Frank, good morning to you, ladies and gentlemen, and welcome to the Q4 2013 and Year-end Mistras Group Inc. Earnings Conference Call. My name is Gary, and I will be your event coordinator this morning. [Operator Instructions] I would now like to hand over to Sotirios. Over to you.

Gary, thank you very much, and good morning. Welcome to the Mistras Group Earnings Conference Call. This is Sotirios Vahaviolos, Founder, Chairman and Chief Executive Officer of Mistras Group. Also joining me today is Frank Joyce, our company's Chief Financial Officer. The purpose of today's call is to review our financial results for the company's fiscal 2013 fourth quarter and to discuss our prospect going forward. This discussion is intended to supplement our quarterly earnings release and our filings with the Securities and Exchange Commission. I would like to start off by saying that while we ended the year below our expectations, the year did, nonetheless, produced some notable increases over last year and the highest amounts ever for us in terms of revenue and advanced EBITDA. While the level of profitability did slip, the causes are all known to us and we have already begun to correct them. I will discuss that more later, but for now, let me turn it over to Frank, who will provide with more details about our financial results. Frank?

Thanks, Sotirios. First, I want to remind everybody that our discussions during this conference call will include forward-looking statements. Actual results could differ materially from those projected. Factors that could cause actual results to differ are discussed in our annual report on Form 10-K and in other reports filed with the SEC. Also, the discussions during this conference call will include certain financial measures that were not prepared in accordance with U.S. Generally Accepted Accounting Principles. Reconciliations of those non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures can be found in Mistras Group Inc.'s current report on Form 8-K dated August 7, 2013. These reports are available on our website in the Investors section and on the SEC website. Now I'm very pleased to present summary of financial results for the fourth quarter of fiscal 2013 and for the full year 2013. Revenues for the quarter, the fourth quarter rather of fiscal 2013 were $144.5 million, up 14% from $127.1 million reported in the prior year. Revenue growth in the quarter was achieved by acquisition growth of 16%, partially offset by a decline in organic revenues of nearly 2%. During the quarter, organic revenue growth of 6% in the services segment was offset by declines in the products and international segments, where a nonrecurring military order in products and the challenging economic conditions in Brazil and Europe contributed to the decline. Gross profit in the fourth quarter was $38.5 million, up from $37.5 million in Q4 '12. Gross margins were 26.7% in the current quarter versus 29.5% in Q4 last year. During the quarter, the services segment had a gross margin decline of about 135 basis points, which occurred across most service lines of the business. International gross margins declined by more than 10% in Q4…

Thank you, Frank. I would like to make a few comments on our fiscal 2013 full year results. While we did not meet our expectations, fiscal 2013 was a year with good profits and plenty of positives. Our cash generation capabilities continues to be strong and as Frank mentioned, we generated $0.93 per share of free cash flow in the 2013, significantly higher than our adjusted EPS of $0.70. We're paying down debt, digesting our acquisitions and positioning each of our business units for future organic growth and profitability. Fiscal 2013 was a transition year for Mistras, a year when we made both structural changes and organizational changes to the company. As a result of these changes, I am confident that fiscal 2014 would be a strong year for Mistras. And now, I would like to provide you with some exciting projects and opportunities that our worldwide team developed in the quarter that go beyond fiscal 2014. Our services division captured a number of key strategic projects in the quarter specifically within the midstream and downstream segments of oil and gas, chemical and power generation. Within the downstream refining segment, we're seeing a move towards unit level turnarounds versus the traditional multiunit type turnarounds. We're seeing refineries looking to take advantage of the favorable crack spreads and therefore, want the flexibility to manufacture high-yielding end products without shutting down the entire refinery for traditionally planned scheduled maintenance. For our other green[ph]customers who are looking to this option, Mistras is providing them with the most comprehensive set of solutions in our industry including upfront engineering, turnaround planning, proprietary software and advance services available. This unprecedented innovation gives our customers the confidence to plan a turnaround, large or small, knowing they can achieve maximum savings. At the same time, we experienced an…

[Operator Instructions] We have our first audio question coming from the line of Tahira Afzal of KeyBanc.

