024	North America		International		Products		Corp/Elim		Total
United States	$	384,522	$	1,129	$	4,800	$	(3,181)	$	387,270
Other Americas	66,829		6,224		960		(3,602)		70,411
Europe	2,107		89,304		2,081		(3,116)		90,376
Asia-Pacific	3,130		4,315		2,019		(612)		8,852
Total	$	456,588	$	100,972	$	9,860	$	(10,511)	$	556,909



Nine Months Ended September 30, 2023	North America		International		Products		Corp/Elim		Total
United States	$	369,811	$	709	$	4,478	$	(1,718)	$	373,280
Other Americas	57,218		11,013		673		(3,565)		65,339
Europe	3,159		75,421		1,275		(2,693)		77,162
Asia-Pacific	1,107		3,521		3,471		(481)		7,618
Total	$	431,295	$	90,664	$	9,897	$	(8,457)	$	523,399

Contract Balances

Share-Based Compensation

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Share-Based Compensation

Stock Options

years from the grant date or one year following the date Mr. Stamatakis is no longer serving as an officer, director or in any other capacity of the Company.

The following table sets forth a summary of the stock option activity, weighted-average exercise prices and options outstanding as of September 30, 2024 as follows:


	Nine months ended September 30,
	2024			2023
	Common Stock Options	Weighted Average Exercise Price		Common Stock Options	Weighted Average Exercise Price
Outstanding at beginning of year:	250	$	5.36	—	$	—
Granted	—	$	—	—	$	—
Exercised	—	$	—	—	$	—
Expired or forfeited	—	$	—	—	$	—
Outstanding at end of year:	250	$	5.36	—	$	—

Stock Issuances to Non-Employee Directors


	Nine months ended September 30,
	2024		2023
Awards issued	60		99
Grant date fair value of awards issued	$	549	$	550

Restricted Stock Unit Awards

A summary of the vesting activity of restricted stock unit awards, with the respective fair value of the awards, is as follows:


	Nine months ended September 30,
	2024		2023
Restricted stock awards vested	461		430
Fair value of awards vested	$	4,184	$	2,639

A summary of the Company’s outstanding, non-vested restricted share units is as follows:


	Nine months ended September 30,
	2024			2023
	Units	Weighted Average Grant-Date Fair Value		Units	Weighted Average Grant-Date Fair Value
Outstanding at beginning of period:	1,184	$	8.07	1,415	$	7.96
Granted	726	$	8.52	591	$	8.37
Vested	(461)	$	9.08	(430)	$	6.14
Forfeited	(179)	$	8.39	(120)	$	7.96
Outstanding at end of period:	1,270	$	8.39	1,456	$	7.71

Performance Restricted Stock Units

For 2023, the Compensation Committee used the following three performance metrics for PRSUs approved in that year.

3.Revenue

For PRSUs awarded in 2024, the Compensation Committee utilized the same metrics as 2023 PRSUs, but with revised performance goals.

A summary of the Company’s PRSU activity is as follows:


	Nine months ended September 30,
	2024			2023
	Units	Weighted Average Grant-Date Fair Value		Units	Weighted Average Grant-Date Fair Value
Outstanding at beginning of period:	60	$	9.33	280	$	9.96
Granted	295	$	8.76	282	$	8.50
Performance condition adjustments	(187)	$	8.76	(314)	$	8.34
Vested	—	$	—	(64)	$	5.58
Forfeited	—	$	—	(84)	$	(6.95)
Outstanding at end of period:	168	$	9.18	100	$	9.83

Earnings (loss) per Share

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Earnings (loss) per Share

The following table sets forth the computations of basic and diluted earnings (loss) per share:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023

Basic earnings (loss) per share
Numerator:
Net income (loss) attributable to Mistras Group, Inc.	$	6,401	$	(10,298)	$	13,765	$	(14,947)
Denominator:
Weighted average common shares outstanding	31,002		30,402		30,895		30,277
Basic earnings (loss) per share	$	0.21	$	(0.34)	$	0.45	$	(0.49)

Diluted earnings (loss) per share:
Numerator:
Net income (loss) attributable to Mistras Group, Inc.	$	6,401	$	(10,298)	$	13,765	$	(14,947)
Denominator:
Weighted average common shares outstanding	31,002		30,402		30,895		30,277
Dilutive effect of stock options outstanding	120		—		103		—
Dilutive effect of restricted stock units outstanding (1)	538		—		515		—
	31,660		30,402		31,513		30,277
Diluted earnings (loss) per share	$	0.20	$	(0.34)	$	0.44	$	(0.49)

_______________

Acquisitions

9 Months Ended

Sep. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Acquisitions

Acquisition-Related Expense


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Due diligence, professional fees and other transaction costs	$	—	$	—	$	1	$	5
Adjustments to fair value of contingent consideration liabilities	—		—		—		—
Acquisition-related expense, net	$	—	$	—	$	1	$	5

The Company's contingent consideration liabilities are included in Accrued expenses and other current liabilities and Other long-term liabilities on the Condensed Consolidated Balance Sheets.

Accounts Receivable, net

9 Months Ended

Sep. 30, 2024

Receivables [Abstract]

Accounts Receivable, net

Accounts receivable consisted of the following:


	September 30, 2024		December 31, 2023

Trade accounts receivable	$	146,410	$	134,495
Allowance for credit losses	(2,306)		(1,648)
Accounts receivable, net	$	144,104	$	132,847

Inventories

9 Months Ended

Sep. 30, 2024

Inventory Disclosure [Abstract]

Inventories

Inventories consisted of the following (in thousands):


	September 30, 2024		December 31, 2023

Raw materials	$	5,302	$	6,099
Work in progress	1,106		839
Finished goods	5,158		5,740
Consumable supplies	2,944		2,605
Inventories	$	14,510	$	15,283

Property, Plant and Equipment, net

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment, net

Property, plant and equipment, net consisted of the following:


	Useful Life (Years)	September 30, 2024		December 31, 2023

Land		$	2,455	$	2,453
Buildings and improvements	30-40	26,419		26,663
Office furniture and equipment	5-8	17,512		21,334
Machinery and equipment	5-7	278,724		269,306
		325,110		319,756
Accumulated depreciation and amortization		(245,258)		(238,784)
Property, plant and equipment, net		$	79,852	$	80,972

Depreciation expense for the three months ended September 30, 2024 and 2023 was approximately $6.1 million and $6.6 million, respectively.

Depreciation expense for the nine months ended September 30, 2024 and 2023 was $18.9 million and $19.0 million, respectively.

Goodwill

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

Changes in the carrying amount of goodwill by segment is shown below:


	North America		International		Products and Systems		Total
Balance at December 31, 2023	$	187,354	$	—	$	—	$	187,354
Foreign currency translation	(1,482)		—		—		(1,482)


Balance at September 30, 2024	$	185,872	$	—	$	—	$	185,872

Intangible Assets

9 Months Ended

Sep. 30, 2024

Intangible Assets, Net (Excluding Goodwill) [Abstract]

Intangible Assets

The gross amount, accumulated amortization and net carrying amount of intangible assets were as follows:


		September 30, 2024				December 31, 2023
	Useful Life (Years)	Gross Amount		Accumulated Amortization		Net Carrying Amount		Gross Amount		Accumulated Amortization		Net Carrying Amount

Customer relationships	5-18	$	110,240	$	(93,518)	$	16,722	$	110,780	$	(90,506)	$	20,274
Software/Technology	3-15	58,314		(34,329)		23,985		55,053		(32,230)		22,823
Covenants not to compete	2-5	12,511		(12,483)		28		12,536		(12,488)		48
Other	2-12	10,394		(9,625)		769		10,466		(9,617)		849
Total		$	191,459	$	(149,955)	$	41,504	$	188,835	$	(144,841)	$	43,994

Amortization expense for the three months ended September 30, 2024 and 2023 was approximately $1.9 million and $2.2 million, respectively.

Amortization expense for the nine months ended September 30, 2024 and 2023 was $5.8 million and $6.5 million, respectively.

