Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2016 | Aug. 29, 2016 | Dec. 31, 2015 | |
Entity Information [Line Items] | |||
Entity Registrant Name | MATRIX SERVICE CO | ||
Entity Central Index Key | 866,273 | ||
Document Type | 10-K | ||
Document Period End Date | Jun. 30, 2016 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 546 | ||
Entity Common Stock, Shares Outstanding | 26,520,376 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Statement [Abstract] | |||
Revenues | $ 1,311,917 | $ 1,343,135 | $ 1,263,089 |
Cost of revenues | 1,185,926 | 1,255,765 | 1,126,616 |
Gross profit | 125,991 | 87,370 | 136,473 |
Selling, general and administrative expenses | 85,109 | 78,568 | 77,866 |
Operating income | 40,882 | 8,802 | 58,607 |
Other income (expense): | |||
Interest expense | (852) | (1,236) | (1,436) |
Interest income | 190 | 468 | 112 |
Other | (567) | 158 | (472) |
Income before income tax expense | 39,653 | 8,192 | 56,811 |
Provision for federal, state and foreign income taxes | 14,116 | 10,090 | 19,934 |
Net income (loss) | 25,537 | (1,898) | 36,877 |
Less: Net income (loss) attributable to noncontrolling interest | (3,326) | (19,055) | |
Net income attributable to Matrix Service Company | $ 28,863 | $ 17,157 | $ 35,810 |
Basic earnings per common share (in dollars per share) | $ 1.09 | $ 0.64 | $ 1.36 |
Diluted earnings per common share (in dollars per share) | $ 1.07 | $ 0.63 | $ 1.33 |
Weighted average common shares outstanding: | |||
Basic (in shares) | 26,597 | 26,603 | 26,288 |
Diluted (in shares) | 27,100 | 27,177 | 26,976 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Other comprehensive income (loss), net of tax: | |||
Net income (loss) | $ 25,537 | $ (1,898) | $ 36,877 |
Foreign currency translation loss (net of tax of $236, $606 and $116 for the years ended June 30, 2016, 2015 and 2014, respectively) | (919) | (5,744) | (409) |
Comprehensive income (loss) | 24,618 | (7,642) | 36,468 |
Less: Comprehensive income (loss) attributable to noncontrolling interest | (3,326) | (19,055) | 1,067 |
Comprehensive income attributable to Matrix Service Company | $ 27,944 | $ 11,413 | $ 35,401 |
Consolidated Statements of Com4
Consolidated Statements of Comprehensive Income (Parentheticals) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Foreign currency translation adjustments, tax effect | $ 236 | $ 606 | $ 116 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2016 | Jun. 30, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 71,656 | $ 79,239 |
Accounts receivable, less allowances (2016 - $8,403; 2015 - $561) | 190,434 | 199,149 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 104,001 | 86,071 |
Inventories | 3,935 | 2,773 |
Income taxes receivable | 9 | 579 |
Other current assets | 5,411 | 5,660 |
Total current assets | 375,446 | 373,471 |
Property, plant and equipment, at cost: | ||
Land and buildings | 39,224 | 32,746 |
Construction equipment | 90,386 | 87,561 |
Transportation equipment | 49,046 | 47,468 |
Office equipment and software | 29,577 | 28,874 |
Construction in progress | 7,475 | 5,196 |
Total property, plant and equipment - at cost | 215,708 | 201,845 |
Accumulated depreciation | (130,977) | (116,782) |
Property, plant and equipment - net | 84,731 | 85,063 |
Goodwill | 78,293 | 71,518 |
Other intangible assets | 20,999 | 23,961 |
Deferred income taxes | 3,719 | 3,729 |
Other assets | 1,779 | 3,947 |
Total assets | 564,967 | 561,689 |
Current liabilities: | ||
Accounts payable | 141,445 | 125,792 |
Billings on uncompleted contracts in excess of costs and estimated earnings | 58,327 | 96,704 |
Accrued wages and benefits | 27,716 | 26,725 |
Accrued insurance | 9,246 | 8,100 |
Income taxes payable | 2,675 | 3,268 |
Other accrued expenses | 6,621 | 6,498 |
Total current liabilities | 246,030 | 267,087 |
Deferred income taxes | 3,198 | 1,244 |
Borrowings under senior revolving credit facility | 0 | 8,804 |
Other liabilities | 173 | 0 |
Total liabilities | 249,401 | 277,135 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock—$.01 par value; 60,000,000 shares authorized; 27,888,217 shares issued as of June 30, 2016 and June 30, 2015; 26,297,145 and 26,440,823 shares outstanding as of June 30, 2016 and June 30, 2015 | 279 | 279 |
Additional paid-in capital | 126,958 | 123,038 |
Retained earnings | 223,257 | 194,394 |
Accumulated other comprehensive loss | (6,845) | (5,926) |
Total stockholders' equity before treasury stock | 343,649 | 311,785 |
Less treasury stock, at cost — 1,591,072 and 1,447,394 shares as of June 30, 2016 and June 30, 2015 | (26,907) | (18,489) |
Total Matrix Service Company stockholders' equity | 316,742 | 293,296 |
Noncontrolling interest | (1,176) | (8,742) |
Total stockholders' equity | 315,566 | 284,554 |
Total liabilities and stockholders' equity | $ 564,967 | $ 561,689 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2016 | Jun. 30, 2015 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 8,403 | $ 561 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 27,888,217 | 27,888,217 |
Treasury stock, shares | 1,591,072 | 1,447,394 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Operating activities: | |||
Net income (loss) | $ 25,537,000 | $ (1,898,000) | $ 36,877,000 |
Adjustments to reconcile net income to net cash provided by operating activities, net of effects of acquisitions : | |||
Depreciation and amortization | 21,441,000 | 23,480,000 | 18,518,000 |
Deferred income taxes | 1,871,000 | (1,052,000) | (3,852,000) |
(Gain) loss on sale of property, plant and equipment | (39,000) | (252,000) | 109,000 |
Provision for uncollectible accounts | 6,034,000 | 357,000 | (159,000) |
Stock-based compensation expense | 6,317,000 | 6,302,000 | 5,688,000 |
Excess tax benefit of exercised stock options and vesting of deferred shares | (3,261,000) | (1,802,000) | (1,730,000) |
Other | 240,000 | 238,000 | 208,000 |
Changes in operating assets and liabilities increasing (decreasing) cash, net of effects from acquisitions: | |||
Accounts receivable | 4,152,000 | 6,831,000 | (31,395,000) |
Costs and estimated earnings in excess of billings on uncompleted contracts | (17,930,000) | (13,063,000) | 13,540,000 |
Inventories | 606,000 | 272,000 | (11,000) |
Other assets and liabilities | 7,380,000 | 11,558,000 | 351,000 |
Accounts payable | 14,698,000 | 12,957,000 | 29,234,000 |
Billings on uncompleted contracts in excess of costs and estimated earnings | (38,377,000) | (11,736,000) | 3,142,000 |
Accrued expenses | 1,657,000 | (7,754,000) | 6,468,000 |
Net cash provided by operating activities | 30,326,000 | 24,438,000 | 76,988,000 |
Investing activities: | |||
Acquisition of property, plant and equipment | (13,939,000) | (15,773,000) | (23,589,000) |
Acquisitions, net of cash acquired (Note 2) | (13,049,000) | (5,551,000) | (51,607,000) |
Proceeds from asset sales | 422,000 | 750,000 | 553,000 |
Net cash used by investing activities | (26,566,000) | (20,574,000) | (74,643,000) |
Financing activities: | |||
Advances under senior revolving credit facility | 10,213,000 | 11,165,000 | 87,826,000 |
Repayments of advances under senior revolving credit facility | (19,017,000) | (13,982,000) | (76,205,000) |
Repayment of acquired long-term debt | (1,858,000) | 0 | 0 |
Payment of debt amendment fees | 0 | 0 | (657,000) |
Open market purchase of treasury shares | (10,461,000) | (5,000,000) | 0 |
Issuances of common stock | 638,000 | 493,000 | 1,175,000 |
Excess tax benefit of exercised stock options and vesting of deferred shares | 3,261,000 | 1,802,000 | 1,730,000 |
Proceeds from issuance of common stock under employee stock purchase plan | 335,000 | 298,000 | 136,000 |
Repurchase of common stock for payment of statutory taxes due on equity-based compensation | (4,588,000) | (2,528,000) | (1,776,000) |
Capital contributions from noncontrolling interest | 10,892,000 | 8,546,000 | 0 |
Net cash provided (used) by financing activities | (10,585,000) | 794,000 | 12,229,000 |
Effect of exchange rate changes on cash | (758,000) | (2,534,000) | (1,209,000) |
Net increase (decrease) in cash and cash equivalents | (7,583,000) | 2,124,000 | 13,365,000 |
Cash and cash equivalents, beginning of period | 79,239,000 | 77,115,000 | |
Cash and cash equivalents, end of period | 71,656,000 | 79,239,000 | 77,115,000 |
Other cash flow information: | |||
Cash paid during the period for income taxes | 9,365,000 | 6,960,000 | 19,160,000 |
Cash paid during the period for interest | 881,000 | 1,281,000 | 1,224,000 |
Non-cash investing: | |||
Purchases of property, plant and equipment on account | 193,000 | 439,000 | 527,000 |
Assumption of debt from acquisition | $ 1,858,000 | $ 0 | $ 0 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income(Loss) | Noncontrolling Interest |
Balances, beginning at Jun. 30, 2013 | $ 238,162 | $ 279 | $ 118,190 | $ 141,427 | $ (21,961) | $ 227 | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 36,877 | 35,810 | 1,067 | ||||
Other comprehensive loss | (409) | (409) | |||||
Consolidated joint venture included in acquisition (Note 2) | 700 | 700 | |||||
Treasury Shares Sold to Employee Stock Purchase Plan (Note 12) | 136 | 39 | 97 | ||||
Exercise of stock options | 1,175 | (1,190) | 0 | 2,365 | |||
Issuance of deferred shares | 0 | (4,680) | 4,680 | ||||
Treasury shares repurchased to satisfy tax withholding obligations | (1,776) | (1,776) | |||||
Tax effect of exercised stock options and vesting of deferred shares | 1,730 | 1,730 | |||||
Stock-based compensation expense | 5,688 | 5,688 | |||||
Balances, ending at Jun. 30, 2014 | 282,283 | 279 | 119,777 | 177,237 | (16,595) | (182) | 1,767 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Noncontrolling Interest, Increase from Subsidiary Equity Issuance | 8,546 | 8,546 | |||||
Net income (loss) | (1,898) | 17,157 | (19,055) | ||||
Other comprehensive loss | (5,744) | (5,744) | |||||
Open market purchase of treasury shares | (5,000) | (5,000) | |||||
Treasury Shares Sold to Employee Stock Purchase Plan (Note 12) | 298 | 134 | 164 | ||||
Exercise of stock options | 493 | (275) | 0 | 768 | |||
Issuance of deferred shares | 0 | (4,702) | 4,702 | ||||
Treasury shares repurchased to satisfy tax withholding obligations | (2,528) | (2,528) | |||||
Tax effect of exercised stock options and vesting of deferred shares | 1,802 | 1,802 | |||||
Stock-based compensation expense | 6,302 | 6,302 | |||||
Balances, ending at Jun. 30, 2015 | 284,554 | 279 | 123,038 | 194,394 | (18,489) | (5,926) | (8,742) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Noncontrolling Interest, Increase from Subsidiary Equity Issuance | 10,892 | 10,892 | |||||
Net income (loss) | 25,537 | 28,863 | (3,326) | ||||
Other comprehensive loss | (919) | (919) | |||||
Open market purchase of treasury shares | (10,461) | (10,461) | |||||
Treasury Shares Sold to Employee Stock Purchase Plan (Note 12) | 335 | 177 | 158 | ||||
Exercise of stock options | 638 | 14 | 624 | ||||
Issuance of deferred shares | 0 | (5,849) | 5,849 | ||||
Treasury shares repurchased to satisfy tax withholding obligations | (4,588) | (4,588) | |||||
Tax effect of exercised stock options and vesting of deferred shares | 3,261 | 3,261 | |||||
Stock-based compensation expense | 6,317 | 6,317 | |||||
Balances, ending at Jun. 30, 2016 | $ 315,566 | $ 279 | $ 126,958 | $ 223,257 | $ (26,907) | $ (6,845) | $ (1,176) |
Consolidated Statements of Cha9
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - shares | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Open market purchase of treasury shares, shares | 654,958 | 283,772 | 0 |
Employee Stock Purchase Plans, shares | 17,304 | 13,243 | 5,440 |
Exercise of stock options, shares | 68,037 | 55,200 | 134,450 |
Issuance of deferred shares, shares | 631,443 | 326,763 | 266,209 |
Treasury shares repurchased to satisfy tax withholding obligations | 205,504 | 105,058 | 80,096 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Organization and Basis of Presentation The consolidated financial statements include the accounts of Matrix Service Company (“Matrix” or the “Company”) and its subsidiaries, all of which are wholly owned. Intercompany transactions and balances have been eliminated in consolidation. The Company operates in the United States, Canada, South Korea and Australia. The Company’s reportable segments are Electrical Infrastructure, Oil Gas & Chemical, Storage Solutions and Industrial. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. We believe the most significant estimates and judgments are associated with revenue recognition, the recoverability tests that must be periodically performed with respect to our goodwill and other intangible assets, valuation reserves on our accounts receivable and deferred tax assets, and the estimation of loss contingencies, including liabilities associated with litigation and with the self-insured retentions on our insurance programs. Actual results could materially differ from those estimates. Revenue Recognition Matrix records revenue on fixed-price contracts on a percentage-of-completion basis, primarily based on costs incurred to date compared to the total estimated contract cost. The Company records revenue on reimbursable and time and material contracts on a proportional performance basis as costs are incurred. Contracts in process are valued at cost plus accrued profits less billings on uncompleted contracts. Contracts are generally considered substantially complete when field construction is completed. The elapsed time from award of a contract to completion of performance may be in excess of one year. Matrix includes pass-through revenue and costs on cost-plus contracts, which are customer-reimbursable materials, equipment and subcontractor costs, when Matrix determines that it is responsible for the procurement and management of such cost components. Matrix has numerous contracts that are in various stages of completion which require estimates to determine the appropriate cost and revenue recognition. The Company has a history of making reasonably dependable estimates of the extent of progress towards completion, contract revenues and contract costs, and accordingly, does not believe significant fluctuations are likely to materialize. However, current estimates may be revised as additional information becomes available. If estimates of costs to complete fixed-price contracts indicate a loss, provision is made through a contract write-down for the total loss anticipated. A number of our contracts contain various cost and performance incentives and penalties that impact the earnings we realize from our contracts, and adjustments related to these incentives and penalties are recorded in the period, on a percentage-of-completion basis, when estimable and probable. Indirect costs, such as salaries and benefits, supplies and tools, equipment costs and insurance costs, are charged to projects based upon direct labor hours and overhead allocation rates per direct labor hour. Warranty costs are normally incurred prior to project completion and are charged to project costs as they are incurred. Warranty costs incurred subsequent to project completion were not material for the periods presented. Overhead allocation rates are established annually during the budgeting process. Precontract Costs Precontract costs are costs incurred in anticipation of obtaining a contract that will result in no future benefit unless the contract is obtained. The Company generally expenses precontract costs to cost of revenue as incurred, but, in certain cases their recognition may be deferred if specific criteria are met. We had no deferred precontract costs at June 30, 2016 or 2015. Change Orders and Claims Recognition Change orders are modifications of an original contract that effectively change the existing provisions of the contract. Change orders may include changes in specifications or designs, manner of performance, facilities, equipment, materials, sites and period of completion of the work. Matrix or our clients may initiate change orders. The client's agreement to the terms of change orders is, in many cases, reached prior to work commencing; however, sometimes circumstances require that work progress prior to obtaining client agreement. Costs related to change orders are recognized as incurred. Revenues attributable to change orders that are unapproved as to price or scope are recognized to the extent that costs have been incurred if the amounts can be reliably estimated and their realization is probable. Revenues in excess of the costs attributable to change orders that are unapproved as to price or scope are recognized only when realization is assured beyond a reasonable doubt. Change orders that are unapproved as to both price and scope are evaluated as claims. Claims are amounts in excess of the agreed contract price that we seek to collect from customers or others for delays, errors in specifications and designs, contract terminations, change orders in dispute or unapproved as to both scope and price or other causes of anticipated additional costs incurred by us. Recognition of amounts as additional contract revenue related to claims is appropriate only if it is probable that the claims will result in additional contract revenue and if the amount can be reliably estimated. We must determine if: • there is a legal basis for the claim; • the additional costs were caused by circumstances that were unforeseen by the Company and are not the result of deficiencies in our performance; • the costs are identifiable or determinable and are reasonable in view of the work performed; and • the evidence supporting the claim is objective and verifiable. If all of these requirements are met, revenue from a claim is recorded only to the extent that we have incurred costs relating to the claim. Unapproved change orders and claims are more fully discussed in Note 7—Contingencies. Cash Equivalents The Company includes as cash equivalents all investments with original maturities of three months or less which are readily convertible into cash. The Company had approximately $0.3 million of restricted cash related to a customer deposit at June 30, 2016 and $0.3 million of restricted cash at June 30, 2015 . We have cash on deposit at June 30, 2016 with banks in the United States, Canada and South Korea in excess of Federal Deposit Insurance Corporation ("FDIC"), Canada Deposit Insurance Corporation ("CDIC") and Korea Deposit Insurance Corporation ("KDIC") insurance limits, respectively. We also have cash on deposit at June 30, 2016 with a bank in Australia that is not eligible for Financial Claims Scheme ("FSC") protection since those funds are in U.S. Dollars; other funds held by the Company in Australia were eligible for FSC protection and were within its protection limits. Accounts Receivable Accounts receivable are carried on a gross basis, less the allowance for uncollectible accounts. The Company’s customers consist primarily of major integrated oil companies, steel companies, independent refiners and marketers, power companies, petrochemical companies, pipeline companies, mining companies, contractors and engineering firms. The Company is exposed to the risk of individual customer defaults or depressed cycles in our customers’ industries. To mitigate this risk many of our contracts require payment as projects progress or advance payment in some circumstances. In addition, in most cases the Company can place liens against the property, plant or equipment constructed or terminate the contract if a material contract default occurs. Management estimates the allowance for uncollectible accounts based on existing economic conditions, the financial condition of its customers and the amount and age of past due accounts. Accounts are written off against the allowance for uncollectible accounts only after all collection attempts have been exhausted. Retentions Contract retentions collectible beyond one year are included in Other Assets in the Consolidated Balance Sheets. Accounts payable retentions are generally settled within one year. Loss Contingencies Various legal actions, claims and other contingencies arise in the normal course of our business. Contingencies are recorded in the consolidated financial statements, or are otherwise disclosed, in accordance with ASC 450-20, “Loss Contingencies”. Specific reserves are provided for loss contingencies to the extent we conclude that a loss is both probable and estimable. We use a case-by-case evaluation of the underlying data and update our evaluation as further information becomes known. We believe that any amounts exceeding our recorded accruals should not materially affect our financial position, results of operations or liquidity. However, the results of litigation are inherently unpredictable and the possibility exists that the ultimate resolution of one or more of these matters could result in a material effect on our financial position, results of operations or liquidity. Legal costs are expensed as incurred. Inventories Inventories consist primarily of steel plate and pipe and aluminum coil and extrusions. Cost is determined primarily using the average cost method and inventories are stated at the lower of cost or net realizable value. Depreciation Depreciation is computed using the straight-line method over the estimated useful lives of the depreciable assets. Depreciable lives are as follows: buildings— 40 years, construction equipment— 3 to 15 years, transportation equipment— 3 to 5 years, and office equipment and software— 3 to 10 years. Leasehold improvements are amortized over the shorter of the useful life of the asset or the lease term. Impairment of Long-Lived Assets The Company evaluates long-lived assets for impairment when events or changes in circumstances indicate, in management’s judgment, that the carrying value of such assets used in operations may not be recoverable. The determination of whether an impairment has occurred is based on management’s estimate of undiscounted future cash flows attributable to the assets as compared to the carrying value of the assets. If an impairment has occurred, the amount of the impairment recognized is determined by estimating the fair value of the assets and, to the extent the carrying value exceeds the fair value of the assets, recording a loss provision. For assets identified to be disposed of in the future, the carrying value of the assets are compared to the estimated fair value less the cost of disposal to determine if an impairment has occurred. Until the assets are disposed of, an estimate of the fair value is redetermined when related events or circumstances change. Goodwill Goodwill represents the excess of the purchase price of acquisitions over the acquisition date fair value of the net