UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_________________
FORM 8-K
__________________
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) May 4, 2016
___________________
Matrix Service Company
(Exact Name of Registrant as Specified in Its Charter)
___________________
DELAWARE | 001-15461 | 73-1352174 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
5100 E Skelly Dr., Suite 500, Tulsa, OK | 74135 | |||
(Address of Principal Executive Offices) | (Zip Code) | |||
918-838-8822
(Registrant’s Telephone Number, Including Area Code)
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
__________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
On May 4, 2016 Matrix Service Company (the “Company”) issued a press release announcing financial results for the third quarter and nine months ended March 31, 2016. The full text of the press release is attached as Exhibit 99 to this Current Report on Form 8-K.
The information in this Item 2.02 and Exhibit 99 attached hereto is being furnished pursuant to Item 2.02 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 | Financial Statements and Exhibits. |
The following exhibit is furnished herewith:
Exhibit No. | Description | |
99 | Press Release dated May 4, 2016, announcing financial results for the third quarter and nine months ended March 31, 2016. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Matrix Service Company | ||||
Dated: May 4, 2016 | By: | /s/ Kevin S. Cavanah | ||
Kevin S. Cavanah | ||||
Vice President and Chief Financial Officer | ||||
EXHIBIT INDEX
Exhibit No. | Description | |
99 | Press Release dated May 4, 2016 announcing financial results for the third quarter and nine months ended March 31, 2016. | |
Exhibit 99
MATRIX SERVICE COMPANY REPORTS THIRD QUARTER RESULTS; LOWERS FISCAL 2016 GUIDANCE
TULSA, OK – May 4, 2016 – Matrix Service Company (Nasdaq: MTRX), a leading contractor to the energy, power and industrial markets across North America, today reported its financial results for its third quarter and nine months ended March 31, 2016.
Key highlights:
• | Year-to-date revenue in the Electrical and Storage Solutions segments increased 54.8% and 7.8%, respectively, while market conditions negatively impacted the Industrial and Oil Gas & Chemical segments |
• | Consolidated gross profit for the three and nine months ended March 31, 2016 was $27.3 million and $91.9 million compared to $2.6 million and $47.0 million for the same periods in fiscal 2015 |
• | Fully diluted quarterly earnings per share increased to $0.16 from a loss of $0.11 a year earlier |
• | Backlog remains healthy at $1.03 billion with an increase in project awards of 26.4% over the prior period |
• | Total liquidity improved 11.3% to $239.9 million at March 31, 2016 |
• | Company completed $5.5 million in quarterly share repurchases for a total of $10.5 million over the last 12 months |
“Third quarter gross margin performance in our primary segments was strong, we received new awards of nearly $225 million in the quarter, and we generated positive cash from operations while also closing an acquisition and repurchasing stock,” said John R. Hewitt, Matrix Service Company’s President and Chief Executive Officer. “That said, because of the negative impact of low commodity prices and reduced gross margins in our Oil Gas & Chemical and Industrial segments, earnings have trailed our expectations. While we still expect overall improvement in operating results in the fourth quarter, low commodity prices will continue to impact our business. We are, therefore, adjusting guidance for the remainder of the fiscal year.”
Hewitt added that despite continued market volatility, long-term opportunities for growth in the Company's diversified portfolio and proposal activity across its primary segments remain strong.
"We remain confident in our ability to win projects in an increasingly competitive environment," said Hewitt. "However, a more cautious approach to decision-making on the part of clients, together with more conservative financial and regulatory requirements, will impact the timing of those awards. Improvement in the global economy and the commodity supply demand imbalances will provide additional stimulus for consolidated backlog growth."
Third Quarter Fiscal 2016 Results
Consolidated revenue was $309.4 million for the three months ended March 31, 2016, compared to $314.2 million in the same period in the prior fiscal year. On a segment basis, consolidated revenue increased in the Electrical Infrastructure and Storage Solutions segments by $46.2 million and $25.4 million, respectively. These increases were offset by decreased revenue in the Oil Gas & Chemical and Industrial segments of $40.1 million and $36.3 million, respectively.
