There were 670 press releases posted in the last 24 hours and 172,312 in the last 365 days.

Matrix Service Company Reports Third Quarter Results

TULSA, Okla., May 09, 2017 (GLOBE NEWSWIRE) -- Matrix Service Company (Nasdaq:MTRX), a leading contractor to the energy, power and industrial markets across North America, today reported financial results for its third quarter ended March 31, 2017.

/EIN News/ -- Key highlights:

  • Increased cost estimate on an Electrical Infrastructure project results in profit reduction on work to date; minimal go forward profit margin expected on this project
  • Under recovery of overhead due to continued low revenue volume also impacts earnings
  • Results in the quarter generate a loss of $0.52 per share on consolidated revenue of $251.2 million
  • Consolidated backlog is $790.4 million on improving bookings in the Oil Gas & Chemical segment compared to $814.0 million at December 31, 2016
  • Company expects full year earnings per share to be near breakeven

“As we announced in our Business Update in late April, our third quarter results were negatively impacted by the forecasted financial outcome of a major project in our Electrical Infrastructure segment. The deterioration is a result of various factors that are impacting schedule progress, labor productivity, and turnover of key systems to the client. Despite these factors, we are very confident in our project team’s ability to complete the project safely and to the high quality standards to which we hold ourselves,” said John R. Hewitt, President and Chief Executive Officer of Matrix Service Company. “Given our strong relationship and historical experience with this customer, we believe we can reach an equitable outcome for both parties."

Hewitt added, "More impactful to annual results has been the ongoing delays in new project awards and starts as well as depressed maintenance spending. These impacts to revenue, alone, resulted in a small loss for the third quarter, and from an operating perspective we anticipate only modest improvement in the fourth quarter. While we are extremely disappointed with these overall results, we remain optimistic about the long-term performance of our business and our strategic vision. We are actively managing  our cost structure to meet our current and future customer commitments as markets improve. Continued strong bidding activity and other key indicators all point to improving capital project and maintenance spending in fiscal 2018.”

Third Quarter Fiscal 2017 Results

Consolidated revenue was $251.2 million for the three months ended March 31, 2017, compared to $309.4 million in the same period in the prior fiscal year.  The decrease was caused by the quarterly impact of the project discussed above as well as lower volume in the Storage Solutions segment, which was nominally offset by higher volume in the Oil Gas & Chemical segment.  The Company lost $13.8 million, or $0.52 per fully diluted share in the third quarter of fiscal 2017 compared to earnings of $4.4 million, or $0.16 per fully diluted share in the prior year.

Consolidated gross profit (loss) was $(2.6) million in the three months ended March 31, 2017 compared to $27.3 million in the three months ended March 31, 2016.  The gross margin was (1.0)% in the three months ended March 31, 2017 compared to 8.8% in the same period in the prior fiscal year.  Very strong project execution throughout the business was offset by the Electrical Infrastructure project discussed above, as well as lower volumes, which led to significantly increased under recovery of construction overhead costs.

Consolidated SG&A expenses were $18.6 million in the three months ended March 31, 2017 compared to $21.0 million in the same period a year earlier.  The decrease in SG&A expense in fiscal 2017 was primarily attributable to a reversal of incentive compensation expense.

Nine Month Fiscal 2017 Results

Consolidated revenue was $905.7 million for the nine months ended March 31, 2017, compared to $952.3 million in the same period in the prior fiscal year.  The decrease resulted from lower volumes in the Industrial and Oil Gas & Chemical segments, which were partially offset by higher volumes in the Electrical Infrastructure segment.  The Company earned $0.8 million, or $0.03 per fully diluted share during the nine months ended March 31, 2017 compared to $19.7 million, or $0.73 per fully diluted share in the prior year.

Consolidated gross profit decreased from $91.9 million in the nine months ended March 31, 2016 to $57.9 million in the nine months ended March 31, 2017.  The gross margin decreased to 6.4% in the nine months ended March 31, 2017 compared to 9.6% in the same period in the prior fiscal year.  Very strong project execution throughout the business was offset by the Electrical Infrastructure project discussed above, as well as lower volumes, which led to significantly increased under recovery of construction overhead costs.