Accrued Expenses and Other Current Liabilities

9 Months Ended

Sep. 30, 2024

Payables and Accruals [Abstract]

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:


	September 30, 2024		December 31, 2023

Accrued salaries, wages and related employee benefits	$	28,061	$	27,372

Accrued workers’ compensation and health benefits	4,616		4,385
Deferred revenue	6,975		7,136
Pension accrual	2,458		2,458
Right-of-use liability - Operating	11,783		10,686
Other accrued expenses	31,730		32,294
Total	$	85,623	$	84,331

Long-Term Debt

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Long-Term Debt

Long-term debt consisted of the following:


	September 30, 2024		December 31, 2023

Senior credit facility	$	76,949	$	71,150
Senior secured term loan, net of unamortized debt issuance costs of $0.3 million and $0.4 million, respectively	109,863		115,253

Other	2,888		3,996
Total debt	189,700		190,399
Less: Current portion	(10,711)		(8,900)
Long-term debt, net of current portion	$	178,989	$	181,499

Senior Credit Facility

The Credit Agreement has the following key terms, conditions and financial covenants:

◦Total Consolidated Debt Leverage Ratio means the ratio of (a) Total Consolidated Debt to (b) EBITDA (as defined in the Credit Agreement) for the trailing four consecutive fiscal quarters.

◦Total Consolidated Debt means all indebtedness (including subordinated debt) of the Company on a consolidated basis.

•The Company is required to maintain a Fixed Charge Coverage Ratio of 1.25 to 1.0 for the duration of the Credit Agreement, as defined in the Credit Agreement.

Other debt

Fair Value Measurements

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

Financial instruments measured at fair value on a recurring basis

The following table represents the changes in the fair value of Level 3 contingent consideration:


	Nine months ended September 30,
	2024		2023
Beginning balance	$	—	$	938

Payments	—		(938)

Revaluation	—		—

Ending balance	$	—	$	—

Financial instruments not measured at fair value on a recurring basis

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Legal Proceedings and Government Investigations The Company is periodically involved in lawsuits, investigations and claims. While uncertainties exist with respect to the ultimate resolution of lawsuits, investigations and claims asserted against it, the Company, based on currently available information, does not believe that any currently pending or threatened legal proceeding to which the Company is a party, or is likely to become a party, including those proceedings identified in this Note 14, will have a material adverse effect on its business, results of operations, cash flows or financial condition. The costs incurred by the Company to defend lawsuits, investigations and claims and amounts the Company pays to other parties because of these matters may be covered by insurance in some circumstances. Litigation and Commercial Claims The Company and a subsidiary of the Company, Mistras Arizona Inspection Services LLC (“Mistras Arizona”), are subject to a lawsuit filed by the State of Arizona and the Arizona Department of Environmental Quality (collectively “DEQ”). The lawsuit, captioned State of Arizona v. Mistras Group, Inc., Mistras Arizona Inspection Services, LLC and Naiman Phoenix, Ltd., was originally filed on February 27, 2024, in the Superior Court of the State of Arizona for Maricopa County, CV 2024-003866 (the "DEQ Complaint"). The DEQ Complaint alleges various violations of Arizona environmental laws and regulations by the Company and Mistras Arizona in connection with the operation by Mistras Arizona of its testing facility in Phoenix, Arizona. The DEQ Complaint seeks, through injunctive relief, the closing of a chromic acid plating line at the testing facility, implementation of a site assessment plan approved by the DEQ, and corrective and remedial action to bring the testing facility into compliance with laws and regulations. In addition, the DEQ Complaint seeks unspecified penalties and costs. The Superior Court held a hearing September 2024 regarding the DEQ’s request for a preliminary injunction. On October 23, 2024, the Superior Court issued a ruling, which declined to issue the preliminary injunction requested by the DEQ, but imposed the following conditions on the Company and Mistras Arizona unless and until modified by the Superior Court or entry of a final judgement: (1) the Company and Mistras Arizona are prohibited from releasing or permitting any release of chromic acid from the facility; (2) within a reasonable time, the Company and Mistras Arizona must complete improvements to the testing facility designed to prevent future discharges of chromium or chromic acid; (3) the Company must notify the DEQ upon completion of the improvement to enable the DEQ to conduct an inspection; and (4) the Company and Mistras Arizona are prohibited from engaging in any chrome plating operations at the testing facility until they notify the DEQ that the improvements have been completed. The DEQ may seek relief if it determines that the improvements are not sufficient to prevent discharges. The Company intends to comply with the Superior Court's ruling. This matter is still in the relatively early stages, including as to factual and expert discovery. It is probable that remediation costs, fines and penalties may be imposed related to this lawsuit. However, the Company is unable to estimate the range of loss that it may incur. In addition to the matters covered by the DEQ complaint on or about November 7, 2024, Mistras Arizona received notice from the Maricopa County Department of Air Quality for alleged violations of various regulations regarding air quality. This matter has been resolved with an immaterial fine paid. In addition, Mistras Arizona’s operations in Phoenix are located at a leased site within the footprint of the Motorola 52nd Street Superfund Site (the “Motorola Site”). Mistras Arizona received a General Notice Letter from the US Environmental Protection Agency (the "EPA"), dated May 21, 2024, informing Mistras Arizona that the EPA has identified it as a potentially responsible party in relation to the Motorola Site. Pension Related Contingencies Certain of the Company’s subsidiaries had significant reductions in their unionized workers in 2018. The collective bargaining agreements for the employees of these subsidiaries required contributions for these employees to two national multi-employer pension funds. The reduction in employees resulted in one of the Company's subsidiaries incurring a complete withdrawal to one of the pension funds under the Employee Retirement Income Security Act of 1974 ("ERISA"), which was fully satisfied in 2019. The Company has determined that the subsidiary is likely to incur partial or complete withdrawal liability to the other pension fund. The balance of the estimated total amount of this potential liability as of September 30, 2024 is approximately $2.5 million, which were incurred in 2018 and 2019.

Segment Disclosure

9 Months Ended

Sep. 30, 2024

Segment Reporting [Abstract]

Segment Disclosure

The Company’s three operating segments are:

Selected consolidated financial information by segment for the periods shown was as follows: (with intercompany transactions eliminated in Corporate and eliminations)


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Revenue
North America	$	149,845	$	148,814	$	456,588	$	431,295
International	33,662		30,980		100,972		90,664
Products and Systems	3,276		2,829		9,860		9,897
Corporate and eliminations	(4,089)		(3,269)		(10,511)		(8,457)
	$	182,694	$	179,354	$	556,909	$	523,399


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Gross profit
North America	$	42,487	$	44,773	$	126,813	$	121,088
International	10,139		8,481		29,667		24,247
Products and Systems	1,933		1,096		5,233		4,773
Corporate and eliminations	18		32		70		73
	$	54,577	$	54,382	$	161,783	$	150,181

Income (loss) from operations by operating segment includes intercompany transactions, which are eliminated in Corporate and eliminations.


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Income (loss) from operations
North America	$	17,455	$	18,004	$	49,742	$	39,719
International	1,778		(12,970)		4,548		(13,031)
Products and Systems	670		(557)		1,479		(78)
Corporate and eliminations	(8,045)		(9,159)		(26,401)		(29,228)
	$	11,858	$	(4,682)	$	29,368	$	(2,618)


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Depreciation and amortization
North America	$	5,843	$	6,603	$	18,191	$	19,329
International	1,940		1,915		5,763		5,663
Products and Systems	193		183		526		526
Corporate and eliminations	80		47		246		(48)
	$	8,056	$	8,748	$	24,726	$	25,470


	September 30, 2024		December 31, 2023
Intangible assets, net
North America	$	33,162	$	37,622
International	1,822		2,998
Products and Systems	1,040		1,168
Corporate and eliminations	5,480		2,206
	$	41,504	$	43,994


	September 30, 2024		December 31, 2023
Total assets
North America	$	413,878	$	402,782
International	104,063		99,398
Products and Systems	12,253		13,259
Corporate and eliminations	21,487		19,337
	$	551,681	$	534,776

Refer to Note 2–Revenue, for revenue by geographic area for the three and nine months ended September 30, 2024 and 2023.

