Good day ladies and gentlemen, and welcome to the Q3 2010 Mistras Group Inc. earnings conference call. (Operator Instructions) I would now like to turn the conference over to your host for today, Sotirios Vahaviolos.

Good morning to everyone, welcome to the Mistras Group earnings conference call to discuss our recent company performance. Again my name is Sotirios Vahaviolos, I am the Founder, Chairman, and Chief Executive Officer of Mistras. Joining me today is Mr. Paul Peterik, the company’s Chief Financial Officer. The purpose of today’s conference call is to discuss our recently released financial results for this company’s third quarter that ended February 28, 2010. Our primary objective of this call is to provide you with a clear understanding of our performance and prospects. This discussion is intended to supplement our quarterly earnings release and our filings with the Security & Exchange Commission. Paul will begin will a brief disclaimer about the information we are providing today and a summary review of our financial results. I will then follow Paul with a few remarks and observations about our performance, marketing activity, and prospects. We will then answer any questions you may have. With that, Paul let me turn it over to you.

Thank you Sotirios, first I want to remind everyone that our discussions during this conference call will include forward-looking statements. Actual results could differ materially from those projected and factors that could cause actual results to differ are discussed in the prospectus for our IPO dated October 7, 2009, in our reports on Form 10-Q and Form 8-K. Also the discussions during this conference call will include certain financial measures that were not prepared in accordance with US GAAP. Reconciliations of these non-US GAAP financial measures to the most directly comparable US GAAP financial measures can be found in the Mistras Group, Inc. current report on Form 8-K dated April 7, 2010. These reports are available on our website at www.mistrasgroup.com, in the Investors SEC Filings and Reports section and on the website of the Securities & Exchange Commission. Now I’d like to present summary financial results for our third quarter. As a reminder we have a May 31 fiscal year end and our third quarter ended February 28, 2010. The third quarter revenues were $64.4 million compared to $47 million for the third quarter of fiscal 2009. The increase of $17.4 million or 36.9% was attributed to revenue increases in all of our segments with our services segment leading the way with a 40.7% growth rate. For the first nine months of fiscal 2010 our consolidated revenues were $192.3 million or 25.5% greater than the comparable period in fiscal 2009. Again our services segment had outstanding growth of 32.5% while our other segments were even with the similar period last year. Our gross profit was $17.6 million in our third quarter of fiscal 2010. This represents an increase of 34.5% from the third quarter of fiscal 2009. As a percentage of revenues our overall gross profit margin was 27.4%…

Thanks Paul, I am sure most of you saw the announcement last week that Paul is retiring. I would like to thank Paul personally for all he has done for Mistras in the past five years. Paul has been a major factor in the growth and development of the company, and he has always been a great partner and colleague for me and everyone else on the Mistras management team. He was also a key member to our team for the success of our IPO last year. As we noted in our release Paul has agreed to remain with the company until a successor is named. Paul, best wishes and good luck from all of us at Mistras. Now I would like to add several observations and comments to Paul’s remarks, first I will start by reminding you that Mistras has a unique business model of technology enabled, asset protection solutions for the world’s aging industrial and public infrastructure. Our model is to be that of a single source provider employing industry leading products and services. It begins with mechanical integrity review which includes assessing and cataloguing existing assets, recommending non-destructive inspection, either traditional or advanced, to inspect the customers’ assets. We use our PC managed proprietary world class data warehousing and analysis software for engineering computations and 24-7 online monitoring of critical assets as well as determining compliance with standards, codes, and regulations. Overall we are pleased with the third quarter results especially in light of the recent weakness in some of our end markets. While we were disappointed in our profitability margins this past quarter, we’re focused on executing our plans to rapidly improve margins going forward. Importantly we believe the significant number of recent contract wins we have had, provide the foundation for increased profitability, and are…

(Operator Instructions) Your first question comes from the line of William Stein – Credit Suisse William Stein – Credit Suisse: You’re raising revenue guidance a little bit today for the full year just so we can model it do we think of that as coming from services where the growth has been strong or perhaps in one of the other segments.