identifiable tangible and intangible assets acquired. In accordance with current accounting guidance, goodwill is not amortized and is tested at least annually for impairment at the reporting unit level. We perform our annual analysis during the fourth quarter of each fiscal year and in any other period in which indicators of impairment warrant additional analysis. Goodwill impairment reviews involve a two-step process. Goodwill is first evaluated for impairment by comparing management’s estimate of the fair value of a reporting unit with its carrying value, including goodwill. Management utilizes a discounted cash flow analysis, referred to as an income approach, to determine the estimated fair value of our reporting units. Significant judgments and assumptions including the discount rate, anticipated revenue growth rate and gross margins, estimated operating and interest expense, and capital expenditures are inherent in these fair value estimates, which are based on our operating and capital budgets and on our strategic plan. As a result, actual results may differ from the estimates utilized in our income approach. The use of alternate judgments and/or assumptions could result in a fair value that differs from our estimate and could result in the recognition of an impairment charge in the financial statements. As a result of these uncertainties, we utilize multiple scenarios and assign probabilities to each of the scenarios in the income approach. We also consider indications obtained from market-based approaches. We compare market multiples derived from market prices of stock of companies that are engaged in a similar line of business to the corresponding measures of the Company. We also consider the combined carrying values of our reporting units to our market capitalization. If the carrying value of our reporting unit is higher than its fair value, there is an indication that impairment may exist and the second step must be performed to measure the amount of impairment. The amount of impairment is determined by comparing the implied fair value of the reporting unit's goodwill to the carrying value of the goodwill calculated in the same manner as if the reporting unit were being acquired in a business combination. If the implied fair value of goodwill is less than its carrying value, we would record an impairment charge for the difference. Other Intangible Assets Intangible assets that have finite useful lives are amortized by the straight-line method over their useful lives ranging from 1.5 years to 15 years. Intangible assets that have indefinite useful lives are not amortized but are tested at least annually for impairment. Each reporting period, we evaluate the remaining useful lives of intangible assets not being amortized to determine whether facts and circumstances continue to support an indefinite useful life. Intangible assets are considered impaired if the fair value of the intangible asset is less than its net book value. If quoted market prices are not available, the fair values of the intangible assets are based on present values of expected future cash flows or royalties avoided using discount rates commensurate with the risks involved. Insurance Reserves We maintain insurance coverage for various aspects of our operations. However, we retain exposure to potential losses through the use of deductibles, coverage limits and self-insured retentions. We establish reserves for claims using a combination of actuarially determined estimates and case-by-case evaluations of the underlying claim data and update our evaluations as further information becomes known. Judgments and assumptions are inherent in our reserve accruals; as a result, changes in assumptions or claims experience could result in changes to these estimates in the future. If actual results of claim settlements are different than the amounts estimated we may be exposed to future gains and losses that could be material. Stock-Based Compensation The Company has issued stock options and nonvested deferred share awards under its long-term incentive compensation plans. The fair value of these awards is calculated at grant date. The fair value of time-based, nonvested deferred shares is the value of the Company’s common stock at the grant date. The fair value of market-based nonvested deferred shares is based on several factors, including the probability that the market condition specified in the grant will be achieved. The fair value of stock options is determined based on the Black-Scholes option pricing model. For all stock-based awards, expense is recognized over the requisite service period, net of estimated forfeitures. Income Taxes We use the asset and liability approach for financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances based on our judgments and estimates are established when necessary to reduce deferred tax assets to the amount expected to be realized in future operating results. Company management believes that realization of deferred tax assets in excess of the valuation allowance is more likely than not. Our estimates are based on facts and circumstances in existence as well as interpretations of existing tax regulations and laws applied to the facts and circumstances, with the help of professional tax advisors. Therefore, we estimate and provide for amounts of additional income taxes that may be assessed by the various taxing authorities. Foreign Currency The functional currencies of the Company’s operations in Canada, South Korea and Australia are the Canadian Dollar, South Korean Won and U.S. Dollar, respectively. For subsidiaries with operations using a foreign functional currency, assets and liabilities are translated at the year end exchange rates and the income statement accounts are translated at average exchange rates throughout the year. Translation gains and losses are reported in Accumulated Other Comprehensive Income (Loss) in the Consolidated Statements of Changes in Stockholders’ Equity and in Other Comprehensive Income (Loss) in the Consolidated Statements of Comprehensive Income. Transaction gains and losses are reported as a component of Other income (expense) in the Consolidated Statements of Income. Recently Issued Accounting Standards Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) On May 28, 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” The ASU also requires entities to disclose both quantitative and qualitative information that enables users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The ASU's disclosure requirements are significantly more comprehensive than those in existing revenue standards. The ASU applies to all contracts with customers except those that are within the scope of other topics in the FASB Accounting Standards Codification ("ASC"). The ASU is effective for annual reporting periods beginning after December 15, 2017, with early adoption permitted on a limited basis. Upon adoption, the Company may elect one of two application methods, a full retrospective application or a modified retrospective application. We expect to adopt this standard on July 1, 2018 and are currently evaluating its expected impact on our financial statements. Accounting Standards Update 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern On August 27, 2014, the FASB issued ASU 2014-15, which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date of issuance of the entity’s financial statements. Further, an entity must provide certain disclosures if there is “substantial doubt about the entity’s ability to continue as a going concern.” The FASB believes that requiring management to perform the assessment will enhance the timeliness, clarity, and consistency of related disclosures and improve convergence with international financial reporting standards ("IFRSs") (which emphasize management’s responsibility for performing the going-concern assessment). However, the time horizon for the assessment (look-forward period) and the disclosure thresholds under U.S. GAAP and IFRSs will continue to differ. The ASU is effective for annual periods ending after December 15, 2016, and interim periods thereafter; early adoption is permitted. We expect to adopt this standard in fiscal 2017. Accounting Standards Update 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments On September 25, 2015, the FASB issued ASU 2015-16 to simplify the accounting for measurement-period adjustments. The ASU was issued in response to stakeholder feedback that restatements of prior periods to reflect adjustments made to provisional amounts recognized in a business combination increase the cost and complexity of financial reporting but do not significantly improve the usefulness of the information. Under the ASU, an acquirer must recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The ASU also requires acquirers to present separately on the face of the income statement, or disclose in the notes, the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. For public business entities, the ASU is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. We adopted this standard on July 1, 2016 with no material impact to the Company's financial statements. Accounting Standards Update 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes On November 20, 2015, the FASB issued ASU 2015-17, which requires entities to present deferred tax assets ("DTAs") and deferred tax liabilities ("DTLs") as noncurrent in a classified balance sheet. The ASU simplifies the current guidance, which requires entities to separately present DTAs and DTLs as current and noncurrent in a classified balance sheet based on the classification of the related asset or liability. For public business entities, the ASU will be effective for annual periods beginning after December 15, 2016, and interim periods within those years with early adoption permitted. The Company elected to retrospectively early adopt ASU 2015-17, effective for the quarter ended December 31, 2015. The quantitative effects of the change on the prior balance sheet presented, for the fiscal year ended June 30, 2015, resulted in a net reclassification of $6.6 million and $6.6 million from the "Deferred income taxes" current asset and liability financial statement line items, respectively, to the "Deferred income taxes" asset and liability financial statement line items included in the noncurrent asset and liability sections of the balance sheet. Accounting Standards Update 2016-02, Leases (Topic 842) On February 25, 2016, the FASB issued ASU 2016-02. The amendments in this update require, among other things, that lessees recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Lessees and lessors must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. For public business entities, the ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating its expected impact on our financial statements. Accounting Standards Update 2016-09, Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting On March 30, 2016, the FASB issued ASU 2016-09, which simplified several aspects of accounting for stock-based compensation transactions, including the accounting for income taxes and forfeitures and statutory tax withholding requirements. The ASU is effective for the Company on July 1, 2017 and early adoption is permitted. The Company is planning to adopt the ASU in the first quarter of fiscal 2017, with no material impacts expected. The following is a description of the key provisions of the ASU and its transition requirements: Accounting for Income Taxes : The amendments require the Company to recognize excess tax benefits or tax deficiencies in its provision for income taxes in its consolidated statements of income during the period of vesting or exercise of its nonvested deferred share awards and stock options, respectively, for which it expects to receive an income tax deduction. Currently, the Company recognizes any excess tax benefits in additional paid-in capital ("APIC") in the balance sheet and any tax deficiencies are recognized as a reduction of APIC to the extent the Company has accumulated excess tax benefits. Any tax deficiencies in excess of accumulated excess tax benefits in APIC are recognized in the provision for income taxes. The amendments also require the Company to only present excess tax benefits and tax deficiencies in the operating section of its statements of cash flows. Currently, the Company is required to present such items in both the financing section and operating section of its statements of cash flows. Amendments to the presentation of excess tax benefits and tax deficiencies in the statements of cash flows may be applied retrospectively or prospectively. Amendments requiring the recognition of excess tax benefits and tax deficiencies in income are to be applied prospectively. The Company is required to apply the amendments for accumulated excess tax benefits on a modified retrospective basis as a cumulative-effect adjustment to retained earnings as of the date of adoption. The balance of accumulated excess tax benefits included in APIC was $9.8 million as of June 30, 2016. Accounting for Forfeitures : The Company currently recognizes expense on all stock-based awards over the requisite service period, net of estimated forfeitures. The amendments in this ASU allow the Company to elect, as a company-wide accounting policy, either to continue to estimate the amount of forfeitures to exclude from compensation expense or to exclude forfeitures from compensation expense when they occur. The Company is planning to account for forfeitures when they occur when it adopts the amendments in the first quarter of fiscal 2017. The Company will apply the accounting change on a modified retrospective basis as a cumulative-effect adjustment to retained earnings as of the date of adoption. The Company does not expect the adoption of these amendments to have a material impact to its financial statements. Statutory Tax Withholding Requirements : Currently, an entire award must be classified as a liability if the fair value of the shares withheld exceeds the Company's minimum statutory withholding obligation. Under the ASU, the Company will be allowed to withhold shares with a fair value up to the amount of tax owed using the maximum statutory tax rate in the employee's applicable jurisdictions. The Company will be allowed to determine one maximum rate for all employees in each jurisdiction, rather than a rate for each employee in the jurisdiction. Also, the ASU requires that cash outflows to reacquire shares withheld for taxes to be classified in the financing section of its statements of cash flows. Since the Company does not have any awards classified as liabilities due to statutory tax withholding requirements as of June 30, 2016, and since the Company already presents its cash outflows for reacquiring shares withheld for taxes as a financing activity in its statements of cash flows, the Company does not expect these amendments to have any impact on its financial statements when adopted during the 1st quarter of fiscal 2017. Accounting Standards Update 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments On June 16, 2016, the FASB issued ASU 2016-13, which changes how the Company accounts for its allowance for uncolletible accounts. The amendments in this update require a financial asset (or a group of financial assets) to be presented at the net amount expected to be collected. The income statement will reflect any increases or decreases of expected credit losses that have taken place during the period. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. Current GAAP delays the recognition of the full amount of credit losses until the loss is probable of occurring. The amendments in this update eliminate the probable initial recognition threshold and, instead, reflect the Company's current estimate of all expected credit losses. In addition, current guidance limits the information the Company may consider in measuring a credit loss to its past events and current conditions. The amendments in this update broaden the information the Company may consider in developing its expected credit loss estimate to include forecasted information. The amendments in this update are effective for the Company on July 1, 2020 and the Company may early adopt on July 1, 2019. The Company must apply the amendments in this update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company does not expect this update to have a material impact to its estimate of the allowance for uncollectible accounts. |
Acquisitions
Acquisitions | 12 Months Ended |
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Purchase of Baillie Tank Equipment, Ltd. On February 1, 2016 , the Company completed the acquisition of all outstanding stock of Baillie Tank Equipment, Ltd. (“BTE”) , an internationally-based company with nearly 20 years of experience in the design and manufacture of products for use on aboveground storage tanks. Founded in 1998, BTE is a provider of tank products including geodesic domes, aluminum internal floating roofs, floating suction and skimmer systems, roof drain systems, and seals. BTE is headquartered in Sydney, Australia with a manufacturing facility in Seoul, South Korea. The Company acquired BTE to expand its service offerings of certain technical solutions for aboveground storage tanks. The business is now known as Matrix Applied Technologies, and its operating results are included in the Storage Solutions segment. The Company purchased BTE with cash on-hand for a net purchase price of $13.0 million . The Company paid $15.4 million when including the subsequent repayment of long-term debt acquired and the settlement of certain other liabilities acquired, and excluding the cash acquired and certain amounts owed to the former owners for working capital adjustments. The net purchase price was allocated to the major categories of assets and liabilities based on their estimated fair value at the acquisition date. The following table summarizes the preliminary net purchase price allocation (in thousands): Current assets $ 5,574 Property, plant and equipment 4,347 Goodwill 6,942 Other intangible assets 720 Other assets 233 Total assets acquired 17,816 Current liabilities 1,581 Deferred income taxes 329 Long-term debt 1,858 Other liabilities 407 Net assets acquired 13,641 Cash acquired 592 Net purchase price $ 13,049 The goodwill recognized from the acquisition is attributable to the synergies of combining our operations and the technical expertise of the acquired workforce. None of the goodwill recognized is deductible for income tax purposes. The fair value of the net assets acquired is preliminary pending the final valuation of those assets. As a result, goodwill is also preliminary since it has been recorded as the excess of the purchase price over the estimated fair value of the net assets acquired. The Company incurred $1.2 million of expenses related to the acquisition for the year ended June 30, 2016, which are included within selling, general and administrative expenses in the consolidated statements of income. The acquired business contributed revenues of $5.4 million and operating income of $0.3 million for the period from February 1, 2016 to June 30, 2016. Pro forma financial information has not been provided since BTE's impact to the Company's operating results is not material. Purchase of HDB Ltd. Limited Partnership On August 22, 2014 , the Company purchased substantially all of the assets of HDB Ltd. Limited Partnership ("HDB"). HDB, headquartered in Bakersfield, California provides construction, fabrication and turnaround services to energy companies throughout California's central valley. The acquisition advanced a strategic goal of the Company to expand into the upstream energy market. The acquisition purchase price was $5.6 million and was funded with cash on hand. Commencing on August 22, 2014, HDB's operating results are included in the Oil Gas & Chemical Segment. The purchase price was allocated to the major categories of assets and liabilities based on their estimated fair value at the acquisition date. The following table summarizes the purchase price allocation (in thousands): Current assets $ 1,645 Property, plant and equipment 1,001 Tax deductible goodwill 3,065 Other intangible assets 900 Total assets acquired 6,611 Current liabilities 1,060 Net assets acquired $ 5,551 All of the recorded goodwill from the HDB acquisition is tax deductible. The operating data related to this acquisition was not material. Purchase of Kvaerner North American Construction Effective as of December 21, 2013, the Company acquired 100% of the stock of Kvaerner North American Construction Ltd. and substantially all of the assets of Kvaerner North American Construction Inc,. together referenced as "KNAC". The businesses are now known as Matrix North American Construction Ltd. and Matrix North American Construction, Inc., together referenced as "Matrix NAC". Matrix NAC is a premier provider of maintenance and capital construction services to power generation, integrated iron and steel, and industrial process facilities. The acquisition significantly expanded the Company's presence in the Electrical Infrastructure and Industrial Segments, and to a lesser extent, the Oil Gas and Chemical segment. The Company purchased KNAC for $88.3 million . The acquisition was funded through a combination of cash-on-hand and borrowings under our senior revolving credit facility. The purchase price was allocated to the major categories of assets and liabilities based on their estimated fair value at the acquisition date. The following table summarizes the final purchase price allocation (in thousands): Current assets $ 83,575 Property, plant and equipment 11,377 Goodwill 39,295 Other intangible assets 24,009 Total assets acquired 158,256 Current liabilities 68,115 Deferred income taxes 1,179 Noncontrolling interest of consolidated joint venture 700 Net assets acquired 88,262 Cash acquired 36,655 Net purchase price $ 51,607 Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and intangible assets. This acquisition generated $39.3 million of goodwill, of which $30.7 million is tax deductible. The equity in the consolidated joint venture represents the acquired equity in KVPB Power Partners. KVPB Power Partners was subsequently renamed MXPB Power Partners, which we refer to as the "acquired EPC joint venture project". The acquired EPC joint venture project was formed by KNAC and an engineering firm to engineer and construct a combined cycle power plant in Dover, Delaware. The Company holds a 65% voting and economic interest in the acquired EPC joint venture project. The total acquired equity of the acquired EPC joint venture project was $2.0 million of which the Company's portion was approximately $1.3 million and the other party's non-controlling portion was approximately $0.7 million . The Company incurred approximately $2.0 million of expenses related to the acquisition in the second quarter of fiscal 2014; therefore, such expenses are included in our results as selling, general and administrative costs for the year ended June 30, 2015 . The unaudited financial information in the table below summarizes the combined results of operations of Matrix Service Company and Matrix NAC for the for the twelve months ended June 30, 2014 and June 30, 2013, on a pro forma basis, as though the companies had been combined as of July 1, 2012. The pro forma earnings for the twelve months ended June 30, 2014 were adjusted to include incremental intangible amortization expense of $4.1 million and depreciation expense of $1.3 million . The pro forma earnings for the twelve months ended June 30, 2013 were adjusted to include incremental amortization expense of $4.1 million and depreciation expense of $1.3 million . Additionally, $0.6 million of income from a one-time KNAC tax settlement and $2.0 million of acquisition-related expenses were removed from the twelve months ended June 30, 2014. The $2.0 million of acquisition-related expenses were included in the twelve months ended June 30, 2013 as if the acquisition occurred at July 1, 2012. The pro forma financial information presented in the table below is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at July 1, 2012 nor should it be taken as indicative of our future consolidated results of operations. Twelve Months Ended June 30, 2014 June 30, 2013 (In thousands, except per share data) Revenues $ 1,397,706 $ 1,096,267 Net income attributable to Matrix Service Company $ 38,786 $ 28,444 Basic earnings per common share $ 1.48 $ 1.10 Diluted earnings per common share $ 1.44 $ 1.08 |