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure
Net income (loss) attributable to Mistras Group, Inc.	$ 6,401	$ (10,298)	$ 13,765	$ (14,947)

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false
Arrangement Duration	109 days

Description of Business and Basis of Presentation (Policies)	9 Months Ended
	Sep. 30, 2024
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The Unaudited Condensed Consolidated Financial Statements contained in this report have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP") and Securities and Exchange Commission ("SEC") guidance allowing for reduced disclosure for interim periods. In the opinion of management, the Unaudited Condensed Consolidated Financial Statements include all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the interim periods of the years ending December 31, 2024 and December 31, 2023. Certain items included in these statements are based on management’s estimates. Actual results may differ from those estimates. The results of operations for any interim period are not necessarily indicative of the results expected for the year. The accompanying Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the notes to the Audited Consolidated Financial Statements contained in the Company’s 2023 Annual Report on Form 10-K ("2023 Annual Report").
Principles of Consolidation	Principles of Consolidation The accompanying Unaudited Condensed Consolidated Financial Statements include the accounts of Mistras Group, Inc. as well as its wholly-owned subsidiaries, majority-owned subsidiaries and consolidated variable interest entities (VIE). For consolidated subsidiaries in which the Company’s ownership interest is less than 100%, the non-controlling interests are reported in stockholders’ equity in the accompanying Condensed Consolidated Balance Sheets. The non-controlling interests in net results, net of tax, is classified separately in the accompanying Unaudited Condensed Consolidated Statements of Income (Loss). All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations of companies acquired are included from the date of acquisition.
Reclassification	Reclassification Certain amounts in prior periods have been reclassified to conform to the current year presentation. Such reclassifications did not have a material effect on the Company’s financial condition or results of operations as previously reported.
Income Taxes	Income Taxes Income taxes are accounted for under the asset and liability method. We recognize deferred tax assets and liabilities at enacted income tax rates for the temporary differences between the financial reporting bases and the tax bases of our assets and liabilities. Any effects of changes in income tax rates or tax laws are included in the provision for income taxes in the period of enactment. Our net deferred tax assets primarily consist of net operating loss carryforwards, or NOLs. A valuation allowance is provided if it is more likely than not that some or all of a deferred income tax asset will not be realized. A current tax liability or asset is recognized for the estimated taxes payable or refundable on tax returns for the current and prior years. As of September 30, 2024, management concluded that it is more likely than not that a substantial portion of the Company’s deferred tax assets will be realized. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company’s effective income tax rate was approximately 29.0% and (16.8)% for the three months ended September 30, 2024 and 2023, respectively. The Company’s effective income tax rate was approximately 22.1% and (1.6)% for the nine months ended September 30, 2024 and 2023, respectively. The effective income tax rate for the three months ended September 30, 2024 was higher than the statutory rate primarily due to the impact of permanent items in the period. The effective income tax rate for the three months ended September 30, 2023 was lower than the statutory rate due to the impact of permanent tax adjustments related to executive compensation and goodwill impairments. The effective income tax rate for the nine months ended September 30, 2024 was higher than the statutory rate primarily due to the impact of permanent items. The effective income tax rate for the nine months ended September 30, 2023 was lower than the statutory rate due primarily to an unfavorable discrete item related to stock compensation.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, Segment Reporting (Topic 280) to expand the disclosures about a public entity's reportable segments and address requests from investors for additional, more detailed information about a reportable segment's expenses. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We do not expect the impact of ASU 2023-07 to be material on our financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) to enhance the transparency and decision usefulness of income tax disclosures, primarily related to the rate reconciliation and income taxes paid disclosures. The new standard is effective for fiscal years beginning after December 15, 2024. We do not expect the impact of ASU 2023-09 to be material on our financial statements.
Revenue	Revenue The Company derives the majority of its revenue by providing services on a time and material basis, and are short-term in nature. The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. Performance Obligations The Company provides highly integrated and bundled inspection services to its customers. The majority of the Company’s contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and is, therefore, not distinct. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the Company’s best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is a relative selling price based on price lists. Contract modifications are not routine in the performance of the Company’s contracts. Generally, when contracts are modified, the modification is to account for changes in scope to the goods and services that are provided. In most instances, contract modifications are for goods or services that are distinct, and, therefore, are accounted for as a separate contract. The Company’s performance obligations are satisfied over time as work progresses or at a point in time. The majority of the Company’s revenue is recognized over time as work progresses for the Company’s service deliverables, which includes providing testing, inspection and mechanical services to our customers. Revenue is recognized over time, based on time and material incurred to date which best portrays the transfer of control to the customer. The Company also utilizes an available practical expedient that provides for revenue to be recognized in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date. Fixed fee arrangements are determined based on expected labor, material, and overhead to be consumed on fulfillment of such services. For these arrangements, revenue is recognized on a cost-to-cost method tracked on an input basis. The majority of our revenue recognized at a point in time is related to product sales when the customer obtains control of the asset, which is generally upon shipment to the customer. Contract costs include labor, material and overhead. The Company expects any significant remaining performance obligations to be satisfied within one year. Contract Estimates The majority of the Company's revenues are short-term in nature. The Company enters into master service agreements ("MSA"s) with customers that specify an overall framework and contract terms. The actual contracting to provide services or furnish products are triggered by a work order, purchase order, or some similar document issued pursuant to a MSA which sets forth the scope of services and/or identifies the products to be provided. From time-to-time, the Company may enter into longer-term contracts, which can range from several months to several years. Revenue on certain contracts is recognized as work is performed based on total costs incurred to date in relation to the total estimated costs for the performance of the contract at completion. This includes contract estimates of costs to be incurred for the performance of the contract. Cost estimation is based upon the professional knowledge and experience of the Company's project managers, engineers and financial professionals. Factors that are considered in estimating the work to be completed include the availability of materials, the effect of any delays in the Company's project performance and the recoverability of any claims. Whenever revisions of estimates, contract costs and/or contract values indicate that the contract costs will exceed estimated revenues, thus creating a loss, a provision for the total estimated loss is recorded in that period. Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on the Consolidated Balance Sheets. Amounts are generally billed as work progresses in accordance with agreed-upon contractual terms, generally at periodic intervals (e.g., weekly, bi-weekly or monthly). Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, the Company sometimes receives advances or deposits from its customers before revenue is recognized, resulting in contract liabilities. These assets and liabilities are aggregated on an individual contract basis and reported on the Consolidated Balance Sheets at the end of each reporting period within accounts receivable, net or accrued expenses and other current liabilities. Unbilled revenue is generally billed in the subsequent quarter to their revenue recognition. The Company considers unbilled receivables as short-term in nature as they are normally converted to trade receivables within 90 days, and thus future changes in economic conditions are unlikely to have a significant effect on the credit loss estimate.
Earnings (loss) per Share	Earnings (loss) per Share Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares outstanding during the period. Diluted earnings per share is computed by dividing net income (loss) by the sum of (1) the weighted-average number of shares of common stock outstanding during the period, and (2) the dilutive effect of assumed conversion of equity awards using the treasury stock method. With respect to the number of weighted-average shares outstanding (denominator), diluted shares reflects: (i) the exercise of options to acquire common stock to the extent that the options’ exercise prices are less than the average market price of common shares during the period and (ii) the pro forma vesting of restricted stock units.
Fair Value Measurements	Fair Value Measurements The Company performs fair value measurements in accordance with the guidance provided by ASC 820, Fair Value Measurements and Disclosures. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It also establishes a three level hierarchy that prioritizes the inputs used to measure fair value. Financial instruments measured at fair value on a recurring basis The fair value of contingent consideration liabilities was estimated using a discounted cash flow technique with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in ASC 820. The significant inputs in the Level 3 measurement not supported by market activity include the probability assessments of expected future cash flows related to the acquisitions, appropriately discounted considering the uncertainties associated with the obligation, and as calculated in accordance with the terms of the applicable acquisition agreements. Financial instruments not measured at fair value on a recurring basis The Company has evaluated current market conditions and borrower credit quality and has determined that the carrying value of its long-term debt approximates fair value. The fair value of the Company’s notes payable and finance lease obligations approximates their carrying amounts based on anticipated interest rates which management believes would currently be available to the Company for similar issuances of debt.
Segment Disclosure	Segment Disclosure The Company’s three operating segments are: •North America. This segment provides asset protection solutions predominantly in North America, with the largest concentration in the United States, followed by Canada, consisting primarily of NDT, inspection, mechanical and engineering services that are used to evaluate the safety, structural integrity and reliability of critical energy, industrial and public infrastructure and commercial aerospace components. Software, digital and data services are included in this segment. •International. This segment offers services, products and systems similar to those of the other segments to select markets within Europe, the Middle East, Africa, Asia and South America, but not to customers in China and South Korea, which are served by the Products and Systems segment. •Products and Systems. This segment designs, manufactures, sells, installs and services the Company’s asset protection products and systems, including equipment and instrumentation, predominantly in the United States. Costs incurred for general corporate services, including finance, legal, and certain other costs that are provided to the segments are reported within Corporate and eliminations. Sales to the International segment from the Products and Systems segment and subsequent sales by the International segment of the same items are recorded and reflected in the operating performance of both segments. Additionally, engineering charges and royalty fees charged to the North America and International segments by the Products and Systems segment are reflected in the operating performance of each segment. The accounting policies of the reportable segments are the same as those described in Note 1-Description of Business and Basis of Presentation. Segment income from operations is one of the primary performance measures used by the chief operating decision maker, to assess the performance of each segment and make resource allocation decisions. Certain general and administrative costs such as human resources, information technology and training are allocated to the segments. Segment income from operations excludes interest and other financial charges and income taxes. Corporate and other assets are comprised principally of cash, deposits, property, plant and equipment, domestic deferred taxes, deferred charges and other assets. Corporate loss from operations consists of administrative charges related to corporate personnel and other charges that cannot be readily identified for allocation to a particular segment.