This is Shu Stateron [ph] for Tahira. First off, you talked about your different product or project opportunities, you talked about opportunities in the U.S. and internationally. First question really on organic growth, can you kind of walk us through your different segments, products, international services, and kind of walk us to where you see better growth opportunities organically now versus maybe what you saw 3 months ago? So really trying to look at change in visibility.

Yes. Let me -- first of all, let me give you the statistics for 2013. Our service organization did 6% organic growth and our international organic growth is 2.3%. What were down really were in products and systems. I don't know if you have anything else to add, Frank.

Yes. Services was a steady 6% both in the quarter and full year. I think in the quarter, our organic growth rate in total was down 2%. But there's a couple of factors, I think, that are important to note in there. As Sotirios mentioned, both international and products were down in the quarter. And in products, there was one very significant order of about $3.6 million, military order for last year that did not recur. And that's the second quarter in the row we've had that as a bad comp. So that was a bit of a headwind. In the fourth quarter, as well as the third quarter, in international, particularly in Brazil, was a very soft quarter for international. And as I think we mentioned earlier, the project work was slow to develop. Product sales were slow. So those are the 2 that have given us trouble. In products, I think, one, we're going to be modest of the bad comp going forward. That's an important thing to note. And then I think, I would like to think that we're near the bottom for both international and that the way those -- and to the extent that, that starts to pick up, we won't have a drag on organic growth as it was in this quarter. So I think you'll see some improvement both in international and product.

And service will continue with the growth, the organic growth.

And then one follow-up on the inorganic side. Can you just give us an update on the acquisition market? What you're seeing in terms of pricing? What you're seeing in terms of opportunities on the bit pipe and just on the acquisition pipeline?

First of all, you touched a very sensitive subject encased. The acquisition opportunities are all there okay? The pricing depends really if it is strategic or basically private equity. Private equities pay a lot more than the Strategic Partners pay. And that's all I can say at this time.

Next question comes from the line of Rich Wesolowski of Sidoti & Company. Richard Wesolowski - Sidoti & Company, LLC: Frank, could you detail how much revenue from acquisitions already completed as included in fiscal '14 guidance?

Fiscal '14 is around $30 million to $32 million. Somewhere in that range. Richard Wesolowski - Sidoti & Company, LLC: Okay, and just briefly, another catch up. Would you repeat the amount of the earn out reversal in the quarter and confirm where that was on the income statement?

Yes. It's about $2.1 million related to Brazil and that was an acquisition-related cost. Richard Wesolowski - Sidoti & Company, LLC: Okay. Sotirios, that was a long and impressive rundown of the recent awards, a lot of which I like to see outside of the energy patch. Would you remind relaying a few details of your plan to revive the advanced service sales growth outside of oil and gas?

Well, basically Rich, we started it about a couple of years ago. And really, we're delighted with oil and gas because of the continues to give us a growth that we're looking for. But at the same time, when we acquired GMA, we acquired also a lot of aerospace industry and that grows also in America. The chemical -- there's no secret in the chemical industry. It's really a big market for us. There's no secret again that the pipeline industry is very affected. But as you probably realize in our case, we're trying to concentrate also toward the run, the evergreen type, the run and maintain evergreen contracts. And we're delighted with our wins in France, okay, on that particular sector. Richard Wesolowski - Sidoti & Company, LLC: When you mentioned the midstream areas in a lot of the pipeline work, I was under the impression that at least some of the radiography work for the new gathering lines was very heavily competed, discounted on price. Is that an area that's becoming too competitive for Mistras to deal in or is it still a good market?