It basically comes from a blend of business. We won a lot of new contracts as well as some of the services that we tried to market it for a while, now really we’re sold to the customers and one of that is as I mentioned basically was the [aims] project. William Stein – Credit Suisse: And you mentioned a moment ago that some customers are managing turnarounds differently today, can you give us a little bit more detail in what way, is it just applying a little bit more pricing pressure on your business or is it something more complex.

In my 35 years of experience in the NDT industry we never had shut downs that we started with 40 to 45 days, we plan for 40 to 45 days, and the customer the last moment while we were working on the shut down [parted] to10 days. That automatically does a lot of inefficiencies for us and of course the amortization of our hard work of putting this in place that we bring on the shut down was amortized over 10 days rather than 45 days. So that created an inefficiency and of course losses for us. William Stein – Credit Suisse: Just one other quick one, the new EBITDA guidance suggests a bigger than I would expect quarter over quarter ramp from fiscal Q3 to Q4, so are we expecting somewhat of a rebound in the services segment or are the others improving more.

I think it is very consistent with our fourth quarter, I think its very consistent and I think we’ll be in line with the past four quarters. Because our business as we’ve said before is really cyclical.

Your next question comes from the line of Jack Atkins – Stephens Inc. Jack Atkins – Stephens Inc. : My first question is to your comments on your efforts to improve gross margins I guess could you go into some more detail on your strategy to improve your gross margins.

Well first of all pricing pressures have slowed down since the start of 2010. We didn’t really have any customers to come in and asking for reduction on their prices. That was the first good sign. The only thing is higher revenue will drive higher profitability. We also see something very interesting to us, trends in the depressed industries such as aerospace heavy industry. This was really the main stay for us in the in house work which is really the traditional NDT that is very profitable for us. That we see really a change. We also are aggressively looking to match our available manpower capabilities to our ever change in demands. We are careful to make sure that we have enough people rather than have too many for our future work. And of course as always in our business it’s the blend of traditional to the advanced NDT. We see more and more advanced NDT especially in the fourth quarter. Jack Atkins – Stephens Inc. : And then just shifting gears and looking at the acquisition environment could you talk a bit about that and also could you maybe address sort of the desire on the part of potential acquisition targets with regard to price. Are they being more reasonable about price, are you still seeing the bid/ask spread between what you are willing to pay and what targets you’re willing to take.

What I’ll say is that if we don’t really, if we don’t get an acquisition on our price we’re going to walk away. We have walked as much away from many companies as we have acquired. So our strategy is we will pay what we think is reasonable and if the seller is looking for more we’re going to walk away.

Your next question comes from the line of Scott Levine – JPMorgan Scott Levine – JPMorgan: So first of all can you talk a little bit more generally about your expectations for the turnaround season here. I guess you touched on it a little bit with describing how some of your customers are handling turnarounds differently more recently, but generally as we head into the summer season as refiners get ready for driving season, and refinery margins remaining under pressure, generally what do you expecting relative to what we’ve seen I guess over the past couple of years.

Basically we have always said that June, July, and December are the worst months, the lowest in revenues months of the year. So from our situation we see also some shifting of the shut down or at least or maintenance work into the summer this year which I think will be beneficial to us. Because a lot of the refineries as you know you mentioned refineries, but there’s a lot of other work that we do on the upstream and midstream in the oil and gas industry, a lot of the work, the maintenance especially work has to be done and you cannot delay forever because if you delay it you’re going to have accidents as some of you are already aware of. Scott Levine – JPMorgan: Secondly are there any drivers on the legislative or regulatory side that you see that might be beneficial to you going forward. I know there’s proposals for some pretty major pieces of legislation, a climate bill, potentially a highway transportation bill, do you see any potential benefit from those, from that type of legislation.

