Matrix Service pany(US:MTRX)2024-11-09 14:52Financial Data and Key Metrics Changes - The company reported revenue of $165.6 million for Q1 2025, a decrease from $197.7 million in Q1 2024, primarily due to the completion of a large renewable diesel project [19] - The net loss for Q1 2025 was $9.2 million or $0.33 per share, compared to an adjusted net loss of $5.7 million or $0.21 per share in Q1 2024 [26] - Consolidated gross margin was $7.8 million or 4.7% in Q1 2025, down from $11.9 million or 6% in Q1 2024, impacted by under-recovery of construction overhead costs [23][24] Business Line Data and Key Metrics Changes - Storage and Terminal Solutions segment revenue was $78.2 million in Q1 2025, down from $90.1 million in Q1 2024, due to reduced volumes in flat bottom tank work [20] - Utility and Power Infrastructure segment revenue increased to $55.9 million in Q1 2025 from $32.4 million in Q1 2024, benefiting from higher volumes in LNG peak shaving projects [21] - Process and Industrial Facilities segment revenue decreased to $31.4 million in Q1 2025 from $75.1 million in Q1 2024, due to the completion of a large renewable diesel project [22] Market Data and Key Metrics Changes - The company maintains a backlog of $1.4 billion, with project awards totaling $148 million in Q1 2025, resulting in a book-to-bill ratio of 0.9 for the quarter [27] - The opportunity pipeline remains strong at approximately $6 billion, with expectations to maintain a book-to-bill ratio of 1.0 or greater on an annual basis [15] Company Strategy and Development Direction - The strategic focus is on higher-margin specialty engineering and construction opportunities, with an emphasis on lean operating models and returns-driven capital allocation [10] - The company anticipates a revenue guidance for fiscal 2025 between $900 million and $950 million, representing a year-over-year increase of 24% to 30% [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand for LNG, NGL, and ammonia storage and terminal infrastructure, which supports the overall growth strategy [12] - The company expects to return to profitability in fiscal 2025, driven by improved project execution and backlog conversion [9][34] Other Important Information - The company generated $12 million in cash from operations, increasing the quarter-end cash balance to $150 million, with zero debt [30] - Management highlighted the importance of safety and maintaining a strong safety culture within the organization [6][7] Q&A Session Summary Question: Why was revenue lower in the utility business? - Management indicated that the decline was due to timing on new projects starting, with expectations for increasing revenues moving forward [36] Question: What caused the increase in SG&A expenses? - The increase was primarily due to long-term incentive compensation tied to stock price increases, with expectations for SG&A to remain around $18 million for the rest of the year [37][38] Question: What is the outlook for small project demand? - Management noted stable demand levels for maintenance work, with improved visibility for future opportunities in refinery maintenance [39][40] Question: How does the change in administration affect the business? - Management believes the change will be net positive, with a reduced regulatory environment likely benefiting infrastructure investment [41][42] Question: Why was the book-to-burn ratio not stronger this quarter? - Management attributed this to timing, with larger projects expected to contribute more significantly in the upcoming quarters [45][46] Question: What is the near-term opportunity tied to LNG projects? - Management indicated a couple of hundred million dollars worth of near-term work tied to LNG projects, with potential for more long-term opportunities [50] Question: What is the company's exposure to renewable markets? - The company has limited direct exposure to wind and solar but is involved in renewable fuels through refinery clients [51][52]