FY 2022 | THIRD QUARTER RESULTS MATRIX SERVICE COMPANY Move to a higher standard" SAFE HARBOR This presentation contains certain forward-looking statements concerning Matrix Service Company's operations, economic performance and management's best judgment as to what may occur in the future. The actual results for the current and future periods and other corporate developments will depend upon a number of economic, competitive and other influences, many of which are beyond the control of the Company, and any ...

Financial Performance - Basic loss per share for the three months ended March 31, 2022, was $(1.30), compared to $(0.49) for the same period in 2021[82]. - The company reported a net loss of $34.9 million for the three months ended March 31, 2022, compared to a net loss of $12.9 million in the prior year[82]. - Total operating loss for the nine months ended March 31, 2022, was $69.7 million, compared to a loss of $27.4 million for the same period in 2021[89]. - The company incurred total restructuring costs of $16.7 million in Q1 2022, significantly higher than $1.9 million in Q1 2021[97]. - The company reported a gross profit loss of $1.8 million for Q1 2022, compared to a profit of $1.6 million in Q1 2021[89]. - Consolidated gross profit decreased to ($1.8) million for the three months ended March 31, 2022, compared to a gross profit of $1.6 million in the same period last year, resulting in a gross margin of (1.0%) compared to 1.1%[108]. - Adjusted net loss for the nine months ended March 31, 2022, was $39.6 million, compared to $15.6 million in the same period last year, with a loss per fully diluted share of $2.90[154]. - For the three months ended March 31, 2022, the net loss was $34.9 million compared to a net loss of $12.9 million for the same period in 2021, representing a 171% increase in losses year-over-year[156]. - Adjusted EBITDA for the nine months ended March 31, 2022 was $(33.7) million, a significant decline from $1.2 million in the same period of 2021[156]. Revenue and Segments - Total gross revenue for the three months ended March 31, 2022, was $178.4 million, an increase of 19.5% compared to $149.4 million for the same period in 2021[89]. - Consolidated revenue for the nine months ended March 31, 2022, reached $507.1 million, up from $498.5 million in the same period of 2021, reflecting a growth of 1.3%[89]. - The Utility and Power Infrastructure segment reported gross revenue of $59.3 million for Q1 2022, a 32.7% increase from $44.7 million in Q1 2021[89]. - The Process and Industrial Facilities segment's gross revenue increased to $69.8 million in Q1 2022, compared to $43.1 million in Q1 2021, marking a growth of 62.1%[89]. - The Storage and Terminal Solutions segment experienced a decline in gross revenue to $49.3 million in Q1 2022 from $61.5 million in Q1 2021, a decrease of 19.9%[89]. - Consolidated revenue for the three months ended March 31, 2022, was $177.0 million, an increase from $148.3 million in the same period last year, with notable increases in the Process and Industrial Facilities and Utility and Power Infrastructure segments by $26.1 million and $14.6 million, respectively[107]. - Revenue for the Process and Industrial Facilities segment increased to $163.2 million in the nine months ended March 31, 2022, up from $140.0 million in the same period last year, driven by higher refinery maintenance and turnaround work[133]. - Revenue for the Storage and Terminal Solutions segment decreased to $172.6 million in the nine months ended March 31, 2022, compared to $201.1 million in the same period last year, primarily due to lower volumes of crude oil tank and terminal capital work[136]. Tax and Cash Flow - The effective tax rates were 0.4% and (7.8)% for the three and nine months ended March 31, 2022, significantly lower than the previous year's rates of 28.2% and 22.6%[70]. - A tax refund of $12.6 million is expected from the carryback of federal net operating losses under the CARES Act[72]. - Cash used by operating activities for the nine months ended March 31, 2022 was $22.5 million, with a net loss of $77.4 million contributing to this figure[167]. - The company had $25.0 million in restricted cash as of March 31, 2022, impacting the overall liquidity position[159]. - Unrestricted cash and cash equivalents totaled $34.1 million as of March 31, 2022, with total liquidity amounting to $86.8 million