Customer Contracts
Customer Contracts | 12 Months Ended |
Jun. 30, 2016 | |
Contractors [Abstract] | |
Customer Contracts | Uncompleted Contracts Contract terms of the Company’s construction contracts generally provide for progress billings based on project milestones. The excess of costs incurred and estimated earnings over amounts billed on uncompleted contracts is reported as a current asset. The excess of amounts billed over costs incurred and estimated earnings on uncompleted contracts is reported as a current liability. Gross and net amounts on uncompleted contracts are as follows: June 30, June 30, (In thousands) Costs and estimated earnings recognized on uncompleted contracts $ 1,875,014 $ 1,633,780 Billings on uncompleted contracts 1,829,340 1,644,413 $ 45,674 $ (10,633 ) Shown on balance sheet as: Costs and estimated earnings in excess of billings on uncompleted contracts $ 104,001 $ 86,071 Billings on uncompleted contracts in excess of costs and estimated earnings 58,327 96,704 $ 45,674 $ (10,633 ) Progress billings in accounts receivable at June 30, 2016 and June 30, 2015 included retentions to be collected within one year of $29.7 million and $25.2 million , respectively. Contract retentions collectible beyond one year are included in other assets in the condensed consolidated balance sheet and totaled $0.3 million at June 30, 2016 and $2.8 million at June 30, 2015 . Accounts payable included retentions of $14.9 million at June 30, 2016 and $10.2 million at June 30, 2015 . Accounts payable retentions are generally expected to be settled within one year. Other During the year ended June 30, 2015 our results of operations were materially impacted by charges resulting from a change in estimate related to an acquired EPC joint venture project in the Electrical Infrastructure segment. The charges resulted in a reduction to operating income of $53.4 million and an after-tax reduction of $18.3 million to net income attributable to Matrix Service Company for fiscal year 2015. The Company recorded additional charges on this project during the year ended June 30, 2016, which resulted in a reduction to operating income of $7.1 million and an after-tax reduction to net income attributable to Matrix Service Company of $2.5 million . The fiscal 2016 project charges are attributable to higher than expected project closeout costs. The Company reached substantial completion on the project in the fourth quarter of fiscal 2015. Under percentage of completion accounting for fixed-priced contracts, contract revenues and earnings are recognized ratably over the contract term based on the proportion of actual costs incurred to total estimated costs. As of June 30, 2016, the Company is performing work on two previously announced significant multi-year projects that are contracted on a fixed price basis. One of the projects is expected to be complete in fiscal 2017 and the second project is expected to be complete in fiscal 2018. Based on the information currently available, the Company believes that its current estimates relating to these projects are reasonably stated. However, it is reasonably possible that changes to these contract estimates, including those related to project costs, project timelines, and change orders or claims, could occur and have a material positive or negative impact to our results of operations and financial position in subsequent accounting periods. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill The changes in the carrying amount of goodwill by segment are as follows: Electrical Infrastructure Oil Gas & Chemical Storage Solutions Industrial Total (In thousands) Goodwill $ 29,666 $ 8,088 $ 10,985 $ 7,097 $ 55,836 Cumulative impairment loss (1) (17,653 ) (3,000 ) (922 ) (3,425 ) (25,000 ) Net balance at June 30, 2013 12,013 5,088 10,063 3,672 30,836 Purchase of Kvaerner North American Construction (Note 2) 31,259 5,855 — 1,962 39,076 Translation adjustment (2) (29 ) — (36 ) (10 ) (75 ) Net balance at June 30, 2014 43,243 10,943 10,027 5,624 69,837 Acquisition related adjustments 175 — — 44 219 Purchase of HDB (Note 2) — 3,065 — — 3,065 Translation adjustment (2) (1,044 ) — (363 ) (196 ) (1,603 ) Net balance at June 30, 2015 42,374 14,008 9,664 5,472 71,518 Purchase of BTE (Note 2) — — 6,942 — 6,942 Translation adjustment (2) (204 ) — 75 (38 ) (167 ) Net balance at June 30, 2016 $ 42,170 $ 14,008 $ 16,681 $ 5,434 $ 78,293 (1) A $25.0 million impairment charge was recorded in February 2005. (2) The translation adjustments relate to the periodic translation of Canadian Dollar and South Korean Won denominated goodwill recorded as a part of prior acquisitions in Canada and South Korea, in which the local currency was determined to be the functional currency. Other Intangible Assets Information on the carrying value of other intangible assets is as follows: At June 30, 2016 Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount (Years) (In thousands) Intellectual property 9 to 15 $ 2,579 $ (1,246 ) $ 1,333 Customer based 1.5 to 15 28,179 (9,655 ) 18,524 Non-compete Agreements 4 to 5 1,453 (1,102 ) 351 Trade names 3 to 5 1,615 (824 ) 791 Total other intangible assets $ 33,826 $ (12,827 ) $ 20,999 At June 30, 2015 Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount (Years) (In thousands) Intellectual property 6 to 15 $ 2,460 $ (1,086 ) $ 1,374 Customer based 1.5 to 15 27,837 (7,109 ) 20,728 Non-compete agreements 4 to 5 1,354 (802 ) 552 Trade name 3 to 5 1,615 (308 ) 1,307 Total other intangible assets $ 33,266 $ (9,305 ) $ 23,961 The increase in the gross carrying amount of other intangible assets at June 30, 2016 compared to June 30, 2015 is due primarily to the February 1, 2016 acquisition of BTE (Note 2). The BTE intangible assets consist of the following amortizing assets: • customer-based intangibles with a fair value of $0.5 million and useful life of between 4 months and 10 years; • intellectual property intangibles with a fair value of $0.1 million and useful life of 10 years; and • non-compete agreement intangibles with a fair value of $0.1 million and useful life of 4 years. Amortization expense totaled $3.6 million , $5.0 million , and $2.8 million in fiscal 2016 , 2015 , and 2014, respectively. We estimate that future amortization of other intangible assets will be as follows (in thousands): For year ending: June 30, 2017 $ 3,298 June 30, 2018 2,957 June 30, 2019 2,590 June 30, 2020 2,580 June 30, 2021 2,562 Thereafter 7,012 Total estimated amortization expense $ 20,999 |
Debt
Debt | 12 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company has a five-year, $200.0 million senior secured revolving credit facility under a credit agreement (the "Credit Agreement") that expires March 13, 2019 . Advances under the senior revolving credit facility may be used for working capital, acquisitions, capital expenditures, issuance of letters of credit and other lawful corporate purposes. The Credit Agreement includes the following covenants and borrowing limitations: • Our Senior Leverage Ratio, as defined in the agreement, may not exceed 2.50 to 1.00 as of the end of each fiscal quarter. • We are required to maintain a Fixed Charge Coverage Ratio, as defined in the agreement, greater than or equal to 1.25 to 1.00 as of the end of each fiscal quarter. • Asset dispositions (other than inventory and obsolete or unneeded equipment disposed of in the ordinary course of business) are limited to $20.0 million per 12 -month period. Amounts borrowed under the Credit Agreement bear interest at LIBOR or an Alternate Base Rate, plus in each case, an additional margin based on the Senior Leverage Ratio. The additional margin on Alternate Base Rate and LIBOR-based loans ranges between 0.25% and 1.0% and between 1.25% and 2.0% , respectively. The Credit Agreement also permits us to borrow in Canadian Dollars with a sublimit of U.S. $40.0 million . Amounts borrowed in Canadian Dollars will bear interest either at the CDOR Rate, plus an additional margin based on the Senior Leverage Ratio ranging from 1.25% to 2.0% , or at the Canadian Prime Rate, plus an additional margin based on the Senior Leverage Ratio ranging from 1.75% to 2.5% . The CDOR Rate is equal to the sum of the annual rate of interest, which is the rate determined as being the arithmetic average of the quotations of all institutions listed in respect of the relevant CDOR interest period for Canadian Dollar denominated bankers’ acceptances, plus 0.1% . The Canadian Prime Rate is equal to the greater of (i) the rate of interest per annum most recently announced or established by JPMorgan Chase Bank, N.A., Toronto Branch as its reference rate in effect on such day for determining interest rates for Canadian Dollar denominated commercial loans in Canada and (ii) the CDOR Rate plus 1.0% . The Unused Credit Facility Fee is between 0.20% and 0.35% based on the Senior Leverage Ratio. Under our Credit Agreement, we may declare and pay dividends on our capital stock during any fiscal year up to an amount which, when added to all other dividends paid during such fiscal year, does not exceed 50% of our cumulative net income for such fiscal year to date. We currently have no future plans to pay cash dividends. The carrying value of the senior revolving credit facility approximates its fair value at each balance sheet date. The Credit Agreement includes a Senior Leverage Ratio covenant, which provides that Consolidated Funded Indebtedness, as defined in the Credit Agreement, as of the end of any fiscal quarter, may not exceed 2.5 times Consolidated EBITDA, as defined in the Credit Agreement, over the previous four quarters. For the four quarters ended June 30, 2016 , Consolidated EBITDA, as defined in the Credit Agreement, was $71.9 million . Accordingly, at June 30, 2016 , there was a restriction on our ability to access the full amount of the senior revolving credit facility. Consolidated Funded Indebtedness at June 30, 2016 was $13.1 million . Availability under the senior revolving credit facility is as follows: June 30, June 30, (In thousands) Senior revolving credit facility $ 200,000 $ 200,000 Capacity constraint due to the Senior Leverage Ratio 20,138 54,968 Capacity under the senior revolving credit facility 179,862 145,032 Letters of credit issued 20,755 40,587 Borrowings outstanding — 8,804 Availability under the senior revolving credit facility $ 159,107 $ 95,641 The Company is in compliance with all other affirmative, negative, and financial covenants under the Credit Agreement. The Company acquired $1.9 million of long-term debt in February 2016 as part of the BTE acquisition, which was subsequently repaid in March 2016. |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The sources of pretax income (loss) are as follows: Twelve Months Ended June 30, June 30, June 30, (In thousands) Domestic $ 33,986 $ (4,001 ) $ 60,129 Foreign 5,667 12,193 (3,318 ) Total $ 39,653 $ 8,192 $ 56,811 For fiscal 2016 and 2015, domestic pretax income included losses of $3.3 million and $19.1 million , respectively, related to our acquired EPC joint venture project. Fiscal 2014 domestic pretax income included income of $1.1 million related to the EPC joint venture project. The Company consolidates the acquired EPC joint venture project and reports a noncontrolling interest. Accordingly, the Company's pretax income includes the noncontrolling interest holder's share of the acquired EPC project loss for which the Company does not receive a tax benefit. The components of the provision for income tax expense (benefit) are as follows: Twelve Months Ended June 30, June 30, June 30, (In thousands) Current: Federal $ 9,930 $ 7,535 $ 19,870 State 2,570 1,606 3,117 Foreign (262 ) 1,791 613 12,238 10,932 23,600 Deferred: Federal 887 1,803 (3,951 ) State 67 (362 ) (51 ) Foreign 924 (2,283 ) 336 1,878 (842 ) (3,666 ) $ 14,116 $ 10,090 $ 19,934 The difference between the expected income tax provision applying the domestic federal statutory tax rate and the reported income tax provision is as follows: Twelve Months Ended June 30, June 30, June 30, (In thousands) Expected provision for Federal income taxes at the statutory rate $ 13,879 $ 2,868 $ 19,887 State income taxes, net of Federal benefit 1,827 1,023 2,275 Deemed foreign dividends — 1,462 — Charges without tax benefit 2,187 1,478 1,405 Change in valuation allowance 311 25 — IRC S199 deduction (999 ) — (1,546 ) Foreign tax credits — (1,433 ) — Research and development and other tax credits (1,928 ) (1,197 ) (1,793 ) Foreign tax differential (815 ) (529 ) (182 ) Noncontrolling interest 1,164 6,669 (374 ) Change in uncertain tax positions (569 ) — — Adjustment to tax accounts (786 ) — — Other (155 ) (276 ) 262 Provision for income taxes $ 14,116 $ 10,090 $ 19,934 Significant components of the Company’s deferred tax assets and liabilities are as follows: June 30, June 30, (In thousands) Deferred tax assets: Warranty reserve $ 195 $ 312 Bad debt reserve 3,188 164 Paid-time-off accrual 865 765 Insurance reserve 2,461 2,178 Legal reserve 87 382 Net operating loss benefit and credit carryforwards 8,207 7,380 Valuation allowance (424 ) (115 ) Accrued compensation and pension 1,268 1,059 Stock compensation expense on nonvested deferred shares 3,472 3,080 Accrued losses 274 970 Foreign currency translation and other 1,041 897 Total deferred tax assets 20,634 17,072 Deferred tax liabilities: Tax over book depreciation 11,504 9,987 Tax over book amortization 2,588 1,658 Branch future liability 2,889 2,193 Prepaid insurance 396 160 Receivable holdbacks and other 2,736 589 Total deferred tax liabilities 20,113 14,587 Net deferred tax asset $ 521 $ 2,485 As reported in the consolidated balance sheets: June 30, June 30, (In thousands) Deferred income tax assets 3,719 3,729 Deferred income tax liabilities (3,198 ) (1,244 ) Net deferred tax asset $ 521 $ 2,485 The Company has state net operating loss carryforwards, state tax credit carryforwards, federal foreign tax credit carryforwards, foreign net operating loss carryforwards and foreign tax credit carryforwards. The valuation allowance at June 30, 2016 and June 30, 2015 reduces the recognized tax benefit of these carryforwards to an amount that is more likely than not to be realized. These carryforwards will generally expire as shown below: Tax Credit Carryforwards Expiration Period Amount (in thousands) State tax credits No expiration $ 357 Federal foreign tax credits June 2017 to June 2025 $ 3,076 Foreign tax credits/incentives June 2034 $ 42 Operating Loss Carryforwards Expiration Period Amount (in thousands) State net operating losses June 2025 to June 2032 $ 18,083 Foreign net operating losses June 2028 to June 2035 $ 11,724 In general, it is the practice and intention of the Company to reinvest the earnings of its foreign subsidiaries in its foreign operations. Such amounts become subject to United States taxation upon the remittance of dividends and under certain other circumstances. As of June 30, 2016 , unremitted earnings of foreign subsidiaries, which have been or are intended to be permanently invested, aggregated to approximately $14.0 million . We anticipate that any deferred tax liability related to the investment in these foreign subsidiaries could be offset by foreign tax credits. The Company files tax returns in multiple domestic and foreign taxing jurisdictions. With a few exceptions, the Company is no longer subject to examination by taxing authorities through fiscal 2011. At June 30, 2016 , the Company updated its evaluation of its open tax years in all known jurisdictions. Based on this evaluation, the Company did not identify any material uncertain tax positions. We have recorded a $0.6 million liability as of June 30, 2016 for unrecognized tax positions and the payment of related interest and penalties. We treat the related interest and penalties as income tax expense. Due to the uncertainties related to these tax matters, we are unable to make a reasonably reliable estimate as to when cash settlement with a taxing authority will occur. |
Contingencies
Contingencies | 12 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Insurance Reserves The Company maintains insurance coverage for various aspects of its operations. However, exposure to potential losses is retained through the use of deductibles, self-insured retentions and coverage limits. Typically our contracts require us to indemnify our customers for injury, damage or loss arising from the performance of our services and provide warranties for materials and workmanship. The Company may also be required to name the customer as an additional insured up to the limits of insurance available, or we may be required to purchase special insurance policies or surety bonds for specific customers or provide letters of credit in lieu of bonds to satisfy performance and financial guarantees on some projects. Matrix maintains a performance and payment bonding line sufficient to support the business. The Company generally requires its subcontractors to indemnify the Company and the Company’s customer and name the Company as an additional insured for activities arising out of the subcontractors’ work. We also require certain subcontractors to provide additional insurance policies, including surety bonds in favor of the Company, to secure the subcontractors’ work or as required by the subcontract. There can be no assurance that our insurance and the additional insurance coverage provided by our subcontractors will fully protect us against a valid claim or loss under the contracts with our customers. Unapproved Change Orders and Claims As of June 30, 2016 and June 30, 2015 , costs and estimated earnings in excess of billings on uncompleted contracts included revenues for unapproved change orders and claims of $10.3 million and $12.7 million , respectively. Generally, collection of amounts related to unapproved change orders and claims is expected within twelve months. However, customers may not pay these amounts until final resolution of related claims, and accordingly, collection of these amounts may extend beyond one year. Other The Company and its subsidiaries are participants in various legal actions. It is the opinion of management that none of the known legal actions will have a material impact on the Company’s financial position, results of operations or liquidity. |
Operating Leases
Operating Leases | 12 Months Ended |
Jun. 30, 2016 | |
Leases [Abstract] | |