Consolidated SG&A expenses were $56.5 million in the nine months ended March 31, 2017 compared to $65.5 million in the same period a year earlier.  The decrease in SG&A expense in fiscal 2017 was partially due to a reduction of fiscal 2017 incentive compensation expense. In addition, fiscal 2016 SG&A was impacted by a non-routine bad debt charge of $5.2 million from a client bankruptcy.

Backlog

Backlog at March 31, 2017 was $790.4 million compared to $814.0 million at December 31, 2016 on project awards of $227.7 million.

Financial Position

Availability under the Company's credit facility of $106.8 million along with the Company's cash balance of $39.7 million provided liquidity of $146.5 million at March 31, 2017, a decrease of $81.9 million since December 31, 2016.  This reduction is primarily attributable to a capacity constraint triggered by the Company's financial performance in the quarter.  During the quarter, the Company paid down debt in the amount of $28.3 million. The Company's liquidity continues to support its long-term strategic growth plans.

Conference Call / Webcast Details

In conjunction with the earnings release, Matrix Service Company will host a conference call / webcast with John R. Hewitt, President and CEO, and Kevin S. Cavanah, Vice President and CFO.  The call will take place at 10:30 a.m. (Eastern) / 9:30 a.m. (Central) on Wednesday, May 10, 2017 and will be simultaneously broadcast live over the Internet which can be accessed at the Company’s website at matrixservicecompany.com on the Investors’ page under Conference Calls/Events.  Please allow extra time prior to the call to visit the site and download the streaming media software required to listen to the Internet broadcast.  The conference call will be recorded and will be available for replay within one hour of completion of the live call and can be accessed following the same link as the live call.

About Matrix Service Company

Founded in 1984, Matrix Service Company is parent to a family of companies that include Matrix Service, Matrix NAC, Matrix PDM Engineering and Matrix Applied Technologies.  Our subsidiaries design, build and maintain infrastructure critical to North America's energy, power and industrial markets. Matrix Service Company is headquartered in Tulsa, Oklahoma with subsidiary offices located throughout the United States and Canada, as well as Sydney, Australia and Seoul, South Korea.

The Company reports its financial results based on four key operating segments: Electrical Infrastructure, Storage Solutions, Oil Gas & Chemical and Industrial.  To learn more about Matrix Service Company, visit matrixservicecompany.com.

This release contains forward-looking statements that are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are generally accompanied by words such as “anticipate,” “continues,” “expect,” “forecast,” “outlook,” “believe,” “estimate,” “should” and “will” and words of similar effect that convey future meaning, concerning the Company’s operations, economic performance and management’s best judgment as to what may occur in the future. Future events involve risks and uncertainties that may cause actual results to differ materially from those we currently anticipate. The actual results for the current and future periods and other corporate developments will depend upon a number of economic, competitive and other influences, including those factors discussed in the “Risk Factors” and “Forward Looking Statements” sections and elsewhere in the Company’s reports and filings made from time to time with the Securities and Exchange Commission. Many of these risks and uncertainties are beyond the control of the Company, and any one of which, or a combination of which, could materially and adversely affect the results of the Company's operations and its financial condition. We undertake no obligation to update information contained in this release, except as required by law.

Matrix Service Company
Condensed Consolidated Statements of Income
(unaudited)
(In thousands, except per share data)
 
    Three Months Ended   Nine Months Ended
    March 31,
 2017
  March 31,
 2016
  March 31,
 2017
  March 31,
 2016
Revenues   $ 251,237     $ 309,422     $ 905,673     $ 952,282  
Cost of revenues   253,851     282,119     847,797     860,390  
Gross profit (loss)   (2,614 )   27,303     57,876     91,892  
Selling, general and administrative expenses   18,596     20,956     56,548     65,509  
Operating income (loss)   (21,210 )   6,347     1,328     26,383  
Other income (expense):                
Interest expense   (833 )   (241 )   (1,573 )   (756 )
Interest income   73     56     111     147  
Other   (51 )   (109 )   3     (311 )
Income (loss) before income tax expense   (22,021 )   6,053     (131 )   25,463  
Provision (benefit) for federal, state and foreign income taxes   (8,521 )   2,507     (1,223 )   9,060  
Net income (loss)     (13,500 )     3,546     1,092     16,403  
Less: Net income (loss) attributable to noncontrolling interest   321     (811 )   321     (3,326 )
Net income (loss) attributable to Matrix Service Company   $ (13,821 )   $ 4,357     $ 771     $ 19,729  
                 