Revenue (Tables)

9 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregated Revenues

The following series of tables present the Company’s disaggregated revenue:

Revenue by industry was as follows:


Three Months Ended September 30, 2024	North America		International		Products		Corp/Elim		Total
Oil & Gas	$	90,460	$	9,040	$	3	$	—	$	99,503
Aerospace & Defense	16,181		5,663		42		—		21,886
Industrials	12,285		6,749		478		—		19,512
Power Generation & Transmission	8,029		3,081		544		—		11,654
Other Process Industries	7,836		3,900		79		—		11,815
Infrastructure, Research & Engineering	5,189		2,744		797		—		8,730
Petrochemical	3,806		198		—		—		4,004
Other	6,059		2,287		1,333		(4,089)		5,590
Total	$	149,845	$	33,662	$	3,276	$	(4,089)	$	182,694


Three Months Ended September 30, 2023	North America		International		Products		Corp/Elim		Total
Oil & Gas	$	94,390	$	8,827	$	35	$	—	$	103,252
Aerospace & Defense	14,240		5,778		47		—		20,065
Industrials	10,325		6,018		310		—		16,653
Power Generation & Transmission	7,388		1,653		696		—		9,737
Other Process Industries	6,933		2,864		(5)		—		9,792
Infrastructure, Research & Engineering	6,042		2,383		1,070		—		9,495
Petrochemical	3,313		586		—		—		3,899
Other	6,183		2,871		676		(3,269)		6,461
Total	$	148,814	$	30,980	$	2,829	$	(3,269)	$	179,354


Nine Months Ended September 30, 2024	North America		International		Products		Corp/Elim		Total
Oil & Gas	$	289,843	$	31,841	$	240	$	—	$	321,924
Aerospace & Defense	48,152		18,092		100		—		66,344
Industrials	33,047		18,480		1,478		—		53,005
Power Generation & Transmission	18,953		6,017		1,569		—		26,539
Other Process Industries	26,132		12,337		155		—		38,624
Infrastructure, Research & Engineering	14,286		7,762		1,901		—		23,949
Petrochemical	11,467		900		—		—		12,367
Other	14,708		5,543		4,417		(10,511)		14,157
Total	$	456,588	$	100,972	$	9,860	$	(10,511)	$	556,909



Nine Months Ended September 30, 2023	North America		International		Products		Corp/Elim		Total
Oil & Gas	$	281,663	$	26,291	$	87	$	—	$	308,041
Aerospace & Defense	41,516		15,894		275		—		57,685
Industrials	30,693		18,274		1,336		—		50,303
Power Generation & Transmission	17,834		4,840		3,189		—		25,863
Other Process Industries	24,906		10,567		73		—		35,546
Infrastructure, Research & Engineering	12,696		6,547		2,759		—		22,002
Petrochemical	10,027		887		—		—		10,914
Other	11,960		7,364		2,178		(8,457)		13,045
Total	$	431,295	$	90,664	$	9,897	$	(8,457)	$	523,399

Revenue per key geographic location was as follows:


Three Months Ended September 30, 2024	North America		International		Products		Corp/Elim		Total
United States	$	124,194	$	402	$	1,658	$	(1,457)	$	124,797
Other Americas	25,108		2,008		107		(577)		26,646
Europe	343		29,458		850		(1,655)		28,996
Asia-Pacific	200		1,794		661		(400)		2,255
Total	$	149,845	$	33,662	$	3,276	$	(4,089)	$	182,694


Three Months Ended September 30, 2023	North America		International		Products		Corp/Elim		Total
United States	$	126,239	$	120	$	1,032	$	(849)	$	126,542
Other Americas	21,907		3,703		49		(1,659)		24,000
Europe	465		26,764		510		(701)		27,038
Asia-Pacific	203		393		1,238		(60)		1,774
Total	$	148,814	$	30,980	$	2,829	$	(3,269)	$	179,354


Nine Months Ended September 30, 2024	North America		International		Products		Corp/Elim		Total
United States	$	384,522	$	1,129	$	4,800	$	(3,181)	$	387,270
Other Americas	66,829		6,224		960		(3,602)		70,411
Europe	2,107		89,304		2,081		(3,116)		90,376
Asia-Pacific	3,130		4,315		2,019		(612)		8,852
Total	$	456,588	$	100,972	$	9,860	$	(10,511)	$	556,909



Nine Months Ended September 30, 2023	North America		International		Products		Corp/Elim		Total
United States	$	369,811	$	709	$	4,478	$	(1,718)	$	373,280
Other Americas	57,218		11,013		673		(3,565)		65,339
Europe	3,159		75,421		1,275		(2,693)		77,162
Asia-Pacific	1,107		3,521		3,471		(481)		7,618
Total	$	431,295	$	90,664	$	9,897	$	(8,457)	$	523,399

Share-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of Stock Option Activity

The following table sets forth a summary of the stock option activity, weighted-average exercise prices and options outstanding as of September 30, 2024 as follows:


	Nine months ended September 30,
	2024			2023
	Common Stock Options	Weighted Average Exercise Price		Common Stock Options	Weighted Average Exercise Price
Outstanding at beginning of year:	250	$	5.36	—	$	—
Granted	—	$	—	—	$	—
Exercised	—	$	—	—	$	—
Expired or forfeited	—	$	—	—	$	—
Outstanding at end of year:	250	$	5.36	—	$	—

Schedule of Fully-vested Common Stock Issued to Non-employee Directors

A summary of the fully-vested common stock the Company issued to its non-employee directors, in connection with its non-employee director compensation, is as follows:


	Nine months ended September 30,
	2024		2023
Awards issued	60		99
Grant date fair value of awards issued	$	549	$	550

Schedule of Vesting Activity of Restricted Stock Unit Awards

A summary of the vesting activity of restricted stock unit awards, with the respective fair value of the awards, is as follows:


	Nine months ended September 30,
	2024		2023
Restricted stock awards vested	461		430
Fair value of awards vested	$	4,184	$	2,639

Schedule of Company's Outstanding, Nonvested Restricted Share Units and Performance Restricted Stock Units

A summary of the Company’s outstanding, non-vested restricted share units is as follows:


	Nine months ended September 30,
	2024			2023
	Units	Weighted Average Grant-Date Fair Value		Units	Weighted Average Grant-Date Fair Value
Outstanding at beginning of period:	1,184	$	8.07	1,415	$	7.96
Granted	726	$	8.52	591	$	8.37
Vested	(461)	$	9.08	(430)	$	6.14
Forfeited	(179)	$	8.39	(120)	$	7.96
Outstanding at end of period:	1,270	$	8.39	1,456	$	7.71

A summary of the Company’s PRSU activity is as follows:


	Nine months ended September 30,
	2024			2023
	Units	Weighted Average Grant-Date Fair Value		Units	Weighted Average Grant-Date Fair Value
Outstanding at beginning of period:	60	$	9.33	280	$	9.96
Granted	295	$	8.76	282	$	8.50
Performance condition adjustments	(187)	$	8.76	(314)	$	8.34
Vested	—	$	—	(64)	$	5.58
Forfeited	—	$	—	(84)	$	(6.95)
Outstanding at end of period:	168	$	9.18	100	$	9.83

Earnings (loss) per Share (Tables)

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Schedule of Computations of Basic and Diluted Earnings (Loss) per Share

The following table sets forth the computations of basic and diluted earnings (loss) per share:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023

Basic earnings (loss) per share
Numerator:
Net income (loss) attributable to Mistras Group, Inc.	$	6,401	$	(10,298)	$	13,765	$	(14,947)
Denominator:
Weighted average common shares outstanding	31,002		30,402		30,895		30,277
Basic earnings (loss) per share	$	0.21	$	(0.34)	$	0.45	$	(0.49)