Operating Leases | Operating Leases The Company is the lessee under operating leases covering real estate and office equipment under non-cancelable operating lease agreements that expire at various times. Future minimum lease payments under non-cancelable operating leases that were in effect at June 30, 2016 total $33.7 million and are payable as follows: fiscal 2017 — $6.2 million ; fiscal 2018 — $5.1 million ; fiscal 2019 — $4.7 million ; fiscal 2020 — $3.7 million ; fiscal 2021 — $3.3 million and thereafter— $10.8 million . Operating lease expense was $6.6 million , $6.7 million and $5.3 million for the twelve months ended June 30, 2016 , June 30, 2015 and June 30, 2014 , respectively. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Jun. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Preferred Stock The Company has 5.0 million shares of preferred stock authorized, none of which was issued or outstanding at June 30, 2016 or June 30, 2015 . Treasury Shares On November 4, 2014 the Board of Directors approved a stock buyback program that replaced the program that had been in place since November 2012. The new program, which expires on December 31, 2016 , allows the Company to purchase up to $25.0 million annually, on a calendar year basis, of common stock if sufficient liquidity exists and management believes the shares purchased would be accretive to the Company's stockholders. The cumulative number of shares repurchased cannot exceed 2,653,399 , which represents 10% of the shares outstanding on the date the new repurchase program was approved. The Company purchased 654,958 and 283,772 shares for $10.5 million and $5.0 million under the stock buyback program during the fiscal years ended June 30, 2016 and 2015, respectively. In addition to the stock buyback program, the Company may repurchase shares of common stock to satisfy the tax withholding obligations upon vesting of an employee’s deferred shares. Matrix repurchased 205,504 and 105,058 shares of common stock during fiscal 2016 and fiscal 2015 , respectively, to satisfy these obligations. These shares were returned to the Company’s pool of treasury shares. The Company has 1,591,072 treasury shares as of June 30, 2016 and intends to utilize these treasury shares solely in connection with equity awards under the Company’s stock incentive plans. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Total stock-based compensation expense for the years ended June 30, 2016 , June 30, 2015 , and June 30, 2014 was $6.3 million , $6.3 million and $5.7 million , respectively. Measured but unrecognized stock-based compensation expense at June 30, 2016 was $9.3 million , all of which related to nonvested deferred shares which are expected to be recognized as expense over a weighted average period of 1.7 years. The recognized tax benefit related to the stock-based compensation expense for the years ended June 30, 2016 , June 30, 2015 and June 30, 2014 totaled $3.2 million , $2.5 million and $2.8 million , respectively. Plan Information Matrix Service Company's 2012 Stock and Incentive Compensation Plan ("2012 Plan") provides stock-based and cash-based incentives for officers, other key employees and directors. Stock options, restricted stock, restricted stock units, stock appreciation rights, performance shares and cash-based awards can be issued under this plan. Upon approval of the 2012 Plan by the Company's stockholders, the 2004 Stock Incentive Plan ("2004 Plan") was frozen with the exception of normal vesting, forfeiture and other activity associated with awards previously granted under the 2004 Plan. Awards totaling 2,300,000 shares have been authorized under the 2012 Plan. At June 30, 2016 there were 1,249,780 shares available for grant under the 2012 Plan. Stock Options Stock options are granted at the market value of the Company’s common stock on the grant date and expire after 10 years. The Company’s policy is to issue shares upon the exercise of stock options from its treasury shares, if available. The Company did not award any new stock options in fiscal years 2014, 2015, or 2016 . Stock option activity and related information for the year ended June 30, 2016 is as follows: Number of Options Weighted-Average Remaining Contractual Life Weighted-Average Exercise Price Aggregate Intrinsic Value (Years) (In thousands) Outstanding at June 30, 2015 190,100 5.7 $ 9.90 $ 1,593 Granted — — Exercised (68,037 ) 9.38 $ 728 Cancelled — — Outstanding at June 30, 2016 122,063 5.3 10.19 $ 769 Vested at June 30, 2016 122,063 5.3 10.19 $ 769 Exercisable at June 30, 2016 122,063 5.3 $ 10.19 $ 769 The total intrinsic value of stock options exercised during fiscal 2016 , 2015 , and 2014 was $0.7 million , $0.7 million and $2.4 million , respectively. Nonvested Deferred Shares The Company has issued nonvested deferred shares under the following types of arrangements: • Time-based awards—Employee awards generally vest in four or five equal annual installments beginning one year after the grant date. Director awards cliff vest on the earlier of three years or upon retirement from the Board. • Market-based awards—These awards are in the form of performance units which vest 3 years after the grant date only if the Company’s common stock achieves certain levels of total shareholder return when compared to the total shareholder return of a peer group of companies as selected by the Compensation Committee of the Board of Directors. The payout is pro-rated and can range from zero to 200% of the original award depending on the Company's relative total shareholder return during the performance period. These awards are settled entirely in stock. As of June 30, 2016 , there are approximately 125,000 , 81,000 , and 128,000 performance units that are scheduled to vest in fiscal 2017 , fiscal 2018 , and fiscal 2019 , respectively. All awards vest upon the death or disability of the participant or upon a change of control of the Company. The grant date fair value of the time-based awards is determined by the market value of the Company's common stock on the grant date. The grant date fair value of the market-based awards is calculated using a Monte Carlo model . For the fiscal 2016 grant, the model estimated the fair value of the award based on approximately 100,000 simulations of the future prices of the Company's common stock compared to the future prices of the common stock of its peer companies based on historical volatilities. The model also took into account the expected dividends of the peer companies over the performance period. Nonvested deferred share activity for the twelve months ended June 30, 2016 is as follows: Shares Weighted Average Grant Date Fair Value per Share Nonvested shares at June 30, 2015 990,268 $ 17.49 Shares granted 370,490 $ 20.77 Performance shares awarded in excess of target 157,022 $ 11.32 Shares vested and released (631,443 ) $ 12.39 Shares cancelled (94,342 ) $ 20.65 Nonvested shares at June 30, 2016 791,995 $ 21.45 There were 242,649 and 381,038 deferred shares granted in fiscal 2015 and 2014 with average grant date fair values of $29.31 and $18.01 , respectively. There were 631,443 , 326,763 and 266,029 deferred shares that vested and were released in fiscal 2016, 2015 and 2014 with weighted average fair values of $22.34 , $23.93 and $22.38 per share, respectively. |
Earnings per Common Share
Earnings per Common Share | 12 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings per Common Share | Earnings per Common Share Basic earnings per share (“EPS”) is calculated based on the weighted average shares outstanding during the period. Diluted earnings per share includes the dilutive effect of employee and director stock options and nonvested deferred shares. Stock options are considered dilutive whenever the exercise price is less than the average market price of the stock during the period and antidilutive whenever the exercise price exceeds the average market price of the common stock during the period. Nonvested deferred shares are considered dilutive (antidilutive) whenever the average market value of the shares during the period exceeds (is less than) the sum of the related average unamortized compensation expense during the period plus the related hypothetical estimated excess tax benefit that will be realized when the shares vest. Stock options and nonvested deferred shares are considered antidilutive in the event we report a net loss. The computation of basic and diluted EPS is as follows: Years Ended June 30, June 30, June 30, (In thousands, except per share data) Basic EPS: Net income attributable to Matrix Service Company $ 28,863 $ 17,157 $ 35,810 Weighted average shares outstanding 26,597 26,603 26,288 Basic EPS $ 1.09 $ 0.64 $ 1.36 Diluted EPS: Weighted average shares outstanding—basic 26,597 26,603 26,288 Dilutive stock options 68 110 180 Dilutive nonvested deferred shares 435 464 508 Diluted weighted average shares 27,100 27,177 26,976 Diluted EPS $ 1.07 $ 0.63 $ 1.33 The following securities are considered antidilutive and have been excluded from the calculation of diluted earnings per share: Twelve Months Ended June 30, June 30, June 30, (In thousands) Nonvested deferred shares 56 148 — Total antidilutive securities 56 148 — |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Jun. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Defined Contribution Plans The Company sponsors defined contribution savings plans for all eligible employees meeting length of service requirements. Under the primary plan, participants may contribute an amount up to 25% of pretax annual compensation subject to certain limitations. The Company matches 100% of the first 3% of employee contributions and 50% of the next 2% of employee contributions. The Company matching contributions vest immediately. The Company’s matching contributions were $5.0 million , $4.9 million , and $4.1 million for the years ended June 30, 2016, 2015 and 2014, respectively. Multiemployer Pension Plans The Company contributes to various union sponsored multiemployer benefit plans in the U.S. and Canada. Benefits under these plans are generally based on compensation levels and years of service. For the Company, the financial risks of participating in multiemployer plans are different from single-employer plans in the following respects: • Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers. • If a participating employer discontinues contributions to a plan, the unfunded obligations of the plan may be borne by the remaining participating employers. • If a participating employer chooses to stop participating in a plan, a withdrawal liability may be created based on the unfunded vested benefits for all employees in the plan. Under federal legislation regarding multiemployer pension plans, in the event of a withdrawal from a plan or plan termination, companies are required to continue funding their proportionate share of such plan’s unfunded vested benefits. We are a participant in multiple union sponsored multiemployer plans, and, as a plan participant, our potential obligation could be significant. The amount of the potential obligation is not currently ascertainable because the information required to determine such amount is not identifiable or readily available. Our participation in significant plans for the fiscal year ended June 30, 2016 is outlined in the table below. The “EIN/Pension Plan Number” column provides the Employer Identification Number (“EIN”) and the three digit plan number. The zone status is based on the latest information that the Company received from the plan and is certified by the plan’s actuary. Plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are generally less than 80 percent funded, and plans in the green zone are generally at least 80 percent funded. The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented. The “Surcharge Imposed” column includes plans in a red zone status that require a payment of a surcharge in excess of regular contributions. The last column lists the expiration date of the collective-bargaining agreement to which the plan is subject. Pension Fund EIN/Pension Plan Number Pension Protection Act Zone Status FIP/RP Status Pending or Implemented Company Contributions Fiscal Year Surcharge Imposed Expiration Date of Collective- Bargaining Agreement 2016 2015 2016 2015 2014 (In thousands) Joint Pension Fund Local Union 164 IBEW 22-6031199/001 Yellow Yellow Yes $ 2,635 $ 3,026 $ 2,955 No 5/31/2017 Boilermaker-Blacksmith National Pension Trust 48-6168020/001 Yellow Yellow Yes 7,658 8,330 3,271 No Described below (1) Joint Pension Fund of Local Union No 102 22-1615726/001 Green Green N/A 3,063 2,395 2,381 No 6/1/2018 IBEW Local 456 Pension Plan 22-6238995/001 Green Yellow N/A 1,168 788 940 No 5/31/2017 Local 351 IBEW Pension Plan 22-3417366/001 Described below (2) Described below (2) Described below (2) 5,018 2,608 2,218 Described below (2) 9/27/2016 Steamfitters Local Union No 420 Pension Plan 23-2004424/001 Red Red Yes 1,265 937 1,677 Yes 4/30/2017 IBEW Local Union 98 Pension Plan 23-1990722/001 Yellow Yellow Yes 1,653 2,768 1,380 No 4/29/2017 Indiana Laborers Pension Fund 35-6027150/001 Yellow Red Yes 2,320 2,519 1,268 No 5/31/2017 Iron Workers Mid-America Pension Plan 36-6488227/001 Green Green N/A 2,248 2,605 1,156 No 5/31/2019 Plumbers & Pipefitters Local Union 74 Pension Fund 51-6015925/001 Yellow Yellow Yes 552 4,473 535 No 6/15/2017 Pipe Fitters Retirement Fund, Local 597 62-6105084/001 Green Green N/A 2,377 2,259 949 No 5/31/2017 Contributions to other multiemployer plans 16,054 22,282 11,639 Total contributions made $ 46,011 $ 54,990 $ 30,369 (1) Our employees are members of several Boilermaker unions that participate in the Boilermaker-Blacksmith National Pension Trust. The most significant of these unions are Boilermakers Local 374 and Boilermakers Local 169, which have collective bargaining agreements that expire on December 31, 2016 and December 31, 2020, respectively. (2) For the Local 351 IBEW Pension Plan, the Company has not received a funding notification that covers the Company's fiscal years 2015 or 2016 during the preparation of this Form 10-K. Under Federal pension law, if a multiemployer pension plan is determined to be in critical or endangered status, the plan must provide notice of this status to participants, beneficiaries, the bargaining parties, the Pension Benefit Guaranty Corporation, and the Department of Labor. The Company also observed that the Local 351 IBEW Pension Plan has not submitted any Critical or Endangered Status Notices to the Department of Labor for either calendar years 2015 or 2016 (which can be accessed at http://www.dol.gov/ebsa/criticalstatusnotices.html). Employee Stock Purchase Plan The Matrix Service Company 2011 Employee Stock Purchase Plan (“ESPP”) was effective January 1, 2011. The ESPP allows employees to purchase shares through payroll deductions and members of the Board of Directors to purchase shares from amounts withheld from their cash retainers. Share purchases are limited to an aggregate market value of no greater than $60,000 per calendar year per participant and are purchased at market value with no discount to the participant. Contributions are with after tax earnings and are accumulated in non-interest bearing accounts for quarterly purchases of company stock. Upon the purchase of shares, the participants receive all stockholder rights including dividend and voting rights, and are permitted to sell their shares at any time. The Company has made 1,000,000 shares available under the ESPP. The ESPP can be terminated at the discretion of the Board of Directors or on January 2, 2021 . Shares are issued from Treasury Stock under the ESPP. There were 17,304 shares issued in fiscal 2016, 13,243 shares in fiscal 2015, and 5,440 shares in fiscal 2014. |
Segment Information
Segment Information | 12 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We operate our business through four reportable segments: Electrical Infrastructure, Oil Gas & Chemical, Storage Solutions, and Industrial. The Electrical Infrastructure segment primarily encompasses construction and maintenance services to a variety of power generation facilities, such as combined cycle plants, natural gas fired power stations, and renewable energy installations. We also provide high voltage services to investor owned utilities, including construction of new substations, upgrades of existing substations, short-run transmission line installations, distribution upgrades and maintenance, and storm restoration services. The Oil Gas & Chemical segment includes turnaround activities, plant maintenance services and construction in the downstream petroleum industry. Another key offering is industrial cleaning services, which include hydroblasting, hydroexcavating, chemical cleaning and vacuum services. We also perform work in the petrochemical, natural gas, gas processing and compression, and upstream petroleum markets. The Storage Solutions segment includes new construction of crude and refined products ASTs, as well as planned and emergency maintenance services. The Storage Solutions segment also includes balance of plant work in storage terminals and tank farms. Also included in the Storage Solutions segment is work related to specialty storage tanks including LNG, LIN/LOX, LPG tanks and other specialty vessels including spheres. Finally, we offer AST products, including geodesic domes, aluminum internal floating roofs, floating suction and skimmer systems, roof drain systems and floating roof seals. The Industrial segment includes construction and maintenance work in the iron and steel and mining and minerals industries. Our work in the mining and minerals industry is primarily for customers engaged in the extraction of copper. We also perform work in bulk material handling and fertilizer production facilities, thermal vacuum chambers, and other industrial markets. The Company evaluates performance and allocates resources based on operating income. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Intersegment sales and transfers are recorded at cost; therefore, no intercompany profit or loss recognized. Segment assets consist primarily of accounts receivable, costs and estimated earnings in excess of billings on uncompleted contracts, property, plant and equipment and goodwill. Results of Operations (In thousands) Electrical Infrastructure Oil Gas & Chemical Storage Solutions Industrial Unallocated Corporate Total Twelve months ended June 30, 2016 Gross revenues $ 349,011 $ 252,973 $ 564,738 $ 149,744 $ — $ 1,316,466 Less: inter-segment revenues — 3,178 1,226 145 — 4,549 Consolidated revenues 349,011 249,795 563,512 149,599 — 1,311,917 Gross profit 29,301 18,553 67,843 10,294 — 125,991 Operating income (loss) 11,144 (3,503 ) 33,449 (208 ) — 40,882 Segment assets 135,298 91,350 201,875 67,569 68,875 564,967 Capital expenditures 1,611 1,481 3,882 104 6,861 13,939 Depreciation and amortization expense 5,008 4,811 8,124 3,498 — 21,441 Twelve months ended June 30, 2015 Gross revenues $ 257,930 $ 310,826 $ 504,155 $ 281,319 $ — $ 1,354,230 Less: inter-segment revenues — 5,466 1,032 4,597 — 11,095 Consolidated revenues 257,930 305,360 503,123 276,722 — 1,343,135 Gross profit (loss) (31,444 ) 25,394 58,085 35,335 — 87,370 Operating income (loss) (44,293 ) 7,064 29,069 16,962 — 8,802 Segment assets 129,725 108,960 172,857 102,761 47,386 561,689 Capital expenditures 579 3,858 2,396 1,139 7,801 15,773 Depreciation and amortization expense 4,915 4,772 7,298 6,495 — 23,480 Twelve months ended June 30, 2014 Gross revenues $ 205,570 $ 240,131 $ 611,826 $ 206,933 $ — $ 1,264,460 Less: inter-segment revenues — 441 930 — — 1,371 Consolidated revenues 205,570 239,690 610,896 206,933 — 1,263,089 Gross profit 20,629 26,912 68,448 20,484 — 136,473 Operating income 7,703 9,939 34,310 6,655 — 58,607 Segment assets 120,264 72,406 200,493 105,049 70,720 568,932 Capital expenditures 9,055 5,421 2,519 1,157 5,437 23,589 Depreciation and amortization expense 3,292 3,768 7,707 3,751 — 18,518 Geographical information is as follows: Revenues Twelve Months Ended June 30, June 30, June 30, (In thousands) United States $ 1,127,893 $ 1,205,713 $ 1,149,262 Canada 178,603 137,422 113,827 Other international 5,421 — — $ 1,311,917 $ 1,343,135 $ 1,263,089 Long-Lived Assets June 30, June 30, June 30, (In thousands) United States $ 158,970 $ 166,132 $ 164,894 Canada 19,915 22,086 28,490 Other international 10,636 — — $ 189,521 $ 188,218 $ 193,384 Information about Significant Customers In fiscal 2016, one customer accounted for 14.8% of our consolidated revenue and 38.9% and 10.2% of our Electrical Infrastructure and Storage Solutions revenue, respectively. Another customer accounted for 10.6% of our consolidated revenue and 24.7% of our Storage Solutions revenue. Three other customers accounted for 16.6% , 14.4% , and 12.7% of our Electrical Infrastructure revenue, and another customer accounted for 19.3% of our Storage Solutions revenue. An additional two customers accounted for 20.2% and 11.2% of our Oil Gas & Chemical revenue, respectively. Three other customers accounted for 36.9% , 20.1% and 14.0% of our Industrial revenue, respectively. In fiscal 2015, one customer accounted for 12.3% of our consolidated revenue and 33.0% of our Storage Solutions revenue. Another customer accounted for 10.9% of our Storage Solutions revenue. Five other customers accounted for 25.1% , 16.3% , 14.7% , 12.7% and 12.7% of our Electrical Infrastructure revenue, respectively. An additional two customers accounted for 17.7% and 12.3% of our Oil Gas & Chemical revenue, respectively. Three other customers accounted for 34.0% , 27.6% , and 19.0% of our Industrial revenue, respectively. In fiscal 2014, two customers accounted for 17.3% and 12.7% of our consolidated revenue and 35.8% and 26.3% of our Storage Solutions revenue, respectively. Four other customers accounted for 20.8% , 17.5% , 17.0% , and 10.8% of our Electrical Infrastructure revenue, respectively. An additional three customers accounted for 18.3% , 14.0% , and 10.2% of our Oil Gas & Chemical revenue, respectively. Five more customers accounted for 23.3% , 15.1% , 13.0% , 12.7% , and 11.3% of our Industrial revenue, respectively. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) Quarterly Financial Data (Unaudited) | 12 Months Ended |
Jun. 30, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | Matrix Service Company Quarterly Financial Data (Unaudited) Fiscal Years Ended June 30, 2016 and June 30, 2015 First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands, except per share amounts) Fiscal Year 2016 Revenues $ 319,331 $ 323,529 $ 309,422 $ 359,635 Gross profit 34,584 30,005 27,303 34,099 Operating income 15,101 4,935 6,347 14,499 Net income attributable to Matrix Service Company 9,941 5,431 4,357 9,134 Earnings per common share: Basic 0.38 0.20 0.16 0.35 Diluted 0.37 0.20 0.16 0.34 Fiscal Year 2015 Revenues $ 321,683 $ 342,880 $ 314,155 $ 364,417 Gross profit 28,379 15,955 2,632 40,404 Operating income (loss) 8,547 (3,671 ) (14,448 ) 18,374 Net income (loss) attributable to Matrix Service Company 5,914 3,286 (2,959 ) 10,916 Earnings (loss) per common share: Basic 0.22 0.12 (0.11 ) 0.41 Diluted 0.22 0.12 (0.11 ) 0.40 The sum of earnings per share for the four quarters may not equal the total earnings per share for the year due to changes in the average number of common shares outstanding and rounding. |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | 12 Months Ended |
Jun. 30, 2016 | |
Valuation and Qualifying Accounts [Abstract] | |
Valuation and Qualifying Accounts | Matrix Service Company Schedule II—Valuation and Qualifying Accounts June 30, 2016 , June 30, 2015 , and June 30, 2014 (In thousands) COL. A COL. B COL. C ADDITIONS COL. D COL. E Balance at Beginning of Period Charged to Costs and Expenses Charged to Other Accounts—Describe Deductions—Describe Balance at End of Period Fiscal Year 2016 Deducted from asset accounts: Allowance for doubtful accounts $ 561 $ 6,065 $ 1,808 (A) $ (31 ) (B) $ 8,403 Valuation reserve for deferred tax assets 115 311 — (2 ) 424 Total $ 676 $ 6,376 $ 1,808 $ (33 ) $ 8,827 Fiscal Year 2015 Deducted from asset accounts: Allowance for doubtful accounts $ 204 $ 422 $ — $ (65 ) (B) $ 561 Valuation reserve for deferred tax assets 90 25 — — 115 Total $ 294 $ 447 $ — $ (65 ) $ 676 Fiscal Year 2014 Deducted from asset accounts: Allowance for doubtful accounts $ 795 $ 121 $ — $ (712 ) (B) $ 204 Valuation reserve for deferred tax assets 90 — — — 90 Total $ 885 $ 121 $ — $ (712 ) $ 294 (A) Relates to a reclassification of reserves that were initially recorded in billings on uncompleted contracts in excess of costs and estimated earnings. (B) Receivables written off against allowance for doubtful accounts. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation The consolidated financial statements include the accounts of Matrix Service Company (“Matrix” or the “Company”) and its subsidiaries, all of which are wholly owned. Intercompany transactions and balances have been eliminated in consolidation. The Company operates in the United States, Canada, South Korea and Australia. The Company’s reportable segments are Electrical Infrastructure, Oil Gas & Chemical, Storage Solutions and Industrial. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. We believe the most significant estimates and judgments are associated with revenue recognition, the recoverability tests that must be periodically performed with respect to our goodwill and other intangible assets, valuation reserves on our accounts receivable and deferred tax assets, and the estimation of loss contingencies, including liabilities associated with litigation and with the self-insured retentions on our insurance programs. Actual results could materially differ from those estimates. |