Consolidated gross profit increased to $27.3 million in the three months ended March 31, 2016 compared to $2.6 million in the three months ended March 31, 2015. Consolidated gross margins were 8.8% in the three months ended March 31, 2016 compared to 0.8% for the three months ended March 31, 2015.
On a segment basis, gross profit increased by $32.8 million in the Electrical Infrastructure segment with a fiscal 2016 gross margin of 11.0%. Electrical Infrastructure margins for fiscal 2015 were negatively impacted by a joint venture project charge of $28.5 million on the Garrison Energy Center project, of which $10.0 million was our joint venture partner's share and was reported as non-controlling interest. This charge reduced fiscal 2015 margins by 57.7% to (46.5%). Gross profit in the Storage Solutions segment increased $3.9 million with fiscal 2016 margins of 11.4%. Gross profit decreased in the Industrial and Oil Gas & Chemical segments by $7.4 million and $4.7 million respectively. Fiscal 2016 gross margins of (3.1%) and 4.7% in the Industrial and Oil Gas & Chemical segments were the result of unfavorable market conditions including lower levels of maintenance and turnaround work, as well as fewer higher margin capital projects which resulted in less recovery of fixed overhead costs. Additionally, a
project charge in our upstream business and a forecasted unfavorable customer settlement in the Industrial segment also impacted these margins.
Consolidated SG&A expenses increased to $21.0 million for the three months ended March 31, 2016 compared to $17.1 million in the same period a year earlier. The increase was primarily due to lower fiscal 2015 incentive compensation and fiscal 2016 acquisition related costs of $0.8 million.
Nine Month Fiscal 2016 Results
Consolidated revenue for the nine months ended March 31, 2016 was $952.3 million compared to $978.7 million in the same period a year earlier, a decrease of $26.4 million, or 2.7%. On a segment basis, consolidated revenue increased in the Electrical Infrastructure and Storage Solutions segments by $89.0 million and $28.8 million, respectively. These increases were offset by decreased revenue in the Industrial and Oil Gas & Chemical segments of $105.2 million and $39.0 million, respectively.
Consolidated gross profit increased to $91.9 million in the nine months ended March 31, 2016 compared to $47.0 million in the nine months ended March 31, 2015. Consolidated gross margins were 9.6% in the nine months ended March 31, 2016 compared to 4.8% for the nine months ended March 31, 2015.
On a segment basis, gross profit increased by $58.1 million in the Electrical Infrastructure segment. Electrical Infrastructure margins for fiscal 2016 were negatively impacted by joint venture project charges of $7.1 million on the Garrison Energy Center project, of which $3.3 million was our joint venture partner's share and is reported as non-controlling interest. In fiscal 2015 these charges totaled $54.7 million of which $19.4 million was our joint venture partner's share and was reported as non-controlling interest. These charges reduced fiscal 2016 gross margins by 3.2% to 7.6 % and fiscal 2015 margins by 35.1% to (24.0%). Gross profit in the Storage Solutions segment increased $9.8 million for the nine months ended March 31, 2016 with margins of 12.5%. Gross profit decreased in the Industrial and Oil Gas & Chemical segments by $18.2 million and $4.7 million respectively. Fiscal 2016 gross margins of 7.5% and 7.7% in the Industrial and Oil Gas & Chemical segments were negatively impacted by unfavorable market conditions which led to lower levels of maintenance and turnaround work, as well as fewer higher margin capital projects, and resulted in less recovery of fixed overhead costs.
Consolidated SG&A expenses increased to $65.5 million for the nine months ended March 31, 2016 compared to $56.5 million in the same period a year earlier. The increase was primarily due to lower fiscal 2015 incentive compensation, a non-routine bad debt charge of $5.2 million from client bankruptcy that occurred in the second quarter of fiscal 2016, as well as fiscal 2016 acquisition related costs of $0.9 million related to closing on Baillie Tank Equipment. Integration of Baillie Tank Equipment is moving ahead of plan and market acceptance is proving to be strong.
