Mistras Reports FQ1 Earnings

Mitras Group

reported FQ1 earnings after the close and will hold a conference call today at 9AM. MG affirmed its FY11 guidance; Adjusted EBITDA $44-49mn), implying that it remains on track to achieve revenue and adjusted EBITDA growth of ~16% and ~19%, respectively. In FQ1, the company posted a solid 15% organic growth rate, augmented by 8% growth from acquisitions, reflecting a continuation of the dual-pronged growth strategy. FQ1 is one of the seasonally weaker quarters, so J.P. Morgan expect EBITDA margin to improve as the year progresses. EPS misses JPM on margins, in line with Street; solid revenue growth. MG reported F1Q EPS of $0.06, in line with the Street consensus but below our $0.08 estimate on lower-than-expected margins. Top line boosted by Services segment. Revenue growth in all segments was strong, led by the Services segment (80% of total revenue), which increased 21% y/y. Most of the margin shortfall was concentrated in the International segment, which fell ~600bps short of our forecast. MG closed Monday at $11.19