In This Article:
Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Matrix Service Co (NASDAQ:MTRX) reported a 21% increase in revenue for the third quarter, reaching $200.2 million compared to $166 million in the same period last year.
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The company achieved the highest quarterly revenues in two years, driven by increased project activity.
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Backlog grew by nearly 8% sequentially to over $1.4 billion, with a book-to-bill ratio of 1.5.
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The Storage and Terminal Solutions segment saw a 77% increase in revenue, driven by an increased volume of work for specialty vessel projects.
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Matrix Service Co (NASDAQ:MTRX) has a strong liquidity position with $247.1 million available, including $185.5 million of uninsured cash.
Negative Points
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Matrix Service Co (NASDAQ:MTRX) revised its fiscal 2025 revenue guidance down by 10% to $770 to $800 million due to exiting the transmission and distribution business.
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The company reported a net loss of $3.4 million or $0.12 per share for the third quarter.
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The Storage and Thermal Solutions segment's gross margin was negatively impacted by lower than anticipated labor productivity on a crude terminal project.
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The Process and Industrial Facilities segment experienced a decrease in revenue due to the completion of a large renewable diesel project.
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Macroeconomic uncertainties, including evolving US trade and environmental policies, have led to some clients delaying final investment decisions, impacting project starts.
Q & A Highlights
Q: Can you explain the decision to exit the Northeast transmission and distribution service line and its financial implications? A: John Hewitt, CEO, explained that the decision was due to competitive disadvantages and high capital investment needs. The business was not winning projects at acceptable margins, leading to the decision to wind it down. The company will sell off construction assets and continue small contracts with existing clients. Kevin Kavanaugh, CFO, added that the business was operating at a loss, so exiting will save costs and allow resource reallocation.
Q: What factors contributed to the revised revenue guidance for fiscal 2025? A: Kevin Kavanaugh, CFO, noted that the revision was due to the timing of project awards and macroeconomic uncertainties. A major project expected in Q2 was delayed, impacting revenue. Additionally, trade and environmental policy uncertainties have caused some clients to delay investment decisions. Despite this, the company expects strong growth in the fourth quarter.