Well if they put money for monitoring and rehabilitate and bridges we will see a lot more going our way. As a matter of fact right now we’re doing more bridges in the United Kingdom than we do in America. Scott Levine – JPMorgan: One more, and there may be obvious answer to this question but obviously there have been some pretty high profile mining accidents recently and realizing that a lot of times those incidents are caused by gas explosions and things of that nature, is that an area of potential for you going forward at all.

In that area we have what we call predictive maintenance, people really when they dig and they create the mines, they use vibration technology to monitor that. As of today the only thing I can tell you is we sell [accident monitors] to them but I will also mention to you that we sell more to Australia than we sell in this country.

Your next question comes from the line of Richard Eastman – Robert W. Baird Richard Eastman – Robert W. Baird : Just a question, I wanted to circle back for a minute or two on the gross margin on the services side, given what you’re seeing in the marketplace today, so we’re seeing smaller abbreviated projects, we’ve locked down some business contractually, some new business, how should we think that your margins will improve, what would be the timeline that we should think about your margins on the services side being able to improve given that some of this contract work will certainly proceed through the fourth quarter into next year, what would be a pace that we could see some improvement there on the margin side.

I would assume that would be very gradual. Its not going to be really instant, instantaneous but it will be gradual. Of course in the second quarter and the fourth quarter you always have the margins that you are looking for. But in the first and the third quarter it will be gradual. Richard Eastman – Robert W. Baird : So your gross margin on the service side can improve in the fourth quarter, how. Is it utilization or is it the types of services that would be fourth quarter verse third quarter.

Basically as I said on the second and the fourth quarter is when you have not only, you have not only shut downs but you also have maintenance work. That’s where you really find some of the problems that you don’t see on a day-to-day basis. That’s when you’re bringing in advanced technologies to really characterize them a lot better than you did before. That automatically drives our advanced technologies in these areas. So that’s really how, you typically for instance you don’t have as many crews of [inaudible] and technology on the third quarter or the first quarter as you do on the second and on the fourth quarter. And these are very high margin areas. Richard Eastman – Robert W. Baird : So the mix can shift, because I would think from a pricing standpoint you already locked in on the pricing side, right, for the next three to six months.

Well you’re not always, it depends on the company, you may be locked on your evergreen accounts, but you’re not locked on everybody else. Richard Eastman – Robert W. Baird : And then the other question I’ve had is when I look at your total operating expense number is there anything in that number in the third quarter that goes away in the fourth quarter. In other words does any of your under utilization show up in the OpEx number versus the gross margin number.

That number tends to be pretty consistent and pretty flat, the operating expense portion. Things that would certainly impact it to a certain extent might be a little bit of administrative, overtime, etc., what’s going on with the provision for doubtful accounts but there’s really nothing in there that moves a whole lot so that’s why in periods of higher volume we bring more to the bottom line. Richard Eastman – Robert W. Baird : So our operating expense in dollars from the third quarter to the fourth quarter should change little.

Very little, yes. Richard Eastman – Robert W. Baird : And then on this utilization issue if one of my technicians is under utilized and spends some of his time training or bid proposal or prospecting, does that hour or two of his time, does that show up in OpEx or does that show up against still as a cost of goods sold.

That shows up as a cost of goods sold, and that shows up as a component of the gross margin. Richard Eastman – Robert W. Baird : So under utilization will show up in that cost of goods sold number. It never switches over to the OpEx number.

As well, as will higher vacation periods, holiday periods, etc., so again in the fourth quarter we don’t have those periods so the margins will improve.

That’s really what effects the December timeframe.

Your next question is a follow-up from the line of William Stein – Credit Suisse William Stein – Credit Suisse: I think you mentioned that fixed capital expenditures including capital leases was I think 3.5% of revenue, I think historically its been a bit higher, can you comment as to what we should think about that, how we should think about modeling fixed capital expenditures going forward.

I think directionally where we are year to date is kind of an approximation. We’re certainly down from previous years because we’ve invested a lot of capital in the past and we have the equipment at our disposal. So I would expect that trend to continue. William Stein – Credit Suisse: To something below, I think historically its been around 4.5, so it would be a little bit more like 4, 3.5, something like that.