Backlog
Backlog at March 31, 2016 was $1.03 billion compared to $1.12 billion at December 31, 2015 on project awards of $224.9 million.
Financial Position
Availability under the Company's credit facility of $166.5 million along with the Company's cash balance of $73.4 million provided liquidity of $239.9 million at March 31, 2016, an increase of $65.1 million, or 37.2%, in fiscal 2016. The increase in liquidity was achieved despite the funding of an acquisition for $13.0 million in cash, a share buyback of $5.5 million and the repayment of $6.8 million of long-term debt.
Earnings Guidance
Due to the negative impact of low commodity prices on the Company's business, primarily in the Oil Gas & Chemical and Industrial segments, the Company is reducing fiscal 2016 guidance. Revenue guidance is being revised from between $1.3 billion and $1.4 billion to between $1.275 billion and $1.325 billion. Fiscal 2016 earnings guidance is being revised from between $1.30 and $1.50 per fully diluted share to between $1.00 and $1.10.
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 10:30 a.m. (Eastern) / 9:30 a.m. (Central) on Thursday, May 5, 2016 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, except as required by law.
For more information, please contact:
Matrix Service Company
Kevin S. Cavanah
Vice President and CFO
T: 918-838-8822
Email:kcavanah@matrixservicecompany.com
Matrix Service Company
Consolidated Statements of Income
(unaudited)
(In thousands, except per share data)
Three Months Ended | Nine Months Ended | |||||||||||||||
March 31, 2016 | March 31, 2015 | March 31, 2016 | March 31, 2015 | |||||||||||||
Revenues | $ | 309,422 | $ | 314,155 | $ | 952,282 | $ | 978,718 | ||||||||
Cost of revenues | 282,119 | 311,523 | 860,390 | 931,752 | ||||||||||||
Gross profit | 27,303 | 2,632 | 91,892 | 46,966 | ||||||||||||
Selling, general and administrative expenses | 20,956 | 17,080 | 65,509 | 56,538 | ||||||||||||
Operating income (loss) | 6,347 | (14,448 | ) | 26,383 | (9,572 | ) | ||||||||||
Other income (expense): | ||||||||||||||||
Interest expense | (241 | ) | (294 | ) | (756 | ) | (946 | ) | ||||||||
Interest income | 56 | 40 | 147 | 390 | ||||||||||||
Other | (109 | ) | 252 | (311 | ) | 281 | ||||||||||
Income (loss) before income tax expense | 6,053 | (14,450 | ) | 25,463 | (9,847 | ) | ||||||||||
Provision for federal, state and foreign income taxes | 2,507 | (1,508 | ) | 9,060 | 3,271 | |||||||||||
Net income (loss) | $ | 3,546 | $ | (12,942 | ) | 16,403 | (13,118 | ) | ||||||||
Less: Net loss attributable to noncontrolling interest | (811 | ) | (9,983 | ) | (3,326 | ) | (19,359 | ) | ||||||||
Net income (loss) attributable to Matrix Service Company | $ | 4,357 | $ | (2,959 | ) | $ | 19,729 | $ | 6,241 | |||||||
Basic earnings (loss) per common share | $ | 0.16 | $ | (0.11 | ) | $ | 0.74 | $ | 0.23 | |||||||
Diluted earnings (loss) per common share | $ | 0.16 | $ | (0.11 | ) | $ | 0.73 | $ | 0.23 | |||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 26,758 | 26,711 | 26,651 | 26,593 | ||||||||||||
Diluted | 27,054 | 26,711 | 27,191 | 27,175 | ||||||||||||
Matrix Service Company
Consolidated Balance Sheets
(unaudited)
(In thousands)
March 31, 2016 | June 30, 2015 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 73,403 | $ | 79,239 | |||
