Matrix Service pany(US:MTRX)2021-11-09 20:48Financial 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].