TULSA, Okla., Feb. 4 /PRNewswire-FirstCall/ -- Matrix Service Co.
(NASDAQ: MTRX), a leading industrial services company, today
reported its financial results for the three and six months ended
December 31, 2009. Second Quarter Fiscal 2010 Highlights: --
Revenues were $150.4 million, -- Gross margins were 12.3%, -- Net
income was $4.5 million, -- Fully diluted EPS was $0.17 per share,
-- Backlog was $323.7 million as of December 31, 2009, and -- Cash
was $61.4 million as of December 31, 2009. Six Month Fiscal 2010
Highlights: -- Revenues were $288.1 million, -- Gross margins were
12.4%, and -- Fully diluted EPS was $0.34 per share. Second Quarter
of Fiscal 2010 Results Net income for the second quarter of fiscal
2010 was $4.5 million, or $0.17 per fully diluted share on total
revenues of $150.4 million. Second quarter operating results
included a charge related to collection costs on claims acquired in
a recent acquisition of $0.9 million or $0.02 per fully diluted
share. Total revenues were $176.9 million and net income was $10.1
million, or $0.38 per fully diluted share, in the comparable period
a year earlier. "As we expected, the market environment continued
to be challenging through the end of calendar 2009," said Michael
J. Bradley, president and CEO of Matrix Service Company. "The
Matrix Service team executed at a high level while further
strengthening our financial condition. Although some awards are
occurring later than expected, we continue to see strong bid flow,
especially in our Construction Services segment where second
quarter backlog awards were at their highest quarterly amount in
almost two years and totaled over $100 million. The growth in our
Electrical and Instrumentation business contributed significantly
to second quarter awards and demonstrates our diversification and
expanded capabilities which is allowing us to pursue projects of
greater scale and complexity." Revenues for the Construction
Services segment were $80.6 million, compared with $100.1 million
in fiscal 2009. The decrease of $19.5 million was primarily due to
delays in project awards and a decline in our customers' capital
spending. Revenues for the Repair and Maintenance Services segment
were $69.8 million in fiscal 2010 compared to $76.8 million in
fiscal 2009. The decline was due to customers applying discretion
to the scope and timing of maintenance programs. Consolidated gross
profit decreased from $26.4 million in fiscal 2009 to $18.4 million
in fiscal 2010. The decrease of $8.0 million was due to lower
revenues in fiscal 2010 and lower gross margins, which decreased to
12.3% in fiscal 2010 compared to 14.9% a year earlier. Gross
margins in the Repair and Maintenance Services segment were 9.4% in
the current fiscal year compared to 17.7% in the prior fiscal year.
Construction Services segment gross margins were 14.8% in the
current fiscal year compared to 12.7% in fiscal 2009. Gross margins
in both segments were negatively affected by a lower volume of
business available to recover construction overhead costs.
Consolidated SG&A expenses decreased 3.4% to $11.4 million in
fiscal 2010 compared to $11.8 million for fiscal 2009. The decline
in SG&A expenses is due to our on-going cost reduction efforts
related primarily to employee related costs and professional fees,
partially offset by a charge of $0.9 million in fiscal 2010 related
to the collection of claims acquired in a recent acquisition. Six
Month Fiscal 2010 Results Net income for fiscal 2010 was $9.0
million, or $0.34 per fully diluted share, on total revenues of
$288.1 million. Fiscal 2010 operating results include charges
related to a legal matter of $1.3 million, or $.03 per fully
diluted share, and $0.9 million, or $0.02 per fully diluted share,
related to collection costs on claims acquired in a recent
acquisition. Total revenues were $363.6 million and net income was
$19.6 million or $0.74 per fully diluted share in fiscal 2009.
