Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 30, 2016 | Nov. 03, 2016 | |
Document Documentand Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | MTRX | |
Entity Registrant Name | MATRIX SERVICE CO | |
Entity Central Index Key | 866,273 | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 26,533,332 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||
Revenues | $ 341,781 | $ 319,331 |
Cost of revenues | 309,503 | 284,747 |
Gross profit | 32,278 | 34,584 |
Selling, general and administrative expenses | 17,977 | 19,483 |
Operating income | 14,301 | 15,101 |
Other income (expense): | ||
Interest expense | (243) | (263) |
Interest income | 12 | 31 |
Other | 7 | (54) |
Income before income tax expense | 14,077 | 14,815 |
Provision for federal, state and foreign income taxes | 4,735 | 5,076 |
Net income | 9,342 | 9,739 |
Less: Net loss attributable to noncontrolling interest | 0 | (202) |
Net income attributable to Matrix Service Company | $ 9,342 | $ 9,941 |
Basic earnings (loss) per common share (US$ per share) | $ 0.35 | $ 0.38 |
Diluted earnings (loss) per common share (US$ per share) | $ 0.35 | $ 0.37 |
Weighted average common shares outstanding: | ||
Basic (shares) | 26,387 | 26,476 |
Diluted (shares) | 26,796 | 27,050 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 9,342 | $ 9,739 |
Other comprehensive loss, net of tax: | ||
Foreign currency translation loss (net of tax of $37 and $180 for the three months ended September 30, 2016 and 2015, respectively) | (279) | (2,449) |
Comprehensive income | 9,063 | 7,290 |
Less: Comprehensive loss attributable to noncontrolling interest | 0 | (202) |
Comprehensive income attributable to Matrix Service Company | $ 9,063 | $ 7,492 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Jun. 30, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 35,579 | $ 71,656 |
Accounts receivable, less allowances (September 30, 2016— $8,457 and June 30, 2016—$8,403) | 230,975 | 190,434 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 105,094 | 104,001 |
Inventories | 3,767 | 3,935 |
Income taxes receivable | 5 | 9 |
Other current assets | 8,855 | 5,411 |
Total current assets | 384,275 | 375,446 |
Property, plant and equipment at cost: | ||
Land and buildings | 39,545 | 39,224 |
Construction equipment | 90,957 | 90,386 |
Transportation equipment | 48,466 | 49,046 |
Office equipment and software | 33,194 | 29,577 |
Construction in progress | 4,285 | 7,475 |
Property, plant and equipment at cost, gross | 216,447 | 215,708 |
Accumulated depreciation | (134,031) | (130,977) |
Property, plant and equipment at cost, net | 82,416 | 84,731 |
Goodwill | 78,274 | 78,293 |
Other intangible assets | 20,151 | 20,999 |
Deferred income taxes | 2,712 | 3,719 |
Other assets | 1,395 | 1,779 |
Total assets | 569,223 | 564,967 |
Current liabilities: | ||
Accounts payable | 127,734 | 141,445 |
Billings on uncompleted contracts in excess of costs and estimated earnings | 52,382 | 58,327 |
Accrued wages and benefits | 23,212 | 27,716 |
Accrued insurance | 9,649 | 9,246 |
Income taxes payable | 3,676 | 2,675 |
Other accrued expenses | 7,439 | 6,621 |
Total current liabilities | 224,092 | 246,030 |
Deferred income taxes | 3,198 | 3,198 |
Borrowings under senior revolving credit facility | 17,186 | 0 |
Other liabilities | 215 | 173 |
Total liabilities | 244,691 | 249,401 |
Commitments and contingencies | ||
Matrix Service Company stockholders' equity: | ||
Common stock—$.01 par value; 60,000,000 shares authorized; 27,888,217 shares issued as of September 30, 2016, and June 30, 2016; 26,528,060 and 26,297,145 shares outstanding as of September 30, 2016 and June 30, 2016 | 279 | 279 |
Additional paid-in capital | 124,464 | 127,058 |
Retained earnings | 232,499 | 223,157 |
Accumulated other comprehensive loss | (7,124) | (6,845) |
Matrix Service Company stockholders' equity | 350,118 | 343,649 |
Less: Treasury stock, at cost — 1,360,157 shares as of September 30, 2016, and 1,591,072 shares as of June 30, 2016 | (24,410) | (26,907) |
Total Matrix Service Company stockholders’ equity | 325,708 | 316,742 |
Noncontrolling interest | (1,176) | (1,176) |
Total stockholders' equity | 324,532 | 315,566 |
Total liabilities and stockholders’ equity | $ 569,223 | $ 564,967 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2016 | Jun. 30, 2016 |
Statement Condensed Consolidated Balance Sheets [Abstract] | ||
Accounts receivable, allowances | $ 8,457 | $ 8,403 |
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 | 1,360,157 | 1,591,072 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Operating activities: | ||
Net income | $ 9,342 | $ 9,739 |
Adjustments to reconcile net income to net cash used by operating activities: | ||
Depreciation and amortization | 4,904 | 5,429 |
Deferred income tax | 1,044 | 1,380 |
Gain on sale of property, plant and equipment | (138) | (74) |
Provision for uncollectible accounts | 54 | 334 |
Stock-based compensation expense | 1,652 | 1,658 |
