Record backlog of $497.5 million with bookings of $227.4 million in the fourth quarter
Revenues increased 13.0% in the fourth quarter and 17.8% in fiscal 2012
Incurred an income tax charge of $3.1 million, or $0.12 per fully diluted share
Fiscal 2012 EPS of $0.65 per fully diluted share inclusive of the above noted income tax charge and strategic investment costs of $0.07 per fully diluted share
Outlook for fiscal 2013 in line with strategic plan revenue growth of 12% to 15%
TULSA, Okla., Sept. 5, 2012 (GLOBE NEWSWIRE) -- Matrix Service Company (Nasdaq:MTRX) today reported its financial results for the fourth quarter and fiscal year ended June 30, 2012. Overview Results for the three and twelve months ended June 30, 2012 continue to show strong revenue growth with significant increases in the Storage Solutions and Oil Gas & Chemical segments. The pace of bookings remains strong in all segments with backlog growing to a record $497.5 million as of June 30, 2012, marking six consecutive quarters of growth. Bid flow remains strong with over $831.4 million of new work booked in fiscal 2012. John R. Hewitt, President and CEO of Matrix Service Company, said: "The solid revenue and backlog growth in the quarter and fiscal year is the result of our outstanding people and commitment to providing quality services to our customers. We continue to execute our strategic plan, including our new brand rollout last month." Fourth Quarter of Fiscal 2012 Results Revenues for the fourth quarter ended June 30, 2012 were $184.9 million compared to $163.6 million in the same period a year earlier, an increase of $21.3 million, or 13.0%. Net income for the fourth quarter of fiscal 2012 was $1.8 million, or $0.07 per fully diluted share. Fourth quarter earnings included an income tax charge of $3.1 million, or $0.12 per fully diluted share. The income tax charge represents adjustments of $2.1 million for prior fiscal years and $1.0 million in fiscal 2012, of which $0.2 million related to fourth quarter activity. Fourth quarter earnings were also reduced by $0.03 per fully diluted share for activity related to our strategic investments, primarily due to our investments in the mining and minerals business, industrial cleaning, corporate development, and the branding initiative. In the same period a year earlier the Company earned $5.7 million or $0.21 per fully diluted share.
Consolidated gross profit was $18.7 million in the fourth quarter of fiscal 2012 compared to $20.9 million in the same period a year earlier. The decrease in gross profit was due to lower gross margins, which decreased from 12.8% in the fourth quarter of fiscal 2011 to 10.1% in the fourth quarter of fiscal 2012 largely offset by the impact of higher revenues. The decrease in margins was primarily due to geographic expansion in the Storage Solutions segment, strategic start-up costs, and a lower volume of work in the Industrial segment. The revenue increase is due to continued growth in the Storage Solutions business in Canada, and higher revenues in the Oil Gas & Chemical and Electrical Infrastructure segments, partially offset by lower Industrial revenue, which decreased due to project timing. Selling, general and administrative expenses were $12.2 million, or 6.6% of revenue, in the fourth quarter of fiscal 2012 compared to $11.4 million, or 6.9% of revenue, in the same period a year earlier.
Fiscal 2012 Results Fiscal year 2012 revenues were $739.0 million compared to $627.1 million in fiscal 2011, an increase of $111.9 million, or 17.8%. Net income for fiscal 2012 was $17.2 million, or $0.65 per fully diluted share. Fiscal 2012 earnings included an income tax charge of $3.1 million, or $0.12 per fully diluted share. Fiscal 2012 earnings were also reduced by $0.07 per fully diluted share for activity related to our strategic investments, primarily due to our investments in the mining and minerals business, industrial cleaning, corporate development and the branding initiative. Net income for fiscal 2011 was $19.0 million, or $0.71 per fully diluted share. Consolidated gross profit was $79.6 million in fiscal 2012 compared to $74.9 million in the same period a year earlier. The increase in gross profit was due to the impact of higher revenues partially offset by the effect of lower gross margins, which decreased from 11.9% in fiscal 2011 to 10.8% in fiscal 2012. The revenue increase is due to higher revenues in Oil Gas & Chemical resulting from turnaround and capital construction work and higher Storage Solutions revenues, which increased due to more work across most of the business. These increases were partially offset by lower Electrical Infrastructure and Industrial revenues. Selling, general and administrative expenses were $48.0 million, or 6.5% of revenues, in fiscal 2012 compared to $44.0 million, or 7.0% of revenue, in the same period a year earlier.