Diluted earnings (loss) per share:
Numerator:
Net income (loss) attributable to Mistras Group, Inc.	$	6,401	$	(10,298)	$	13,765	$	(14,947)
Denominator:
Weighted average common shares outstanding	31,002		30,402		30,895		30,277
Dilutive effect of stock options outstanding	120		—		103		—
Dilutive effect of restricted stock units outstanding (1)	538		—		515		—
	31,660		30,402		31,513		30,277
Diluted earnings (loss) per share	$	0.20	$	(0.34)	$	0.44	$	(0.49)

_______________

Acquisitions (Tables)

9 Months Ended

Sep. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Schedule of Acquisition-related Expense

These amounts are reported as Acquisition-related expense, net on the Unaudited Condensed Consolidated Statements of Income (Loss) and were as follows for the three and nine months ended September 30, 2024 and 2023:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Due diligence, professional fees and other transaction costs	$	—	$	—	$	1	$	5
Adjustments to fair value of contingent consideration liabilities	—		—		—		—
Acquisition-related expense, net	$	—	$	—	$	1	$	5

Accounts Receivable, net (Tables)

9 Months Ended

Sep. 30, 2024

Receivables [Abstract]

Schedule of Accounts Receivable, Net

Accounts receivable consisted of the following:


	September 30, 2024		December 31, 2023

Trade accounts receivable	$	146,410	$	134,495
Allowance for credit losses	(2,306)		(1,648)
Accounts receivable, net	$	144,104	$	132,847

Inventories (Tables)

9 Months Ended

Sep. 30, 2024

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories consisted of the following (in thousands):


	September 30, 2024		December 31, 2023

Raw materials	$	5,302	$	6,099
Work in progress	1,106		839
Finished goods	5,158		5,740
Consumable supplies	2,944		2,605
Inventories	$	14,510	$	15,283

Property, Plant and Equipment, net (Tables)

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment, net

Property, plant and equipment, net consisted of the following:


	Useful Life (Years)	September 30, 2024		December 31, 2023

Land		$	2,455	$	2,453
Buildings and improvements	30-40	26,419		26,663
Office furniture and equipment	5-8	17,512		21,334
Machinery and equipment	5-7	278,724		269,306
		325,110		319,756
Accumulated depreciation and amortization		(245,258)		(238,784)
Property, plant and equipment, net		$	79,852	$	80,972

Goodwill (Tables)

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Changes in Carrying Amount of Goodwill

Changes in the carrying amount of goodwill by segment is shown below:


	North America		International		Products and Systems		Total
Balance at December 31, 2023	$	187,354	$	—	$	—	$	187,354
Foreign currency translation	(1,482)		—		—		(1,482)


Balance at September 30, 2024	$	185,872	$	—	$	—	$	185,872

Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2024

Intangible Assets, Net (Excluding Goodwill) [Abstract]

Schedule of Net Carrying Amount of Intangible Assets

The gross amount, accumulated amortization and net carrying amount of intangible assets were as follows:


		September 30, 2024				December 31, 2023
	Useful Life (Years)	Gross Amount		Accumulated Amortization		Net Carrying Amount		Gross Amount		Accumulated Amortization		Net Carrying Amount

Customer relationships	5-18	$	110,240	$	(93,518)	$	16,722	$	110,780	$	(90,506)	$	20,274
Software/Technology	3-15	58,314		(34,329)		23,985		55,053		(32,230)		22,823
Covenants not to compete	2-5	12,511		(12,483)		28		12,536		(12,488)		48
Other	2-12	10,394		(9,625)		769		10,466		(9,617)		849
Total		$	191,459	$	(149,955)	$	41,504	$	188,835	$	(144,841)	$	43,994

Accrued Expenses and Other Current Liabilities (Tables)

9 Months Ended

Sep. 30, 2024

Payables and Accruals [Abstract]

Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:


	September 30, 2024		December 31, 2023

Accrued salaries, wages and related employee benefits	$	28,061	$	27,372

Accrued workers’ compensation and health benefits	4,616		4,385
Deferred revenue	6,975		7,136
Pension accrual	2,458		2,458
Right-of-use liability - Operating	11,783		10,686
Other accrued expenses	31,730		32,294
Total	$	85,623	$	84,331

Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Schedule of Long-term Debt

Long-term debt consisted of the following:


	September 30, 2024		December 31, 2023

Senior credit facility	$	76,949	$	71,150
Senior secured term loan, net of unamortized debt issuance costs of $0.3 million and $0.4 million, respectively	109,863		115,253

Other	2,888		3,996
Total debt	189,700		190,399
Less: Current portion	(10,711)		(8,900)
Long-term debt, net of current portion	$	178,989	$	181,499

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Schedule of Changes in Fair Value of Level 3 Contingent Consideration

The following table represents the changes in the fair value of Level 3 contingent consideration:


	Nine months ended September 30,
	2024		2023
Beginning balance	$	—	$	938

Payments	—		(938)

Revaluation	—		—

Ending balance	$	—	$	—

Segment Disclosure (Tables)

9 Months Ended

Sep. 30, 2024

Segment Reporting [Abstract]

Schedule of Selected Consolidated Financial Information by Segment

Selected consolidated financial information by segment for the periods shown was as follows: (with intercompany transactions eliminated in Corporate and eliminations)


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Revenue
North America	$	149,845	$	148,814	$	456,588	$	431,295
International	33,662		30,980		100,972		90,664
Products and Systems	3,276		2,829		9,860		9,897
Corporate and eliminations	(4,089)		(3,269)		(10,511)		(8,457)
	$	182,694	$	179,354	$	556,909	$	523,399


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Gross profit
North America	$	42,487	$	44,773	$	126,813	$	121,088
International	10,139		8,481		29,667		24,247
Products and Systems	1,933		1,096		5,233		4,773
Corporate and eliminations	18		32		70		73
	$	54,577	$	54,382	$	161,783	$	150,181

Income (loss) from operations by operating segment includes intercompany transactions, which are eliminated in Corporate and eliminations.


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Income (loss) from operations
North America	$	17,455	$	18,004	$	49,742	$	39,719
International	1,778		(12,970)		4,548		(13,031)
Products and Systems	670		(557)		1,479		(78)
Corporate and eliminations	(8,045)		(9,159)		(26,401)		(29,228)
	$	11,858	$	(4,682)	$	29,368	$	(2,618)


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Depreciation and amortization
North America	$	5,843	$	6,603	$	18,191	$	19,329
International	1,940		1,915		5,763		5,663
Products and Systems	193		183		526		526
Corporate and eliminations	80		47		246		(48)
	$	8,056	$	8,748	$	24,726	$	25,470


	September 30, 2024		December 31, 2023
Intangible assets, net
North America	$	33,162	$	37,622
International	1,822		2,998
Products and Systems	1,040		1,168
Corporate and eliminations	5,480		2,206
	$	41,504	$	43,994


	September 30, 2024		December 31, 2023
Total assets
North America	$	413,878	$	402,782
International	104,063		99,398
Products and Systems	12,253		13,259
Corporate and eliminations	21,487		19,337
	$	551,681	$	534,776

Description of Business and Basis of Presentation - Narrative (Details) - segment	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Accounting Policies [Abstract]
Number of operating segments			3
Effective income tax rate	29.00%	(16.80%)	22.10%	(1.60%)

Revenue - Narrative (Details) - USD ($) $ in Millions	9 Months Ended
Revenue - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2024	Sep. 30, 2023
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue recognized that was included in contract liability balance at the beginning of the year	$ 6.2	$ 5.7
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, expected timing of satisfaction period	1 year