Revenue Recognition | Revenue Recognition Matrix records revenue on fixed-price contracts on a percentage-of-completion basis, primarily based on costs incurred to date compared to the total estimated contract cost. The Company records revenue on reimbursable and time and material contracts on a proportional performance basis as costs are incurred. Contracts in process are valued at cost plus accrued profits less billings on uncompleted contracts. Contracts are generally considered substantially complete when field construction is completed. The elapsed time from award of a contract to completion of performance may be in excess of one year. Matrix includes pass-through revenue and costs on cost-plus contracts, which are customer-reimbursable materials, equipment and subcontractor costs, when Matrix determines that it is responsible for the procurement and management of such cost components. Matrix has numerous contracts that are in various stages of completion which require estimates to determine the appropriate cost and revenue recognition. The Company has a history of making reasonably dependable estimates of the extent of progress towards completion, contract revenues and contract costs, and accordingly, does not believe significant fluctuations are likely to materialize. However, current estimates may be revised as additional information becomes available. If estimates of costs to complete fixed-price contracts indicate a loss, provision is made through a contract write-down for the total loss anticipated. A number of our contracts contain various cost and performance incentives and penalties that impact the earnings we realize from our contracts, and adjustments related to these incentives and penalties are recorded in the period, on a percentage-of-completion basis, when estimable and probable. Indirect costs, such as salaries and benefits, supplies and tools, equipment costs and insurance costs, are charged to projects based upon direct labor hours and overhead allocation rates per direct labor hour. Warranty costs are normally incurred prior to project completion and are charged to project costs as they are incurred. Warranty costs incurred subsequent to project completion were not material for the periods presented. Overhead allocation rates are established annually during the budgeting process. |
Precontract Costs | Precontract Costs Precontract costs are costs incurred in anticipation of obtaining a contract that will result in no future benefit unless the contract is obtained. The Company generally expenses precontract costs to cost of revenue as incurred, but, in certain cases their recognition may be deferred if specific criteria are met. We had no deferred precontract costs at June 30, 2016 or 2015. |
Change Orders and Claims Recognition | Change Orders and Claims Recognition Change orders are modifications of an original contract that effectively change the existing provisions of the contract. Change orders may include changes in specifications or designs, manner of performance, facilities, equipment, materials, sites and period of completion of the work. Matrix or our clients may initiate change orders. The client's agreement to the terms of change orders is, in many cases, reached prior to work commencing; however, sometimes circumstances require that work progress prior to obtaining client agreement. Costs related to change orders are recognized as incurred. Revenues attributable to change orders that are unapproved as to price or scope are recognized to the extent that costs have been incurred if the amounts can be reliably estimated and their realization is probable. Revenues in excess of the costs attributable to change orders that are unapproved as to price or scope are recognized only when realization is assured beyond a reasonable doubt. Change orders that are unapproved as to both price and scope are evaluated as claims. Claims are amounts in excess of the agreed contract price that we seek to collect from customers or others for delays, errors in specifications and designs, contract terminations, change orders in dispute or unapproved as to both scope and price or other causes of anticipated additional costs incurred by us. Recognition of amounts as additional contract revenue related to claims is appropriate only if it is probable that the claims will result in additional contract revenue and if the amount can be reliably estimated. We must determine if: • there is a legal basis for the claim; • the additional costs were caused by circumstances that were unforeseen by the Company and are not the result of deficiencies in our performance; • the costs are identifiable or determinable and are reasonable in view of the work performed; and • the evidence supporting the claim is objective and verifiable. If all of these requirements are met, revenue from a claim is recorded only to the extent that we have incurred costs relating to the claim. Unapproved change orders and claims are more fully discussed in Note 7—Contingencies. |
Cash Equivalents | Cash Equivalents The Company includes as cash equivalents all investments with original maturities of three months or less which are readily convertible into cash. The Company had approximately $0.3 million of restricted cash related to a customer deposit at June 30, 2016 and $0.3 million of restricted cash at June 30, 2015 . We have cash on deposit at June 30, 2016 with banks in the United States, Canada and South Korea in excess of Federal Deposit Insurance Corporation ("FDIC"), Canada Deposit Insurance Corporation ("CDIC") and Korea Deposit Insurance Corporation ("KDIC") insurance limits, respectively. We also have cash on deposit at June 30, 2016 with a bank in Australia that is not eligible for Financial Claims Scheme ("FSC") protection since those funds are in U.S. Dollars; other funds held by the Company in Australia were eligible for FSC protection and were within its protection limits. |
Accounts Receivable | Accounts Receivable Accounts receivable are carried on a gross basis, less the allowance for uncollectible accounts. The Company’s customers consist primarily of major integrated oil companies, steel companies, independent refiners and marketers, power companies, petrochemical companies, pipeline companies, mining companies, contractors and engineering firms. The Company is exposed to the risk of individual customer defaults or depressed cycles in our customers’ industries. To mitigate this risk many of our contracts require payment as projects progress or advance payment in some circumstances. In addition, in most cases the Company can place liens against the property, plant or equipment constructed or terminate the contract if a material contract default occurs. Management estimates the allowance for uncollectible accounts based on existing economic conditions, the financial condition of its customers and the amount and age of past due accounts. Accounts are written off against the allowance for uncollectible accounts only after all collection attempts have been exhausted. |
Retentions | Retentions Contract retentions collectible beyond one year are included in Other Assets in the Consolidated Balance Sheets. Accounts payable retentions are generally settled within one year. |
Loss Contingencies | Loss Contingencies Various legal actions, claims and other contingencies arise in the normal course of our business. Contingencies are recorded in the consolidated financial statements, or are otherwise disclosed, in accordance with ASC 450-20, “Loss Contingencies”. Specific reserves are provided for loss contingencies to the extent we conclude that a loss is both probable and estimable. We use a case-by-case evaluation of the underlying data and update our evaluation as further information becomes known. We believe that any amounts exceeding our recorded accruals should not materially affect our financial position, results of operations or liquidity. However, the results of litigation are inherently unpredictable and the possibility exists that the ultimate resolution of one or more of these matters could result in a material effect on our financial position, results of operations or liquidity. Legal costs are expensed as incurred. |
Inventories | Inventories Inventories consist primarily of steel plate and pipe and aluminum coil and extrusions. Cost is determined primarily using the average cost method and inventories are stated at the lower of cost or net realizable value. |
Depreciation | Depreciation Depreciation is computed using the straight-line method over the estimated useful lives of the depreciable assets. Depreciable lives are as follows: buildings— 40 years, construction equipment— 3 to 15 years, transportation equipment— 3 to 5 years, and office equipment and software— 3 to 10 years. Leasehold improvements are amortized over the shorter of the useful life of the asset or the lease term. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company evaluates long-lived assets for impairment when events or changes in circumstances indicate, in management’s judgment, that the carrying value of such assets used in operations may not be recoverable. The determination of whether an impairment has occurred is based on management’s estimate of undiscounted future cash flows attributable to the assets as compared to the carrying value of the assets. If an impairment has occurred, the amount of the impairment recognized is determined by estimating the fair value of the assets and, to the extent the carrying value exceeds the fair value of the assets, recording a loss provision. For assets identified to be disposed of in the future, the carrying value of the assets are compared to the estimated fair value less the cost of disposal to determine if an impairment has occurred. Until the assets are disposed of, an estimate of the fair value is redetermined when related events or circumstances change. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price of acquisitions over the acquisition date fair value of the net identifiable tangible and intangible assets acquired. In accordance with current accounting guidance, goodwill is not amortized and is tested at least annually for impairment at the reporting unit level. We perform our annual analysis during the fourth quarter of each fiscal year and in any other period in which indicators of impairment warrant additional analysis. Goodwill impairment reviews involve a two-step process. Goodwill is first evaluated for impairment by comparing management’s estimate of the fair value of a reporting unit with its carrying value, including goodwill. Management utilizes a discounted cash flow analysis, referred to as an income approach, to determine the estimated fair value of our reporting units. Significant judgments and assumptions including the discount rate, anticipated revenue growth rate and gross margins, estimated operating and interest expense, and capital expenditures are inherent in these fair value estimates, which are based on our operating and capital budgets and on our strategic plan. As a result, actual results may differ from the estimates utilized in our income approach. The use of alternate judgments and/or assumptions could result in a fair value that differs from our estimate and could result in the recognition of an impairment charge in the financial statements. As a result of these uncertainties, we utilize multiple scenarios and assign probabilities to each of the scenarios in the income approach. We also consider indications obtained from market-based approaches. We compare market multiples derived from market prices of stock of companies that are engaged in a similar line of business to the corresponding measures of the Company. We also consider the combined carrying values of our reporting units to our market capitalization. If the carrying value of our reporting unit is higher than its fair value, there is an indication that impairment may exist and the second step must be performed to measure the amount of impairment. The amount of impairment is determined by comparing the implied fair value of the reporting unit's goodwill to the carrying value of the goodwill calculated in the same manner as if the reporting unit were being acquired in a business combination. If the implied fair value of goodwill is less than its carrying value, we would record an impairment charge for the difference. |
Other Intangible Assets | Other Intangible Assets Intangible assets that have finite useful lives are amortized by the straight-line method over their useful lives ranging from 1.5 years to 15 years. Intangible assets that have indefinite useful lives are not amortized but are tested at least annually for impairment. Each reporting period, we evaluate the remaining useful lives of intangible assets not being amortized to determine whether facts and circumstances continue to support an indefinite useful life. Intangible assets are considered impaired if the fair value of the intangible asset is less than its net book value. If quoted market prices are not available, the fair values of the intangible assets are based on present values of expected future cash flows or royalties avoided using discount rates commensurate with the risks involved. |
Insurance Reserves | Insurance Reserves We maintain insurance coverage for various aspects of our operations. However, we retain exposure to potential losses through the use of deductibles, coverage limits and self-insured retentions. We establish reserves for claims using a combination of actuarially determined estimates and case-by-case evaluations of the underlying claim data and update our evaluations as further information becomes known. Judgments and assumptions are inherent in our reserve accruals; as a result, changes in assumptions or claims experience could result in changes to these estimates in the future. If actual results of claim settlements are different than the amounts estimated we may be exposed to future gains and losses that could be material. |
Stock-Based Compensation | Stock-Based Compensation The Company has issued stock options and nonvested deferred share awards under its long-term incentive compensation plans. The fair value of these awards is calculated at grant date. The fair value of time-based, nonvested deferred shares is the value of the Company’s common stock at the grant date. The fair value of market-based nonvested deferred shares is based on several factors, including the probability that the market condition specified in the grant will be achieved. The fair value of stock options is determined based on the Black-Scholes option pricing model. For all stock-based awards, expense is recognized over the requisite service period, net of estimated forfeitures. |
Income Taxes | Income Taxes We use the asset and liability approach for financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances based on our judgments and estimates are established when necessary to reduce deferred tax assets to the amount expected to be realized in future operating results. Company management believes that realization of deferred tax assets in excess of the valuation allowance is more likely than not. Our estimates are based on facts and circumstances in existence as well as interpretations of existing tax regulations and laws applied to the facts and circumstances, with the help of professional tax advisors. Therefore, we estimate and provide for amounts of additional income taxes that may be assessed by the various taxing authorities. |
Foreign Currency | Foreign Currency The functional currencies of the Company’s operations in Canada, South Korea and Australia are the Canadian Dollar, South Korean Won and U.S. Dollar, respectively. For subsidiaries with operations using a foreign functional currency, assets and liabilities are translated at the year end exchange rates and the income statement accounts are translated at average exchange rates throughout the year. Translation gains and losses are reported in Accumulated Other Comprehensive Income (Loss) in the Consolidated Statements of Changes in Stockholders’ Equity and in Other Comprehensive Income (Loss) in the Consolidated Statements of Comprehensive Income. Transaction gains and losses are reported as a component of Other income (expense) in the Consolidated Statements of Income. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) On May 28, 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” The ASU also requires entities to disclose both quantitative and qualitative information that enables users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The ASU's disclosure requirements are significantly more comprehensive than those in existing revenue standards. The ASU applies to all contracts with customers except those that are within the scope of other topics in the FASB Accounting Standards Codification ("ASC"). The ASU is effective for annual reporting periods beginning after December 15, 2017, with early adoption permitted on a limited basis. Upon adoption, the Company may elect one of two application methods, a full retrospective application or a modified retrospective application. We expect to adopt this standard on July 1, 2018 and are currently evaluating its expected impact on our financial statements. Accounting Standards Update 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern On August 27, 2014, the FASB issued ASU 2014-15, which provides guidance on determining when and how reporting entities must disclose going-concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date of issuance of the entity’s financial statements. Further, an entity must provide certain disclosures if there is “substantial doubt about the entity’s ability to continue as a going concern.” The FASB believes that requiring management to perform the assessment will enhance the timeliness, clarity, and consistency of related disclosures and improve convergence with international financial reporting standards ("IFRSs") (which emphasize management’s responsibility for performing the going-concern assessment). However, the time horizon for the assessment (look-forward period) and the disclosure thresholds under U.S. GAAP and IFRSs will continue to differ. The ASU is effective for annual periods ending after December 15, 2016, and interim periods thereafter; early adoption is permitted. We expect to adopt this standard in fiscal 2017. Accounting Standards Update 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments On September 25, 2015, the FASB issued ASU 2015-16 to simplify the accounting for measurement-period adjustments. The ASU was issued in response to stakeholder feedback that restatements of prior periods to reflect adjustments made to provisional amounts recognized in a business combination increase the cost and complexity of financial reporting but do not significantly improve the usefulness of the information. Under the ASU, an acquirer must recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The ASU also requires acquirers to present separately on the face of the income statement, or disclose in the notes, the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. For public business entities, the ASU is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. We adopted this standard on July 1, 2016 with no material impact to the Company's financial statements. Accounting Standards Update 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes On November 20, 2015, the FASB issued ASU 2015-17, which requires entities to present deferred tax assets ("DTAs") and deferred tax liabilities ("DTLs") as noncurrent in a classified balance sheet. The ASU simplifies the current guidance, which requires entities to separately present DTAs and DTLs as current and noncurrent in a classified balance sheet based on the classification of the related asset or liability. For public business entities, the ASU will be effective for annual periods beginning after December 15, 2016, and interim periods within those years with early adoption permitted. The Company elected to retrospectively early adopt ASU 2015-17, effective for the quarter ended December 31, 2015. The quantitative effects of the change on the prior balance sheet presented, for the fiscal year ended June 30, 2015, resulted in a net reclassification of $6.6 million and $6.6 million from the "Deferred income taxes" current asset and liability financial statement line items, respectively, to the "Deferred income taxes" asset and liability financial statement line items included in the noncurrent asset and liability sections of the balance sheet. Accounting Standards Update 2016-02, Leases (Topic 842) On February 25, 2016, the FASB issued ASU 2016-02. The amendments in this update require, among other things, that lessees recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Lessees and lessors must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. For public business entities, the ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating its expected impact on our financial statements. Accounting Standards Update 2016-09, Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting On March 30, 2016, the FASB issued ASU 2016-09, which simplified several aspects of accounting for stock-based compensation transactions, including the accounting for income taxes and forfeitures and statutory tax withholding requirements. The ASU is effective for the Company on July 1, 2017 and early adoption is permitted. The Company is planning to adopt the ASU in the first quarter of fiscal 2017, with no material impacts expected. The following is a description of the key provisions of the ASU and its transition requirements: Accounting for Income Taxes : The amendments require the Company to recognize excess tax benefits or tax deficiencies in its provision for income taxes in its consolidated statements of income during the period of vesting or exercise of its nonvested deferred share awards and stock