Matrix Service CEO Discusses Q1 2011 Results - Earnings Call Transcript
To begin, we are pleased to report that the fiscal 2011 is off to a good start, was followed backlog growth in both our construction services and repair and maintenance services segments. Consolidated backlog has grown in both of the last two quarters and now stands at $395 million, a 20% increase over the prior year and the highest level since May 2009. The $42 million increase in the first quarter was primarily due to awards in the aboveground storage tank market or we are seeing renewed capital investment and a pickup in repair work.
In addition to the backlog growth, we are pleased with the overall operating results in the first quarter which are driven by the aboveground storage tank and the electrical and instrumentation markets. Revenue from our electrical and instrumentation business more than doubled in the first quarter compared to the prior year and the aboveground storage tank construction revenues increased 30% over the same period a year ago. Consolidated gross margins while lower compared to the prior year’s increase from the fourth quarter of fiscal of 2010 to the first quarter of fiscal 2011 despite a slow start of the quarter as I mentioned during the last conference call.
We remain focused on project selection and execution in order to improve our gross margins going forward. Cost reductions implemented over the past two years contributed to our improved operating results in the quarter. The aggressive changes in our cost structure and response to the economic slowdown has positioned the company to better absorb overhead cost and improve overall gross margins. We will continue to manage our cost structure in response to ever changing market conditions. However, improvements in our business segments may require us to add resources to address the opportunities we see developing.
As we look forward, we are encouraged by a number of positive developments in many of our businesses. This trend is supported by improvements in the economy in capital markets and many projects which were delayed or cancelled are now moving forward as long term outlook improves.
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