Revenue - Disaggregated Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Disaggregation of Revenue [Line Items]
Revenue	$ 182,694	$ 179,354	$ 556,909	$ 523,399
United States
Disaggregation of Revenue [Line Items]
Revenue	124,797	126,542	387,270	373,280
Other Americas
Disaggregation of Revenue [Line Items]
Revenue	26,646	24,000	70,411	65,339
Europe
Disaggregation of Revenue [Line Items]
Revenue	28,996	27,038	90,376	77,162
Asia-Pacific
Disaggregation of Revenue [Line Items]
Revenue	2,255	1,774	8,852	7,618
Oil & Gas
Disaggregation of Revenue [Line Items]
Revenue	99,503	103,252	321,924	308,041
Aerospace & Defense
Disaggregation of Revenue [Line Items]
Revenue	21,886	20,065	66,344	57,685
Industrials
Disaggregation of Revenue [Line Items]
Revenue	19,512	16,653	53,005	50,303
Power Generation & Transmission
Disaggregation of Revenue [Line Items]
Revenue	11,654	9,737	26,539	25,863
Other Process Industries
Disaggregation of Revenue [Line Items]
Revenue	11,815	9,792	38,624	35,546
Infrastructure, Research & Engineering
Disaggregation of Revenue [Line Items]
Revenue	8,730	9,495	23,949	22,002
Petrochemical
Disaggregation of Revenue [Line Items]
Revenue	4,004	3,899	12,367	10,914
Other
Disaggregation of Revenue [Line Items]
Revenue	5,590	6,461	14,157	13,045
Operating segments \| North America
Disaggregation of Revenue [Line Items]
Revenue	149,845	148,814	456,588	431,295
Operating segments \| North America \| United States
Disaggregation of Revenue [Line Items]
Revenue	124,194	126,239	384,522	369,811
Operating segments \| North America \| Other Americas
Disaggregation of Revenue [Line Items]
Revenue	25,108	21,907	66,829	57,218
Operating segments \| North America \| Europe
Disaggregation of Revenue [Line Items]
Revenue	343	465	2,107	3,159
Operating segments \| North America \| Asia-Pacific
Disaggregation of Revenue [Line Items]
Revenue	200	203	3,130	1,107
Operating segments \| North America \| Oil & Gas
Disaggregation of Revenue [Line Items]
Revenue	90,460	94,390	289,843	281,663
Operating segments \| North America \| Aerospace & Defense
Disaggregation of Revenue [Line Items]
Revenue	16,181	14,240	48,152	41,516
Operating segments \| North America \| Industrials
Disaggregation of Revenue [Line Items]
Revenue	12,285	10,325	33,047	30,693
Operating segments \| North America \| Power Generation & Transmission
Disaggregation of Revenue [Line Items]
Revenue	8,029	7,388	18,953	17,834
Operating segments \| North America \| Other Process Industries
Disaggregation of Revenue [Line Items]
Revenue	7,836	6,933	26,132	24,906
Operating segments \| North America \| Infrastructure, Research & Engineering
Disaggregation of Revenue [Line Items]
Revenue	5,189	6,042	14,286	12,696
Operating segments \| North America \| Petrochemical
Disaggregation of Revenue [Line Items]
Revenue	3,806	3,313	11,467	10,027
Operating segments \| North America \| Other
Disaggregation of Revenue [Line Items]
Revenue	6,059	6,183	14,708	11,960
Operating segments \| International
Disaggregation of Revenue [Line Items]
Revenue	33,662	30,980	100,972	90,664
Operating segments \| International \| United States
Disaggregation of Revenue [Line Items]
Revenue	402	120	1,129	709
Operating segments \| International \| Other Americas
Disaggregation of Revenue [Line Items]
Revenue	2,008	3,703	6,224	11,013
Operating segments \| International \| Europe
Disaggregation of Revenue [Line Items]
Revenue	29,458	26,764	89,304	75,421
Operating segments \| International \| Asia-Pacific
Disaggregation of Revenue [Line Items]
Revenue	1,794	393	4,315	3,521
Operating segments \| International \| Oil & Gas
Disaggregation of Revenue [Line Items]
Revenue	9,040	8,827	31,841	26,291
Operating segments \| International \| Aerospace & Defense
Disaggregation of Revenue [Line Items]
Revenue	5,663	5,778	18,092	15,894
Operating segments \| International \| Industrials
Disaggregation of Revenue [Line Items]
Revenue	6,749	6,018	18,480	18,274
Operating segments \| International \| Power Generation & Transmission
Disaggregation of Revenue [Line Items]
Revenue	3,081	1,653	6,017	4,840
Operating segments \| International \| Other Process Industries
Disaggregation of Revenue [Line Items]
Revenue	3,900	2,864	12,337	10,567
Operating segments \| International \| Infrastructure, Research & Engineering
Disaggregation of Revenue [Line Items]
Revenue	2,744	2,383	7,762	6,547
Operating segments \| International \| Petrochemical
Disaggregation of Revenue [Line Items]
Revenue	198	586	900	887
Operating segments \| International \| Other
Disaggregation of Revenue [Line Items]
Revenue	2,287	2,871	5,543	7,364
Operating segments \| Products
Disaggregation of Revenue [Line Items]
Revenue	3,276	2,829	9,860	9,897
Operating segments \| Products \| United States
Disaggregation of Revenue [Line Items]
Revenue	1,658	1,032	4,800	4,478
Operating segments \| Products \| Other Americas
Disaggregation of Revenue [Line Items]
Revenue	107	49	960	673
Operating segments \| Products \| Europe
Disaggregation of Revenue [Line Items]
Revenue	850	510	2,081	1,275
Operating segments \| Products \| Asia-Pacific
Disaggregation of Revenue [Line Items]
Revenue	661	1,238	2,019	3,471
Operating segments \| Products \| Oil & Gas
Disaggregation of Revenue [Line Items]
Revenue	3	35	240	87
Operating segments \| Products \| Aerospace & Defense
Disaggregation of Revenue [Line Items]
Revenue	42	47	100	275
Operating segments \| Products \| Industrials
Disaggregation of Revenue [Line Items]
Revenue	478	310	1,478	1,336
Operating segments \| Products \| Power Generation & Transmission
Disaggregation of Revenue [Line Items]
Revenue	544	696	1,569	3,189
Operating segments \| Products \| Other Process Industries
Disaggregation of Revenue [Line Items]
Revenue	79	(5)	155	73
Operating segments \| Products \| Infrastructure, Research & Engineering
Disaggregation of Revenue [Line Items]
Revenue	797	1,070	1,901	2,759
Operating segments \| Products \| Petrochemical
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Operating segments \| Products \| Other
Disaggregation of Revenue [Line Items]
Revenue	1,333	676	4,417	2,178
Corp/Elim
Disaggregation of Revenue [Line Items]
Revenue	(4,089)	(3,269)	(10,511)	(8,457)
Corp/Elim \| United States
Disaggregation of Revenue [Line Items]
Revenue	(1,457)	(849)	(3,181)	(1,718)
Corp/Elim \| Other Americas
Disaggregation of Revenue [Line Items]
Revenue	(577)	(1,659)	(3,602)	(3,565)
Corp/Elim \| Europe
Disaggregation of Revenue [Line Items]
Revenue	(1,655)	(701)	(3,116)	(2,693)
Corp/Elim \| Asia-Pacific
Disaggregation of Revenue [Line Items]
Revenue	(400)	(60)	(612)	(481)
Corp/Elim \| Oil & Gas
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Corp/Elim \| Aerospace & Defense
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Corp/Elim \| Industrials
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Corp/Elim \| Power Generation & Transmission
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Corp/Elim \| Other Process Industries
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Corp/Elim \| Infrastructure, Research & Engineering
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Corp/Elim \| Petrochemical
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Corp/Elim \| Other
Disaggregation of Revenue [Line Items]
Revenue	$ (4,089)	$ (3,269)	$ (10,511)	$ (8,457)

Share-Based Compensation - Equity Incentive Plans (Details) - 2016 Plan - shares	May 14, 2024	Sep. 30, 2024
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Increase in total number of shares authorized for issuance (in shares)	1,300,000
Total number of shares authorized for issuance (in shares)	6,200,000
Number of awards that may be granted (in shares)		1,600,000

Share-Based Compensation - Stock Options Narrative (Details) - $ / shares		9 Months Ended
	Oct. 11, 2023	Sep. 30, 2024	Sep. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option award granted (in shares)		0	0
Weighted average grant date fair value of stock option award granted (in dollars per share)		$ 0	$ 0
Stock Options \| Interim President And CEO
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option award granted (in shares)	250,000
Weighted average grant date fair value of stock option award granted (in dollars per share)	$ 5.36
Expiration term of options	10 years
Expiration term of options in the event grantee no longer serving	1 year

Share-Based Compensation - Stock Options (Details) - $ / shares	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Common Stock Options
Outstanding at beginning of period (in shares)	250,000	0
Granted (in shares)	0	0
Exercised (in shares)	0	0
Expired or forfeited (in shares)	0	0
Outstanding at end of period (in shares)	250,000	0
Weighted Average Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 5.36	$ 0
Granted (in dollars per share)	0	0
Exercised (in dollars per share)	0	0
Expired or forfeited (in dollars per share)	0	0
Outstanding at end of period (in dollars per share)	$ 5.36	$ 0