options, respectively, for which it expects to receive an income tax deduction. Currently, the Company recognizes any excess tax benefits in additional paid-in capital ("APIC") in the balance sheet and any tax deficiencies are recognized as a reduction of APIC to the extent the Company has accumulated excess tax benefits. Any tax deficiencies in excess of accumulated excess tax benefits in APIC are recognized in the provision for income taxes. The amendments also require the Company to only present excess tax benefits and tax deficiencies in the operating section of its statements of cash flows. Currently, the Company is required to present such items in both the financing section and operating section of its statements of cash flows. Amendments to the presentation of excess tax benefits and tax deficiencies in the statements of cash flows may be applied retrospectively or prospectively. Amendments requiring the recognition of excess tax benefits and tax deficiencies in income are to be applied prospectively. The Company is required to apply the amendments for accumulated excess tax benefits on a modified retrospective basis as a cumulative-effect adjustment to retained earnings as of the date of adoption. The balance of accumulated excess tax benefits included in APIC was $9.8 million as of June 30, 2016. Accounting for Forfeitures : The Company currently recognizes expense on all stock-based awards over the requisite service period, net of estimated forfeitures. The amendments in this ASU allow the Company to elect, as a company-wide accounting policy, either to continue to estimate the amount of forfeitures to exclude from compensation expense or to exclude forfeitures from compensation expense when they occur. The Company is planning to account for forfeitures when they occur when it adopts the amendments in the first quarter of fiscal 2017. The Company will apply the accounting change on a modified retrospective basis as a cumulative-effect adjustment to retained earnings as of the date of adoption. The Company does not expect the adoption of these amendments to have a material impact to its financial statements. Statutory Tax Withholding Requirements : Currently, an entire award must be classified as a liability if the fair value of the shares withheld exceeds the Company's minimum statutory withholding obligation. Under the ASU, the Company will be allowed to withhold shares with a fair value up to the amount of tax owed using the maximum statutory tax rate in the employee's applicable jurisdictions. The Company will be allowed to determine one maximum rate for all employees in each jurisdiction, rather than a rate for each employee in the jurisdiction. Also, the ASU requires that cash outflows to reacquire shares withheld for taxes to be classified in the financing section of its statements of cash flows. Since the Company does not have any awards classified as liabilities due to statutory tax withholding requirements as of June 30, 2016, and since the Company already presents its cash outflows for reacquiring shares withheld for taxes as a financing activity in its statements of cash flows, the Company does not expect these amendments to have any impact on its financial statements when adopted during the 1st quarter of fiscal 2017. Accounting Standards Update 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments On June 16, 2016, the FASB issued ASU 2016-13, which changes how the Company accounts for its allowance for uncolletible accounts. The amendments in this update require a financial asset (or a group of financial assets) to be presented at the net amount expected to be collected. The income statement will reflect any increases or decreases of expected credit losses that have taken place during the period. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. Current GAAP delays the recognition of the full amount of credit losses until the loss is probable of occurring. The amendments in this update eliminate the probable initial recognition threshold and, instead, reflect the Company's current estimate of all expected credit losses. In addition, current guidance limits the information the Company may consider in measuring a credit loss to its past events and current conditions. The amendments in this update broaden the information the Company may consider in developing its expected credit loss estimate to include forecasted information. The amendments in this update are effective for the Company on July 1, 2020 and the Company may early adopt on July 1, 2019. The Company must apply the amendments in this update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company does not expect this update to have a material impact to its estimate of the allowance for uncollectible accounts. |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Business Acquisition [Line Items] | |
Business Acquisition, Pro Forma Information | The pro forma financial information presented in the table below is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at July 1, 2012 nor should it be taken as indicative of our future consolidated results of operations. Twelve Months Ended June 30, 2014 June 30, 2013 (In thousands, except per share data) Revenues $ 1,397,706 $ 1,096,267 Net income attributable to Matrix Service Company $ 38,786 $ 28,444 Basic earnings per common share $ 1.48 $ 1.10 Diluted earnings per common share $ 1.44 $ 1.08 |
Baillie Tank Equipment, Ltd. [Member] | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary net purchase price allocation (in thousands): Current assets $ 5,574 Property, plant and equipment 4,347 Goodwill 6,942 Other intangible assets 720 Other assets 233 Total assets acquired 17,816 Current liabilities 1,581 Deferred income taxes 329 Long-term debt 1,858 Other liabilities 407 Net assets acquired 13,641 Cash acquired 592 Net purchase price $ 13,049 |
HDB, Inc. [Member] | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the purchase price allocation (in thousands): Current assets $ 1,645 Property, plant and equipment 1,001 Tax deductible goodwill 3,065 Other intangible assets 900 Total assets acquired 6,611 Current liabilities 1,060 Net assets acquired $ 5,551 |
Kvaerner North American Construction [Member] | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the final purchase price allocation (in thousands): Current assets $ 83,575 Property, plant and equipment 11,377 Goodwill 39,295 Other intangible assets 24,009 Total assets acquired 158,256 Current liabilities 68,115 Deferred income taxes 1,179 Noncontrolling interest of consolidated joint venture 700 Net assets acquired 88,262 Cash acquired 36,655 Net purchase price $ 51,607 |
Customer Contracts (Tables)
Customer Contracts (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Contractors [Abstract] | |
Gross and net amount of uncompleted contracts | Gross and net amounts on uncompleted contracts are as follows: June 30, June 30, (In thousands) Costs and estimated earnings recognized on uncompleted contracts $ 1,875,014 $ 1,633,780 Billings on uncompleted contracts 1,829,340 1,644,413 $ 45,674 $ (10,633 ) Shown on balance sheet as: Costs and estimated earnings in excess of billings on uncompleted contracts $ 104,001 $ 86,071 Billings on uncompleted contracts in excess of costs and estimated earnings 58,327 96,704 $ 45,674 $ (10,633 ) |
Goodwill and Other Intangible28
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Carrying value of goodwill by segment | The changes in the carrying amount of goodwill by segment are as follows: Electrical Infrastructure Oil Gas & Chemical Storage Solutions Industrial Total (In thousands) Goodwill $ 29,666 $ 8,088 $ 10,985 $ 7,097 $ 55,836 Cumulative impairment loss (1) (17,653 ) (3,000 ) (922 ) (3,425 ) (25,000 ) Net balance at June 30, 2013 12,013 5,088 10,063 3,672 30,836 Purchase of Kvaerner North American Construction (Note 2) 31,259 5,855 — 1,962 39,076 Translation adjustment (2) (29 ) — (36 ) (10 ) (75 ) Net balance at June 30, 2014 43,243 10,943 10,027 5,624 69,837 Acquisition related adjustments 175 — — 44 219 Purchase of HDB (Note 2) — 3,065 — — 3,065 Translation adjustment (2) (1,044 ) — (363 ) (196 ) (1,603 ) Net balance at June 30, 2015 42,374 14,008 9,664 5,472 71,518 Purchase of BTE (Note 2) — — 6,942 — 6,942 Translation adjustment (2) (204 ) — 75 (38 ) (167 ) Net balance at June 30, 2016 $ 42,170 $ 14,008 $ 16,681 $ 5,434 $ 78,293 |
Carrying value of other intangible assets | Information on the carrying value of other intangible assets is as follows: At June 30, 2016 Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount (Years) (In thousands) Intellectual property 9 to 15 $ 2,579 $ (1,246 ) $ 1,333 Customer based 1.5 to 15 28,179 (9,655 ) 18,524 Non-compete Agreements 4 to 5 1,453 (1,102 ) 351 Trade names 3 to 5 1,615 (824 ) 791 Total other intangible assets $ 33,826 $ (12,827 ) $ 20,999 At June 30, 2015 Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount (Years) (In thousands) Intellectual property 6 to 15 $ 2,460 $ (1,086 ) $ 1,374 Customer based 1.5 to 15 27,837 (7,109 ) 20,728 Non-compete agreements 4 to 5 1,354 (802 ) 552 Trade name 3 to 5 1,615 (308 ) 1,307 Total other intangible assets $ 33,266 $ (9,305 ) $ 23,961 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Amortization expense totaled $3.6 million , $5.0 million , and $2.8 million in fiscal 2016 , 2015 , and 2014, respectively. We estimate that future amortization of other intangible assets will be as follows (in thousands): For year ending: June 30, 2017 $ 3,298 June 30, 2018 2,957 June 30, 2019 2,590 June 30, 2020 2,580 June 30, 2021 2,562 Thereafter 7,012 Total estimated amortization expense $ 20,999 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Availability under the senior credit facility | June 30, June 30, (In thousands) Senior revolving credit facility $ 200,000 $ 200,000 Capacity constraint due to the Senior Leverage Ratio 20,138 54,968 Capacity under the senior revolving credit facility 179,862 145,032 Letters of credit issued 20,755 40,587 Borrowings outstanding — 8,804 Availability under the senior revolving credit facility $ 159,107 $ 95,641 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of sources of pretax income | The sources of pretax income (loss) are as follows: Twelve Months Ended June 30, June 30, June 30, (In thousands) Domestic $ 33,986 $ (4,001 ) $ 60,129 Foreign 5,667 12,193 (3,318 ) Total $ 39,653 $ 8,192 $ 56,811 |
Components of the provision for income taxes | The components of the provision for income tax expense (benefit) are as follows: Twelve Months Ended June 30, June 30, June 30, (In thousands) Current: Federal $ 9,930 $ 7,535 $ 19,870 State 2,570 1,606 3,117 Foreign (262 ) 1,791 613 12,238 10,932 23,600 Deferred: Federal 887 1,803 (3,951 ) State 67 (362 ) (51 ) Foreign 924 (2,283 ) 336 1,878 (842 ) (3,666 ) $ 14,116 $ 10,090 $ 19,934 |
Difference between expected income tax provision applying domestic federal statutory tax rate and reported income tax provision | The difference between the expected income tax provision applying the domestic federal statutory tax rate and the reported income tax provision is as follows: Twelve Months Ended June 30, June 30, June 30, (In thousands) Expected provision for Federal income taxes at the statutory rate $ 13,879 $ 2,868 $ 19,887 State income taxes, net of Federal benefit 1,827 1,023 2,275 Deemed foreign dividends — 1,462 — Charges without tax benefit 2,187 1,478 1,405 Change in valuation allowance 311 25 — IRC S199 deduction (999 ) — (1,546 ) Foreign tax credits — (1,433 ) — Research and development and other tax credits (1,928 ) (1,197 ) (1,793 ) Foreign tax differential (815 ) (529 ) (182 ) Noncontrolling interest 1,164 6,669 (374 ) Change in uncertain tax positions (569 ) — — Adjustment to tax accounts (786 ) — — Other (155 ) (276 ) 262 Provision for income taxes $ 14,116 $ 10,090 $ 19,934 |
Significant components of Company's deferred tax assets and liabilities | Significant components of the Company’s deferred tax assets and liabilities are as follows: June 30, June 30, (In thousands) Deferred tax assets: Warranty reserve $ 195 $ 312 Bad debt reserve 3,188 164 Paid-time-off accrual 865 765 Insurance reserve 2,461 2,178 Legal reserve 87 382 Net operating loss benefit and credit carryforwards 8,207 7,380 Valuation allowance (424 ) (115 ) Accrued compensation and pension 1,268 1,059 Stock compensation expense on nonvested deferred shares 3,472 3,080 Accrued losses 274 970 Foreign currency translation and other 1,041 897 Total deferred tax assets 20,634 17,072 Deferred tax liabilities: Tax over book depreciation 11,504 9,987 Tax over book amortization 2,588 1,658 Branch future liability 2,889 2,193 Prepaid insurance 396 160 Receivable holdbacks and other 2,736 589 Total deferred tax liabilities 20,113 14,587 Net deferred tax asset $ 521 $ 2,485 |
Significant components of Company's deferred tax assets and liabilities as reported in consolidated balance sheets | June 30, June 30, (In thousands) Deferred income tax assets 3,719 3,729 Deferred income tax liabilities (3,198 ) (1,244 ) Net deferred tax asset $ 521 $ 2,485 |
Summary of Tax Credit Carryforwards | These carryforwards will generally expire as shown below: Tax Credit Carryforwards Expiration Period Amount (in thousands) State tax credits No expiration $ 357 Federal foreign tax credits June 2017 to June 2025 $ 3,076 Foreign tax credits/incentives June 2034 $ 42 |
Summary of Operating Loss Carryforwards | Operating Loss Carryforwards Expiration Period Amount (in thousands) State net operating losses June 2025 to June 2032 $ 18,083 Foreign net operating losses June 2028 to June 2035 $ 11,724 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock option activity and related information | Stock option activity and related information for the year ended June 30, 2016 is as follows: Number of Options Weighted-Average Remaining Contractual Life Weighted-Average Exercise Price Aggregate Intrinsic Value (Years) (In thousands) Outstanding at June 30, 2015 190,100 5.7 $ 9.90 $ 1,593 Granted — — Exercised (68,037 ) 9.38 $ 728 Cancelled — — Outstanding at June 30, 2016 122,063 5.3 10.19 $ 769 Vested at June 30, 2016 122,063 5.3 10.19 $ 769 Exercisable at June 30, 2016 122,063 5.3 $ 10.19 $ 769 |
Nonvested deferred share activity | Nonvested deferred share activity for the twelve months ended June 30, 2016 is as follows: Shares Weighted Average Grant Date Fair Value per Share Nonvested shares at June 30, 2015 990,268 $ 17.49 Shares granted 370,490 $ 20.77 Performance shares awarded in excess of target 157,022 $ 11.32 Shares vested and released (631,443 ) $ 12.39 Shares cancelled (94,342 ) $ 20.65 Nonvested shares at June 30, 2016 791,995 $ 21.45 |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted earnings per share | The computation of basic and diluted EPS is as follows: Years Ended June 30, June 30, June 30, (In thousands, except per share data) Basic EPS: Net income attributable to Matrix Service Company $ 28,863 $ 17,157 $ 35,810 Weighted average shares outstanding 26,597 26,603 26,288 Basic EPS $ 1.09 $ 0.64 $ 1.36 Diluted EPS: Weighted average shares outstanding—basic 26,597 26,603 26,288 Dilutive stock options 68 110 180 Dilutive nonvested deferred shares 435 464 508 Diluted weighted average shares 27,100 27,177 26,976 Diluted EPS $ 1.07 $ 0.63 $ 1.33 |
Schedule of antidilutive securities excluded from computation of diluted earnings per share | The following securities are considered antidilutive and have been excluded from the calculation of diluted earnings per share: Twelve Months Ended June 30, June 30, June 30, (In thousands) Nonvested deferred shares 56 148 — Total antidilutive securities 56 148 — |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Multiemployer Pension Plans | Our participation in significant plans for the fiscal year ended June 30, 2016 is outlined in the table below. The “EIN/Pension Plan Number” column provides the Employer Identification Number (“EIN”) and the three digit plan number. The zone status is based on the latest information that the Company received from the plan and is certified by the plan’s actuary. Plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are generally less than 80 percent funded, and plans in the green zone are generally at least 80 percent funded. The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented. The “Surcharge Imposed” column includes plans in a red zone status that require a payment of a surcharge in excess of regular contributions. The last column lists the expiration date of the collective-bargaining agreement to which the plan is subject. Pension Fund EIN/Pension Plan Number Pension Protection Act Zone Status FIP/RP Status Pending or Implemented Company Contributions Fiscal Year Surcharge Imposed Expiration Date of Collective- Bargaining Agreement 2016 2015 2016 2015 2014 (In thousands) Joint Pension Fund Local Union 164 IBEW 22-6031199/001 Yellow Yellow Yes $ 2,635 $ 3,026 $ 2,955 No 5/31/2017 Boilermaker-Blacksmith National Pension Trust 48-6168020/001 Yellow Yellow Yes 7,658 8,330 3,271 No Described below (1) Joint Pension Fund of Local Union No 102 22-1615726/001 Green Green N/A 3,063 2,395 2,381 No 6/1/2018 IBEW Local 456 Pension Plan 22-6238995/001 Green Yellow N/A 1,168 788 940 No 5/31/2017 Local 351 IBEW Pension Plan 22-3417366/001 Described below (2) Described below (2) Described below (2) 5,018 2,608 2,218 Described below (2) 9/27/2016 Steamfitters Local Union No 420 Pension Plan 23-2004424/001 Red Red Yes 1,265 937 1,677 Yes 4/30/2017 IBEW Local Union 98 Pension Plan 23-1990722/001 Yellow Yellow Yes 1,653 2,768 1,380 No 4/29/2017 Indiana Laborers Pension Fund 35-6027150/001 Yellow Red Yes 2,320 2,519 1,268 No 5/31/2017 Iron Workers Mid-America Pension Plan 36-6488227/001 Green Green N/A 2,248 2,605 1,156 No 5/31/2019 Plumbers & Pipefitters Local Union 74 Pension Fund 51-6015925/001 Yellow Yellow Yes 552 4,473 535 No 6/15/2017 Pipe Fitters Retirement Fund, Local 597 62-6105084/001 Green Green N/A 2,377 2,259 949 No 5/31/2017 Contributions to other multiemployer plans 16,054 22,282 11,639 Total contributions made $ 46,011 $ 54,990 $ 30,369 (1) Our employees are members of several Boilermaker unions that participate in the Boilermaker-Blacksmith National Pension Trust. The most significant of these unions are Boilermakers Local 374 and Boilermakers Local 169, which have collective bargaining agreements that expire on December 31, 2016 and December 31, 2020, respectively. (2) For the Local 351 IBEW Pension Plan, the Company has not received a funding notification that covers the Company's fiscal years 2015 or 2016 during the preparation of this Form 10-K. Under Federal pension law, if a multiemployer pension plan is determined to be in critical or endangered status, the plan must provide notice of this status to participants, beneficiaries, the bargaining parties, the Pension Benefit Guaranty Corporation, and the Department of Labor. The Company also observed that the Local 351 IBEW Pension Plan has not submitted any Critical or Endangered Status Notices to the Department of Labor for either calendar years 2015 or 2016 (which can be accessed at http://www.dol.gov/ebsa/criticalstatusnotices.html). |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Results of Operations | Results of Operations (In thousands) Electrical Infrastructure Oil Gas & Chemical Storage Solutions Industrial Unallocated Corporate Total Twelve months ended June 30, 2016 Gross revenues $ 349,011 $ 252,973 $ 564,738 $ 149,744 $ — $ 1,316,466 Less: inter-segment revenues — 3,178 1,226 145 — 4,549 Consolidated revenues 349,011 249,795 563,512 149,599 — 1,311,917 Gross profit 29,301 18,553 67,843 10,294 — 125,991 Operating income (loss) 11,144 (3,503 ) 33,449 (208 ) — 40,882 Segment assets 135,298 91,350 201,875 67,569 68,875 564,967 Capital expenditures 1,611 1,481 3,882 104 6,861 13,939 Depreciation and amortization expense 5,008 4,811 8,124 3,498 — 21,441 Twelve months ended June 30, 2015 Gross revenues $ 257,930 $ 310,826 $ 504,155 $ 281,319 $ — $ 1,354,230 Less: inter-segment revenues — 5,466 1,032 4,597 — 11,095 Consolidated revenues 257,930 305,360 503,123 276,722 — 1,343,135 Gross profit (loss) (31,444 ) 25,394 58,085 35,335 — 87,370 Operating income (loss) (44,293 ) 7,064 29,069 16,962 — 8,802 Segment assets 129,725 108,960 172,857 102,761 47,386 561,689 Capital expenditures 579 3,858 2,396 1,139 7,801 15,773 Depreciation and amortization expense 4,915 4,772 7,298 6,495 — 23,480 Twelve months ended June 30, 2014 Gross revenues $ 205,570 $ 240,131 $ 611,826 $ 206,933 $ — $ 1,264,460 Less: inter-segment revenues — 441 930 — — 1,371 Consolidated revenues 205,570 239,690 610,896 206,933 — 1,263,089 Gross profit 20,629 26,912 68,448 20,484 — 136,473 Operating income 7,703 9,939 34,310 6,655 — 58,607 Segment assets 120,264 72,406 200,493 105,049 70,720 568,932 Capital expenditures 9,055 5,421 2,519 1,157 5,437 23,589 Depreciation and amortization expense 3,292 3,768 7,707 3,751 — 18,518 |
Summary of revenues and long lived assets according to geographic areas | Geographical information is as follows: Revenues Twelve Months Ended June 30, June 30, June 30, (In thousands) United States $ 1,127,893 $ 1,205,713 $ 1,149,262 Canada 178,603 137,422 113,827 Other international 5,421 — — $ 1,311,917 $ 1,343,135 $ 1,263,089 Long-Lived Assets June 30, June 30, June 30, (In thousands) United States $ 158,970 $ 166,132 $ 164,894 Canada 19,915 22,086 28,490 Other international 10,636 — — $ 189,521 $ 188,218 $ 193,384 |
Quarterly Financial Data (Una35
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Data (Unaudited) | Matrix Service Company Quarterly Financial Data (Unaudited) Fiscal Years Ended June 30, 2016 and June 30, 2015 First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands, except per share amounts) Fiscal Year 2016 Revenues $ 319,331 $ 323,529 $ 309,422 $ 359,635 Gross profit 34,584 30,005 27,303 34,099 Operating income 15,101 4,935 6,347 14,499 Net income attributable to Matrix Service Company 9,941 5,431 4,357 9,134 Earnings per common share: Basic 0.38 0.20 0.16 0.35 Diluted 0.37 0.20 0.16 0.34 Fiscal Year 2015 Revenues $ 321,683 $ 342,880 $ 314,155 $ 364,417 Gross profit 28,379 15,955 2,632 40,404 Operating income (loss) 8,547 (3,671 ) (14,448 ) 18,374 Net income (loss) attributable to Matrix Service Company 5,914 3,286 (2,959 ) 10,916 Earnings (loss) per common share: Basic 0.22 0.12 (0.11 ) 0.41 Diluted 0.22 0.12 (0.11 ) 0.40 The sum of earnings per share for the four quarters may not equal the total earnings per share for the year due to changes in the average number of common shares outstanding and rounding. |
Summary of Significant Accoun36
