Matrix Service pany(US:MTRX)2022-05-10 20:54Financial 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].