Not really, not really. Because I think we just offer more than just basically radiography, okay, doing the work. We offer a lot more services and that's what I try to address. I try to address here and saying that Mistras with our evergreens and any customer that we have, we just don't offer only the inspection. We offer asset protection solutions. We basically -- there's a lot of other services we provide, but just keep in mind also, that there are shortages and the demand is very high in that area. So pricing factors plays into this. But in our situation, basically, we're going to walk away if it is really on price or bad pricing. Richard Wesolowski - Sidoti & Company, LLC: All right. And then last one, I'm wondering are we now through the pocket of time where the evergreen renewals in the U.S. are mainly on the contracts where Mistras is the incumbent and maybe discuss just the pace of evergreen renewal potential over the course of the year.

Well, because of the multiple evergreens that we have, this will always be repeated. You always see evergreens turning around, okay. And last year as you probably realize, is that the refineries that change hands in America, the big refineries that change hands in America was our own evergreens. And so people do not spend the money that they typically spent when they such changes.

Next question comes from the line of Andrew Wittmann of Baird. Andrew J. Wittmann - Robert W. Baird & Co. Incorporated, Research Division: So in your prepared remarks, Sotirios, you talked about some of the organizational and structural changes that you've put in place and maybe will be putting in place. Can you just give us a little bit more detail specifically on what some of those are and how you expect them to deliver some results?

Well, first of all basically, we try to take more control on the pricing, okay? Pricing. Because that's, if you notice, that was one of our problems, okay? The other thing is that we really -- basically hire -- the acquisitions in Europe, we hire the appropriate people to really match them with the ones that we had in order for us to really have people that can run a bigger business than we had before, okay? In the case of Brazil for instance, we made all the changes internally. We have a very strong company now and that organizational report directly to the United States, the service organization, because basically, that will be America. America will be one basically management, okay? In the case of Europe, we basically selected, promoted a Vice President for business development that will really -- are not going to worry only about 1 country, will worry about the whole Europe, okay? And a lot more cost controls within the company. And that's really as far as I can go, I would prefer not to discuss anymore. Andrew J. Wittmann - Robert W. Baird & Co. Incorporated, Research Division: Got you. So when it comes to utilization of your people in the fourth quarter and so far what you're seeing in the first quarter, can you talk about how utilization is trending and the impact that you might see ...

Well, basically, in our case, what we trend is really be un-billable as we've discussed before. We've seen absolutely 0 change for the un-billable. And as we said in the last time, it was really more on the margin, it was really the margin question. Andrew J. Wittmann - Robert W. Baird & Co. Incorporated, Research Division: Got it. So do you still see -- so do you still feel like utilization is where it needs to be or is it unchanged...

It's exactly where it needs. I mean, we always like less but I don't think we can do better than what we're doing now. Andrew J. Wittmann - Robert W. Baird & Co. Incorporated, Research Division: Got it. And then, you kind of talked on the update call about your expectations for the fall turnaround, is there any change in what you're seeing there if customers come to you and sort of planning a little bit more, a little bit less from what you've expected in June?

Andrew, what we discussed even before that we see the fall to basically be flat, something that we have similar to what we had last year. There's a lot of -- as we probably realize, there's a lot of what I call noise in the system where everybody believes that the spring will be very, very large. It will be a very big turnarounds. I've been in this industry for 40 years. I have never seen the changes that I saw last year and the delays. So I hope that it will be in the spring, but that's all I can say for now. We're really are not -- our numbers are really based not on plan issues turnarounds.

Next question is from the line of Tristan Richardson of D. A. Davidson. Tristan Richardson - D.A. Davidson & Co., Research Division: Just to follow-up on Brazil. I mean, I know that, that market has been soft at least in the fourth quarter. I'm sort of curious, longer term it's a big market. It seems like a big opportunity. I'm just curious does that market remain spotty? Or do you look at '14 and see sort of a pickup? I just love to hear your outlook on Brazil.

