Matrix Service pany(US:MTRX)2025-09-10 20:42Revenue and Profitability - Revenue for fiscal 2025 increased by $41.1 million, or 6%, to $769.3 million, driven primarily by higher volumes in the Storage and Terminal Solutions and Utility and Power Infrastructure segments [167]. - Total revenue for fiscal 2025 was $769.3 million, an increase of $41.1 million or 6% compared to fiscal 2024 [173]. - Gross profit for fiscal 2025 decreased by $0.8 million, or 2%, with a gross margin of 5.2%, down from 5.6% in fiscal 2024 [168]. - Total gross profit for fiscal 2025 was $39.7 million, a decrease of $796,000 or 2% compared to fiscal 2024 [173]. - Utility and Power Infrastructure gross profit increased by $7.7 million, or 83%, with a gross margin of 6.8% compared to 5.0% in fiscal 2024 [177]. Project Awards and Backlog - Project awards during fiscal 2025 totaled $726.0 million, resulting in a book-to-bill ratio of 0.9x and maintaining a backlog of $1.4 billion [156]. - The backlog as of June 30, 2025, was $1.38 billion, down from $1.43 billion a year earlier, with significant contributions from the Storage and Terminal Solutions segment [160]. - Approximately 55% of the total backlog reported as of June 30, 2025, is expected to be recognized as revenue within fiscal 2026 [165]. - The Utility and Power Infrastructure segment booked $215.4 million in project awards during fiscal 2025, with strong long-term prospects driven by increasing electrical demand [163]. - The Process and Industrial Facilities segment secured $172.9 million in project awards, including a five-year renewal of a refinery maintenance contract [164]. Cash Flow and Liquidity - Cash flows provided by operating activities were $117.5 million for fiscal 2025, up from $72.6 million in fiscal 2024 [189]. - Unrestricted cash and cash equivalents at June 30, 2025, totaled $224.6 million, with total liquidity of $284.5 million, an increase of $114.9 million during fiscal 2025 [182]. - Cash flows used by investing activities amounted to $7.4 million in fiscal 2025, primarily due to capital expenditures for improvements at a fabrication facility in Bakersfield, California [193]. - Financing activities used $10.4 million of cash in fiscal 2024, mainly due to $10.0 million in advances and $20.0 million in net repayments under the ABL facility [195]. Restructuring and Costs - Restructuring costs for fiscal 2025 amounted to $3.6 million, reflecting organizational restructuring efforts [169]. - Costs and estimated earnings in excess of billings on uncompleted contracts (CIE) decreased by $4.1 million, while billings on uncompleted contracts in excess of costs and estimated earnings (BIE) increased by $152.3 million, contributing positively to cash flows from operating activities [192]. Net Loss and Financial Position - The company reported a net loss of $29.5 million for fiscal 2025, compared to a net loss of $25.0 million in fiscal 2024 [190]. - The borrowing base under the ABL Facility was $64.6 million as of June 30, 2025, with no borrowings outstanding [188]. Stock and Dividends - 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 [196]. - The stock repurchase program allows for the repurchase of up to 2,707,175 shares, with 1,349,037 shares available for repurchase as of June 30, 2025 [197]. - The company had 277,731 treasury shares as of June 30, 2025, intended for use in equity awards and the Employee Stock Purchase Plan [198]. Goodwill and Impairment - The company performed its annual goodwill impairment test as of May 31, 2025, resulting in no impairment [211]. Future Commitments and Risks - Future payments for operating leases were $25.9 million as of June 30, 2025, with $5.8 million payable within the next 12 months [199]. - A 100-basis point (or 1%) increase or decrease in the interest rate would increase or decrease interest income by approximately $2.5 million per year [215]. - The applicable margin for Base Rate and Canadian Prime Rate borrowings is between 1.00% to 1.50%, and for Term SOFR borrowings, it is between 2.00% and 2.50% [215]. - The company has not entered into derivative instruments to hedge foreign currency risk, but evaluates the materiality of foreign currency exposure periodically [218]. - A 10% unfavorable change in the Canadian Dollar against the U.S. Dollar would not have had a material impact on the financial results for the fiscal year ended June 30, 2025 [218]. - The company has exposure to materials derived from commodities such as steel plate, steel pipe, and copper, which are key materials used [219]. - The company mitigates risks associated with commodity price exposure by procuring materials upon contract execution and negotiating contract provisions [219]. - Movements in the Canadian Dollar to U.S. Dollar exchange rate have not significantly impacted the company's results historically [217]. - The company has subsidiaries in Canada and South Korea, using Canadian Dollar and South Korean Won as functional currencies, respectively [216]. - Further growth in Canadian, South Korean, and/or Australian operations could impact financial results due to exchange rate fluctuations [217].