Matrix Service Company Announces Results for the First Quarter Ended September 30, 2012
First Quarter Highlights:
- Backlog at record $534.6 million with project awards of $246.8 million
- Quarterly revenues were $209.6 million, an increase of 23.8%
- Fully diluted earnings per share increase 38.5% to $0.18
- Company reaffirms fiscal 2013 earnings and revenue guidance
TULSA, Okla., Nov. 8, 2012 (GLOBE NEWSWIRE) -- Matrix Service Company (Nasdaq:MTRX) today reported its financial results for the first quarter ended September 30, 2012. In the quarter, the Company experienced strong growth in new contract awards resulting in record backlog of $534.6 million as of September 30, 2012. The Company's strategic investments and business development efforts have resulted in significant new transmission and distribution projects and emerging opportunities in the mining and minerals market. In addition to the strategic growth areas, our core business continues to perform well, resulting in record quarterly revenue of $209.6 million.
John R. Hewitt, President and CEO of Matrix Service Company, said: "Our performance in the quarter is consistent with our strategic focus and we are seeing significant business activity across all operating segments. Consistent with our vision, we continue to invest in strategic end markets, resulting in exciting new contract awards and greater diversity in our business."
Financial Results
Revenues for the first quarter ended September 30, 2012 were $209.6 million compared to $169.3 million in the same period a year earlier, an increase of $40.3 million, or 23.8%. Net income for the first quarter of fiscal 2013 was $4.7 million, or $0.18 per fully diluted share. In the same period a year earlier the Company earned $3.5 million, or $0.13 per fully diluted share.
Consolidated gross profit was $22.2 million in the first quarter of fiscal 2013 compared to $18.1 million in the same period a year earlier primarily due to higher revenues. Revenues increased in our Oil Gas & Chemical, Electrical Infrastructure and Storage Solutions segments by $21.3 million, $11.3 million and $9.3 million, respectively. Gross margins were 10.6% in the first quarter of fiscal 2013 versus 10.7% in the first quarter of fiscal 2012. In line with our plan, selling, general and administrative costs increased by $2.8 million, or 24.3%. This increase is primarily related to our planned investments in the branding initiative and strategic growth areas. In addition, the first quarter results include a bad debt charge of $0.7 million. SG&A expense as a percentage of revenue remained unchanged at 6.8%.
Backlog
Backlog at September 30, 2012 totaled $534.6 million, an increase of $37.1 million, or 7.5%, compared to the backlog at June 30, 2012 of $497.5 million. Project awards in the first quarter totaled $246.8 million.
Financial Position
At September 30, 2012, the Company's cash balance was $17.2 million. The cash balance along with availability under the senior credit facility gives the Company liquidity of $125.6 million. The cash balance at September 30, 2012, which has increased to approximately $50 million at the end of October, was lower than the previous quarter due to a high volume of time and material work and short-term maintenance projects at the end of the first quarter.
Stock Repurchase Program
On November 6, 2012 the Board of Directors approved an extension of the Company's Stock Repurchase Program which was set to expire on December 31, 2012. Under the extension, which expires at the end of calendar year 2014, the Company has authorization to purchase up to 2.1 million shares.
Earnings Guidance
The Company is reaffirming fiscal 2013 guidance of revenue between $800 million and $850 million and earnings between $0.83 and $0.98 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 Friday, November 9, 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 | ||
| September 30, 2012 | September 30, 2011 | |
| Revenues | $ 209,608 | $ 169,321 |
| Cost of revenues | 187,364 | 151,228 |
| Gross profit | 22,244 | 18,093 |
| Selling, general and administrative expenses | 14,320 | 11,483 |
| Operating income | 7,924 | 6,610 |
| Other income (expense): | ||
| Interest expense | (183) | (277) |
| Interest income | 8 | 3 |
| Other | 57 | (676) |
| Income before income tax expense | 7,806 | 5,660 |
| Provision for federal, state and foreign income taxes | 3,122 | 2,151 |
| Net income | $ 4,684 | $ 3,509 |
| Basic earnings per common share | $ 0.18 | $ 0.13 |
| Diluted earnings per common share | $ 0.18 | $ 0.13 |
| Weighted average common shares outstanding: | ||
| Basic | 25,788 | 26,400 |
| Diluted | 26,148 | 26,722 |
| Matrix Service Company | ||
| Consolidated Balance Sheets | ||