Other | 63 | 60 |
Changes in operating assets and liabilities increasing (decreasing) cash: | ||
Accounts receivable | (40,595) | 16,181 |
Costs and estimated earnings in excess of billings on uncompleted contracts | (1,093) | 2,467 |
Inventories | 168 | (90) |
Other assets and liabilities | (2,206) | 293 |
Accounts payable | (13,597) | (26,197) |
Billings on uncompleted contracts in excess of costs and estimated earnings | (5,945) | (21,429) |
Accrued expenses | (3,241) | (4,182) |
Net cash used by operating activities | (49,588) | (14,431) |
Investing activities: | ||
Acquisition of property, plant and equipment | (1,826) | (3,941) |
Proceeds from asset sales | 153 | 135 |
Net cash used by investing activities | (1,673) | (3,806) |
Financing activities: | ||
Advances under senior revolving credit facility | 27,186 | 962 |
Repayments of advances under senior revolving credit facility | (10,000) | 0 |
Issuances of common stock | 46 | 384 |
Proceeds from issuance of common stock under employee stock purchase plan | 83 | 72 |
Repurchase of common stock for payment of statutory taxes due on equity-based compensation | (1,878) | (382) |
Capital contributions from noncontrolling interest | 0 | 8,433 |
Net cash provided by financing activities | 15,437 | 9,469 |
Effect of exchange rate changes on cash and cash equivalents | (253) | (1,291) |
Decrease in cash and cash equivalents | (36,077) | (10,059) |
Cash and cash equivalents, beginning of period | 71,656 | 79,239 |
Cash and cash equivalents, end of period | 35,579 | 69,180 |
Supplemental disclosure of cash flow information: | ||
Income taxes | 2,997 | 1,747 |
Interest | 238 | 311 |
Non-cash investing and financing activities: | ||
Purchases of property, plant and equipment on account | $ 79 | $ 603 |
Condensed Consolidated Stateme7
Condensed 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 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest 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 | 8,433 | 8,433 | |||||
Net income | 9,739 | 9,941 | (202) | ||||
Other comprehensive income (loss) | (2,449) | (2,449) | |||||
Treasury shares sold to Employee Stock Purchase Plan | 72 | 35 | 37 | ||||
Exercise of stock options | 384 | (15) | 399 | ||||
Issuance of deferred shares | 0 | (590) | 590 | ||||
Tax effect of exercised stock options and vesting of deferred shares | 20 | 20 | |||||
Other treasury share purchases | (382) | (382) | |||||
Stock-based compensation expense | 1,658 | 1,658 | |||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Sep. 30, 2015 | 302,029 | 279 | 124,146 | 204,335 | (17,845) | (8,375) | (511) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Retrospective adjustment upon adoption of ASU 2016-09 (see Note 1) | 0 | 100 | (100) | ||||
Beginning equity balances, as adjusted | 315,566 | 279 | 127,058 | 223,157 | (26,907) | (6,845) | (1,176) |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Jun. 30, 2016 | 315,566 | 279 | 126,958 | 223,257 | (26,907) | (6,845) | (1,176) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Noncontrolling Interest, Increase from Subsidiary Equity Issuance | 0 | 0 | |||||
Net income | 9,342 | 9,342 | 0 | ||||
Other comprehensive income (loss) | (279) | (279) | |||||
Treasury shares sold to Employee Stock Purchase Plan | 83 | 38 | 45 | ||||
Exercise of stock options | 46 | (25) | 71 | ||||
Issuance of deferred shares | 0 | (4,259) | 4,259 | ||||
Other treasury share purchases | (1,878) | (1,878) | |||||
Stock-based compensation expense | 1,652 | 1,652 | |||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Sep. 30, 2016 | $ 324,532 | $ 279 | $ 124,464 | $ 232,499 | $ (24,410) | $ (7,124) | $ (1,176) |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - shares | 3 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Exercise of stock options, shares | 4,400 | 43,137 |
Issuance of deferred shares, shares | 335,295 | 63,809 |
Employee Stock Purchase Plan, shares | 4,982 | 3,993 |
Other treasury shares purchases, shares | 113,762 | 20,105 |
Basis of Presentation (Notes)
Basis of Presentation (Notes) | 3 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation and Accounting Policies The condensed consolidated financial statements include the accounts of Matrix Service Company (“Matrix”, “we”, “our”, “us”, “its” or the “Company”) and its subsidiaries, unless otherwise indicated. Intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with Rule 10-01 of Regulation S-X for interim financial statements required to be filed with the Securities and Exchange Commission and do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. The information furnished reflects all adjustments, consisting of normal recurring adjustments and other adjustments described herein, that are, in the opinion of management, necessary for a fair statement of the results of operations, cash flows and financial position for the interim periods presented. The accompanying condensed financial statements should be read in conjunction with the audited financial statements for the year ended June 30, 2016 , included in the Company’s Annual Report on Form 10-K for the year then ended. The results of operations for the three month period ended September 30, 2016 may not necessarily be indicative of the results of operations for the full year ending June 30, 2017 . 