when including $52.7 million available under the ABL Facility[158]. Goodwill and Impairment - Goodwill impairment of $18.3 million was recorded due to stock price decline and underperformance against forecasts[58]. - The company reported a goodwill impairment of $18.3 million for the nine months ended March 31, 2022, which is a significant non-cash expense impacting financial results[168]. - Goodwill is tested annually for impairment, with the impairment test involving a comparison of fair value and carrying value[189]. Backlog and Future Outlook - Total backlog increased by 0.5% and 28.5% during the three and nine months ended March 31, 2022, respectively, with project awards of $179.7 million and $638.7 million during the respective periods[144]. - In the Utility and Power Infrastructure segment, backlog decreased by 23.9% for the three months ended March 31, 2022, and by 32.7% for the nine months ended March 31, 2022, despite strong bidding activity[145]. - In the Process and Industrial Facilities segment, backlog increased by 14.2% for the three months ended March 31, 2022, and by 112.7% for the nine months ended March 31, 2022, reflecting strong client spending on refinery maintenance[146]. - The company expects project awards to increase in the fourth quarter of fiscal 2022, leading to higher revenue volume and improved earnings in the future[106]. Debt and Financing - The ABL Facility provides for borrowings of up to $100 million, with a borrowing base of $76.4 million as of March 31, 2022[62][64]. - The company incurred $1.9 million in cash used for financing activities, primarily due to fees related to the ABL Facility and stock repurchases[169]. - The company has not paid cash dividends on common stock and is limited to stock dividends only under the terms of the ABL Facility[170]. - As of March 31, 2022, there were 1,349,037 shares available for repurchase under the Stock Buyback Program, with a limit of $2.5 million per fiscal year[171]. Revenue Recognition - The company recognizes revenue only when a contract with a customer is identified, which includes approval, rights, obligations, payment terms, and collectibility being probable[176]. - Performance obligations in contracts are identified, with many contracts having a single performance obligation due to integrated services provided[177]. - The contract price is determined based on expected consideration from the customer, with fixed-price contracts having a lump-sum amount[178]. - Variable consideration amounts can increase or decrease the contract price based on performance metrics, with estimates reassessed each accounting period[179]. - Revenue is recognized as performance obligations are satisfied, using the percentage-of-completion method for fixed-price contracts[181]. - Costs incurred include direct labor, materials, and indirect costs, with indirect costs allocated based on direct costs incurred[183]. - As of March 31, 2022, costs and estimated earnings in excess of billings on uncompleted contracts included revenues for unpriced change orders and claims of $9.3 million[187]. Internal Controls - The company maintains effective disclosure controls and procedures, as evaluated by management as of March 31, 2022[196]. - There have been no material changes in internal controls over financial reporting during the quarter ended March 31, 2022[197].

Matrix Service Company (NASDAQ:MTRX) Q3 2022 Earnings Conference Call May 10, 2022 10:30 AM ET Company Participants Kellie Smythe - Investor Relations John Hewitt - President and Chief Executive Officer Kevin Cavanah - Vice President and Chief Financial Officer Conference Call Participants John Franzreb - Sidoti Jean Ramirez - D.A. Davidson Operator Good day, ladies and gentlemen. Thank you for standing by and welcome to the Matrix Service Company Conference Call to discuss Results for the Third Quarter Fis ...

FY 2022 | SECOND QUARTER RESULTS MATRIX SERVICE COMPANY Move to a higher standard" SAFE HARBOR This presentation contains certain forward-looking statements concerning Matrix Service Company's operations, economic performance and management's best judgment as to what may occur in the future. The actual results for the current and future periods and other corporate developments will depend upon a number of economic, competitive and other influences, many of which are beyond the control of the Company, and an ...

