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Matrix Service Company Announces Results For The Fourth Quarter And Fiscal Year Ended June 30, 2013 And Provides Fiscal 2014 Guidance

Financial Position

At June 30, 2013, the Company's cash balance was $63.8 million as compared to $39.7 million at June 30, 2012. The cash balance along with availability under the senior credit facility gives the Company liquidity of $175.4 million.

Earnings Guidance

The Company expects that fiscal 2014 revenues will be between $980 million and $1.04 billion and earnings to be between $1.00 and $1.15 per fully diluted share.

Conference Call Details

In conjunction with the earnings release, Matrix Service Company will host a conference call with John R. Hewitt, President and CEO, and Kevin S. Cavanah, Vice President and CFO. The call will take place at 11:00 a.m. (Eastern) / 10:00 a.m. (Central) on Wednesday, September 4, 2013 and will be simultaneously broadcast live over the Internet, which can be accessed at the Company's website at matrixservicecompany.com on the Investors' page under Conference Calls/Events. Please allow extra time prior to the call to visit the site and download the streaming media software required to listen to the Internet broadcast. The conference call will be recorded and will be available for replay within one hour of completion of the live call and can be accessed following the same link as the live call.

About Matrix Service Company

Matrix Service Company provides engineering, fabrication, construction and repair and maintenance services to the Electrical Infrastructure, Oil Gas & Chemical, Storage Solutions and Industrial markets.

The Company is headquartered in Tulsa, Oklahoma, with regional operating facilities throughout the United States and Canada.

This release contains forward-looking statements that are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are generally accompanied by words such as "anticipate," "continues," "expect," "forecast," "outlook," "believe," "estimate," "should" and "will" and words of similar effect that convey future meaning, concerning the Company's operations, economic performance and management's best judgment as to what may occur in the future. Future events involve risks and uncertainties that may cause actual results to differ materially from those we currently anticipate. The actual results for the current and future periods and other corporate developments will depend upon a number of economic, competitive and other influences, including those factors discussed in the "Risk Factors" and "Forward Looking Statements" sections and elsewhere in the Company's reports and filings made from time to time with the Securities and Exchange Commission. Many of these risks and uncertainties are beyond the control of the Company, and any one of which, or a combination of which, could materially and adversely affect the results of the Company's operations and its financial condition. We undertake no obligation to update information contained in this release.

 
Matrix Service Company
Consolidated Statements of Income
(In thousands, except per share data)
 
  Three Months Ended Twelve Months Ended
  June 30, 2013 June 30, 2012 June 30, 2013 June 30, 2012
Revenues $ 235,560 $ 184,862 $ 892,574 $ 739,046
Cost of revenues 208,561 166,206 797,872 659,428
Gross profit 26,999 18,656 94,702 79,618
Selling, general and administrative expenses 15,412 12,246 57,988 47,983
Operating income 11,587 6,410 36,714 31,635
Other income (expense):        
Interest expense (195) (197) (800) (814)
Interest income 7 8 32 26
Other (123) 73 (30) (357)
Income before income tax expense 11,276 6,294 35,916 30,490
Provision for federal, state and foreign income taxes 3,909 4,508 11,908 13,302
Net income $ 7,367 $ 1,786 $ 24,008 $ 17,188
Basic earnings per common share $ 0.28 $ 0.07 $ 0.92 $ 0.66
Diluted earnings per common share $ 0.28 $ 0.07 $ 0.91 $ 0.65
Weighted average common shares outstanding:        
Basic 26,086 25,738 25,962 25,921
Diluted 26,548 26,122 26,358 26,298
 
 
Matrix Service Company
Consolidated Balance Sheets
(In thousands)  
 