Accounts receivable, less allowances (March 31, 2016— $6,246 and June 30, 2015—$561) | 170,713 | 199,149 | |||||
Costs and estimated earnings in excess of billings on uncompleted contracts | 92,646 | 86,071 | |||||
Inventories | 3,464 | 2,773 | |||||
Income taxes receivable | 2,870 | 579 | |||||
Other current assets | 8,004 | 5,660 | |||||
Total current assets | 351,100 | 373,471 | |||||
Property, plant and equipment at cost: | |||||||
Land and buildings | 38,645 | 32,746 | |||||
Construction equipment | 89,046 | 87,561 | |||||
Transportation equipment | 48,187 | 47,468 | |||||
Office equipment and software | 29,168 | 28,874 | |||||
Construction in progress | 9,826 | 5,196 | |||||
Total property, plant and equipment - at cost | 214,872 | 201,845 | |||||
Accumulated depreciation | (127,527 | ) | (116,782 | ) | |||
Property, plant and equipment - net | 87,345 | 85,063 | |||||
Goodwill | 78,845 | 71,518 | |||||
Other intangible assets | 21,936 | 23,961 | |||||
Deferred income taxes | 3,569 | 3,729 | |||||
Other assets | 6,847 | 3,947 | |||||
Total assets | $ | 549,642 | $ | 561,689 | |||
Matrix Service Company
Consolidated Balance Sheets (continued)
(unaudited)
(In thousands, except share data)
March 31, 2016 | June 30, 2015 | ||||||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 122,941 | $ | 125,792 | |||
Billings on uncompleted contracts in excess of costs and estimated earnings | 66,809 | 96,704 | |||||
Accrued wages and benefits | 28,944 | 26,725 | |||||
Accrued insurance | 8,542 | 8,100 | |||||
Income taxes payable | 473 | 3,268 | |||||
Other accrued expenses | 5,393 | 6,498 | |||||
Total current liabilities | 233,102 | 267,087 | |||||
Deferred income taxes | 2,620 | 1,244 | |||||
Borrowings under senior credit facility | 3,845 | 8,804 | |||||
Other liabilities | 203 | — | |||||
Total liabilities | 239,770 | 277,135 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Matrix Service Company stockholders' equity: | |||||||
Common stock—$.01 par value; 60,000,000 shares authorized; 27,888,217 shares issued as of March 31, 2016, and June 30, 2015; 26,606,490 and 26,440,823 shares outstanding as of March 31, 2016 and June 30, 2015 | 279 | 279 | |||||
Additional paid-in capital | 125,655 | 123,038 | |||||
Retained earnings | 214,123 | 194,394 | |||||
Accumulated other comprehensive loss | (6,987 | ) | (5,926 | ) | |||
333,070 | 311,785 | ||||||
Less: Treasury stock, at cost— 1,281,727 shares as of March 31, 2016, and 1,447,394 shares as of June 30, 2015 | (22,022 | ) | (18,489 | ) | |||
Total Matrix Service Company stockholders’ equity | 311,048 | 293,296 | |||||
Noncontrolling interest | (1,176 | ) | (8,742 | ) | |||
Total stockholders' equity | 309,872 | 284,554 | |||||
Total liabilities and stockholders’ equity | $ | 549,642 | $ | 561,689 | |||
Matrix Service Company
Results of Operations
(unaudited)
(In thousands)
Three Months Ended | Nine Months Ended | |||||||||||||||
March 31, 2016 | March 31, 2015 | March 31, 2016 | March 31, 2015 | |||||||||||||
Gross revenues | ||||||||||||||||
Electrical Infrastructure | $ | 94,414 | $ | 48,228 | $ | 251,437 | $ | 162,434 | ||||||||
Oil Gas & Chemical | 56,251 | 97,612 | 188,682 | 228,230 | ||||||||||||
Storage Solutions | 132,857 | 107,640 | 400,074 | 370,977 | ||||||||||||
Industrial | 26,650 | 64,841 | 116,375 | 224,173 | ||||||||||||
Total gross revenues | $ | 310,172 | $ | 318,321 | $ | 956,568 | $ | 985,814 | ||||||||
