Matrix Service Company Reports Fourth Quarter and Full-Year Fiscal 2024 Results; Issues Fiscal 2025 Revenue Guidance
TULSA, Okla., Sept. 09, 2024 (GLOBE NEWSWIRE) -- Matrix Service Company (NASDAQ:MTRX), a leading North American industrial engineering, construction, and maintenance contractor, today announced results for the fourth quarter and year ended June 30, 2024.
FOURTH QUARTER FISCAL 2024 RESULTS(all comparisons versus the prior year quarter unless otherwise noted)
Total backlog of $1.4 billion, +31% on a year-over-year basis
Total project awards in the quarter of $175.9 million, resulting in a book-to-bill ratio of 0.9x
Revenue of $189.5 million
Net loss per share of $(0.16) versus $(0.01); adjusted net loss per share of $(0.14)(1) versus $(0.11)
Adjusted EBITDA of $0.2 million(1) versus $2.2 million
Cash flow from operations of $47.0 million
Liquidity at June 30, 2024 of $169.6 million with no outstanding debt
FULL-YEAR FISCAL 2024 RESULTS(all comparisons versus the prior year unless otherwise noted)
Total project awards of $1.1 billion, resulting in a book-to-bill ratio of 1.5x
Revenue of $728.2 million
Net loss per share of $(0.91) versus $(1.94); adjusted net loss per share of $(1.03) versus $(1.48)
Adjusted EBITDA of $(10.5) million versus $(18.0) million
Cash flow from operations of $72.6 million
FULL-YEAR FISCAL 2025 REVENUE GUIDANCE
Revenue between $900 and $950 million
_______________(1) Adjusted net loss and adjusted loss per share are non-GAAP financial measures which exclude restructuring costs and gain on sale of non-core assets, Adjusted EBITDA is a non-GAAP financial measure which excludes interest expense, interest income, income taxes, depreciation and amortization expense, impairments to goodwill, gain on asset sales, restructuring costs, and stock-based compensation. See the Non-GAAP Financial Measures section included at the end of this release for a reconciliation to net loss and net loss per share.
"We advanced work on multiple large projects during the quarter, which contributed to meaningful cash generation to close-out the fiscal year," said John Hewitt, President and Chief Executive Officer. "As a reminder, we are still in the early phases of these multi-year projects.
"Demand within our core markets remains robust and bidding activity continues to be strong. We ended the year with a book to bill of 1.5x which drove backlog growth of 31% on a year-over-year basis.
"As we enter fiscal 2025, Matrix is well-positioned to achieve significant improvement in revenue, a return to historical margins, and improved earnings. The Company begins the year with a backlog of $1.4 billion, an opportunity pipeline of over $6 billion, and a streamlined organization that will efficiently leverage the Company's cost structure as it continues to grow.
"We have reached an inflection point and, as we move through the year, we believe revenues from strong project execution and conversion of backlog put the company on a trajectory of upward growth and profitability.
"Based on the activity in our business, we are providing full-year revenue guidance that reflects the strength of the business and our expectations for growth."
Financial SummaryFiscal fourth quarter revenue was $189.5 million, compared to $205.9 million in the fiscal fourth quarter of 2023. The decline was due to lower revenues from refinery maintenance and turnarounds, and midstream gas processing projects, offset by increases in revenues from peak shaver projects and LNG storage projects.
Gross margin was $12.4 million, or 6.6%, in the fourth quarter of fiscal 2024 compared to $14.7 million, or 7.1% for fourth quarter fiscal 2023. Strong project execution in the fiscal fourth quarter was partly offset by lower revenue volumes due to slower than expected project start-ups.
SG&A expenses were $17.3 million in the fourth quarter of fiscal 2024 compared to $17.0 million in the fourth quarter of fiscal 2023.
The Company's effective tax rate for the fourth quarter of fiscal 2024 was 0.9%, compared to the fourth quarter fiscal 2023 rate of 9.9%, impacted by the valuation allowance placed on all our deferred tax assets due to the existence of a cumulative loss over a three-year period. The Company's effective tax rate for fiscal 2024 was 0.1%, compared to 0.8% for fiscal 2023.
For the fourth quarter of fiscal 2024, the Company had a net loss of $4.4 million, or $(0.16) per share, compared to a net loss of $0.3 million, or $(0.01) per share, in the fourth quarter of fiscal 2023. Net loss for the full year fiscal 2024 was $25.0 million, or $(0.91) per share, compared to a net loss of $52.4 million, or $(1.94) per share for fiscal year 2023. Adjusted net loss for the fourth quarter fiscal 2024 was $3.9 million, or $(0.14) per share compared to $3.0 million, or $(0.11) per share for the fourth quarter fiscal 2023. Adjusted net loss for fiscal 2024 was $29.0 million, or $(1.06) per share, compared to $39.8 million, or $(1.48) per share for fiscal 2023.