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. The ASU was adopted during the Company's first fiscal quarter ending September 30, 2016. In connection with the adoption of the ASU, the Company now performs an assessment of its ability to continue as a going concern on a quarterly basis. Disclosure regarding the status of the Company's ability to continue as a going concern is required when there are conditions or events that raise substantial doubt about its ability to continue as a going concern within one year after the date that the financial statements are issued. 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 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 the ASU's 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 adopted the ASU during its first fiscal quarter ending September 30, 2016. The following is a description of the key provisions of the ASU and their impacts to the Company's financial statements: 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. Previously, the Company recognized any excess tax benefits in additional paid-in capital ("APIC") in the balance sheet and any tax deficiencies were 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 were 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 as a component of deferred tax activity. Previously, the Company was required to present such items in both the financing section and operating section of its statements of cash flows. Amendments related to the recognition of excess tax benefits and tax deficiencies in income are required to be applied prospectively, and amendments related to the cash flow statement presentation of excess tax benefits and tax deficiencies may be applied either retrospectively or prospectively. The Company applied the amendments requiring the recognition of excess tax benefits and tax deficiencies in income prospectively. As a result, the Company recognized $0.4 million of excess tax benefits in its provision for income taxes during the three months ended September 30, 2016, which increased basic and diluted earnings per share by $0.01 . Under the prior accounting standard, the Company would have recognized the excess tax benefits in equity as additional paid-in capital. The amendments relating to the presentation of excess tax benefits and tax deficiencies in the statement of cash flows were applied retrospectively. The effect of the retrospective adjustment was to eliminate the presentation of an operating cash outflow and a financing cash inflow for excess tax benefits on exercised stock options and vesting of deferred shares. These eliminations reduced both net cash used by operating activities and net cash provided by financing activities by less than $0.1 million for the three months ended September 30, 2015. Net cash flows did not change as a result of the retrospective adjustment. Accounting for 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 as they occur. Upon the adoption of the ASU during the first quarter of fiscal 2017, the Company elected to account for forfeitures as they occur. The Company is required to apply these amendments on a modified retrospective basis with a cumulative adjustment to retained earnings as of the beginning of the fiscal year. The Company recorded a modified retrospective adjustment to reduce the June 30, 2016 retained earnings balance and increase the additional paid-in capital balance by $0.1 million each. Statutory Tax Withholding Requirements : Under the prior accounting standard, 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 is 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 is 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 the statement of cash flows. The Company adopted the ASU during the first quarter of fiscal 2017. Since the Company did not have any awards classified as liabilities due to statutory tax withholding requirements as of September 30, 2016, and since the Company already presented its cash outflows for reacquiring shares withheld for taxes as a financing activity in its statements of cash flows, these amendments did not have any impact on its financial statements upon adoption. The Company does not expect changes to employee withholdings for stock compensation to have a material impact to the financial statements. 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 uncollectible 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. At this time, the Company does not expect this update to have a material impact to its estimate of the allowance for uncollectible accounts. |
Acquisitions (Notes)