Basic earnings (loss) per common share   $ (0.52 )   $ 0.16     $ 0.03     $ 0.74  
Diluted earnings (loss) per common share   $ (0.52 )   $ 0.16     $ 0.03     $ 0.73  
Weighted average common shares outstanding:                
Basic   26,594     26,758     26,511     26,651  
Diluted   26,594     27,054     26,838     27,191  


Matrix Service Company
Condensed Consolidated Balance Sheets
(unaudited)
(In thousands) 
 
  March 31,
 2017
  June 30,
 2016
Assets      
Current assets:      
Cash and cash equivalents $ 39,697     $ 71,656  
Accounts receivable, less allowances (March 31, 2017— $9,247 and June 30, 2016—$8,403) 223,338     190,434  
Costs and estimated earnings in excess of billings on uncompleted contracts 69,986     104,001  
Inventories 3,926     3,935  
Income taxes receivable 5,314     9  
Other current assets 7,373     5,411  
Total current assets 349,634     375,446  
Property, plant and equipment at cost:      
Land and buildings 39,826     39,224  
Construction equipment 93,178     90,386  
Transportation equipment 48,156     49,046  
Office equipment and software 36,284     29,577  
Construction in progress 5,827     7,475  
Total property, plant and equipment - at cost 223,271     215,708  
Accumulated depreciation (141,308 )   (130,977 )
Property, plant and equipment - net 81,963     84,731  
Goodwill 113,182     78,293  
Other intangible assets 27,781     20,999  
Deferred income taxes 5,663     3,719  
Other assets 2,045     1,779  
Total assets $ 580,268     $ 564,967  
       


Matrix Service Company
Condensed Consolidated Balance Sheets (continued)
(unaudited)
(In thousands, except share data)
 
  March 31,
 2017
  June 30,
 2016
Liabilities and stockholders’ equity      
Current liabilities:      
Accounts payable $ 97,271     $ 141,445  
Billings on uncompleted contracts in excess of costs and estimated earnings 75,424     58,327  
Accrued wages and benefits 25,102     27,716  
Accrued insurance 8,804     9,246  
Income taxes payable 148     2,675  
Other accrued expenses 8,314     6,621  
Total current liabilities 215,063     246,030  
Deferred income taxes 377     3,198  
Borrowings under senior revolving credit facility 44,139      
Other liabilities 472     173  
Total liabilities 260,051     249,401  
Commitments and contingencies      
Stockholders’ equity:      
Matrix Service Company stockholders' equity:      
Common stock—$.01 par value; 60,000,000 shares authorized; 27,888,217 shares issued as of March 31, 2017, and June 30, 2016; 26,594,319 and 26,297,145 shares outstanding as of March 31, 2017 and June 30, 2016 279     279  
Additional paid-in capital 126,513     127,058  
Retained earnings 223,928     223,157  
Accumulated other comprehensive loss (7,807 )   (6,845 )
  342,913     343,649  
Less: Treasury stock, at cost — 1,293,898 shares as of March 31, 2017, and 1,591,072 shares as of June 30, 2016 (22,696 )   (26,907 )
Total Matrix Service Company stockholders’ equity 320,217     316,742  
Noncontrolling interest     (1,176 )
Total stockholders' equity 320,217     315,566  
Total liabilities and stockholders’ equity $ 580,268     $ 564,967  
       


Matrix Service Company
Results of Operations
(unaudited)
(In thousands) 
 