Summary of Significant Accounting Policies (Details Textual) - USD ($) $ in Millions | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Summary of Significant Accounting Policies (Textual) [Abstract] | ||
Restricted cash | $ 0.3 | $ 0.3 |
Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life of intangible assets | 1 year 6 months | |
Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life of intangible assets | 15 years | |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable life of office equipment and software | 40 years | |
Construction Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable life of office equipment and software | 3 years | |
Construction Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable life of office equipment and software | 15 years | |
Transportation Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable life of office equipment and software | 3 years | |
Transportation Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable life of office equipment and software | 5 years | |
Office Equipment and Software [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable life of office equipment and software | 3 years | |
Office Equipment and Software [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable life of office equipment and software | 10 years |
Summary of Significant Accoun37
Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Impact of New Accounting Pronouncement) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Other Additional Capital | $ 9.8 | |
Deferred Tax Asset Impact [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 6.6 | |
Deferred Tax Liabilities Impact [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 6.6 |
Acquisitions (Details Textual)
Acquisitions (Details Textual) - USD ($) $ in Thousands | Feb. 01, 2016 | Feb. 01, 2016 | Aug. 22, 2014 | Dec. 21, 2013 | Jun. 30, 2016 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | ||||||||||
Goodwill | $ 78,293 | $ 69,837 | $ 30,836 | $ 71,518 | ||||||
Noncontrolling interest in joint venture | (1,176) | $ (8,742) | ||||||||
Baillie Tank Equipment, Ltd. [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business Combination, Consideration Transferred | $ 13,049 | |||||||||
Business Acquisition, Effective Date of Acquisition | Feb. 1, 2016 | |||||||||
Net assets acquired | $ 13,641 | 13,641 | ||||||||
Economic purchase price | 15,400 | |||||||||
Goodwill | $ 6,942 | $ 6,942 | ||||||||
Acquisition-related expenses | 1,200 | |||||||||
Revenue of Acquiree since Acquisition Date, Actual | 5,400 | |||||||||
Earnings of Acquiree since Acquisition Date, Actual | $ 300 | |||||||||
HDB, Inc. [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business Acquisition, Effective Date of Acquisition | Aug. 22, 2014 | |||||||||
Net assets acquired | $ 5,551 | $ 5,600 | ||||||||
Tax deductible goodwill | $ 3,065 | |||||||||
Kvaerner North American Construction [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business Combination, Consideration Transferred | $ 51,607 | |||||||||
Stock acquired, percent | 100.00% | |||||||||
Net assets acquired | $ 88,262 | $ 88,262 | ||||||||
Goodwill | 39,295 | $ 39,295 | ||||||||
Tax deductible goodwill | 30,700 | |||||||||
Acquisition-related expenses | 2,000 | |||||||||
Incremental intangible amortization expense | 4,100 | 4,100 | ||||||||
Depreciation expenses | 1,300 | $ 1,300 | ||||||||
Income from one-time tax settlement | $ 600 | |||||||||
MXPB Power Partners [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Ownership interest in joint venture, percent | 65.00% | |||||||||
Equity of joint venture acquired | 2,000 | |||||||||
Company's portion of joint venture equity acquired | 1,300 | |||||||||
Noncontrolling interest in joint venture | $ 700 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 01, 2016 | Dec. 21, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2014 | Aug. 22, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2013 |
Business Acquisition [Line Items] | |||||||||||
Goodwill | $ 78,293 | $ 71,518 | $ 69,837 | $ 30,836 | |||||||
Pro Forma Information: | |||||||||||
Revenues | $ 1,397,706 | $ 1,096,267 | |||||||||
Net income attributable to Matrix Service Company | $ 38,786 | $ 28,444 | |||||||||
Basic earnings per common share (in dollars per share) | $ 1.48 | $ 1.10 | |||||||||
Diluted earnings per common share (in dollars per share) | $ 1.44 | $ 1.08 | |||||||||
Baillie Tank Equipment, Ltd. [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Business Combination, Consideration Transferred | $ 13,049 | ||||||||||
Current assets | 5,574 | ||||||||||
Property, plant and equipment | 4,347 | ||||||||||
Goodwill | 6,942 | ||||||||||
Other intangible assets | 720 | ||||||||||
Other assets | 233 | ||||||||||
Total assets acquired | 17,816 | ||||||||||
Current liabilities | 1,581 | ||||||||||
Deferred income taxes | 329 | ||||||||||
Long-term debt | 1,858 | ||||||||||
Other liabilities | 407 | ||||||||||
Net assets acquired | 13,641 | ||||||||||
Cash acquired | $ 592 | ||||||||||
HDB, Inc. [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Current assets | $ 1,645 | ||||||||||
Property, plant and equipment | 1,001 | ||||||||||
Tax deductible goodwill | 3,065 | ||||||||||
Other intangible assets | 900 | ||||||||||
Total assets acquired | 6,611 | ||||||||||
Current liabilities | 1,060 | ||||||||||
Net assets acquired | $ 5,600 | $ 5,551 | |||||||||
Kvaerner North American Construction [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Business Combination, Consideration Transferred | $ 51,607 | ||||||||||
Current assets | 83,575 | ||||||||||
Property, plant and equipment | 11,377 | ||||||||||
Goodwill | 39,295 | $ 39,295 | |||||||||
Tax deductible goodwill | 30,700 | ||||||||||
Other intangible assets | 24,009 | ||||||||||
Total assets acquired | 158,256 | ||||||||||
Current liabilities | 68,115 | ||||||||||
Deferred income taxes | 1,179 | ||||||||||
Noncontrolling interest of consolidated joint venture | 700 | ||||||||||
Net assets acquired | 88,262 | $ 88,262 | |||||||||
Cash acquired | $ 36,655 |
Customer Contracts (Details)
Customer Contracts (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Jun. 30, 2015 |
Gross and net amount of uncompleted contracts | ||
Costs and estimated earnings recognized on uncompleted contracts | $ 1,875,014 | $ 1,633,780 |
Billings on uncompleted contracts | 1,829,340 | 1,644,413 |
Total | 45,674 | (10,633) |
Shown on balance sheet as: | ||
Costs and estimated earnings in excess of billings on uncompleted contracts | 104,001 | 86,071 |
Billings on uncompleted contracts in excess of costs and estimated earnings | 58,327 | 96,704 |
Total | $ 45,674 | $ (10,633) |
Customer Contracts (Details Tex
Customer Contracts (Details Textual) - USD ($) $ in Millions | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Business Acquisition [Line Items] | ||
Contract Receivable Retainage, Next Twelve Months | $ 29.7 | $ 25.2 |
Contract Receivable Retainage, after Next Twelve Months | 0.3 | 2.8 |
Retention Payable | 14.9 | 10.2 |
Change In Accounting Estimate, Financial Effect, Operating Income | $ 7.1 | $ 53.4 |
Change in Accounting Estimate, Financial Effect, Net Income | 2.5 | 18.3 |
Goodwill and Other Intangible42
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | |
Carrying value of goodwill by segment | ||||
Goodwill | $ 55,836 | |||
Cumulative impairment loss | (25,000) | |||
Net Goodwill | $ 71,518 | $ 69,837 | $ 30,836 | |
Acquisition Related Adjustment for Final Working Capital Settlement | 219 | |||
Goodwill resulting from purchase | 6,942 | 3,065 | 39,076 | |
Translation adjustment | (167) | (1,603) | (75) | |
Net Goodwill | 78,293 | 71,518 | 69,837 | |
Electrical Infrastructure [Member] | ||||
Carrying value of goodwill by segment | ||||
Goodwill | 29,666 | |||
Cumulative impairment loss | (17,653) | |||
Net Goodwill | 42,374 | 43,243 | 12,013 | |
Acquisition Related Adjustment for Final Working Capital Settlement | 175 | |||
Goodwill resulting from purchase | 0 | 0 | 31,259 | |
Translation adjustment | (204) | (1,044) | (29) | |
Net Goodwill | 42,170 | 42,374 | 43,243 | |
Oil Gas & Chemical [Member] | ||||
Carrying value of goodwill by segment | ||||
Goodwill | 8,088 | |||
Cumulative impairment loss | (3,000) | |||
Net Goodwill | 14,008 | 10,943 | 5,088 | |
Acquisition Related Adjustment for Final Working Capital Settlement | 0 | |||
Goodwill resulting from purchase | 0 | 3,065 | 5,855 | |
Translation adjustment | 0 | 0 | 0 | |
Net Goodwill | 14,008 | 14,008 | 10,943 | |
Storage Solutions [Member] | ||||
Carrying value of goodwill by segment | ||||
Goodwill | 10,985 | |||
Cumulative impairment loss | (922) | |||
Net Goodwill | 9,664 | 10,027 | 10,063 | |
Acquisition Related Adjustment for Final Working Capital Settlement | 0 | |||
Goodwill resulting from purchase | 6,942 | 0 | 0 | |
Translation adjustment | 75 | (363) | (36) | |
Net Goodwill | 16,681 | 9,664 | 10,027 | |
Industrial [Member] | ||||
Carrying value of goodwill by segment | ||||
Goodwill | 7,097 | |||
Cumulative impairment loss | $ (3,425) | |||
Net Goodwill | 5,472 | 5,624 | 3,672 | |
Acquisition Related Adjustment for Final Working Capital Settlement | 44 | |||
Goodwill resulting from purchase | 0 | 0 | 1,962 | |
Translation adjustment | (38) | (196) | (10) | |
Net Goodwill | $ 5,434 | $ 5,472 | $ 5,624 |
Goodwill and Other Intangible43
Goodwill and Other Intangible Assets (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Carrying value of other intangible assets | ||
Gross carrying amount | $ 33,826 | $ 33,266 |
Accumulated amortization | (12,827) | (9,305) |
Net carrying amount | 20,999 | 23,961 |
Intangible assets, net, excluding Goodwill | $ 20,999 | 23,961 |
Minimum [Member] | ||
Carrying value of other intangible assets | ||
Useful life of intangible assets | 1 year 6 months | |
Maximum [Member] | ||
Carrying value of other intangible assets | ||
Useful life of intangible assets | 15 years | |
Intellectual Property [Member] | ||
Carrying value of other intangible assets | ||
Gross carrying amount | $ 2,579 | 2,460 |
Accumulated amortization | (1,246) | (1,086) |
Net carrying amount | $ 1,333 | $ 1,374 |
Intellectual Property [Member] | Minimum [Member] | ||
Carrying value of other intangible assets | ||
Useful life of intangible assets | 9 years | 6 years |
Intellectual Property [Member] | Maximum [Member] | ||
Carrying value of other intangible assets | ||
Useful life of intangible assets | 15 years | 15 years |
Customer based [Member] | ||
Carrying value of other intangible assets | ||
Gross carrying amount | $ 28,179 | $ 27,837 |
Accumulated amortization | (9,655) | (7,109) |
Net carrying amount | $ 18,524 | $ 20,728 |
Customer based [Member] | Minimum [Member] | ||
Carrying value of other intangible assets | ||
Useful life of intangible assets | 1 year 6 months | 1 year 6 months |
Customer based [Member] | Maximum [Member] | ||
Carrying value of other intangible assets | ||
Useful life of intangible assets | 15 years | 15 years |
Noncompete Agreements [Member] | ||
Carrying value of other intangible assets | ||
Gross carrying amount | $ 1,453 | $ 1,354 |
Accumulated amortization | (1,102) | (802) |
Net carrying amount | $ 351 | $ 552 |
Noncompete Agreements [Member] | Minimum [Member] | ||
Carrying value of other intangible assets | ||
Useful life of intangible assets | 4 years | 4 years |
Noncompete Agreements [Member] | Maximum [Member] | ||
Carrying value of other intangible assets | ||
Useful life of intangible assets | 5 years | 5 years |
Trade Names [Member] | ||
Carrying value of other intangible assets | ||
Gross carrying amount | $ 1,615 | $ 1,615 |
Accumulated amortization | (824) | (308) |
Net carrying amount | $ 791 | $ 1,307 |
Trade Names [Member] | Minimum [Member] | ||
Carrying value of other intangible assets | ||
Useful life of intangible assets | 3 years | 3 years |
Trade Names [Member] | Maximum [Member] | ||
Carrying value of other intangible assets | ||
Useful life of intangible assets | 5 years | 5 years |
Baillie Tank Equipment, Ltd. [Member] | Intellectual Property [Member] | ||
Carrying value of other intangible assets | ||
Useful life of intangible assets | 10 years | |
Gross carrying amount | $ 100 | |
Baillie Tank Equipment, Ltd. [Member] | Customer based [Member] | ||
Carrying value of other intangible assets | ||
Gross carrying amount | $ 500 | |
Baillie Tank Equipment, Ltd. [Member] | Customer based [Member] | Minimum [Member] | ||
Carrying value of other intangible assets | ||
Useful life of intangible assets | 4 months | |
Baillie Tank Equipment, Ltd. [Member] | Customer based [Member] | Maximum [Member] | ||
Carrying value of other intangible assets | ||
Useful life of intangible assets | 10 years | |
Baillie Tank Equipment, Ltd. [Member] | Noncompete Agreements [Member] | ||
Carrying value of other intangible assets | ||
Useful life of intangible assets | 4 years | |
Gross carrying amount | $ 100 |
Goodwill and Other Intangible44
Goodwill and Other Intangible Assets (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 3,600 | $ 5,000 | $ 2,800 |
June 30, 2015 | 3,298 | ||
June 30, 2016 | 2,957 | ||
June 30, 2017 | 2,590 | ||
June 30, 2018 | 2,580 | ||
June 30, 2019 | 2,562 | ||
Thereafter | 7,012 | ||
Net carrying amount | $ 20,999 | $ 23,961 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Jun. 30, 2015 |
Availability under senior credit facility | ||
Senior revolving credit facility | $ 200,000 | $ 200,000 |
Capacity Constraint Due To Senior Leverage Ratio | 20,138 | 54,968 |
Line Of Credit Facility Maximum Borrowing Capacity After Consideration Of Capacity Constraint | 179,862 | 145,032 |
Borrowings outstanding | 0 | 8,804 |
Letters of credit issued | 20,755 | 40,587 |
Availability under the senior credit facility | $ 159,107 | $ 95,641 |
Debt (Details Textual)
Debt (Details Textual) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | |
Line of Credit Facility [Line Items] | |||
Line Of Credit Facility Maximum Borrowing Capacity After Consideration Of Capacity Constraint | $ 179,862 | $ 145,032 | |
Debt (Textual) [Abstract] | |||
Senior revolving credit facility | $ 200,000 | 200,000 | |
Line of Credit Facility, Expiration Date | Mar. 13, 2019 | ||
Senior Leverage Ratio, Maximum | 2.5 | ||
Senior Leverage Ratio, Minimum | 1 | ||
Fixed Charge Coverage Ratio, Maximum | 1.25 | ||
Fixed Charge Coverage Ratio, Minimum | 1 | ||
Limit on asset dispositions | $ 20,000 | ||
Additional Margin on alternate base rate loans, Minimum | 0.25% | ||
Additional Margin on alternate base rate loans, Maximum | 1.00% | ||
Additional Margin on LIBOR loans, Minimum | 1.25% | ||
Additional Margin on LIBOR loans, Maximum | 2.00% | ||
Sublimit on Canadian dollar borrowings | $ 40,000 | ||
Additional Margin on CDOR loans, Minimum | 1.25% | ||
Additional Margin on CDOR loans, Maximum | 2.00% | ||
Additional Margin on Canadian prime rate loans, Minimum | 1.75% | ||
Additional Margin on Canadian prime rate loans, Maximum | 2.50% | ||
Maximum limit of consolidated funded indebtedness | 2.5 | ||
Consolidated EBITDA as defined in the Credit Agreement | $ 71,900 | ||
Consolidated Funded Indebtedness | $ 13,100 | ||
CDOR Rate description | Sum of the annual rate of interest which is the rate determined as being the arithmetic average of the quotations of all institutions listed in respect of the relevant CDOR interest period for Canadian Dollar denominated bankers’ acceptances, plus 0.1% | ||
Canadian prime rate description | Greater of (i) the rate of interest per annum most recently announced or established by JPMorgan Chase Bank, N.A., Toronto Branch as its reference rate in effect on such day for determining interest rates for Canadian Dollar denominated commercial loans in Canada and (ii) the CDOR Rate plus 1.0% | ||
Assumption of debt from acquisition | $ 1,858 | $ 0 | $ 0 |
Minimum [Member] | |||
Line of Credit Facility [Line Items] | |||
Unused Credit Facility Fee | 0.20% | ||
Maximum [Member] | |||
Line of Credit Facility [Line Items] | |||
Unused Credit Facility Fee | 0.35% | ||
CDOR Rate [Member] | |||
Line of Credit Facility [Line Items] | |||
Spread on variable rate basis (percent) | 0.10% | ||
Canadian Prime Rate [Member] | |||
Line of Credit Facility [Line Items] | |||
Spread on variable rate basis (percent) | 1.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Components of pretax income | |||
Domestic | $ 33,986 | $ (4,001) | $ 60,129 |
Foreign | 5,667 | 12,193 | (3,318) |
Income before income tax expense | $ 39,653 | $ 8,192 | $ 56,811 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Current: | |||
Federal | $ 9,930 | $ 7,535 | $ 19,870 |
State | 2,570 | 1,606 | 3,117 |
Foreign | (262) | 1,791 | 613 |
Total | 12,238 | 10,932 | 23,600 |
Deferred: | |||
Federal | 887 | 1,803 | (3,951) |
State | 67 | (362) | (51) |
Foreign | 924 | (2,283) | 336 |
Total | 1,878 | (842) | (3,666) |
Provision for income taxes | $ 14,116 | $ 10,090 | $ 19,934 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Difference between expected income tax provision applying domestic federal statutory tax rate and reported income tax provision | |||
Expected provision for Federal income taxes at the statutory rate | $ 13,879 | $ 2,868 | $ 19,887 |
State income taxes, net of Federal benefit | 1,827 | 1,023 | 2,275 |
Deemed foreign dividends | 0 | 1,462 | 0 |
Charges without tax benefit | 2,187 | 1,478 | 1,405 |
Change in valuation allowance | 311 | 25 | 0 |
IRS S199 deduction | (999) | 0 | (1,546) |
Foreign tax credits | 0 | (1,433) | 0 |
Research and development and other tax credits | (1,928) | (1,197) | (1,793) |
Foreign tax differential | (815) | (529) | (182) |
Noncontrolling interest | 1,164 | 6,669 | (374) |
Change in uncertain tax positions | (569) | 0 | 0 |
Adjustment to tax accounts | (786) | 0 | 0 |
Other | (155) | (276) | 262 |
Provision for income taxes | $ 14,116 | $ 10,090 | $ 19,934 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | Jun. 30, 2016 | Jun. 30, 2015 |
Deferred tax assets: | ||
Warranty reserve | $ 195 | $ 312 |
Bad debt reserve | 3,188 | 164 |
Paid time-off accrual | 865 | 765 |
Insurance reserve | 2,461 | 2,178 |
Legal reserve | 87 | 382 |
Net operating loss benefit and credit carryforwards | 8,207 | 7,380 |
Valuation allowance | (424) | (115) |
Accrued compensation and pension | 1,268 | 1,059 |
Stock compensation expense on nonvested deferred shares | 3,472 | 3,080 |
Accrued losses | 274 | 970 |
Foreign currency translation and other | 1,041 | 897 |
Total deferred tax assets | 20,634 | 17,072 |
Deferred tax liabilities: | ||
Tax over book depreciation | 11,504 | 9,987 |
Tax over book amortization | 2,588 | 1,658 |
Branch future liability | 2,889 | 2,193 |
Prepaid insurance | 396 | 160 |
Receivable holdbacks and other | 2,736 | 589 |
Total deferred tax liabilities | 20,113 | 14,587 |
Net deferred tax asset | $ 521 | $ 2,485 |
Income Taxes (Details 4)
Income Taxes (Details 4) - USD ($) $ in Thousands | Jun. 30, 2016 | Jun. 30, 2015 |
Significant components of Company's deferred tax assets and liabilities as reported in consolidated balance sheets | ||
Deferred income tax assets | $ 3,719 | $ 3,729 |
Deferred income tax liabilities | (3,198) | (1,244) |
Net deferred tax asset | $ 521 | $ 2,485 |
Income Taxes Income Taxes (Deta
Income Taxes Income Taxes (Details 5) $ in Millions | 12 Months Ended |
Jun. 30, 2016USD ($) | |
State tax credit carryforward [Member] | |
Tax Credit Carryforward [Line Items] | |
Tax Credit Carryforward, Description | No expiration |
Tax Credit Carryforward, Amount | $ 0 |
Federal tax credit carryforward [Member] | |
Tax Credit Carryforward [Line Items] | |
Tax Credit Carryforward, Description | June 2017 to June 2025 |
Tax Credit Carryforward, Amount | $ 3 |
Foreign tax credit carryforward [Member] | |
Tax Credit Carryforward [Line Items] | |
Tax Credit Carryforward, Description | June 2,034 |
Tax Credit Carryforward, Amount | $ 0 |
Income Taxes Income Taxes (De53
Income Taxes Income Taxes (Details 6) $ in Millions | 12 Months Ended |
Jun. 30, 2016USD ($) | |
State and Local Jurisdiction [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards, Limitations on Use | June 2025 to June 2032 |
Operating Loss Carryforwards | $ 18 |
Foreign Tax Authority [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards, Limitations on Use | June 2028 to June 2035 |
Operating Loss Carryforwards | $ 12 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Tax Disclosure [Abstract] | |||
Income (Loss) from Continuing Operations Attributable to Noncontrolling Interest | $ 3.3 | $ 19.1 | $ 1.1 |
Unremitted earnings | 14 | ||
Liability for Uncertain Tax Positions, Noncurrent | $ 0.6 |
Contingencies (Details Textual)
Contingencies (Details Textual) - USD ($) $ in Millions | Jun. 30, 2016 | Jun. 30, 2015 |
Commitments and Contingencies Disclosure [Abstract] | ||
Claims related to unapproved change orders | $ 10.3 | $ 12.7 |
Operating Leases (Details Textu
Operating Leases (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Leases [Abstract] | |||
Future minimum operating lease payable, in total | $ 33.7 | ||
Minimum operating lease payable, Fiscal 2016 | 6.2 | ||
Minimum operating lease payable, Fiscal 2017 | 5.1 | ||
Minimum operating lease payable, Fiscal 2018 | 4.7 | ||
Minimum operating lease payable, Fiscal 2019 | 3.7 | ||
Minimum operating lease payable, Fiscal 2020 | 3.3 | ||
Minimum operating lease payable, Thereafter | 10.8 | ||
Operating lease expense | $ 6.6 | $ 6.7 | $ 5.3 |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) - USD ($) | Dec. 31, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | Nov. 06, 2012 |
Equity, Class of Treasury Stock [Line Items] | |||||
Stock Repurchase Program Expiration Date | Dec. 31, 2016 | ||||
Preferred stock shares authorized | 5,000,000 | 5,000,000 | |||
Preferred stock shares issued | 0 | 0 | |||
Preferred stock shares outstanding | 0 | 0 | |||
Annual maximum purchases authorized under stock buyback program | $ 25,000,000 | ||||
Purchase of common stock on stock buyback program | 654,958 | 283,772 | 2,653,399 | ||
Payments for Repurchase of Common Stock | $ (10,461,000) | $ (5,000,000) | $ 0 | ||
Common stock shares withheld | 205,504 | 105,058 | |||
Treasury stock, shares | 1,591,072 | 1,447,394 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Stock option activity and related information | |||
Number of options outstanding at June 30, 2014 | 190,100 | ||
Number of options granted | 0 | ||
Number of options exercised | (68,037) | (55,200) | (134,450) |
Number of options cancelled | 0 | ||
Number of options outstanding at June 30, 2015 | 122,063 | 190,100 | |
Number of options vested or expected to vest at June 30, 2015 | 122,063 | ||
Number of options exercisable at June 30, 2015 | 122,063 | ||
Weighted average remaining contractual life | 5 years 3 months | 5 years 8 months | |