Acquisitions (Notes) | 3 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | Note 2 – Acquisition 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 7,030 Other intangible assets 720 Other assets 233 Total assets acquired 17,904 Current liabilities 1,669 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 $0.8 million of expenses related to the acquisition during fiscal 2016, which were included within selling, general and administrative expenses in the consolidated statements of income. The acquired business contributed revenues of $1.0 million and an operating loss of $0.4 million during the three months ended September 30, 2016. |
Uncompleted Contracts (Notes)
Uncompleted Contracts (Notes) | 3 Months Ended |
Sep. 30, 2016 | |
Disclosure Customer Contracts Additional Information [Abstract] | |
Uncompleted 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 recognized on uncompleted contracts is reported as a current liability. Gross and net amounts on uncompleted contracts are as follows: September 30, June 30, (in thousands) Costs incurred and estimated earnings recognized on uncompleted contracts $ 2,107,546 $ 1,875,014 Billings on uncompleted contracts 2,054,834 1,829,340 $ 52,712 $ 45,674 Shown in balance sheet as: Costs and estimated earnings in excess of billings on uncompleted contracts $ 105,094 $ 104,001 Billings on uncompleted contracts in excess of costs and estimated earnings 52,382 58,327 $ 52,712 $ 45,674 Progress billings in accounts receivable at September 30, 2016 and June 30, 2016 included retentions to be collected within one year of $43.2 million and $29.7 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 . There were no retentions collectible beyond one year at September 30, 2016 . Other 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 September 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. On the project that is expected to complete in fiscal 2018, which is a contract for the construction of a power generating station, the Company recorded a project charge in the first quarter of fiscal 2017. The charge primarily related to costs incurred that relate to a pending claim for which the Company did not recognize any profit and changes in estimated costs on certain portions of the work. The Company is in active negotiations with the client regarding the recovery of claim related costs and extension of the project completion date. These costs primarily relate to owner provided engineering and equipment, which has resulted in additional work and a delayed project completion date. The outcome of these negotiations is unpredictable and may have a significant financial impact to the Company. Although there is significant uncertainty surrounding the client negotiations on the power generation project, based on the information currently available, the Company believes that its current estimates relating to these projects are reasonable. However, it is 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. |
Intangible Assets Including Goo
Intangible Assets Including Goodwill (Notes) | 3 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets Including Goodwill | Intangible Assets Including Goodwill Goodwill The changes in the carrying value of goodwill by segment are as follows: Electrical Infrastructure Oil Gas & Chemical Storage Solutions Industrial Total (In thousands) Net balance at June 30, 2016 $ 42,170 $ 14,008 $ 16,681 $ 5,434 $ 78,293 Purchase price adjustment for BTE (Note 2) — — 88 — 88 Translation adjustment (1) (92 ) — 2 (17 ) (107 ) Net balance at September 30, 2016 $ 42,078 $ 14,008 $ 16,771 $ 5,417 $ 78,274 (1) 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. The Company performed its annual goodwill impairment test as of May 31, 2016, which did not indicate the existence of any impairment at that time. While the operating results for the Oil Gas & Chemical and Industrial segments indicated a loss for the three months ended September 30, 2016, the Company does not consider these results to be a triggering event requiring the performance of an interim goodwill impairment test since the Company has not significantly changed its forecasts since the annual test was performed and the Company continues to consider these segments as core to its business and believes future performance will improve. The Company will continue to monitor its operating results for indicators of impairment and perform additional tests as necessary. Other Intangible Assets Information on the carrying value of other intangible assets is as follows: At September 30, 2016 Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount (Years) (In thousands) Intellectual property 9 to 15 $ 2,579 $ (1,291 ) $ 1,288 Customer-based 1.5 to 15 28,113 (10,227 ) 17,886 Non-compete agreements 4 to 5 1,453 (1,138 ) 315 Trade names 3 to 5 1,615 (953 ) 662 Total amortizing intangible assets $ 33,760 $ (13,609 ) $ 20,151 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 amortizing intangible assets $ 33,826 $ (12,827 ) $ 20,999 Amortization expense totaled $0.8 million during each of the three months ended September 30, 2016 and 2015. We estimate that the remaining amortization expense at September 30, 2016 will be as follows (in thousands): Period ending: Remainder of Fiscal 2017 $ 2,482 Fiscal 2018 2,935 Fiscal 2019 2,582 Fiscal 2020 2,572 Fiscal 2021 2,552 Fiscal 2022 1,705 Thereafter 5,323 Total estimated remaining amortization expense at September 30, 2016 $ 20,151 |
