Matrix Service pany(US:MTRX)2023-09-12 18:57Financial Data and Key Metrics Changes - The company reported a total revenue of $205.9 million for the fourth quarter, a 10% increase from the previous quarter, with gross margin improving to 7.1%, up from 2.4% in the third quarter [73] - The adjusted net loss for the fourth quarter was $3.1 million, or $0.11 per share, compared to a loss of $12.7 million, or $0.47 per share, in the third quarter [25][48] - The company generated total awards of $464 million in the fourth quarter, resulting in a book-to-bill ratio of 2.3, marking the highest quarterly awards in five years [20] Business Line Data and Key Metrics Changes - Revenue from the Storage and Terminals Solutions segment increased by 23% to $64.1 million in the fourth quarter compared to $52.2 million in the third quarter, driven by recently awarded capital projects [12] - The Utility and Power Infrastructure segment saw revenue rise to $39.1 million in the fourth quarter from $35 million in the third quarter, with a gross margin of 9.6% due to strong execution on power delivery projects [12] - The Process and Industrial Facilities segment's revenue increased to $102.7 million in the fourth quarter from $99.7 million in the third quarter, with a gross margin of 8.2% [49] Market Data and Key Metrics Changes - The company reported an ending backlog of $1.1 billion as of June 30, 2023, representing an 85% year-over-year increase, with strong growth potential in infrastructure services [7] - The company expects to see significant revenue growth in the second half of fiscal 2024 as capital projects transition from engineering to construction [24] Company Strategy and Development Direction - The company has transformed its organization to be more cost-efficient while aligning its skills and expertise with core markets, focusing on increasing efficiency and improving performance [10] - The strategic focus includes leveraging its premier cryogenic storage brand and expanding into the small to medium-sized LNG facility market, which presents strong growth potential [21][22] - The company aims to return to historical consolidated gross margin ranges of 10% to 12% as it executes on its backlog and capital projects [73] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about moving past previous operational issues and expects revenue to stabilize in the first half of fiscal 2024, with strong growth anticipated in the second half [13] - The company highlighted the importance of maintaining a safe work environment as project volume increases, emphasizing the need for training and planning [18][19] - Management noted that the spending recovery in end markets is beginning to materialize, with strong visibility into revenue and a focus on maximizing profitability [51] Other Important Information - The company has a cash balance of $79.8 million, with total borrowings of $10 million, indicating a conservative management of the balance sheet to support growth [66] - The company completed the sale of a small, non-core business during the fourth quarter, resulting in a gain of $2.9 million [48] Q&A Session Summary Question: Can you provide an update on the gas processing job that has impacted results? - The gas processing project reached mechanical completion in the fourth quarter, and the facility is operational, with no material changes expected in the forecast [53] Question: What are the expectations for labor and staffing given the backlog profile? - The company plans to add key positions in operations and has been proactive in recruiting, while craft labor recruitment has been successful [55] Question: What are the capital allocation priorities moving forward? - The focus will be on executing projects in backlog, managing working capital, and considering additional capital expenditures as needed [60]