Matrix Service pany(MTRX) - 2025 Q2 - Quarterly Report

Revenue Performance - Revenue for the second quarter of fiscal 2025 increased by $12.1 million, or 7$187.2 million, a 7% increase from $175.0 million in the same period last year[93]. - For the six months ended December 31, 2024, total revenue was$352.7 million, a decrease of 5% from $372.7 million in the same period last year[104]. Project Awards and Backlog - Project awards during the second quarter totaled$90.5 million, marking the lowest quarterly awards in over three years due to customer spending delays related to the 2024 presidential election[73]. - Backlog as of December 31, 2024, decreased to $1.31 billion from$1.41 billion as of September 30, 2024, primarily due to revenue recognized exceeding project awards[76]. - The book-to-bill ratio for the total backlog was 0.5x for the quarter, indicating that project awards were less than revenue recognized[76]. - The company anticipates strong award activity in the coming quarters due to robust market drivers such as increased oil and gas demand and the clean energy transition[73]. Segment Performance - The Storage and Terminal Solutions segment booked $32.8 million in project awards during the second quarter, with significant opportunities in LNG and ammonia projects expected to drive growth[81]. - The Utility and Power Infrastructure segment secured$21.4 million in project awards during the second quarter, with a promising pipeline for LNG peak shaving projects[82]. - The Process and Industrial Facilities segment recorded $36.3 million in project awards during the second quarter, including a five-year renewal of a refinery maintenance contract[83]. - Storage and Terminal Solutions revenue rose by$33.1 million, or 53%, driven by increased work volume for specialty vessel and LNG storage[95]. - Utility and Power Infrastructure revenue increased by $20.9 million, or 52$40.7 million, or 57%, attributed to lower revenue volumes from completed projects[100]. - Utility and Power Infrastructure revenue for the six months increased by $44.4 million, or 61$84.4 million, or 58%, in the six months ended December 31, 2024 compared to the same period last year[115]. - Process and Industrial gross profit decreased by $9.4 million, or 80$10.9 million, with a gross margin of 5.8%, slightly down from 6.0% in the prior year due to under-recovery of construction overhead costs[88]. - Gross profit for the three months ended December 31, 2024, was $10.9 million, a slight increase of 3$10.6 million in the same period last year[94]. - The effective tax rate for the three months ended December 31, 2024, was (0.3%), impacted by valuation allowances on deferred tax assets[92]. Cash Flow and Liquidity - Unrestricted cash and cash equivalents totaled $156.8 million, with total liquidity of$211.7 million as of December 31, 2024, reflecting an increase of $30.4 million during the second quarter of fiscal 2025[119]. - Cash provided by operating activities for the six months ended December 31, 2024 totaled$45.5 million, despite a net loss of $14.8 million[126]. - Cash flows used by investing activities amounted to$2.7 million due to capital expenditures for facility improvements and construction equipment purchases[129]. - The company has an asset-based credit agreement with a maximum loan amount of $90.0 million, maturing on September 9, 2026, with a borrowing base of$59.7 million as of December 31, 2024[124][125]. - Factors impacting liquidity include changes in costs and estimated earnings on uncompleted contracts, contract disputes, and collection issues[122][124]. Corporate Actions - Selling, general and administrative expenses increased by $1.6 million, or 10$2.2 million year over year, contributing to a net corporate revenue and expenses of $14.1 million during the six months ended December 31, 2024[117]. - The stock buyback program allows for the repurchase of up to 2,707,175 shares, with 1,349,037 shares available for repurchase as of December 31, 2024[132]. - The company believes the reduction in revenue is temporary due to a strong backlog, including a significant gas processing construction project expected to commence in late fiscal 2025[115]. - Interest income increased by$1.4 million due to higher cash balances invested in interest-bearing accounts[90].