Press Release

• Company achieves fourth quarter earnings per share of $0.40; full year earnings per share of $0.63
• Fourth quarter revenue increases to $370.5 million; full year revenue increases to $1.35 billion
• Recently announced Energy Transfer Partners award increases year-end backlog to $1.4 billion and full year project awards to $1.8 billion
• Fiscal 2016 earnings guidance: revenue of $1.4 to $1.6 billion and fully diluted EPS of $1.45 to $1.75

TULSA, Okla., Aug. 31, 2015 (GLOBE NEWSWIRE) -- Matrix Service Company (Nasdaq:MTRX) today reported its financial results for the fourth quarter and year ended June 30, 2015.

"As we close the books on fiscal 2015, our business is strong and I am confident in our fiscal 2016 guidance" said John R. Hewitt, President and CEO of Matrix Service Company. "We have begun work on the Napanee Generating Station and all six terminals for Energy Transfer's Dakota Access Pipeline, two foundational projects for fiscal 2016 and 2017. Our reputation and continued diversification has resulted in record backlog; our proposal funnel is full; we have a strong balance sheet; and we continue to invest in our people, processes and systems."

In addition to achieving record revenue, new awards and backlog, the company also achieved a recordable incident rate of 0.60 for fiscal year 2015, ranking them among the leaders in the industry for safety performance. Hewitt added "I am especially proud of our employees' commitment to our core values, of which safety is first, and to our long-term strategy. It is their collective effort that defines the quality of our work, the strength of our client relationships and our ongoing success."

Fourth Quarter Fiscal 2015 Results

Revenue for the fourth quarter ended June 30, 2015 was $370.5 million compared to $344.4 million in the same period a year earlier, an increase of $26.1 million, or 7.6%. In fiscal 2015, the Company generated net income of $10.9 million, or $0.40 per fully diluted share. In the same period a year earlier, the Company earned $7.6 million, or $0.28 per fully diluted share.

On a segment basis, revenue increased in the Oil Gas & Chemical and Electrical Infrastructure segments by $28.7 million and $28.2 million respectively, partially offset by decreases of $23.3 million and $7.5 million in the Industrial and Storage Solutions segments.

Consolidated gross profit was $40.4 million in the three months ended June 30, 2015 compared to $36.9 million in the three months ended June 30, 2014. Fiscal 2015 gross margins were 10.9% compared to 10.7% in the same period a year earlier.

Selling, general and administrative costs were $22.0 million in the fourth quarter of fiscal 2015, compared to $22.7 million in the same period a year earlier. SG&A expense as a percentage of revenue decreased to 5.9% in the three months ended June 30, 2015 as compared to 6.6% for the three months ended June 30, 2014.

Fiscal 2015 Results

Revenue for the year ended June 30, 2015 was $1.349 billion compared to $1.263 billion in the same period a year earlier, an increase of $86.2 million, or 6.8%. In fiscal 2015, the Company earned net income of $17.2 million, or $0.63 per fully diluted share. In the same period a year earlier, the Company earned $35.8 million, or $1.33 per fully diluted share. In fiscal 2015, the Company recorded charges on an acquired EPC joint venture project discussed in previous earnings releases of $53.4 million. The Company's portion of these losses totaled $34.7 million. The charges, which were partially offset by lower incentive compensation, reduced earnings for the period by $0.67 per fully diluted share.

On a segment basis, consolidated revenue increased in the Industrial, Oil Gas & Chemical and Electrical Infrastructure segments by $69.8 million, $65.7 million and $58.5 million respectively, partially offset by a decrease in the Storage Solutions segment of $107.8 million.

Consolidated gross profit was $87.4 million in the year ended June 30, 2015 compared to $136.5 million in same period a year earlier. Fiscal 2015 gross margins were reduced by 4.4% to 6.5% related to charges of $53.4 million on an acquired EPC joint venture power generation project. Fiscal 2014 gross margins were 10.8%.

Consolidated SG&A expenses were $78.6 million in the year ended June 30, 2015 compared to $77.9 million in the same period a year earlier. SG&A expense as a percentage of revenue was 5.8% in the year ended June 30, 2015 compared to 6.2% in the same period a year earlier.

Income Tax Expense

The effective tax rates were 38.4% and 37.0% for the three months and fiscal year ended June 30, 2015. The Company estimates that its fiscal 2016 effective tax rate will approximate 37.0%.

Backlog

Backlog at June 30, 2015 totaled $1.414 billion, an increase of $498.7 million, or 54.4%, compared to the backlog at June 30, 2014 of $915.8 million, and increased by $175.2 million compared to the March 31, 2015 backlog of $1.239 billion. Project awards totaled $545.8 million and $1.848 billion in the three months and fiscal year ended June 30, 2015, respectively.

Financial Position

The Company's cash balance increased to $79.2 million at June 30, 2015 as compared to $77.1 million a year earlier. The cash balance along with availability under the senior credit facility gives the Company liquidity of $174.8 million. In fiscal 2015, the Company generated $23.2 million from operations, funded capital expenditures of $15.8 million, an acquisition of $5.6 million and repurchased shares of $5.0 million while reducing the outstanding balance under the senior credit facility by $2.8 million.

Earnings Guidance

The Company continues to expect fiscal 2016 revenue will be between $1.4 billion and $1.6 billion and earnings will be between $1.45 and $1.75 per fully diluted share. The Company is anticipating normal quarterly variability with the first quarter being the lowest as activity in the Oil Gas and Chemical segment is typically slower in the summer months.

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 Tuesday, September 1, 2015 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.

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 amount.

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.

Three Months Ended June 30, 2015

The following table provides a summary of changes in our backlog for the three months ended June 30, 2015:

Twelve Months Ended June 30, 2015

The following table provides a summary of changes in our backlog for the twelve months ended June 30, 2015:

CONTACT: For more information, please contact:

         

         Matrix Service Company

         Kevin S. Cavanah

         Vice President and CFO

         T: 918-838-8822

         Email:kcavanah@matrixservicecompany.com