  June 30, 2013 June 30, 2012
Assets    
Current assets:    
Cash and cash equivalents $ 63,750 $ 39,726
Accounts receivable, less allowances (2013 -- $795 ; 2012—$1,201) 140,840 108,034
Costs and estimated earnings in excess of billings on uncompleted contracts 73,773 68,562
Inventories 2,988 2,482
Income taxes receivable 3,032
Deferred income taxes 5,657 6,024
Other current assets 6,234 5,688
Total current assets 296,274 230,516
Property, plant and equipment at cost:    
Land and buildings 29,649 28,846
Construction equipment 69,998 59,176
Transportation equipment 34,366 25,865
Office equipment and software 18,426 16,892
Construction in progress 9,080 2,910
  161,519 133,689
Accumulated depreciation (90,218) (78,814)
  71,301 54,875
Goodwill 30,836 28,675
Other intangible assets 7,551 6,504
Other assets 4,016 2,565
Total assets $ 409,978 $ 323,135
 
 
Matrix Service Company
Consolidated Balance Sheets (continued)
(In thousands, except share data)  
 
  June 30, 2013 June 30, 2012
Liabilities and stockholders' equity    
Current liabilities:    
Accounts payable $ 68,961 $ 48,931
Billings on uncompleted contracts in excess of costs and estimated earnings 62,848 30,293
Accrued wages and benefits 21,919 15,298
Accrued insurance 7,599 6,912
Income taxes payable 1,115
Other accrued expenses 3,039 3,414
Total current liabilities 164,366 105,963
Deferred income taxes 7,450 6,075
Commitments and contingencies    
Stockholders' equity:    
Common stock—$.01 par value; 60,000,000 shares authorized; 27,888,217 shares issued as of June 30, 2013 and June 30, 2012 279 279
Additional paid-in capital 118,190 116,693
Retained earnings 141,427 117,419
Accumulated other comprehensive income 227 771
  260,123 235,162
Less treasury stock, at cost— 1,779,593 and 2,141,990 shares as of June 30, 2013 and June 30, 2012 (21,961) (24,065)
Total stockholders' equity 238,162 211,097
Total liabilities and stockholders' equity $ 409,978 $ 323,135
 
 
Results of Operations
(In thousands)  
 
  Electrical Infrastructure Oil Gas & Chemical Storage Solutions Industrial Total
           
Three Months Ended June 30, 2013          
Gross revenues $ 46,102 $ 66,609 $ 96,993 $ 26,472 $ 236,176
Less: inter-segment revenues 87 529 616
Consolidated revenues 46,102 66,522 96,464 26,472 235,560
Gross profit 5,425 8,951 10,910 1,713 26,999
Operating income (loss) 2,746 4,428 4,458 (45) 11,587
           
Three months ended June 30, 2012          
Gross revenues $ 31,825 $ 54,713 $ 96,530 $ 2,220 $ 185,288
Less: inter-segment revenues 426 426
Consolidated revenues 31,825 54,713 96,104 2,220 184,862
Gross profit 4,092 5,772 9,316 (524) 18,656
Operating income (loss) 1,850 2,390 2,973 (803) 6,410
           
Twelve Months Ended June 30, 2013          
Gross revenues $ 171,204 $ 273,979 $ 395,794 $ 54,321 $ 895,298
Less: inter-segment revenues 131 2,593 2,724
Consolidated revenues 171,204 273,848 393,201 54,321 892,574
Gross profit 21,754 32,879 37,455 2,614 94,702
Operating income (loss) 11,185 15,415 11,904 (1,790) 36,714
           
Twelve Months Ended June 30, 2012          
Gross revenues $ 135,086 $ 206,031 $ 380,488 $ 19,983 $ 741,588
Less: inter-segment revenues 208 2,334 2,542
Consolidated revenues 135,086 205,823 378,154 19,983 739,046
Gross profit 16,676 20,070 42,393 479 79,618
Operating income (loss) 7,609 8,134 17,493 (1,601) 31,635

Backlog

We define backlog as the total dollar amount of revenues that we expect to recognize as a result of performing work that has been awarded to us through a signed contract, notice to proceed or other type of assurance that we consider firm. The following arrangements are considered firm:

  • fixed-price awards;  
  • minimum customer commitments on cost plus arrangements; and  
  • certain time and material arrangements in which the estimated value is firm or can be estimated with a reasonable amount of certainty in both timing and amounts.

For long-term maintenance contracts we include only the amounts that we expect to recognize into revenue over the next 12 months. For all other arrangements, we calculate backlog as the estimated contract amount less revenues recognized as of the reporting date.

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