Matrix Service pany(US:MTRX)2026-02-05 21:20Financial Performance - Consolidated revenue increased by $23.3 million, or 12%, to $210.5 million for the three months ended December 31, 2025, compared to $187.2 million in the same period of 2024[83]. - For the six months ended December 31, 2025, consolidated revenue increased by $69.6 million, or 20%, to $422.4 million, primarily due to increased volumes in Storage and Terminal Solutions and Utility and Power Infrastructure segments[96]. - Total revenue for the six months ended December 31, 2025, was $422.4 million, a 20% increase from $352.7 million in the same period last year[1]. Profitability - Gross profit rose by $2.2 million, or 21%, to $13.1 million, with a gross margin of 6.2% for the three months ended December 31, 2025, compared to 5.8% in the same period last year[84]. - Gross profit for the six months ended December 31, 2025, increased by $8.6 million, or 46%, with a gross margin of 6.5%, up from 5.3% in the same period last year[97]. - Total gross profit increased by $8.6 million, or 46%, reaching $27.3 million, with a gross margin improvement from 5.3% to 6.5%[1]. Segment Performance - Project awards for the Storage and Terminal Solutions segment totaled $124.5 million in Q2 of fiscal 2026, contributing to a total of $260.6 million for the six months ended December 31, 2025[76]. - The Utility and Power Infrastructure segment secured $15.8 million in project awards during Q2 of fiscal 2026, with a total of $50.5 million for the six months ended December 31, 2025[77]. - The Process and Industrial Facilities segment achieved $36.2 million in project awards in Q2 of fiscal 2026, totaling $53.2 million for the six months ended December 31, 2025[78]. - Utility and Power Infrastructure segment revenue increased by $14.3 million, or 23%, driven by higher volumes in power delivery and natural gas projects[91]. - Storage and Terminal Solutions revenue increased by $35.6 million, or 20%, driven by higher LNG peak shaving work, despite decreases in tanks and terminal work[2]. - Utility and Power Infrastructure revenue rose by $32.9 million, or 28%, primarily due to increased volumes for LNG peak shaving projects and power delivery work[4]. Backlog and Project Awards - The company reported a backlog of $1,127.1 million as of December 31, 2025, down from $1,161.0 million as of September 30, 2025, reflecting a decrease of approximately 2.9%[72]. - The book-to-bill ratio for the Storage and Terminal Solutions segment was 1.2x for the three months ended December 31, 2025, indicating a healthy project award to revenue recognized ratio[72]. - The company anticipates that bidding activity in LNG, NGLs, and ammonia projects will continue to be strong, positioning these areas as key growth drivers[76]. Cash Flow and Liquidity - Unrestricted cash and cash equivalents at December 31, 2025, totaled $199.0 million, with total liquidity amounting to $257.6 million[9]. - Liquidity decreased by $26.9 million during the six months ended December 31, 2025, primarily due to changes in working capital and capital expenditures[9]. - Cash flows used by operating activities were $(18.4) million for the six months ended December 31, 2025, compared to $45.5 million in the same period last year[15]. - Cash flows provided by operating activities were $(18.4) million for the six months ended December 31, 2025, compared to $45.5 million for the same period in 2024[116]. - Accounts receivable increased by $77.0 million in the six months ended December 31, 2025, negatively impacting cash flows from operating activities[116]. - Billings on uncompleted contracts in excess of costs and estimated earnings increased by $59.3 million, positively impacting cash flows from operating activities[116]. Operating Loss and Net Loss - The operating loss improved by $4.2 million, or 66%, to $(2.2) million for the three months ended December 31, 2025, compared to $(6.4) million in the same period last year[88]. - Net loss decreased by $4.6 million, or 84%, to $(0.9) million for the three months ended December 31, 2025, compared to $(5.5) million in the same period last year[83]. - For the six months ended December 31, 2025, the net loss was $4.6 million compared to a net loss of $14.8 million for the same period in 2024[116]. Strategic Decisions - The company removed certain projects from backlog due to increased risk profiles, reflecting a strategic decision to maintain a high-quality financial and commercial risk profile[79]. - The company has a competitive advantage due to its strong balance sheet, which provides financial capacity to pursue high-quality opportunities[68]. - The company noted that structural macrotrends, including the clean energy transition and increased power requirements, are expected to support durable growth in end markets[69]. Stock and Dividends - The company has never paid cash dividends on its common stock, and future dividend payments will depend on various factors including financial condition and capital requirements[121]. - 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, 2025[122]. Accounting Policies - There have been no material changes in critical accounting policies and estimates from those reported in the fiscal 2025 Annual Report[124].