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TheStreet Open House

Matrix Service's CEO Discusses Q3 2012 Results - Earnings Call Transcript

John R. Hewitt

Thank you, Kevin, and good morning. Today, we'll provide an update on the company's strategic plans and investments, discuss the operating segment changes, as well as our results for the quarter and 9 months ended March 31, 2012. In addition, we will comment on the change in our full year guidance.

The company completed an update of its long-term strategic plan in the third quarter and has begun investing in many strategic growth areas, including mining and metals, material handling, industrial cleaning, high-voltage electrical and shale energy development opportunities. We're targeting a consolidated average revenue growth rate of 12%-15% per year over the next 5 years. This growth will come from organic development of our existing business lines and services, leveraging our existing strong market presence and reputation, recruitment of key leadership and select acquisitions that provide a strategic and cultural fit.

The company is also investing in critical infrastructure to support our growth, such as safety, corporate development, information systems, employee training and risk management. While these investments are expected to have a negative effect on earnings in the short term, the management team believes these actions are necessary to achieve the company's strategic goals and will result in improved operating results and greater shareholder value over the long term.

In support of the strategic goals discussed above, Matrix Service Company is changing its operating segments, effective this quarter. Historically, the company has reported 2 operating segments: Construction Services and Repair and Maintenance Services. This segmentation no longer fairly represents our strategy or the diversity of the markets in which we will be providing services over the next few years.

Going forward, the company will report 4 operating segments: Electrical Infrastructure, Oil Gas & Chemical, Storage Solutions and Industrial. These new operating segments are consistent with the company's current strategic focus and organizational structure and will provide greater transparency into the business.

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