Segment ResultsStorage and Terminals Solutions segment revenue increased to $70.0 million in the fourth quarter compared to $64.1 million in the fourth quarter of fiscal 2023, due to increased activity on NGL storage projects. Gross margin was 3.1% in the fourth quarter of fiscal 2024, compared to 3.2% in the fourth quarter fiscal 2023.
Utility and Power Infrastructure segment revenue increased to $65.3 million in the fourth quarter of fiscal 2024 compared to $39.1 million in the fourth quarter of fiscal 2023, benefiting from higher volumes of work associated with LNG peak shaving projects. Gross margin decreased to 4.2% in the fourth quarter fiscal 2024, compared to 9.6% for the fourth quarter fiscal 2023, due to lower margins on power delivery work for competitively bid projects. Margins were also impacted during the period by the under-recovery of construction overhead costs due to the allocation of resources to this segment in support of early-stage activity on large construction projects.
Process and Industrial Facilities segment revenue decreased to $54.2 million in the fourth quarter of fiscal 2024 compared to $102.7 million in the fourth quarter of fiscal 2023, primarily due to lower revenue for midstream gas processing projects, refinery maintenance and turnarounds, and a recently completed large renewable diesel project. Fourth quarter gross margin increased to 15.4%, compared to 8.2% for the fourth quarter fiscal 2023 due to overall strong project execution across the entire portfolio of projects.
Outlook
The following forward-looking guidance reflects the Company's current expectations and beliefs as of September 9, 2024. Various factors outside of the Company's control may impact the Company's revenue and business. This includes the timing of project awards and starts which may be impacted by market fundamentals, client decision-making, and the regulatory environment in which they operate. The following statements apply only as of the date of this disclosure and are expressly qualified in their entirety by the cautionary statements included elsewhere in this document:
Fiscal Year 2024
Fiscal Year 2025
Actual
Guidance
% Change
Revenue
$728.2 million
$900 - $950 million
24% - 30%
On an overall basis, the quality of the Company's backlog remains strong, and its revenue is expected to increase in fiscal 2025 as the current backlog converts to revenue.
On a segment basis:
In Storage and Terminal Solutions segment, the Company expects revenue to increase as the level of work increases on specialty vessel and related facility projects currently in backlog.
In the Utility and Power Infrastructure segment, the Company expects revenue to increase as the level of work accelerates on LNG peak shaving projects currently in backlog.
In the Process and Industrial Facilities segment, the Company expects revenue to decrease on a year over year basis as existing projects near completion and we await the start of new projects both in backlog and in our opportunity pipeline.
Backlog
The Company's backlog remained at near record levels in the fourth quarter of fiscal 2024, ending at $1.4 billion as of June 30, 2024. Project awards totaled $175.9 million in the fourth quarter of fiscal 2024, resulting in a full year book-to-bill ratio of 1.5x. Project awards in the quarter included a significant butane storage project. The table below summarizes our awards, book-to-bill ratios and backlog by segment for our fourth fiscal quarter (amounts are in thousands, except for book-to-bill ratios):
Three Months Ended
Fiscal Year Ended
June 30, 2024
June 30, 2024
Backlog as of
Segment:
Awards
Book-to-Bill(1)
Awards
Book-to-Bill(1)
June 30, 2024
Storage and Terminal Solutions
$
129,911
1.9x
$
804,396
2.9x
$
798,255
Utility and Power Infrastructure
12,543
0.2x
104,099
0.6x
379,697
Process and Industrial Facilities
33,432
0.6x
182,382
0.7x
$
251,521
Total
$
175,886
0.9x
$
1,090,877
1.5x
$
1,429,473
_______________(1) Calculated by dividing project awards by revenue recognized during the period.
Financial Position
Net cash provided by operating activities during fiscal 2024 was $72.6 million, compared to $10.2 million during fiscal 2023. Net cash provided by operating activities during the year primarily reflect scheduled payments from customers associated with project awards in backlog.
As of June 30, 2024, Matrix had total liquidity of $169.6 million. Liquidity is comprised of $115.6 million of unrestricted cash and cash equivalents and $54.0 million of borrowing availability under the credit facility. The Company also has $25.0 million of restricted cash to support the facility. As of June 30, 2024, we had no outstanding borrowings under the facility.