I would assume basically 3% to 4% is more realistic and you always by the way goes hand in hand with new centers of excellence we create. That’s where we put a lot of money sometimes for the new centers of excellence especially advanced centers of excellence. I mentioned before [inaudible] that’s where you put a lot of money. William Stein – Credit Suisse: I’m just realizing looking through my model that taxes were quite a bit lower this quarter than they had been in the past, how should I think about that in Q4 and then going forward.

Q3 included an adjustment of our ETR or effective tax rate to reflect updated estimates up to the distribution of where the taxable income was going to come from. It also included reflected our just filed fiscal 2009 tax return and some FIN 18 adjustments but at the end of the day our effective tax rate currently is estimated to be approximately 42%. And this compares to 45% last fiscal year. William Stein – Credit Suisse: And 42 going forward or is that, or does that continue to ratchet down.

Yes, 42 certainly for the foreseeable future and then that gets adjusted based on the timing differences and everything else in the tax provision as we go forward.

Your next question is a follow-up from the line of Richard Eastman – Robert W. Baird Richard Eastman – Robert W. Baird : Was there any impact on the international business from currency here, sales impact.

In the third quarter there was a bit of a positive impact for currency. Year over year, quarter over quarter about 2.5% of the total growth in revenues were impacted based on a weaker dollar and again you’ve got to be careful because we’re really comparing quarters not sequential quarters. Richard Eastman – Robert W. Baird : That’s year over year and that’s just the international, 2.5%.

No 2.5% would be the total impact across all the segments. Richard Eastman – Robert W. Baird : You had mentioned in your statements, the gross margin on the products and systems side, are we kind of sustainably up in the mid 50’s or is that going to continue to bounce around.

Basically in the products, it will be in the 50 to 55 range. You’re not going to go below 50, its not going to go above 55, but that’s the range that we’re really, at the same time you have to remember you have to have a certain volume. In the products you’re looking for the break-even and if you are exceeding the break-even your margins are very high. Richard Eastman – Robert W. Baird : And is there any pricing pressure on the product side.

Not really, its more application related and of course in the last year, don’t forget you had a terrible capital market. Capital basically in the capital, everything was slowed down, everything was slowed down, and we won a lot of these awards like I mentioned the JSF because that was a military project. The industry is just opening up right now. It was really the industry, the capital purchases was very closed from the industry before. And it was really better for us in Europe and abroad. That was really, last year was almost dead. Richard Eastman – Robert W. Baird : And I just want to go back to this gross margin on the services side one more time, when you talk about your customers and you had commented about a typical project would be you plan for 40 to 45 days, now they’re more like 10 days, and that’s the customer down sizing the scale of the project.

I think basically the customer spends their money because its not only us during the shut down. There are the mechanical contractors, there are many, many contractors, and they have very limited budgets and when they find something that is more related to mechanical they spend their money there. And that’s really what has happened. Richard Eastman – Robert W. Baird : And the impact on your business is that again your guys aren’t utilized for 40 to 45 days, they’re utilized for 10, and then you need to reschedule them or is it an overtime issue.

Well its really an issue of really reschedule them to other areas and at the same time when you put 40, 50 people as we typically do on a shut down you really, you’re spending one week of training for safety and other issues. Now that cost, you amortize over 10 days rather than 45 days. Richard Eastman – Robert W. Baird : And you don’t have to pick up, is there any shift in the per diem costs or anything. Are they assuming you’ll pick that up or is there, are you still able to pass that through.

Per diem is always an expense but in different areas its different kind of numbers. Different companies look at per diem differently but we always get per diem when we shift people, when we bring let’s say people in California from Texas, we will charge a per diem. Richard Eastman – Robert W. Baird : And they’re still paying that.

They’re still paying it.

There are no additional questions at this time; I would like to turn it back over to management for any additional or closing comments.