Financial Performance - Consolidated revenue for the three months ended December 31, 2021, was $162.0 million, a decrease from $167.5 million in the same period last year [110]. - Consolidated gross profit decreased to $3.2 million for the three months ended December 31, 2021, with a gross margin of 2.0%, down from 9.1% in the same period last year [111]. - Consolidated net loss for the three months ended December 31, 2021, was $24.9 million, or $0.93 per fully diluted share, compared to a net loss of $4.6 million, or $0.17 per fully diluted share, in the same period last year [115]. - Consolidated revenue for the six months ended December 31, 2021, was $330.1 million, compared to $350.2 million in the same period last year [123]. - For the six months ended December 31, 2021, the company reported a net loss of $42.5 million, or $1.59 per fully diluted share, compared to a net loss of $7.6 million, or $0.29 per fully diluted share in the same period of 2020 [128]. - Adjusted net loss for the six months ended December 31, 2021, was $26.2 million, with an adjusted loss per fully diluted share of $0.98, compared to an adjusted net loss of $4.1 million and $0.16 per share in the same period of 2020 [149]. - Adjusted EBITDA for the three months ended December 31, 2021, was $(7,091) thousand, compared to $6,229 thousand for the same period in 2020 [154]. - Net loss for the six months ended December 31, 2021, was $(42,457) thousand, an increase from $(7,628) thousand in the same period of 2020 [154]. Segment Performance - For the Utility and Power Infrastructure segment, revenue was $54.8 million for the three months ended December 31, 2021, compared to $52.0 million in the same period last year [116]. - The Process and Industrial Facilities segment reported revenue of $50.3 million for the three months ended December 31, 2021, with $210.4 million in project awards booked in the first half of fiscal 2022 [118]. - The Storage and Terminal Solutions segment revenue was $56.9 million for the three months ended December 31, 2021, down from $64.2 million in the same period last year [120]. - Revenue for the Utility and Power Infrastructure segment was $112.0 million, a slight decrease from $112.7 million in the same period last year, primarily due to lower volumes of power delivery [129]. - The segment gross margin for Utility and Power Infrastructure was (5.9)% in fiscal 2022, down from 11.1% in fiscal 2021, impacted by increased costs for a large capital project and low volumes [130]. - Revenue for the Process and Industrial Facilities segment was $94.2 million, down from $97.2 million in the same period last year, but the company booked $210.4 million in project awards in the first half of fiscal 2022 [131]. - The segment gross margin for Process and Industrial Facilities was 7.5%, down from 11.9% in the same period last year, due to low volumes leading to under recovery of construction overhead costs [132]. - Revenue for the Storage and Terminal Solutions segment was $123.9 million, down from $140.4 million in the same period last year, primarily due to lower volumes of crude oil tank and terminal capital work [133]. Cost Management - The company reduced its cost structure by approximately $80 million, or about 29%, with one-third related to SG&A and the rest to construction overhead [108]. - Consolidated SG&A expenses were $15.9 million for the three months ended December 31, 2021, down from $16.7 million in the same period last year [112]. - Interest expense increased to $0.5 million for the three months ended December 31, 2021, compared to $0.4 million in the same period last year [113]. Backlog and Project Awards - The backlog as of December 31, 2021, was $591.6 million, reflecting a 27.9% increase compared to the backlog at the beginning of the period [138]. - The company achieved project awards of $192.2 million and $459.1 million during the three and six months ended December 31, 2021, respectively, resulting in book-to-bill ratios of 1.2 and 1.4 [139]. - Backlog in the Utility and Power Infrastructure segment decreased by 15.0% during the three months ended December 31, 2021, while backlog in the Process and Industrial Facilities segment increased by 35.3% [140][141]. Liquidity and Capital Management - Total liquidity as of December 31, 2021, was $101.7 million, consisting of $65.0 million in unrestricted cash and cash equivalents and $36.7 million available under the ABL Facility [157]. - Cash provided by operating activities for the six months ended December 31, 2021, totaled $11.4 million, with a net cash effect from changes in operating assets and liabilities of $35.5 million [167]. - The company had $33.4 million in letters of credit outstanding under the ABL Facility as of December 31, 2021, which decreased to $23.6 million by January 31, 2022 [162]. - Capital expenditures for the six months ended December 31, 2021, were $0.6 million, with investing activities using $0.5 million of cash [170]. - The ABL Facility provides for available borrowings of up to $100.0 million, which may be increased by an additional $15.0 million under certain conditions [160]. - The company is required to maintain a minimum of $25.0 million of restricted cash at all times under the ABL Facility [161]. Stock and Equity Management - The company has never paid cash dividends on its common stock, with future payments dependent on the terms of the ABL Facility and financial conditions [172]. - The company has a Stock Buyback Program approved in November 2018, allowing repurchases up to 2,707,175 shares, with no repurchases made in the first half of fiscal 2022 [173]. - As of December 31, 2021, there were 1,349,037 shares available for repurchase under the Stock Buyback Program, and the company held 1,114,242 treasury shares [174]. - The company has not made any stock repurchases in the first half of fiscal 2022 and has no current plans to do so [173]. Revenue Recognition and Accounting - Costs and estimated earnings in excess of billings on uncompleted contracts included revenues for unpriced change orders and claims of $10.1 million at December 31, 2021, compared to $14.6 million at June 30, 2021 [189]. - The company recognizes revenue over time for fixed-price contracts using the percentage-of-completion method, based on costs incurred to date compared to total estimated costs [183]. - The company evaluates contracts for performance obligations and recognizes revenue as those obligations are satisfied, requiring significant judgment [179]. Goodwill and Tax Assets - Goodwill is tested annually for impairment, with the last test performed on May 31, and the company uses discounted cash flow analysis and market multiples to estimate fair value [192]. - The company has established valuation allowances for deferred tax assets based on judgments and estimates, believing realization of deferred tax assets in excess of the valuation allowance is more likely than not [193]. Market Risk - The company has no material changes in market risk from those reported in the previous fiscal year [195].

Financial Data and Key Metrics Changes - Revenue for the second quarter was $162 million, aligning with expectations, while gross margins were 2%, significantly impacted by under-recoveries of construction overhead costs, which negatively affected gross margins by over 500 basis points across all segments [9][10] - The company reported an adjusted net loss of $10.2 million, with an adjusted earnings per share of $0.38, while the quarterly net loss was $24.9 million, resulting in a loss per share of $0.93 [10] - The backlog increased to $592 million, with a book-to-bill ratio of 1.4 for the first half of the fiscal year, indicating a strong recovery in market demand [5][8] Segment Data and Key Metrics Changes - Utility and Power Infrastructure segment revenue was $55 million with a gross margin of -0.9%, affected by low volumes and competitive bidding [11] - Process and Industrial Facilities segment revenue was $50 million, with a book-to-bill of 2.2, indicating strong project awards, although revenue volume did not yet reflect this [12] - Storage and Terminal Solutions segment generated $57 million in revenue with a gross margin of -0.3%, impacted by under-recovery of construction overhead costs and lower margins on specific projects [13] Market Data and Key Metrics Changes - The company noted a significant increase in project awards, with over $210 million booked in the first two quarters of fiscal 2022, reflecting a positive market recovery [5][19] - There is a growing demand for capital investment in natural gas-related infrastructure, driven by rising global demand and increased gas prices [20][21] - The bidding environment is highly active across all segments, with notable opportunities in clean energy and traditional energy markets [18][24] Company Strategy and Development Direction - The company is focusing on transitioning to clean energy and renewables while maintaining its position in traditional energy markets, with a strong emphasis on capital projects related to renewable fuels and natural gas [18][19] - Management is implementing internal initiatives to streamline operations and reduce costs, having already cut approximately $80 million in costs since the pandemic began [27][28] - The company is expanding its maintenance operations under