Backlog
Backlog at June 30, 2012 totaled $497.5 million, an increase of $42.5 million, or 9.3%, compared to the backlog at March 31, 2012, and an increase of $92.3 million, or 22.8%, compared to backlog at June 30, 2011. Financial Position At June 30, 2012, Matrix Service's cash balance was $39.7 million. The cash balance along with the availability under the senior credit facility gives the Company liquidity of $146.5 million. Earnings Guidance The Company expects that fiscal 2013 revenues will be between $800 million and $850 million and earnings to be between $0.83 and $0.98 per fully diluted share. Conference Call Details In conjunction with the earnings release, Matrix Service 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 Thursday, September 6, 2012 and will be simultaneously broadcast live over the Internet which can be accessed at the Company's website at www.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. The Matrix Service Company logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=13990 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, 2012
June 30, 2011
June 30, 2012
June 30, 2011
Revenues
$184,862
$163,629
$739,046
$627,052
Cost of revenues
166,206
142,755
659,428
552,138
Gross profit
18,656
20,874
79,618
74,914
Selling, general and administrative expenses
12,246
11,359
47,983
44,014
Operating income
6,410
9,515
31,635
30,900
Other income (expense):
Interest expense
(197)
(201)
(814)
(795)
Interest income
8
6
26
71
Other
73
(155)
(357)
440
Income before income tax expense
6,294
9,165
30,490
30,616
Provision for federal, state and foreign income taxes
4,508
3,482
13,302
11,634
Net income
$1,786
$5,683
$17,188
$18,982
Basic earnings per common share
$0.07
$0.21
$0.66
$0.72
Diluted earnings per common share
$0.07
$0.21
$0.65
$0.71
Weighted average common shares outstanding:
Basic
25,738
26,457
25,921
26,406
Diluted
26,122
26,797
26,298
26,686
Matrix Service Company
Consolidated Balance Sheets
(In thousands)
June 30, 2012
June 30, 2011
Assets
Current assets:
Cash and cash equivalents
$39,726
$59,357
Accounts receivable, less allowances (2012 - $1,201; 2011 - $1,428)
108,034
103,483
Costs and estimated earnings in excess of billings on uncompleted contracts
68,562
40,056
Inventories
2,482
2,249
Income tax receivable
--
399
Deferred income taxes
6,024
5,607
Other current assets
5,688
4,399
Total current assets
230,516
215,550
Property, plant and equipment, at cost:
Land and buildings
28,846
28,287
Construction equipment
59,176
55,272
Transportation equipment
25,865
21,690
Furniture and fixtures
16,892
15,442
Construction in progress
2,910
2,465
133,689
123,156
Accumulated depreciation
(78,814)
(69,845)
54,875
53,311
Goodwill
28,675
29,058
Other intangible assets
6,504
6,953
Other assets
2,565
1,564
Total assets
$323,135
$306,436
Matrix Service Company
Consolidated Balance Sheets (continued)
(In thousands, except share data)
June 30, 2012
June 30, 2011
Liabilities and stockholders' equity
Current liabilities:
Accounts payable
$48,931
$36,377
Billings on uncompleted contracts in excess of costs and estimated earnings
30,293
35,485
Accrued wages and benefits
15,298
18,099
Accrued insurance
6,912
7,514
Income taxes payable
1,115
--
Acquisition payable
400
--
Other accrued expenses
3,014
2,701
Total current liabilities
105,963
100,176
Deferred income taxes
6,075
5,789
Acquisition payable
--
800
Commitments and contingencies
Stockholders' equity:
Common stock -- $.01 par value; 60,000,000 shares authorized; 27,888,217 shares issued as of June 30, 2012 and June 30, 2011
279
279
Additional paid-in capital
116,693
113,686
Retained earnings
117,419
100,231
Accumulated other comprehensive income
771
1,436
235,162
215,632
Less treasury stock, at cost – 2,141,990 and 1,417,539 shares as of June 30, 2012 and June 30, 2011
(24,065)
(15,961)
Total stockholders' equity
211,097
199,671
Total liabilities and stockholders' equity
$323,135
$306,436
Results of Operations
(In thousands)
Electrical Infrastructure
Oil Gas & Chemical
Storage Solutions
Industrial
Total
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 (loss)
4,092
5,772
9,316
(524)
18,656
Operating income (loss)
1,850
2,390
2,973
(803)
6,410
Three Months Ended June 30, 2011
Gross revenues
$ 24,907
$ 47,567
$ 83,840
$ 7,869
$ 164,183
Less: inter-segment revenues
--
23
531
--
554
Consolidated revenues
24,907
47,544
83,309
7,869
163,629
Gross profit
3,333
4,538
11,577
1,426
20,874
Operating income
1,310
1,611
5,733
861
9,515
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
7,609
8,134
17,493
(1,601)
31,635
Twelve Months Ended June 30, 2011
Gross revenues
$ 151,065
$ 143,753
$ 299,762
$ 33,934
$ 628,514
Less: inter-segment revenues
7
399
1,056
--
1,462
Consolidated revenues
151,058
143,354
298,706
33,934
627,052
Gross profit
18,337
13,647
38,779
4,151
74,914
Operating income
9,111
3,105
16,612
2,072
30,900
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.
The following table provides a summary of changes in our backlog in the fourth quarter of fiscal 2012:
Electrical Infrastructure
Oil Gas & Chemical
Storage Solutions
Industrial
Total
(In thousands)
Backlog as of March 31, 2012
$110,575
$74,574
$252,967
$16,816
$454,932
Net awards
48,949
98,001
79,708
724
227,382
Revenue recognized
(31,825)
(54,713)
(96,104)
(2,220)
(184,862)
Backlog as of June 30, 2012
$127,699
$117,862
$236,571
$15,320
$497,452
The following table provides a summary of changes in our backlog for fiscal 2012:
Electrical Infrastructure
Oil Gas & Chemical
Storage Solutions
Industrial
Total
(In thousands)
Backlog as of June 30, 2011
$85,551
$92,162
$218,073
$9,332
$405,118
Net awards
177,234
231,523
396,652
25,971
831,380
Revenue recognized
(135,086)
(205,823)
(378,154)
(19,983)
(739,046)
Backlog as of June 30, 2012
$127,699
$117,862
$236,571
$15,320
$497,452
CONTACT: Matrix Service Company Kevin S. Cavanah Vice President and CFO T: 918-838-8822 Email:kcavanah@matrixservicecompany.com