Weighted average remaining contractual life vested or expected to vest at June 30, 2015 | 5 years 3 months | ||
Weighted average remaining contractual life exercisable at June 30, 2015 | 5 years 3 months | ||
Weighted average exercise price at June 30, 2014 | $ 9.90 | ||
Weighted average exercise price granted | 0 | ||
Weighted average exercise price exercised | 9.38 | ||
Weighted average exercise price cancelled | 0 | ||
Weighted average exercise price at June 30, 2015 | 10.19 | $ 9.90 | |
Weighted average exercise price vested or expected to vest at June 30, 2015 | 10.19 | ||
Weighted average exercise price exercisable at June 30, 2015 | $ 10.19 | ||
Aggregate intrinsic value outstanding at June 30, 2015 | $ 769 | $ 1,593 | |
Aggregate intrinsic value exercised | 728 | 700 | $ 2,400 |
Aggregate intrinsic value outstanding at June 30, 2016 | 769 | $ 1,593 | |
Aggregate intrinsic value vested or expected to be vest at June 30, 2016 | 769 | ||
Aggregate intrinsic value exercisable at June 30, 2016 | $ 769 |
Stock-Based Compensation (Det59
Stock-Based Compensation (Details 2) - $ / shares | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Stock options information | ||
Stock options outstanding, option outstanding | 122,063 | 190,100 |
Stock options outstanding weighted average remaining contractual life | 5 years 3 months | 5 years 8 months |
Stock options exercisable option outstanding | 122,063 | |
Stock options exercisable weighted average exercise price | $ 10.19 | |
Stock options exercisable weighted average remaining contractual life | 5 years 3 months |
Stock-Based Compensation (Det60
Stock-Based Compensation (Details 3) | 12 Months Ended |
Jun. 30, 2016$ / sharesshares | |
Nonvested deferred share activity | |
Nonvested shares at June 30, 2014 | shares | 990,268 |
Shares granted | shares | 370,490 |
Performance shares awarded in excess of target | shares | 157,022 |
Shares vested and released | shares | (631,443) |
Shares cancelled | shares | (94,342) |
Nonvested shares at June 30, 2015 | shares | 791,995 |
Weighted average grant date fair value per share at June 30, 2014 | $ / shares | $ 17.49 |
Weighted average grant date fair value per share granted | $ / shares | 20.77 |
Weighted average grant date fair value per performance shares | $ / shares | 11.32 |
Weighted average grant date fair value per share vested and released | $ / shares | 12.39 |
Weighted average grant date fair value per share cancelled | $ / shares | 20.65 |
Weighted average grant date fair value per share at June 30, 2015 | $ / shares | $ 21.45 |
Stock-Based Compensation (Det61
Stock-Based Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 6,317 | $ 6,302 | $ 5,688 |
Unrecognized stock-based compensation expense | $ 9,300 | ||
Weighted average period | 1 year 8 months | ||
Stock based compensation expense recognized tax | $ 3,200 | 2,500 | 2,800 |
Common stock grant expiration term | 10 years | ||
Total intrinsic value of stock option | $ 728 | $ 700 | $ 2,400 |
Vesting period | 3 years | ||
Description of vesting period of director awards | 3 years | ||
Deferred shares granted | 242,649 | 381,038 | |
Average grant date fair value | $ 29.31 | $ 18.01 | |
Deferred shares vested and released | 631,443 | 326,763 | 266,029 |
Weighted average fair value | $ 22.34 | $ 23.93 | $ 22.38 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used | Monte Carlo model | ||
Share Based Compensation Arrangement By Share Based Payment Award Fair Value Method Number of Simulations Used | 100,000 | ||
Employee Award [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period, equal annual installments | 1 year | ||
Employee Award [Member] | Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 4 years | ||
Employee Award [Member] | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 5 years | ||
Market Based Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Pro-rate of original awards, minimum | 0.00% | ||
Pro-rate of original awards maximum | 200.00% | ||
Vest in 2016 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Minimum threshold shares scheduled to vest for performance based shares | 125,000 | ||
Vest in 2017 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Minimum threshold shares scheduled to vest for performance based shares | 81,000 | ||
Vest in 2018 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Minimum threshold shares scheduled to vest for performance based shares | 128,000 | ||
Matrix Service Company's 2012 Stock and Incentive Compensation Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share awards authorized | 2,300,000 | ||
Share awards grant | 1,249,780 |
Earnings per Common Share (Deta
Earnings per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Basic EPS: | |||||||||||
Net income | $ 9,134 | $ 4,357 | $ 5,431 | $ 9,941 | $ 10,916 | $ (2,959) | $ 3,286 | $ 5,914 | $ 28,863 | $ 17,157 | $ 35,810 |
Weighted average shares outstanding | 26,597 | 26,603 | 26,288 | ||||||||
Basic EPS (in dollars per share) | $ 0.35 | $ 0.16 | $ 0.20 | $ 0.38 | $ 0.41 | $ (0.11) | $ 0.12 | $ 0.22 | $ 1.09 | $ 0.64 | $ 1.36 |
Diluted EPS: | |||||||||||
Weighted average shares outstanding | 26,597 | 26,603 | 26,288 | ||||||||
Dilutive stock options | 68 | 110 | 180 | ||||||||
Dilutive nonvested deferred shares | 435 | 464 | 508 | ||||||||
Diluted weighted average shares | 27,100 | 27,177 | 26,976 | ||||||||
Diluted EPS (in dollars per share) | $ 0.34 | $ 0.16 | $ 0.20 | $ 0.37 | $ 0.40 | $ (0.11) | $ 0.12 | $ 0.22 | $ 1.07 | $ 0.63 | $ 1.33 |
Earnings per Common Share (De63
Earnings per Common Share (Details 1) - shares shares in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Antidilutive Securities Excluded From Computation Of Diluted Earnings Per Share | |||
Total antidilutive securities | 56 | 148 | 0 |
Nonvested Deferred Shares [Member] | |||
Antidilutive Securities Excluded From Computation Of Diluted Earnings Per Share | |||
Total antidilutive securities | 56 | 148 | 0 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Multiemployer Pension Plans | |||
Total contributions made | $ 46,011 | $ 54,990 | $ 30,369 |
Contributions to other multiemployer plans | $ 16,054 | $ 22,282 | 11,639 |
Joint Pension Fund Local Union One Six Four Ibew [Member] | |||
Multiemployer Pension Plans | |||
EIN/Pension Plan Number | 22-6031199/001 | ||
Pension Protection Act Zone Status | Yellow | Yellow | |
FIP/RP Status Pending or Implemented | Implemented | ||
Total contributions made | $ 2,635 | $ 3,026 | 2,955 |
Surcharge Imposed | No | ||
Expiration Date of Collective-Bargaining Agreement | May 31, 2017 | ||
Boilermaker-Blacksmith National Pension Trust [Member] | |||
Multiemployer Plans [Line Items] | |||
Multiemployer Plans, Collective-Bargaining Arrangement, Expiration Date, Description | Described below (1) | ||
Multiemployer Pension Plans | |||
EIN/Pension Plan Number | 48-6168020/001 | ||
Pension Protection Act Zone Status | Yellow | Yellow | |
FIP/RP Status Pending or Implemented | Implemented | ||
Total contributions made | $ 7,658 | $ 8,330 | 3,271 |
Surcharge Imposed | No | ||
Joint Pension Fund Local Union Number One Zero Two [Member] [Domain] | |||
Multiemployer Pension Plans | |||
EIN/Pension Plan Number | 22-1615726/001 | ||
Pension Protection Act Zone Status | Green | Green | |
FIP/RP Status Pending or Implemented | NA | ||
Total contributions made | $ 3,063 | $ 2,395 | 2,381 |
Surcharge Imposed | No | ||
Expiration Date of Collective-Bargaining Agreement | Jun. 1, 2018 | ||
IBEW Local Four Five Six Pension Plan [Member] [Domain] | |||
Multiemployer Pension Plans | |||
EIN/Pension Plan Number | 22-6238995/001 | ||
Pension Protection Act Zone Status | Green | Yellow | |
FIP/RP Status Pending or Implemented | NA | ||
Total contributions made | $ 1,168 | $ 788 | 940 |
Surcharge Imposed | No | ||
Expiration Date of Collective-Bargaining Agreement | May 31, 2017 | ||
Local 351 IBEW Pension Plan [Member] | |||
Multiemployer Pension Plans | |||
EIN/Pension Plan Number | 22-3417366/001 | ||
Multiemployer Plans, Certified Zone Status, Description | Described below (2) | Described below (2) | |
FIP/RP Status Pending or Implemented | Implemented | ||
Total contributions made | $ 5,018 | $ 2,608 | 2,218 |
Multiemployer Plan, Surcharge | Described below (2) | ||
Expiration Date of Collective-Bargaining Agreement | Sep. 27, 2016 | ||
Steamfitters Local Union Number Four Two Zero Pension Plan [Member] [Domain] | |||
Multiemployer Pension Plans | |||
EIN/Pension Plan Number | 23-2004424/001 | ||
Pension Protection Act Zone Status | Red | Red | |
FIP/RP Status Pending or Implemented | Implemented | ||
Total contributions made | $ 1,265 | $ 937 | 1,677 |
Surcharge Imposed | Yes | ||
Expiration Date of Collective-Bargaining Agreement | Apr. 30, 2017 | ||
IBEW Local Union Nine Eight Pension Plan [Member] | |||
Multiemployer Pension Plans | |||
EIN/Pension Plan Number | 23-1990722/001 | ||
Pension Protection Act Zone Status | Yellow | Yellow | |
FIP/RP Status Pending or Implemented | Implemented | ||
Total contributions made | $ 1,653 | $ 2,768 | 1,380 |
Surcharge Imposed | No | ||
Expiration Date of Collective-Bargaining Agreement | Apr. 29, 2017 | ||
Indiana Laborers Pension Fund [Domain] | |||
Multiemployer Pension Plans | |||
EIN/Pension Plan Number | 35-6027150/001 | ||
Pension Protection Act Zone Status | Yellow | Red | |
FIP/RP Status Pending or Implemented | Implemented | ||
Total contributions made | $ 2,320 | $ 2,519 | 1,268 |
Surcharge Imposed | No | ||
Expiration Date of Collective-Bargaining Agreement | May 31, 2017 | ||
Ironworkers Mid-America Pension Plan [Member] | |||
Multiemployer Pension Plans | |||
EIN/Pension Plan Number | 36-6488227/001 | ||
Pension Protection Act Zone Status | Green | Green | |
FIP/RP Status Pending or Implemented | NA | ||
Total contributions made | $ 2,248 | $ 2,605 | 1,156 |
Surcharge Imposed | No | ||
Expiration Date of Collective-Bargaining Agreement | May 31, 2019 | ||
Plumbers and Pipefitters Local Union Seven Four Pension Fund [Member] | |||
Multiemployer Pension Plans | |||
EIN/Pension Plan Number | 51-6015925/001 | ||
Pension Protection Act Zone Status | Yellow | Yellow | |
FIP/RP Status Pending or Implemented | Implemented | ||
Total contributions made | $ 552 | $ 4,473 | 535 |
Surcharge Imposed | No | ||
Expiration Date of Collective-Bargaining Agreement | Jun. 15, 2017 | ||
Pipefitters Retirement Fund Local Five Nine Seven [Member] | |||
Multiemployer Pension Plans | |||
EIN/Pension Plan Number | 62-6105084/001 | ||
Pension Protection Act Zone Status | Green | Green | |
FIP/RP Status Pending or Implemented | NA | ||
Total contributions made | $ 2,377 | $ 2,259 | $ 949 |
Surcharge Imposed | No | ||
Expiration Date of Collective-Bargaining Agreement | May 31, 2017 |
Employee Benefit Plans (Detai65
Employee Benefit Plans (Details Textual) - USD ($) | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Employee Benefit Plans (Textual) [Abstract] | |||
Percentage of limitation on pretax compensation | 25.00% | ||
Company match of first 3% of employee contributions | 100.00% | ||
Percentage of employee contribution for first half | 3.00% | ||
Employee contribution for next 2% | 50.00% | ||
Percentage of employee contribution for next half | 2.00% | ||
Contribution made by company | $ 5,000,000 | $ 4,900,000 | $ 4,100,000 |
Employee share purchase limit aggregate market value | $ 60,000 | ||
Shares available at ESPP | 1,000,000 | ||
Employee Stock Purchase Plan, Termination Date | Jan. 2, 2021 | ||
Shares issued under ESPP | 17,304 | 13,243 | 5,440 |
Zone Red [Member] | |||
Multiemployer Plans [Line Items] | |||
Percentage of plan funded | 65.00% | ||
Description of plans funded | less than 65 percent | ||
Zone Yellow [Member] | |||
Multiemployer Plans [Line Items] | |||
Percentage of plan funded | 80.00% | ||
Description of plans funded | less than 80 percent | ||
Zone Green [Member] | |||
Multiemployer Plans [Line Items] | |||
Percentage of plan funded | 80.00% | ||
Description of plans funded | at least 80 percent |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Results of Operations | |||||||||||
Revenues | $ 1,311,917 | $ 1,343,135 | $ 1,263,089 | ||||||||
Less: Inter-segment revenues | 1,311,917 | 1,343,135 | 1,263,089 | ||||||||
Gross profit | $ 34,099 | $ 27,303 | $ 30,005 | $ 34,584 | $ 40,404 | $ 2,632 | $ 15,955 | $ 28,379 | 125,991 | 87,370 | 136,473 |
Operating income (loss) | 14,499 | $ 6,347 | $ 4,935 | $ 15,101 | 18,374 | $ (14,448) | $ (3,671) | $ 8,547 | 40,882 | 8,802 | 58,607 |
Segment assets | 564,967 | 561,689 | 564,967 | 561,689 | 568,932 | ||||||
Capital expenditures | 13,939 | 15,773 | 23,589 | ||||||||
Depreciation and amortization | 21,441 | 23,480 | 18,518 | ||||||||
Electrical Infrastructure [Member] | |||||||||||
Results of Operations | |||||||||||
Revenues | 349,011 | 257,930 | 205,570 | ||||||||
Less: Inter-segment revenues | 349,011 | 257,930 | 205,570 | ||||||||
Gross profit | 29,301 | (31,444) | 20,629 | ||||||||
Operating income (loss) | 11,144 | (44,293) | 7,703 | ||||||||
Segment assets | 135,298 | 129,725 | 135,298 | 129,725 | 120,264 | ||||||
Capital expenditures | 1,611 | 579 | 9,055 | ||||||||
Depreciation and amortization | 5,008 | 4,915 | 3,292 | ||||||||
Oil Gas & Chemical [Member] | |||||||||||
Results of Operations | |||||||||||
Revenues | 249,795 | 305,360 | 239,690 | ||||||||
Less: Inter-segment revenues | 249,795 | 305,360 | 239,690 | ||||||||
Gross profit | 18,553 | 25,394 | 26,912 | ||||||||
Operating income (loss) | (3,503) | 7,064 | 9,939 | ||||||||
Segment assets | 91,350 | 108,960 | 91,350 | 108,960 | 72,406 | ||||||
Capital expenditures | 1,481 | 3,858 | 5,421 | ||||||||
Depreciation and amortization | 4,811 | 4,772 | 3,768 | ||||||||
Storage Solutions [Member] | |||||||||||
Results of Operations | |||||||||||
Gross profit | 67,843 | 58,085 | 68,448 | ||||||||
Operating income (loss) | 33,449 | 29,069 | 34,310 | ||||||||
Segment assets | 201,875 | 172,857 | 201,875 | 172,857 | 200,493 | ||||||
Capital expenditures | 3,882 | 2,396 | 2,519 | ||||||||
Depreciation and amortization | 8,124 | 7,298 | 7,707 | ||||||||
Industrial [Member] | |||||||||||
Results of Operations | |||||||||||
Gross profit | 10,294 | 35,335 | 20,484 | ||||||||
Operating income (loss) | (208) | 16,962 | 6,655 | ||||||||
Segment assets | 67,569 | 102,761 | 67,569 | 102,761 | 105,049 | ||||||
Capital expenditures | 104 | 1,139 | 1,157 | ||||||||
Depreciation and amortization | 3,498 | 6,495 | 3,751 | ||||||||
Unallocated Corporate [Member] | |||||||||||
Results of Operations | |||||||||||
Segment assets | $ 68,875 | $ 47,386 | 68,875 | 47,386 | 70,720 | ||||||
Capital expenditures | 6,861 | 7,801 | 5,437 | ||||||||
Gross [Member] | |||||||||||
Results of Operations | |||||||||||
Revenues | 1,316,466 | 1,354,230 | 1,264,460 | ||||||||
Less: Inter-segment revenues | 1,316,466 | 1,354,230 | 1,264,460 | ||||||||
Gross [Member] | Electrical Infrastructure [Member] | |||||||||||
Results of Operations | |||||||||||
Revenues | 349,011 | 257,930 | 205,570 | ||||||||
Less: Inter-segment revenues | 349,011 | 257,930 | 205,570 | ||||||||
Gross [Member] | Oil Gas & Chemical [Member] | |||||||||||
Results of Operations | |||||||||||
Revenues | 252,973 | 310,826 | 240,131 | ||||||||
Less: Inter-segment revenues | 252,973 | 310,826 | 240,131 | ||||||||
Gross [Member] | Storage Solutions [Member] | |||||||||||
Results of Operations | |||||||||||
Revenues | 564,738 | 504,155 | 611,826 | ||||||||
Less: Inter-segment revenues | 564,738 | 504,155 | 611,826 | ||||||||
Gross [Member] | Industrial [Member] | |||||||||||
Results of Operations | |||||||||||
Revenues | 149,744 | 281,319 | 206,933 | ||||||||
Less: Inter-segment revenues | 149,744 | 281,319 | 206,933 | ||||||||
Industrial [Member] | |||||||||||
Results of Operations | |||||||||||
Revenues | 149,599 | 276,722 | 206,933 | ||||||||
Less: Inter-segment revenues | 149,599 | 276,722 | 206,933 | ||||||||
Storage Solutions [Member] | |||||||||||
Results of Operations | |||||||||||
Revenues | 563,512 | 503,123 | 610,896 | ||||||||
Less: Inter-segment revenues | 563,512 | 503,123 | 610,896 | ||||||||
Intersegment Eliminations [Member] | |||||||||||
Results of Operations | |||||||||||
Revenues | 4,549 | 11,095 | 1,371 | ||||||||
Less: Inter-segment revenues | 4,549 | 11,095 | 1,371 | ||||||||
Intersegment Eliminations [Member] | Electrical Infrastructure [Member] | |||||||||||
Results of Operations | |||||||||||
Revenues | 0 | 0 | 0 | ||||||||
Less: Inter-segment revenues | 0 | 0 | 0 | ||||||||
Intersegment Eliminations [Member] | Oil Gas & Chemical [Member] | |||||||||||
Results of Operations | |||||||||||
Revenues | 3,178 | 5,466 | 441 | ||||||||
Less: Inter-segment revenues | 3,178 | 5,466 | 441 | ||||||||
Intersegment Eliminations [Member] | Storage Solutions [Member] | |||||||||||
Results of Operations | |||||||||||
Revenues | 1,226 | 1,032 | 930 | ||||||||
Less: Inter-segment revenues | 1,226 | 1,032 | 930 | ||||||||
Intersegment Eliminations [Member] | Industrial [Member] | |||||||||||
Results of Operations | |||||||||||
Revenues | 145 | 4,597 | 0 | ||||||||
Less: Inter-segment revenues | $ 145 | $ 4,597 | $ 0 |
Segment Information (Details 1)
Segment Information (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Summary of revenues and long lived assets according to geographic areas | |||||||||||
Revenues | $ 359,635 | $ 309,422 | $ 323,529 | $ 319,331 | $ 364,417 | $ 314,155 | $ 342,880 | $ 321,683 | $ 1,311,917 | $ 1,343,135 | $ 1,263,089 |
Long-Lived Assets | 189,521 | 188,218 | 189,521 | 188,218 | 193,384 | ||||||
UNITED STATES | |||||||||||
Summary of revenues and long lived assets according to geographic areas | |||||||||||
Revenues | 1,127,893 | 1,205,713 | 1,149,262 | ||||||||
Long-Lived Assets | 158,970 | 166,132 | 158,970 | 166,132 | 164,894 | ||||||
CANADA | |||||||||||
Summary of revenues and long lived assets according to geographic areas | |||||||||||
Revenues | 178,603 | 137,422 | 113,827 | ||||||||
Long-Lived Assets | 19,915 | 22,086 | 19,915 | 22,086 | 28,490 | ||||||
Other international [Member] | |||||||||||
Summary of revenues and long lived assets according to geographic areas | |||||||||||
Revenues | 5,421 | 0 | 0 | ||||||||
Long-Lived Assets | $ 10,636 | $ 0 | $ 10,636 | $ 0 | $ 0 |
Segment Information (Details Te
Segment Information (Details Textual) | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Customer One [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 14.80% | 12.30% | 17.30% |
Customer Two [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 10.60% | 12.70% | |
Electrical Infrastructure [Member] | Customer One [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 38.90% | 25.10% | 20.80% |
Electrical Infrastructure [Member] | Customer Two [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 16.30% | 17.50% | |
Electrical Infrastructure [Member] | Customer Three [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 16.60% | 14.70% | 17.00% |
Electrical Infrastructure [Member] | Customer Four [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 14.40% | 12.70% | 10.80% |
Electrical Infrastructure [Member] | Customer Five [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 12.70% | 12.70% | |
Oil Gas & Chemical [Member] | Customer One [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 17.70% | 18.30% | |
Oil Gas & Chemical [Member] | Customer Two [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 12.30% | 14.00% | |
Oil Gas & Chemical [Member] | Customer Three [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 10.20% | ||
Oil Gas & Chemical [Member] | Customer Six [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 20.20% | ||
Oil Gas & Chemical [Member] | Customer Seven [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 11.20% | ||
Storage Solutions [Member] | Customer One [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 10.20% | 33.00% | 35.80% |
Storage Solutions [Member] | Customer Two [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 24.70% | 10.90% | 26.30% |
Storage Solutions [Member] | Another Customer [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 19.30% | ||
Industrial [Member] | Customer One [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 34.00% | 23.30% | |
Industrial [Member] | Customer Two [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 27.60% | 15.10% | |
Industrial [Member] | Customer Three [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 19.00% | 13.00% | |
Industrial [Member] | Customer Four [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 12.70% | ||
Industrial [Member] | Customer Five [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 11.30% | ||
Industrial [Member] | Customer Eight [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 36.90% | ||
Industrial [Member] | Customer Nine [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 20.10% | ||
Industrial [Member] | Customer Ten [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 14.00% |
Quarterly Financial Data (Una69
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Sales Revenue, Services, Net | $ 359,635 | $ 309,422 | $ 323,529 | $ 319,331 | $ 364,417 | $ 314,155 | $ 342,880 | $ 321,683 | $ 1,311,917 | $ 1,343,135 | $ 1,263,089 |
Gross Profit | 34,099 | 27,303 | 30,005 | 34,584 | 40,404 | 2,632 | 15,955 | 28,379 | 125,991 | 87,370 | 136,473 |
Operating income | 14,499 | 6,347 | 4,935 | 15,101 | 18,374 | (14,448) | (3,671) | 8,547 | 40,882 | 8,802 | 58,607 |
Net income | $ 9,134 | $ 4,357 | $ 5,431 | $ 9,941 | $ 10,916 | $ (2,959) | $ 3,286 | $ 5,914 | $ 28,863 | $ 17,157 | $ 35,810 |
Basic earnings per common share (in dollars per share) | $ 0.35 | $ 0.16 | $ 0.20 | $ 0.38 | $ 0.41 | $ (0.11) | $ 0.12 | $ 0.22 | $ 1.09 | $ 0.64 | $ 1.36 |
Diluted earnings per common share (in dollars per share) | $ 0.34 | $ 0.16 | $ 0.20 | $ 0.37 | $ 0.40 | $ (0.11) | $ 0.12 | $ 0.22 | $ 1.07 | $ 0.63 | $ 1.33 |
Valuation and Qualifying Acco70
Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 676 | $ 294 | $ 885 |
Charged to Costs and Expenses | 6,376 | 447 | 121 |
Charged to Other Accounts | 1,808 | 0 | 0 |
Deductions | (33) | (65) | (712) |
Balance at End of Period | 8,827 | 676 | 294 |
Allowance for Doubtful Accounts [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 561 | 204 | 795 |
Charged to Costs and Expenses | 6,065 | 422 | 121 |
Charged to Other Accounts | 1,808 | 0 | 0 |
Deductions | (31) | (65) | (712) |
Balance at End of Period | 8,403 | 561 | 204 |
Valuation Allowance of Deferred Tax Assets [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 115 | 90 | 90 |
Charged to Costs and Expenses | 311 | 25 | 0 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions | (2) | 0 | 0 |
Balance at End of Period | $ 424 | $ 115 | $ 90 |