Master Service Agreements (MSAs) to provide more stability and predictability in revenue [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in end markets, with expectations of improved revenue and profitability by the fourth fiscal quarter [8][17] - The sentiment among clients is shifting positively, with increased spending plans and confidence in infrastructure investments [17][18] - The company anticipates a gradual translation of backlog into revenue, with significant impacts expected in the latter half of the fiscal year [54] Other Important Information - The company had $93 million in cash at the end of the quarter, including $28 million in restricted cash, with total liquidity increasing to $102 million [15][16] - A non-cash valuation allowance of $14.2 million on deferred tax assets impacted earnings, but the company expects to utilize these assets when profitability returns [10] Q&A Session Summary Question: Change in cost structure and its impact - Management confirmed that the change in cost structure enhances earnings power but does not alter gross margin targets or break-even revenue levels [33] Question: Details on project impacting gross margin - A thermal storage project faced scope development issues post-award, leading to increased costs and delays, but management expects to complete it by the end of April [34] Question: Share repurchase strategy - Management indicated that cash priorities focus on funding projects and increasing capital spending rather than share repurchases at this time [38] Question: Cash flow dynamics with ramping revenues - Cash flow will depend on the source of revenue increases, with maintenance activity requiring upfront funding and capital projects needing careful cash management [41] Question: Infrastructure upgrades and carbon footprint minimization - There is significant bidding activity for LNG facilities and midstream gas processing upgrades aimed at reducing carbon footprints, reflecting industry willingness to invest [44][46] Question: Lag in backlog translating to revenue - Management expects backlog to start impacting revenue in the third quarter, with a gradual build-up rather than an immediate spike [52][54] Question: Impact of labor and raw material inflation - The company is managing to incorporate inflation costs into bids, although labor sourcing may become more challenging as work volumes increase [56][58]

Financial Performance - Consolidated revenue for the three months ended September 30, 2021, was $168.1 million, a decrease from $182.8 million in the same period last year, with declines across all segments[95]. - Consolidated gross profit decreased to $(3.5) million, resulting in a gross margin of (2.1)%, down from 7.9% in the same period last year, primarily due to lower than forecasted margins on projects[96]. - The net loss for the three months ended September 30, 2021, was $17.5 million, or $0.66 per fully diluted share, compared to a net loss of $3.0 million, or $0.12 per fully diluted share, in the same period last year[99]. - Adjusted net loss for the same period was $16.0 million, an increase from $3.3 million in the prior year, resulting in an adjusted loss per fully diluted share of $0.60[119]. - Adjusted EBITDA for the three months ended September 30, 2021, was $(14.3) million, compared to $4.1 million in the same period of 2020[122]. Segment Performance - Revenue for the Utility and Power Infrastructure segment was $57.2 million, down from $60.7 million in the same period last year, primarily due to lower volumes of power delivery work[100]. - The Process and Industrial Facilities segment reported revenue of $43.9 million, a decrease from $45.9 million, attributed to lower volumes of thermal vacuum chamber work[102]. - Storage and Terminal Solutions segment revenue was $67.0 million, down from $76.2 million, mainly due to lower volumes of crude oil tank capital work[104]. Backlog and Opportunities - Backlog as of September 30, 2021, increased to $561.4 million from $462.6 million as of June 30, 2021, with a book-to-bill ratio of 1.6[108]. - The company expects increased opportunities in the Utility and Power Infrastructure segment due to the $1.2 trillion Infrastructure Investment and Jobs Act[109]. - Key capital construction contracts were awarded in the Storage and Terminal Solutions segment, including an LNG tank and a biodiesel tank package[111]. Cash Flow and Liquidity - Total liquidity as of September 30, 2021, was $66.8 million, consisting of $34.7 million in unrestricted cash and $32.1 million available under the ABL Facility[123]. - Cash used by operating activities for the three months ended September 30, 2021, totaled $19.2 million, with a net loss of $17.5 million contributing significantly to this figure[132]. - The company expects letters of credit outstanding to decrease by approximately $20.0 million in the second quarter of fiscal 2022, which will increase availability under the ABL Facility[123]. - The ABL Facility provides for available borrowings of up to $100.0 million, which may be increased by an additional $15.0 million under certain conditions[126]. Cost Management and Strategic Review - SG&A expenses were $16.6 million for the three months ended September 30, 2021, down from $18.1 million a year earlier, reflecting implemented cost reductions[97]. - The company is strategically reviewing business processes and managing costs to maintain a strong balance sheet amid uncertainties from the COVID-19 pandemic[125]. Shareholder Information - As of September 30, 2021, there were 1,349,037 shares available for repurchase under the Stock Buyback Program, with 1,191,189 treasury shares held[138]. - The company has never paid cash dividends on its common stock, and future dividend payments will depend on the terms of the ABL Facility and other financial conditions[136]. Legal and Accounting Considerations - The company has various legal actions and claims that could materially affect its financial position, results of operations, or liquidity[157]. - Goodwill is tested annually for impairment, with the last test performed on May 31, showing no impairment if fair value exceeds carrying value[154]. - The company utilizes a discounted cash flow analysis and market multiples to determine the estimated fair value of reporting units, which involves significant judgments and assumptions[155]. - Deferred income tax assets and liabilities are computed annually, with valuation allowances established when necessary to reduce deferred tax assets to realizable amounts[156]. Changes in Working Capital - Accounts receivable decreased by $3.1 million during the three months ended September 30, 2021, contributing to increased cash flows from operating activities[138]. - Costs and estimated earnings in excess of billings on uncompleted contracts increased by $3.0 million, while billings on uncompleted contracts in excess of costs decreased by $2.9 million, both affecting cash flows from operating activities[138]. - Inventories and other current assets increased by $3.3 million during the same period, which decreased cash flows from operating activities[138]. - Accounts payable and other liabilities increased by $2.8 million, contributing to increased cash flows from operating activities[138].

Matrix Service Company (NASDAQ:MTRX) Q1 2022 Earnings Conference Call November 9, 2021 10:30 AM ET Company Participants Kellie Smythe - Senior Director, Investor Relations John Hewitt - President and CEO Kevin Cavanah - Vice President and CFO Conference Call Participants John Franzreb - Sidoti & Company Zane Karimi - D.A. Davidson Operator Good day and thank you for standing by. Welcome to the Matrix Service Company Conference Call to discuss Results for the First Quarter Fiscal 2022. At this time, all part ...

Financial Performance - The company's Q1 FY2022 revenue was $168093 million[15] - The company's Q1 FY2022 gross profit was -$3508 million, resulting in a gross profit margin of -21%[15] - The company's Q1 FY2022 net loss was $17538 million, with an EPS loss of $066[15] - Adjusted EBITDA for Q1 FY2022 was -$14278 million[15, 30] Segment Performance - Utility & Power Infrastructure revenue was $57204 million in Q1 FY2022[8], with a gross profit margin of -107%[8] - Process & Industrial Facilities revenue was $43905 million in Q1 FY2022[11], with a gross profit margin of 65%[11] - Storage & Terminal Solutions revenue was $66984 million in Q1 FY2022[13], with a gross profit margin of 06%[13] Awards and Backlog - Project awards totaled $267 million in 1Q FY2022[6] - The company's ending backlog was $561 million in 1Q FY2022[6] - The company has implemented approximately $70 million of cost reductions on an annualized basis, translating to approximately a 27% decrease in overhead cost structure over the past two years[17] Cash Flow and Liquidity - The company ended 1st Quarter FY 2022 with cash of $62 million and no debt[19] - The company has a credit facility borrowing base of $75 million[19] Market Outlook - The company's opportunity pipeline is strong across all segments, with LNG and NGLs representing 321% and Gas representing 123% of the pipeline[22]

FY 2021 | FOURTH QUARTER AND FULL YEAR RESULTS 2 MATRIX SERVICE COMPANY Move to a higher standard" SAFE HARBOR | --- | --- | --- | |-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...