Conference Call Details
In conjunction with the earnings release, Matrix Service Company will host a conference call 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 Tuesday, September 10, 2024.
Investors and other interested parties can access a live audio-visual webcast using this webcast link: https://edge.media-server.com/mmc/p/9dfxb3ch, or through the Company's website at www.matrixservicecompany.com on the Investors Relations page under Events & Presentations.
If you would like to dial in to the conference call, please register at https://register.vevent.com/register/BI896f05552b1f480eac6c6f77492cc225 at least 10 minutes prior to the start time. Upon registration, participants will receive a dial-in number and unique PIN to join the call as well as an e-mail confirmation with the details.
For those unable to participate in the conference call, a replay of the webcast will be available on the Investor Relations page of the Company's website.
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
Matrix Service Company (NASDAQ:MTRX), through its subsidiaries, is a leading North American industrial engineering, construction, and maintenance contractor headquartered in Tulsa, Oklahoma with offices located throughout the United States and Canada, as well as Sydney, Australia and Seoul, South Korea.
The Company reports its financial results in three key operating segments: Storage and Terminal Solutions, Utility and Power Infrastructure, and Process and Industrial Facilities.
With a focus on sustainability, building strong Environment, Social and Governance (ESG) practices, and living our core values, Matrix ranks among the Top Contractors by Engineering-News Record, was recognized for its Board diversification by 2020 Women on Boards, is an active signatory to CEO Action for Diversity and Inclusion, and is consistently recognized as a Great Place to Work®. 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 the successful implementation of the Company's business improvement plan and the 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.
For more information, please contact:
Kellie SmytheSenior Director, Investor RelationsT: 918-359-8267Email:
Matrix Service CompanyConsolidated Statements of Income(In thousands, except per share data)
Three Months Ended
Fiscal Years Ended
June 30,2024
June 30,2023
June 30,2024
June 30,2023
Revenue
$
189,499
$
205,854
$
728,213
$
795,020
Cost of revenue
177,052
191,159
687,740
764,200
Gross profit
12,447
14,695
40,473
30,820
Selling, general and administrative expenses
17,293
17,031
70,085
68,249
Goodwill impairment
—
—
—
12,316
Restructuring costs
501
261
501
3,142
Operating loss
(5,347
)
(2,597
)
(30,113
)
(52,887
)
Other income (expense):
Interest expense
(343
)
(468
)
(1,130
)
(2,024
)
Interest income
862
126
1,339
290
Other
411
2,566
4,892
1,860
Loss before income tax expense (benefit)
(4,417
)
(373
)
(25,012
)
(52,761
)
Provision (benefit) for federal, state and foreign income taxes
(40
)
(37
)
(36
)
(400
)
Net loss
$
(4,377
)
$
(336
)
$
(24,976
)
$
(52,361
)
Basic loss per common share
$
(0.16
)
$
(0.01
)
$
(0.91
)
$
(1.94
)
Diluted loss per common share
$
(0.16
)
$
(0.01
)
$
(0.91
)
$
(1.94
)
Weighted average common shares outstanding:
Basic
27,447
27,047
27,379
26,988
Diluted
27,447
27,047
27,379
26,988
Matrix Service CompanyConsolidated Balance Sheets(In thousands)
June 30,2024
June 30,2023
Assets
Current assets:
Cash and cash equivalents
$
115,615
$
54,812
Accounts receivable, net of allowance for credit losses
138,987
145,764
Costs and estimated earnings in excess of billings on uncompleted contracts
33,893
44,888
Inventories
8,839
7,437
Income taxes receivable
180
496
Prepaid expenses
4,065
5,741
Other current assets
12
3,118
Total current assets
301,591
262,256
Restricted cash
25,000
25,000
Property, plant and equipment - net
43,498
47,545
Operating lease right-of-use assets
19,150
21,799
Goodwill
29,023
29,120
Other intangible assets, net of accumulated amortization
1,651
3,066
Other assets, non-current
31,438
11,718
Total assets
$
451,351
$
400,504
Matrix Service CompanyConsolidated Balance Sheets (continued)(In thousands, except share data)
June 30,2024
June 30,2023
Liabilities and stockholders' equity
Current liabilities:
Accounts payable
$
65,629
$
76,365
Billings on uncompleted contracts in excess of costs and estimated earnings
171,308
85,436
Accrued wages and benefits
15,878
13,679
Accrued insurance
4,605
5,579
Operating lease liabilities
3,739
4,661
Other accrued expenses
3,956
1,815
Total current liabilities
265,115
187,535
Deferred income taxes
25
26
Operating lease liabilities
19,156
20,660