| (In thousands) | ||
| September 30, 2012 | June 30, 2012 | |
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 17,170 | $ 39,726 |
| Accounts receivable, less allowances (September 30, 2012 -- $1,906 and June 30, 2012 -- $1,201) | 156,844 | 108,034 |
| Costs and estimated earnings in excess of billings on uncompleted contracts | 77,598 | 68,562 |
| Inventories | 3,267 | 2,482 |
| Deferred income taxes | 5,760 | 6,024 |
| Other current assets | 5,560 | 5,688 |
| Total current assets | 266,199 | 230,516 |
| Property, plant and equipment at cost: | ||
| Land and buildings | 29,357 | 28,846 |
| Construction equipment | 60,207 | 59,176 |
| Transportation equipment | 26,027 | 25,865 |
| Office equipment and software | 17,391 | 16,892 |
| Construction in progress | 5,984 | 2,910 |
| 138,966 | 133,689 | |
| Accumulated depreciation | (81,407) | (78,814) |
| 57,559 | 54,875 | |
| Goodwill | 28,763 | 28,675 |
| Other intangible assets | 6,392 | 6,504 |
| Other assets | 3,937 | 2,565 |
| Total assets | $ 362,850 | $ 323,135 |
| Matrix Service Company | ||
| Consolidated Balance Sheets (continued) | ||
| (In thousands, except share data) | ||
| September 30, 2012 | June 30, 2012 | |
| Liabilities and stockholders' equity | ||
| Current liabilities: | ||
| Accounts payable | $ 61,664 | $ 48,931 |
| Billings on uncompleted contracts in excess of costs and estimated earnings | 45,637 | 30,293 |
| Accrued wages and benefits | 15,281 | 15,298 |
| Accrued insurance | 7,055 | 6,912 |
| Income taxes payable | 3,238 | 1,115 |
| Acquisition payable | 400 | 400 |
| Other accrued expenses | 3,334 | 3,014 |
| Total current liabilities | 136,609 | 105,963 |
| Deferred income taxes | 6,063 | 6,075 |
| Long term debt | 3,355 | -- |
| Total liabilities | 146,027 | 112,038 |
| Commitments and contingencies | ||
| Stockholders' equity: | ||
| Common stock -- $.01 par value; 60,000,000 shares authorized; 27,888,217 shares issued as of September 30, 2012, and June 30, 2012 | 279 | 279 |
| Additional paid-in capital | 117,297 | 116,693 |
| Retained earnings | 122,103 | 117,419 |
| Accumulated other comprehensive income | 1,238 | 771 |
| 240,917 | 235,162 | |
| Less: Treasury stock, at cost —2,051,764 shares as of September 30, 2012, and 2,141,990 shares as of June 30, 2012 | (24,094) | (24,065) |
| Total stockholders' equity | 216,823 | 211,097 |
| Total liabilities and stockholders' equity | $ 362,850 | $ 323,135 |
| Results of Operations | ||
| (In thousands) | ||
| Three Months Ended | ||
| September 30, 2012 | September 30, 2011 | |
| Gross revenues | ||
| Electrical Infrastructure | $ 33,270 | $ 22,012 |
| Oil Gas & Chemical | 67,097 | 45,999 |
| Storage Solutions | 105,418 | 95,922 |
| Industrial | 4,975 | 6,575 |
| Total gross revenues | $ 210,760 | $ 170,508 |
| Less: Inter-segment revenues | ||
| Electrical Infrastructure | $ -- | $ -- |
| Oil Gas & Chemical | -- | 175 |
| Storage Solutions | 1,152 | 1,012 |
| Industrial | -- | -- |
| Total inter-segment revenues | $ 1,152 | $ 1,187 |
| Consolidated revenues | ||
| Electrical Infrastructure | $ 33,270 | $ 22,012 |
| Oil Gas & Chemical | 67,097 | 45,824 |
| Storage Solutions | 104,266 | 94,910 |
| Industrial | 4,975 | 6,575 |
| Total consolidated revenues | $ 209,608 | $ 169,321 |
| Gross profit (loss) | ||
| Electrical Infrastructure | $ 4,706 | $ 2,785 |
| Oil Gas & Chemical | 7,867 | 4,347 |
| Storage Solutions | 9,969 | 10,387 |
| Industrial | (298) | 574 |
| Total gross profit | $ 22,244 | $ 18,093 |
| Operating income (loss) | ||
| Electrical Infrastructure | $ 2,319 | $ 729 |
| Oil Gas & Chemical | 3,775 | 1,412 |
| Storage Solutions | 3,449 | 4,226 |
| Industrial | (1,619) | 243 |
| Total operating income | $ 7,924 | $ 6,610 |
| Segment assets | ||
| Electrical Infrastructure | $ 56,826 | $ 40,550 |
| Oil Gas & Chemical | 71,848 | 54,036 |
| Storage Solutions | 186,600 | 139,820 |
| Industrial | 14,179 | 17,949 |
| Other | 33,397 | 46,918 |
| Total segment assets | $ 362,850 | $ 299,273 |
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 for the three months ended September 30, 2012:
| Electrical Infrastructure | Oil Gas & Chemical | Storage Solutions | Industrial | Total | |
| (In thousands) | |||||
| Backlog as of June 30, 2012 | $ 127,699 | $ 117,862 | $ 236,571 | $ 15,320 | $ 497,452 |
| Net awards | 40,889 | 66,092 | 132,603 | 7,218 | 246,802 |
| Revenue recognized | (33,270) | (67,097) | (104,266) | (4,975) | (209,608) |
| Backlog as of September 30, 2012 | $ 135,318 | $ 116,857 | $ 264,908 | $ 17,563 | $ 534,646 |
CONTACT: Matrix Service Company
Kevin S. Cavanah
Vice President and CFO
T: 918-838-8822
Email:kcavanah@matrixservicecompany.com
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