Less: Inter-segment revenues | ||||||||||||||||
Electrical Infrastructure | $ | — | $ | — | $ | — | $ | — | ||||||||
Oil Gas & Chemical | 522 | 1,854 | 3,102 | 3,656 | ||||||||||||
Storage Solutions | 228 | 477 | 1,040 | 718 | ||||||||||||
Industrial | — | 1,835 | 144 | 2,722 | ||||||||||||
Total inter-segment revenues | $ | 750 | $ | 4,166 | $ | 4,286 | $ | 7,096 | ||||||||
Consolidated revenues | ||||||||||||||||
Electrical Infrastructure | $ | 94,414 | $ | 48,228 | $ | 251,437 | $ | 162,434 | ||||||||
Oil Gas & Chemical | 55,729 | 95,758 | 185,580 | 224,574 | ||||||||||||
Storage Solutions | 132,629 | 107,163 | 399,034 | 370,259 | ||||||||||||
Industrial | 26,650 | 63,006 | 116,231 | 221,451 | ||||||||||||
Total consolidated revenues | $ | 309,422 | $ | 314,155 | $ | 952,282 | $ | 978,718 | ||||||||
Gross profit (loss) | ||||||||||||||||
Electrical Infrastructure | $ | 10,407 | $ | (22,429 | ) | $ | 19,136 | $ | (38,976 | ) | ||||||
Oil Gas & Chemical | 2,616 | 7,261 | 14,270 | 18,999 | ||||||||||||
Storage Solutions | 15,108 | 11,247 | 49,766 | 39,996 | ||||||||||||
Industrial | (828 | ) | 6,553 | 8,720 | 26,947 | |||||||||||
Total gross profit | $ | 27,303 | $ | 2,632 | $ | 91,892 | $ | 46,966 | ||||||||
Operating income (loss) | ||||||||||||||||
Electrical Infrastructure | $ | 4,948 | $ | (24,306 | ) | $ | 5,425 | $ | (46,484 | ) | ||||||
Oil Gas & Chemical | (1,964 | ) | 2,563 | (3,577 | ) | 5,823 | ||||||||||
Storage Solutions | 6,382 | 5,055 | 24,305 | 18,785 | ||||||||||||
Industrial | (3,019 | ) | 2,240 | 230 | 12,304 | |||||||||||
Total operating income | $ | 6,347 | $ | (14,448 | ) | $ | 26,383 | $ | (9,572 | ) | ||||||
Matrix Service Company
Consolidated Statements of Cash Flows
(unaudited)
(In thousands)
Nine Months Ended | |||||||
March 31, 2016 | March 31, 2015 | ||||||
Operating activities: | |||||||
Net income (loss) | $ | 16,403 | $ | (13,118 | ) | ||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 16,139 | 17,332 | |||||
Deferred income tax | 1,413 | (1,026 | ) | ||||
Gain on sale of property, plant and equipment | (111 | ) | (305 | ) | |||
Provision for uncollectible accounts | 5,684 | 419 | |||||
Stock-based compensation expense | 5,023 | 4,730 | |||||
Excess tax benefit of exercised stock options and vesting of deferred shares | (3,222 | ) | (1,764 | ) | |||
Other | 179 | 178 | |||||
Changes in operating assets and liabilities increasing (decreasing) cash, net of effects from acquisitions: | |||||||
Accounts receivable | 23,684 | 17,353 | |||||
Costs and estimated earnings in excess of billings on uncompleted contracts | (6,575 | ) | (4,332 | ) | |||
Inventories | 568 | 170 | |||||
Other assets and liabilities | (5,461 | ) | 2,425 | ||||
Accounts payable | (3,492 | ) | (23,025 | ) | |||
Billings on uncompleted contracts in excess of costs and estimated earnings | (29,895 | ) | 31,006 | ||||
Accrued expenses | 983 | 6,932 | |||||
Net cash provided by operating activities | 21,320 | 36,975 | |||||
Investing activities: | |||||||
Acquisition of property, plant and equipment | (11,746 | ) | (11,075 | ) | |||
Acquisitions | (13,049 | ) | (5,551 | ) | |||
Proceeds from asset sales | 258 | 653 | |||||
Net cash used by investing activities | $ | (24,537 | ) | $ | (15,973 | ) | |
Matrix Service Company
Consolidated Statements of Cash Flows (continued)