Share-Based Compensation - Fully-vested Common Stock Issued to Non-employee Directors (Details) - Common Stock - Non-employee Directors - USD ($) shares in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards issued (in shares)	60	99
Grant date fair value of awards issued	$ 549	$ 550

Share-Based Compensation - Restricted Stock Unit Awards - Narrative (Details) - Restricted Stock Unit Awards - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Recognized share-based compensation expense (benefit)	$ 1.6	$ 0.7	$ 3.9	$ 2.5
Unrecognized compensation cost, net of estimated forfeitures	$ 8.9		$ 8.9
Weighted-average period over which unrecognized compensation cost is expected to be recognized (years)			2 years 4 months 24 days

Share-Based Compensation - Vesting Activity of Restricted Stock Unit Awards (Details) - Restricted Stock Unit Awards - USD ($) shares in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock awards vested (in shares)	461	430
Fair value of awards vested	$ 4,184	$ 2,639

Share-Based Compensation - Restricted Stock Units Awards - Activity (Details) - Restricted Stock Unit Awards - $ / shares shares in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Restricted Stock Units Awards (Units)
Outstanding at beginning of period (in shares)	1,184	1,415
Granted (in shares)	726	591
Vested (in shares)	(461)	(430)
Forfeited (in shares)	(179)	(120)
Outstanding at end of period (in shares)	1,270	1,456
Weighted Average Grant-Date Fair Value (in dollars per share)
Outstanding at the beginning of period (in dollars per share)	$ 8.07	$ 7.96
Granted (in dollars per share)	8.52	8.37
Vested (in dollars per share)	9.08	6.14
Forfeited (in dollars per share)	8.39	7.96
Outstanding at end of period (in dollars per share)	$ 8.39	$ 7.71

Share-Based Compensation - Performance Restricted Stock Units - Narrative (Details) - PRSUs $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024 USD ($) shares	Sep. 30, 2023 USD ($) shares	Sep. 30, 2024 USD ($) metric shares	Sep. 30, 2023 USD ($) shares	Dec. 31, 2023 shares	Dec. 31, 2022 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of units increased (decreased) during the period (in shares) \| shares			(187,000)
Recognized share-based compensation expense (benefit) \| $	$ 0.0	$ 0.1	$ 0.3	$ 0.6
Unrecognized compensation cost \| $	$ 0.9		$ 0.9
Nonvested shares outstanding (in shares) \| shares	168,000	100,000	168,000	100,000	60,000	280,000
Weighted-average period over which unrecognized compensation cost is expected to be recognized (years)			2 years 4 months 24 days
Executive and Senior Officers
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance period (years)			1 year
Award vesting period			4 years
Requisite service period			5 years
Executive and Senior Officers \| Anniversary 1
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting percentage (ratably on each of the first four anniversary date)			25.00%
Executive and Senior Officers \| Anniversary 2
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting percentage (ratably on each of the first four anniversary date)			25.00%
Executive and Senior Officers \| Anniversary 3
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting percentage (ratably on each of the first four anniversary date)			25.00%
Executive and Senior Officers \| Anniversary 4
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting percentage (ratably on each of the first four anniversary date)			25.00%
Executive and Senior Officers \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Target award percentage	0.00%		0.00%
Executive and Senior Officers \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Target award percentage	200.00%		200.00%
Executive Officers
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of performance award metrics \| metric			3

Share-Based Compensation - Performance Restricted Stock Units - Activity (Details) - PRSUs - $ / shares shares in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Performance Restricted Stock (Units)
Outstanding at beginning of period (in shares)	60	280
Granted (in shares)	295	282
Performance condition adjustments (in shares)	(187)	(314)
Vested (in shares)	0	(64)
Forfeited (in shares)	0	(84)
Outstanding at end of period (in shares)	168	100
Weighted Average Grant-Date Fair Value (in dollars per share)
Outstanding at the beginning of period (in dollars per share)	$ 9.33	$ 9.96
Granted (in dollars per share)	8.76	8.50
Performance condition adjustments (in dollars per share)	8.76	8.34
Vested (in dollars per share)	0	5.58
Forfeited (in dollars per share)	0	6.95
Outstanding at end of period (in dollars per share)	$ 9.18	$ 9.83

Earnings (loss) per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Basic earnings (loss) per share
Net income (loss) attributable to Mistras Group, Inc.	$ 6,401	$ (10,298)	$ 13,765	$ (14,947)
Denominator:
Weighted average common shares outstanding, basic (in shares)	31,002,000	30,402,000	30,895,000	30,277,000
Basic earnings (loss) per share (in dollars per share)	$ 0.21	$ (0.34)	$ 0.45	$ (0.49)
Numerator:
Net income (loss) attributable to Mistras Group, Inc.	$ 6,401	$ (10,298)	$ 13,765	$ (14,947)
Denominator:
Weighted average common shares outstanding, basic (in shares)	31,002,000	30,402,000	30,895,000	30,277,000
Dilutive effect of stock options outstanding (in shares)	120,000	0	103,000	0
Dilutive effect of restricted stock units outstanding (in shares)	538,000	0	515,000	0
Weighted average common shares outstanding, diluted (in shares)	31,660,000	30,402,000	31,513,000	30,277,000
Diluted earnings (loss) per share (in dollars per share)	$ 0.20	$ (0.34)	$ 0.44	$ (0.49)
Restricted Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive shares excluded from computation of diluted EPS due to net loss for the period (in shares)			1,508,255	926,224

Acquisitions (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Acquisitions (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]
Due diligence, professional fees and other transaction costs	$ 0	$ 0	$ 1	$ 5
Adjustments to fair value of contingent consideration liabilities	0	0	0	0
Acquisition-related expense, net	$ 0	$ 0	$ 1	$ 5

Accounts Receivable, net - Schedule of Accounts Receivable, net (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Receivables [Abstract]
Trade accounts receivable	$ 146,410	$ 134,495
Allowance for credit losses	(2,306)	(1,648)
Accounts receivable, net	$ 144,104	$ 132,847

Accounts Receivable, net - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Receivables [Abstract]
Unbilled revenues accrued	$ 30.3	$ 18.5

Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Inventory Disclosure [Abstract]
Raw materials	$ 5,302	$ 6,099
Work in progress	1,106	839
Finished goods	5,158	5,740
Consumable supplies	2,944	2,605
Inventories	$ 14,510	$ 15,283

Property, Plant and Equipment, net - Schedule of Property, Plant and Equipment, net (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment, net
Property, plant and equipment, gross	$ 325,110	$ 319,756
Accumulated depreciation and amortization	(245,258)	(238,784)
Property, plant and equipment, net	79,852	80,972
Land
Property, Plant and Equipment, net
Property, plant and equipment, gross	2,455	2,453
Buildings and improvements
Property, Plant and Equipment, net
Property, plant and equipment, gross	$ 26,419	26,663
Buildings and improvements \| Minimum
Property, Plant and Equipment, net
Useful Life (Years)	30 years
Buildings and improvements \| Maximum
Property, Plant and Equipment, net
Useful Life (Years)	40 years
Office furniture and equipment
Property, Plant and Equipment, net
Property, plant and equipment, gross	$ 17,512	21,334
Office furniture and equipment \| Minimum
Property, Plant and Equipment, net
Useful Life (Years)	5 years
Office furniture and equipment \| Maximum
Property, Plant and Equipment, net
Useful Life (Years)	8 years
Machinery and equipment
Property, Plant and Equipment, net
Property, plant and equipment, gross	$ 278,724	$ 269,306
Machinery and equipment \| Minimum
Property, Plant and Equipment, net
Useful Life (Years)	5 years
Machinery and equipment \| Maximum
Property, Plant and Equipment, net
Useful Life (Years)	7 years

Property, Plant and Equipment, net - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 6.1	$ 6.6	$ 18.9	$ 19.0

Goodwill - Changes in Carrying Amount of Goodwill (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2024 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 187,354
Foreign currency translation	(1,482)
Ending balance	185,872
North America
Goodwill [Roll Forward]
Beginning balance	187,354
Foreign currency translation	(1,482)
Ending balance	185,872
International
Goodwill [Roll Forward]
Beginning balance	0
Foreign currency translation	0
Ending balance	0
Products and Systems
Goodwill [Roll Forward]
Beginning balance	0
Foreign currency translation	0
Ending balance	$ 0

Goodwill - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Goodwill - Narrative (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Goodwill [Line Items]
Goodwill impairment charges	$ 0	$ 13,799	$ 0	$ 13,799
International
Goodwill [Line Items]
Goodwill impairment charges		$ 13,800