Revenues for the Construction Services segment were $158.3 million
compared with $214.9 million in fiscal 2009. The decrease of $56.6
million was primarily due to delays in project awards and a decline
in our customers' capital spending. Revenues for the Repair and
Maintenance Services segment were $129.8 million in fiscal 2010
compared to $148.7 million in fiscal 2009. The decline was due to
customers applying discretion to the scope and timing of
maintenance programs. Consolidated gross profit decreased from
$53.0 million in fiscal 2009 to $35.9 million in fiscal 2010. The
reduction of $17.1 million was due primarily to the decrease in
revenues and lower gross margins of 12.4% in fiscal 2010 compared
to 14.6% in fiscal 2009. Gross margins in the Repair and
Maintenance Services segment were 9.9% in the current fiscal year
versus 17.0% in the prior fiscal year. Construction Services
segment gross margins were 14.5% in the current fiscal year
compared to 12.9% in fiscal 2009. Gross margins in both segments
were negatively affected by a lower volume of business available to
recover construction overhead costs. Consolidated SG&A expenses
decreased $2.3 million to $21.5 million fiscal 2010 compared to
$23.8 million for fiscal 2009. The decline in SG&A expenses is
due to our on-going cost reduction efforts related primarily to
employee related costs and professional fees, partially offset by a
charge of $0.9 million incurred in fiscal 2010 related to the
collection of claims acquired in a recent acquisition. Backlog
Consolidated backlog as of December 31, 2009 was $323.7 million
compared to $328.1 million as of September 30, 2009. Financial
Position During the second quarter, the Company increased its cash
balance from $56.5 million as of September 30, 2009, to $61.4
million as of December 31, 2009. The Company did not borrow under
its $75.0 million revolving credit facility during the six months
ended December 31, 2009. Earnings Guidance The outlook for the
Construction Services segment is improving, but the timing of
project awards continues to lag expectations. The Repair and
Maintenance Services segment continues to be affected by the
lingering weakness in the economy and energy sector which has
caused an overall softening of the Aboveground Storage Tank market
and weak fundamentals within the refining industry. As a result,
Matrix Service expects to achieve earnings toward the lower end our
of our previously stated EPS guidance of $0.80 to $1.10 per fully
diluted share, excluding the legal charge previously announced of
$0.03 per fully diluted share and the charge related to collection
costs on claims acquired in a recent acquisition of $0.02 per fully
diluted share. Conference Call Details In conjunction with the
press release, Matrix Service will host a conference call with
Michael J. Bradley, president and CEO, and Thomas E. Long, vice
president and CFO. The call will take place at 11:00 a.m. (Eastern)
/ 10:00 a.m. (Central) today and will be simultaneously broadcast
live over the Internet at http://www.matrixservice.com/ or
http://www.vcall.com/. 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 online archive of the
broadcast will be available within one hour of completion of the
live call. About Matrix Service Company Matrix Service Company
provides engineering, construction and repair and maintenance
services principally to the petroleum, petrochemical, power, bulk
storage terminal, pipeline and industrial gas industries. The
Company is headquartered in Tulsa, Oklahoma, with regional
operating facilities located in California, Delaware, Illinois,
Michigan, New Jersey, Oklahoma, Pennsylvania, Texas, and Washington
in the U.S. and in Canada. 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. For more information, please contact:
Matrix Service Company Tom Long Vice President and CFO T:
918-838-8822 E: Matrix Service Company Consolidated Statements of