    Three Months Ended   Nine Months Ended
    March 31,
 2017
  March 31,
 2016
  March 31,
 2017
  March 31,
 2016
Gross revenues                
Electrical Infrastructure   $ 82,032     $ 94,414     $ 273,215     $ 251,437  
Oil Gas & Chemical   69,295     56,251     164,036     188,682  
Storage Solutions   74,431     132,857     403,008     400,074  
Industrial   26,501     26,650     74,254     116,375  
Total gross revenues   $ 252,259     $ 310,172     $ 914,513     $ 956,568  
Less: Inter-segment revenues                
Oil Gas & Chemical   $ 407     $ 522     $ 6,892     $ 3,102  
Storage Solutions   379     228     677     1,040  
Industrial   236         1,271     144  
Total inter-segment revenues   $ 1,022     $ 750     $ 8,840     $ 4,286  
Consolidated revenues                
Electrical Infrastructure   $ 82,032     $ 94,414     $ 273,215     $ 251,437  
Oil Gas & Chemical   68,888     55,729     157,144     185,580  
Storage Solutions   74,052     132,629     402,331     399,034  
Industrial   26,265     26,650     72,983     116,231  
Total consolidated revenues   $ 251,237     $ 309,422     $ 905,673     $ 952,282  
Gross profit (loss)                
Electrical Infrastructure   $ (13,371 )   $ 10,407     $ (896 )   $ 19,136  
Oil Gas & Chemical   4,333     2,616     6,765     14,270  
Storage Solutions   5,456     15,108     48,980     49,766  
Industrial   968     (828 )   3,027     8,720  
Total gross profit (loss)   $ (2,614 )   $ 27,303     $ 57,876     $ 91,892  
Operating income (loss)                
Electrical Infrastructure   $ (16,306 )   $ 4,948     $ (13,085 )   $ 5,425  
Oil Gas & Chemical   (2,199 )   (1,964 )   (7,054 )   (3,577 )
Storage Solutions   (1,552 )   6,382     23,463     24,305  
Industrial   (1,153 )   (3,019 )   (1,996 )   230  
Total operating income (loss)   $ (21,210 )   $ 6,347     $ 1,328     $ 26,383  

Backlog

We define backlog as the total dollar amount of revenue that we expect to recognize as a result of performing work that has been awarded to us through a signed contract, notice to proceed or other type of assurance that we consider firm.  The following arrangements are considered firm:

  • fixed-price awards;
  • minimum customer commitments on cost plus arrangements; and
  • certain time and material arrangements in which the estimated value is firm or can be estimated with a reasonable amount of certainty in both timing and amounts.

For long-term maintenance contracts and other established arrangements, we include only the amounts that we expect to recognize into revenue over the next 12 months.  For all other arrangements, we calculate backlog as the estimated contract amount less revenue recognized as of the reporting date.

The following table provides a summary of changes in our backlog for the three months ended March 31, 2017:

  Electrical
Infrastructure
  Oil Gas &
Chemical
  Storage
Solutions
  Industrial   Total
  (In thousands)
Backlog as of December 31, 2016 $ 338,413     $ 209,505     $ 185,491     $ 80,581     $ 813,990  
Project awards 57,630     100,459     52,981     16,592     227,662  
Revenue recognized (82,032 )   (68,888 )   (74,052 )   (26,265 )   (251,237 )
Backlog as of March 31, 2017 $ 314,011     $ 241,076     $ 164,420     $ 70,908     $ 790,415  

The following table provides a summary of changes in our backlog for the nine months ended March 31, 2017:

  Electrical
Infrastructure
  Oil Gas &
Chemical
  Storage
Solutions
  Industrial   Total
  (In thousands)
Backlog as of June 30, 2016 $ 369,791     $ 91,478     $ 359,013     $ 48,390     $ 868,672  
Project awards 217,435     280,240     207,738     92,306     797,719  
Acquired backlog from Houston Interests (Note 2)     26,502         3,195     29,697  
Revenue recognized (273,215 )   (157,144 )   (402,331 )   (72,983 )   (905,673 )
Backlog as of March 31, 2017 $ 314,011     $ 241,076     $ 164,420     $ 70,908     $ 790,415  
For more information, please contact:

Matrix Service Company
Kevin S. Cavanah
Vice President and CFO
T: 918-838-8822
Email:kcavanah@matrixservicecompany.com

Primary Logo