Well, the outlook in Brazil basically is that we like to really come out of the negatives that we have now and going to the positive. But we're not really looking -- we're looking to really -- in a company it's very stable as we have now because we reduced the staff as you realized in bringing them to the exact size. And we're looking at the third and the fourth quarter for better numbers.

And next question comes from the line of Tom Hayes.

Just a couple of quick questions. Most of them have been answered, but was the goodwill write-off driven through the reported margin line for international business?

It did not go through margins. It went -- it's a separate line item on the P&L. If that's your question.

Yes. I'm just wondering if the margin report for international is x the goodwill write-off. Sounds like it was. Then just 2 kind of quick questions. What stock comp and kind of CapEx plans are for next year?

Stock comp is around 5 for next year and what was the other one?

CapEx.

CapEx should be about 3.5% of revenue so yes, whatever that math is.

[Operator Instructions] Okay, and we do have a question again from Rich. Richard Wesolowski - Sidoti & Company, LLC: We've seen -- I'm sure you've seen scattered signals that other firms are entering deeper into the advanced service realm, which is to be expected. I'm wondering if there's any service lines that you once considered advanced that you might consider not traditional but more commoditized in that realm.

Well, surely you will see basically the computer radiography and things like this that would be really not advanced, okay? But, areas like Acoustic Emission, areas like phase array, will always remain advanced and always will require a lot of training. Richard Wesolowski - Sidoti & Company, LLC: Okay. I understand the make up of your revenue is different today than it was in '07 and '08 the last time the downstream oil and gas business went bananas. But it's possible as you mentioned we're heading to a period where there's too few of companies like Mistras to perform the work around the chemical, the pipeline and the refineries. As you look out past this year, 2, 3 years out, do you have a target for the company's gross or operating margin? Is it a lot higher than it is today?

Well, there's no shrivel [ph]. We always talk about the operating margins to be in the 30% range, okay? That's what we prefer. And as far as the growth potential, we like to be -- the organic growth we like to be on the upper teens, I'm sorry, on the upper...

Single digits.

Single digits. Andrew J. Wittmann - Robert W. Baird & Co. Incorporated, Research Division: So as you look at the targets that are high single-digit organic growth and gross margins, a couple of hundred basis points above where they are today.

We hope so because I think we have the technology and keep in mind that we have more online systems. We have more software, we have more things than anybody else has to offer. And we like the compliment that now everybody wants to be in the advanced services.

I think, Rich, on gross margins for the next year, when we look at revenues of 570 to 600 I think the implicit gross margins in that range are on the low point of about 28.6% to -- and a high point to about 28.8%. So just to give you that range for fiscal '14 guidance.

Next question is from the line of Stephen Ragard of Stephens Inc.

Just a follow up, I guess, on the last comment you made, about 28.6% to 28.8% gross margin next year embedded in the EBITDA guidance. Can you sort of just walk us through, is that coming from a rebound in both international and services or both? Can you just kind of talk about that a little bit?

Stephen, before basically Frank answers the question, keep in mind that Richard comment was on the long run. So when I said 30%, I didn't mean for next year. I meant for the long run.

That's fine. I think it will be both international and services. That's where I would see it. I think international where adjustments to direct labor are more difficult, higher revenues tend to boost margins quicker. I think just in services and just looking around the organization, there's been a number of structural and management changes there that I think would push margins up a bit too. It's very competitive environment out there but those are the 2. So I think net-net were talking about 0.6 or 0.8 increase from where we ended this year.

Okay. That's helpful. I guess, more housekeeping just to make sure I heard you guys correctly. Frank, did you call it $1.6 million in transition cost in the quarter?

Yes, $1.6 million in the gross margin, line across a sales in the fourth quarter and international.

Okay. And then some note on the tax loan. So 38% still what we should be using going forward?

Yes. That's a good question. 38% is a good number.

Okay. We have no further questions. I just like to hand back to Sotirios for the closing comments.

Okay. I would like to thank everyone for listening in on our call and hope that you have a great day.