Intangible Assets - Schedule of Net Carrying Amount of Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Gross Amount	$ 191,459	$ 188,835
Accumulated Amortization	(149,955)	(144,841)
Net Carrying Amount	41,504	43,994
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Amount	110,240	110,780
Accumulated Amortization	(93,518)	(90,506)
Net Carrying Amount	$ 16,722	20,274
Customer relationships \| Minimum
Finite-Lived Intangible Assets [Line Items]
Useful Life (Years)	5 years
Customer relationships \| Maximum
Finite-Lived Intangible Assets [Line Items]
Useful Life (Years)	18 years
Software/Technology
Finite-Lived Intangible Assets [Line Items]
Gross Amount	$ 58,314	55,053
Accumulated Amortization	(34,329)	(32,230)
Net Carrying Amount	$ 23,985	22,823
Software/Technology \| Minimum
Finite-Lived Intangible Assets [Line Items]
Useful Life (Years)	3 years
Software/Technology \| Maximum
Finite-Lived Intangible Assets [Line Items]
Useful Life (Years)	15 years
Covenants not to compete
Finite-Lived Intangible Assets [Line Items]
Gross Amount	$ 12,511	12,536
Accumulated Amortization	(12,483)	(12,488)
Net Carrying Amount	$ 28	48
Covenants not to compete \| Minimum
Finite-Lived Intangible Assets [Line Items]
Useful Life (Years)	2 years
Covenants not to compete \| Maximum
Finite-Lived Intangible Assets [Line Items]
Useful Life (Years)	5 years
Other
Finite-Lived Intangible Assets [Line Items]
Gross Amount	$ 10,394	10,466
Accumulated Amortization	(9,625)	(9,617)
Net Carrying Amount	$ 769	$ 849
Other \| Minimum
Finite-Lived Intangible Assets [Line Items]
Useful Life (Years)	2 years
Other \| Maximum
Finite-Lived Intangible Assets [Line Items]
Useful Life (Years)	12 years

Intangible Assets - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Amortization expense of intangibles	$ 1.9	$ 2.2	$ 5.8	$ 6.5

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Payables and Accruals [Abstract]
Accrued salaries, wages and related employee benefits	$ 28,061	$ 27,372
Accrued workers’ compensation and health benefits	4,616	4,385
Deferred revenue	6,975	7,136
Pension accrual	2,458	2,458
Right-of-use liability - Operating	11,783	10,686
Other accrued expenses	31,730	32,294
Total	$ 85,623	$ 84,331

Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Debt Instrument [Line Items]
Total debt	$ 189,700	$ 190,399
Less: Current portion	(10,711)	(8,900)
Long-term debt, net of current portion	178,989	181,499
Senior credit facility
Debt Instrument [Line Items]
Total debt	76,949	71,150
Senior credit facility \| Senior Secured Term Loan
Debt Instrument [Line Items]
Unamortized debt issuance costs	300	400
Total debt	109,863	115,253
Other
Debt Instrument [Line Items]
Total debt	$ 2,888	$ 3,996

Long-Term Debt - Narrative (Details)		9 Months Ended
Long-Term Debt - Narrative (Details)	Aug. 01, 2022 USD ($)	Sep. 30, 2024 USD ($)	Dec. 31, 2023 USD ($)
Debt Instrument [Line Items]
Debt outstanding		$ 189,700,000	$ 190,399,000
Line of Credit \| Credit Agreement
Debt Instrument [Line Items]
Consolidated debt ratio (less than)	1.25
Consolidated debt ratio (greater than)	3.75
Fixed charge coverage ratio	1.25
Number of days, written notice required prior to an acquisition	5 days
Amount of acquisition requiring written notice	$ 10,000,000
Line of Credit \| Credit Agreement \| Senior credit facility
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 190,000,000
Term of credit facility	5 years
Maximum borrowing capacity in non-U.S. Dollar currencies	$ 100,000,000
Line of Credit \| Credit Agreement \| Secured Debt
Debt Instrument [Line Items]
Term loan	125,000,000
Line of Credit \| Credit Agreement \| Letter of Credit
Debt Instrument [Line Items]
Maximum amount available for the issuance of letters of credit	$ 20,000,000
Line of Credit \| Credit Agreement \| Minimum \| Variable Rate Component
Debt Instrument [Line Items]
SOFR margin range	1.25%
Line of Credit \| Credit Agreement \| Maximum \| Variable Rate Component
Debt Instrument [Line Items]
SOFR margin range	2.75%
Line of Credit \| Credit Agreement \| Through June 30, 2023
Debt Instrument [Line Items]
Total consolidated debt leverage ratio	4.0
Line of Credit \| Credit Agreement \| After June 30, 2023
Debt Instrument [Line Items]
Total consolidated debt leverage ratio	3.75
Line of Credit \| Credit Agreement \| Through June 30, 2024
Debt Instrument [Line Items]
Debt periodic payments	$ 1,560,000
Line of Credit \| Credit Agreement \| Through June 30, 2025
Debt Instrument [Line Items]
Debt periodic payments	2,340,000
Line of Credit \| Credit Agreement \| After June 30, 2025
Debt Instrument [Line Items]
Debt periodic payments	$ 3,120,000
Senior credit facility
Debt Instrument [Line Items]
Debt outstanding		76,949,000	71,150,000
Outstanding borrowings		186,800,000
Outstanding letters of credit		3,100,000
Capitalized costs associated with debt modifications		900,000
Senior credit facility \| Senior Secured Term Loan
Debt Instrument [Line Items]
Debt outstanding		109,863,000	115,253,000
Other
Debt Instrument [Line Items]
Debt outstanding		2,888,000	$ 3,996,000
Other \| Minimum
Debt Instrument [Line Items]
Debt periodic payments		$ 1,000
Interest rate		0.40%
Other \| Maximum
Debt Instrument [Line Items]
Debt periodic payments		$ 16,100
Interest rate		3.50%

Fair Value Measurements (Details) - Level 3 - Contingent Consideration - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 0	$ 938
Payments	0	(938)
Revaluation	0	0
Ending balance	$ 0	$ 0

Commitments and Contingencies (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Litigation
Pension accrual	$ 2,458	$ 2,458
Pension Related Contingencies
Litigation
Pension accrual	$ 2,500

Segment Disclosure (Details) $ in Thousands	3 Months Ended		9 Months Ended
Segment Disclosure (Details) $ in Thousands	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) segment	Sep. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
Segment Reporting [Abstract]
Number of operating segments \| segment			3
Financial information by segment
Revenue	$ 182,694	$ 179,354	$ 556,909	$ 523,399
Gross profit	54,577	54,382	161,783	150,181
Income (loss) from operations	11,858	(4,682)	29,368	(2,618)
Depreciation and amortization	8,056	8,748	24,726	25,470
Intangible assets, net	41,504		41,504		$ 43,994
Total assets	551,681		551,681		534,776
Operating segments \| North America
Financial information by segment
Revenue	149,845	148,814	456,588	431,295
Gross profit	42,487	44,773	126,813	121,088
Income (loss) from operations	17,455	18,004	49,742	39,719
Depreciation and amortization	5,843	6,603	18,191	19,329
Intangible assets, net	33,162		33,162		37,622
Total assets	413,878		413,878		402,782
Operating segments \| International
Financial information by segment
Revenue	33,662	30,980	100,972	90,664
Gross profit	10,139	8,481	29,667	24,247
Income (loss) from operations	1,778	(12,970)	4,548	(13,031)
Depreciation and amortization	1,940	1,915	5,763	5,663
Intangible assets, net	1,822		1,822		2,998
Total assets	104,063		104,063		99,398
Operating segments \| Products and Systems
Financial information by segment
Revenue	3,276	2,829	9,860	9,897
Gross profit	1,933	1,096	5,233	4,773
Income (loss) from operations	670	(557)	1,479	(78)
Depreciation and amortization	193	183	526	526
Intangible assets, net	1,040		1,040		1,168
Total assets	12,253		12,253		13,259
Corporate and eliminations
Financial information by segment
Revenue	(4,089)	(3,269)	(10,511)	(8,457)
Gross profit	18	32	70	73
Income (loss) from operations	(8,045)	(9,159)	(26,401)	(29,228)
Depreciation and amortization	80	$ 47	246	$ (48)
Intangible assets, net	5,480		5,480		2,206
Total assets	$ 21,487		$ 21,487		$ 19,337