(Unaudited)
(In thousands)
Nine Months Ended | |||||||
March 31, 2016 | March 31, 2015 | ||||||
Financing activities: | |||||||
Capital contributions from noncontrolling interest | $ | 10,892 | $ | 7,802 | |||
Issuances of common stock | 578 | 493 | |||||
Excess tax benefit of exercised stock options and vesting of deferred shares | 3,222 | 1,764 | |||||
Advances under credit agreement | 2,753 | 8,289 | |||||
Repayments of advances under credit agreement | (7,712 | ) | (9,976 | ) | |||
Repayment of acquired long-term debt | (1,858 | ) | — | ||||
Proceeds from issuance of common stock under employee stock purchase plan | 261 | 215 | |||||
Open market purchase of treasury shares | (5,460 | ) | — | ||||
Repurchase of common stock for payment of statutory taxes due on equity-based compensation | (4,540 | ) | (2,472 | ) | |||
Net cash provided (used) by financing activities | (1,864 | ) | 6,115 | ||||
Effect of exchange rate changes on cash and cash equivalents | (755 | ) | (1,049 | ) | |||
Increase (decrease) in cash and cash equivalents | (5,836 | ) | 26,068 | ||||
Cash and cash equivalents, beginning of period | 79,239 | 77,115 | |||||
Cash and cash equivalents, end of period | $ | 73,403 | $ | 103,183 | |||
Supplemental disclosure of cash flow information: | |||||||
Cash paid during the period for: | |||||||
Income taxes | $ | 9,192 | $ | 6,700 | |||
Interest | $ | 789 | $ | 1,019 | |||
Non-cash investing and financing activities: | |||||||
Purchases of property, plant and equipment on account | $ | 401 | $ | 1,104 | |||
Acquisition of long-term debt | $ | 1,858 | $ | — | |||
Backlog
We define backlog as the total dollar amount of revenue 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 and other established arrangements, 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 revenue recognized as of the reporting date.
Three Months Ended March 31, 2016
The following table provides a summary of changes in our backlog for the three months ended March 31, 2016:
Electrical Infrastructure | Oil Gas & Chemical | Storage Solutions | Industrial | Total | |||||||||||||||
(In thousands) | |||||||||||||||||||
Backlog as of December 31, 2015 | $ | 426,782 | $ | 116,311 | $ | 506,059 | $ | 67,882 | $ | 1,117,034 | |||||||||
Project awards | 51,561 | 40,465 | 109,437 | 23,398 | 224,861 | ||||||||||||||
Revenue recognized | (94,414 | ) | (55,729 | ) | (132,629 | ) | (26,650 | ) | (309,422 | ) | |||||||||
Backlog as of March 31, 2016 | $ | 383,929 | $ | 101,047 | $ | 482,867 | $ | 64,630 | $ | 1,032,473 | |||||||||
Nine Months Ended March 31, 2016
The following table provides a summary of changes in our backlog for the nine months ended March 31, 2016:
Electrical Infrastructure | Oil Gas & Chemical | Storage Solutions | Industrial | Total | |||||||||||||||
(In thousands) | |||||||||||||||||||
Backlog as of June 30, 2015 | $ | 493,973 | $ | 132,985 | $ | 670,493 | $ | 123,147 | 1,420,598 | ||||||||||
Project awards | 141,393 | 153,642 | 233,421 | 69,320 | 597,776 | ||||||||||||||
Project delays and cancellations | — | — | (22,013 | ) | (11,606 | ) | (33,619 | ) | |||||||||||
Revenue recognized | (251,437 | ) | (185,580 | ) | (399,034 | ) | (116,231 | ) | (952,282 | ) | |||||||||
Backlog as of March 31, 2016 | $ | 383,929 | $ | 101,047 | $ | 482,867 | $ | 64,630 | $ | 1,032,473 | |||||||||