Income (In thousands, except per share data) (unaudited) One Month
Three Months Ended Six Months Ended Ended -------------------------
------------------------ -------- December 31, November 30,
December 31, November 30, June 30, 2009 2008 2009 2008 2009
-------- -------- ------- -------- -------- Revenues $150,425
$176,937 $288,075 $363,587 $45,825 Cost of revenues 131,983 150,568
252,215 310,547 40,676 -------- -------- ------- -------- --------
Gross profit 18,442 26,369 35,860 53,040 5,149 Selling, general and
administrative expenses 11,376 11,776 21,463 23,838 3,570 --------
-------- ------- -------- -------- Operating income 7,066 14,593
14,397 29,202 1,579 Other income (expense): Interest expense (188)
(123) (362) (237) (91) Interest income 17 104 60 213 17 Other 461
175 544 911 98 -------- -------- ------- -------- -------- Income
before income tax expense 7,356 14,749 14,639 30,089 1,603
Provision for federal, state and foreign income taxes 2,823 4,621
5,597 10,457 609 -------- -------- ------- -------- -------- Net
income $4,533 $10,128 $9,042 $19,632 $994 ======== ======== =======
======== ======== Basic earnings per common share $0.17 $0.39 $0.34
$0.75 $0.04 Diluted earnings per common share $0.17 $0.38 $0.34
$0.74 $0.04 Weighted average common shares outstanding: Basic
26,273 26,102 26,234 26,087 26,192 Diluted 26,459 26,400 26,449
26,456 26,434 Matrix Service Company Consolidated Balance Sheets
(In thousands) December 31, May 31, 2009 2009 ---- ---- Assets
Current assets: Cash and cash equivalents $61,367 $34,553 Accounts
receivable, less allowances (December 31, 2009 -$811 and May 31,
2009 -$710) 76,175 122,283 Costs and estimated earnings in excess
of billings on uncompleted contracts 36,813 35,619 Inventories
4,284 4,926 Income taxes receivable - 647 Deferred income taxes
3,926 4,843 Prepaid expenses 4,562 3,935 Other current assets 2,322
3,044 ----- ----- Total current assets 189,449 209,850 Property,
plant and equipment at cost: Land and buildings 27,580 27,319
Construction equipment 55,311 53,925 Transportation equipment
18,563 17,971 Furniture and fixtures 15,042 14,527 Construction in
progress 1,155 812 ----- --- 117,651 114,554 Accumulated
depreciation (61,751) (55,745) ------- ------- 55,900 58,809
Goodwill 27,248 25,768 Other intangible assets 4,317 4,571 Other
assets 1,349 4,453 ----- ----- Total assets $278,263 $303,451
======== ======== Matrix Service Company Consolidated Balance
Sheets (In thousands, except share data) December 31, May 31, 2009
2009 ---- ---- Liabilities and stockholders' equity Current
liabilities: Accounts payable $36,190 $48,668 Billings on
uncompleted contracts in excess of costs and estimated earnings
35,539 51,305 Accrued insurance 7,236 7,612 Accrued wages and
benefits 10,223 16,566 Income taxes payable 12 - Current capital
lease obligation 943 1,039 Other accrued expenses 2,295 2,200 -----
----- Total current liabilities 92,438 127,390 Long-term capital
lease obligation 588 850 Deferred income taxes 4,095 4,822
Stockholders' equity: Common stock -$.01 par value; 60,000,000
shares authorized; 27,888,217 shares issued as of December 31, 2009
and May 31, 2009 279 279 Additional paid-in capital 110,740 110,272
Retained earnings 85,429 75,393 Accumulated other comprehensive
income 834 596 --- --- 197,282 186,540 Less: Treasury stock, at
cost - 1,582,261 shares as of December 31, 2009 and 1,696,517
shares as of May 31, 2009 (16,140) (16,151) ------- ------- Total
stockholders' equity 181,142 170,389 ------- ------- Total
liabilities and stockholders' equity $278,263 $303,451 ========
======== Results of Operations (In thousands) Repair &
Construction Maintenance Services Services Other Total --------
------------ ----- ----- Three Months Ended December 31, 2009 Gross
revenues $84,511 $69,849 $- $154,360 Less: Inter-segment revenues
3,929 6 - 3,935 ----- --- --- ----- Revenues 80,582 69,843 -
150,425 Gross profit 11,894 6,548 - 18,442 Operating income 5,006
