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Matrix Service's CEO Discusses Q4 2011 Results - Earnings Call Transcript

Stocks in this article: MTRX

Although fiscal 2011 was a good year for Matrix Service Co., as both revenues and backlog increased from lower levels experienced during the recession that impacted fiscal 2010, gross margins are improved significantly in fiscal 2011, reflecting better project execution and a recovery of construction overhead costs due to higher business volume and man hours. Our Electrical and Instrumentation group was a major contributor to the company's improvement in fiscal 2011 with E&I group achieving revenue growth of 58% in fiscal 2011 compared to the prior year. In addition, our Aboveground Storage Tank construction group achieved revenue growth of 35% in fiscal 2011. Growth in these groups was partially offset by continued weakness in the Downstream Petroleum market with both the Repair and Maintenance Services and Construction Services segments combining for an 8% decline year-over-year.

We are, however, optimistic about the near-term prospects for the Downstream Petroleum market as backlog has increased over the last half of fiscal 2011. Finally, our balance sheet and liquidity remain very strong, positioning the company to execute on our strategic plans, which I will discuss later on this call.

I'd now like to turn the call over to Kevin to discuss our financial results for the period.

Kevin Cavanah

Thanks, John. In our press release yesterday, we disclosed the results of the fourth quarter and the full year of fiscal 2011. As I go through my prepared remarks, please note that the fourth quarter and full-year results for fiscal 2010 included certain non-routine charges that were previously disclosed in our SEC filings. We did not incur similar charges in fiscal 2011.

First of all, revenues for the fourth quarter ended June 30, 2011, were $164 million compared to $141 million in fiscal 2010. The increase of $23 million was primarily due to turnaround activity in the Downstream Petroleum market, new awards in our AST Construction Services segment and continued growth in our Electrical and Instrumentation, Repair and Maintenance business. Consolidated gross margins for the quarter were 12.8%, compared to 2.7% in the fourth quarter last year. SG&A expenses were 6.9% of revenue for the fourth quarter compared to 7.4% in the same period last year. This produced net income for the fourth quarter of fiscal 2011 of $5.7 million or $0.21 per fully diluted share compared to a net loss of $4.2 million or $0.16 per fully diluted share in the fourth quarter last year.

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