2,060 - 7,066 Income before income tax expense 5,139 2,217 - 7,356
Net income 3,224 1,309 - 4,533 Segment assets 120,697 88,760 68,806
278,263 Capital expenditures 234 719 863 1,816 Depreciation and
amortization expense 1,647 1,300 - 2,947 Three Months Ended
November 30, 2008 Gross revenues $108,084 $77,499 $- $185,583 Less:
Inter-segment revenues 7,955 691 - 8,646 ----- --- --- -----
Revenues 100,129 76,808 - 176,937 Gross profit 12,761 13,608 -
26,369 Operating income 5,618 8,975 - 14,593 Income before income
tax expense 5,680 9,069 - 14,749 Net income 4,434 5,694 - 10,128
Segment assets 135,887 96,865 31,771 264,523 Capital expenditures
932 814 1,739 3,485 Depreciation and amortization expense 1,359
1,121 - 2,480 Six Months Ended December 31, 2009 Gross revenues
$165,090 $130,025 $- $295,115 Less: Inter-segment revenues 6,837
203 - 7,040 ----- --- --- ----- Revenues 158,253 129,822 - 288,075
Gross profit 22,990 12,870 - 35,860 Operating income 10,272 4,125 -
14,397 Income before income tax expense 10,351 4,288 - 14,639 Net
income 6,517 2,525 - 9,042 Segment assets 120,697 88,760 68,806
278,263 Capital expenditures 502 806 1,541 2,849 Depreciation and
amortization expense 3,330 2,636 - 5,966 Six Months Ended November
30, 2008 Gross revenues $230,445 $149,666 $- $380,111 Less:
Inter-segment revenues 15,558 966 - 16,524 ------ --- --- ------
Revenues 214,887 148,700 - 363,587 Gross profit 27,806 25,234 -
53,040 Operating income 13,110 16,092 - 29,202 Income before income
tax expense 13,383 16,706 - 30,089 Net income 8,813 10,819 - 19,632
Segment assets 135,887 96,865 31,771 264,523 Capital expenditures
1,973 1,744 2,873 6,590 Depreciation and amortization expense 2,771
2,090 - 4,861 One Month Ended June 30, 2009 Gross revenues $29,224
$17,297 $- $46,521 Less: Inter-segment revenues 693 3 - 696 --- ---
--- --- Revenues 28,531 17,294 - 45,825 Gross profit 3,251 1,898 -
5,149 Operating income 1,141 438 - 1,579 Income before income tax
expense 1,116 487 - 1,603 Net income 720 274 - 994 Capital
expenditures 121 64 163 348 Depreciation and amortization expense
543 451 - 994 Backlog We define backlog as the total dollar amount
of revenues that we expect to recognize as a result of performing
work that has been awarded to us through a signed contract that we
consider firm. The following contract types are considered firm: -
fixed-price arrangements; - minimum customer commitments on cost
plus arrangements; and - certain time and material contracts in
which the estimated contract value is firm or can be estimated with
a reasonable amount of certainty in both timing and amounts. For
long-term maintenance contracts 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 revenues recognized as of the reporting date. The
following table provides a rollforward of our backlog for the
three- months ended December 31, 2009: Repair and Construction
Maintenance Services Services Total ------------ ----------
-------- (In thousands) Backlog as of September 30, 2009 $167,852
$160,266 $328,118 New backlog awarded 100,759 50,862 151,621
Backlog cancelled (5,600) - (5,600) Revenue recognized on contracts
in backlog (80,582) (69,843) (150,425) ------- ------- --------
Backlog as of December 31, 2009 $182,429 $141,285 $323,714 ========
======== ======== The following table provides a rollforward of our
backlog for the six- months ended December 31, 2009: Repair and
Construction Maintenance Services Services Total ------------
---------- -------- (In thousands) Backlog as of June 30, 2009
$224,260 $167,837 $392,097 New backlog awarded 134,660 103,270
237,930 Backlog cancelled (18,238) - (18,238) Revenue recognized on
contracts in backlog (158,253) (129,822) (288,075) --------
-------- -------- Backlog as of December 31, 2009 $182,429 $141,285
$323,714 ======== ======== ======== DATASOURCE: Matrix Service Co.
CONTACT: Tom Long, Vice President and CFO of Matrix Service
Company, +1-918-838-8822, Web Site: http://www.matrixservice.com/
Copyright