Debt (Notes)
Debt (Notes) | 3 Months Ended |
Sep. 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 credit facility may be used for working capital, acquisitions, capital expenditures, issuances of letters of credit and other lawful 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 , determined 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 , determined 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 sub-limit 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. The Credit Agreement includes a Senior Leverage Ratio covenant, which provides that Consolidated Funded Indebtedness, 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 September 30, 2016 , Consolidated EBITDA, as defined in the Credit Agreement, was $70.2 million . Accordingly, at September 30, 2016 , there was a restriction on our ability to access the full amount of the credit facility. Consolidated Funded Indebtedness at September 30, 2016 was $30.1 million . Availability under the senior revolving credit facility was as follows: September 30, June 30, (In thousands) Senior revolving credit facility $ 200,000 $ 200,000 Capacity constraint due to the Senior Leverage Ratio 24,395 20,138 Capacity under the credit facility 175,605 179,862 Borrowings outstanding 17,186 — Letters of credit 20,784 20,755 Availability under the senior revolving credit facility $ 137,635 $ 159,107 Outstanding borrowings at September 30, 2016 under our Credit Agreement were primarily used to fund working capital needs in our Canadian business due to the timing of collections and disbursements on the previously announced power generating project. The Company is in compliance with all affirmative, negative, and financial covenants under the Credit Agreement. |
Income Taxes (Notes)
Income Taxes (Notes) | 3 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
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. The Company provides for income taxes regardless of whether it has received a tax assessment. Taxes are provided when it is considered probable that additional taxes will be due in excess of amounts included in the tax return. The Company regularly reviews exposure to additional income taxes due, and as further information is known or events occur, adjustments may be recorded. Our effective tax rate for the three months ended September 30, 2016 was 33.6% compared to 34.3% in the same period a year earlier. The Company recorded discrete benefits of $0.3 million during the three months ended September 30, 2016 and recorded $0.5 million of discrete benefits during the three months ended September 30, 2015 . The fiscal 2017 discrete benefits primarily relate to the application of ASU 2016-09 (See Note 1) and the fiscal 2016 tax rate was positively impacted by a discrete item related to our Canadian operations. |
Commitments and Contingencies (
Commitments and Contingencies (Notes) | 3 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and 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 Costs and estimated earnings in excess of billings on uncompleted contracts included revenues for unapproved change orders and claims of $26.2 million at September 30, 2016 and $10.3 million at June 30, 2016 . During the first quarter of fiscal 2017, the Company recognized $5.8 million of unapproved change orders and a $11.4 million claim in connection with its ongoing work on a gas fired generating facility being constructed in Canada. Generally, collection of amounts related to unapproved change orders and claims is expected within twelve months. However, since customers may not pay these amounts until final resolution of related claims, 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. |
Earnings per Common Share (Note
Earnings per Common Share (Notes) | 3 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings per Common Share | Earnings per Common Share Basic earnings per share (“Basic EPS”) is calculated based on the weighted average shares outstanding during the period. Diluted earnings per share (“Diluted EPS”) includes the dilutive effect of stock options and nonvested deferred shares. The computation of basic and diluted earnings per share is as follows: Three Months Ended September 30, September 30, (In thousands, except per share data) Basic EPS: Net income attributable to Matrix Service Company $ 9,342 $ 9,941 Weighted average shares outstanding 26,387 26,476 Basic earnings per share $ 0.35 $ 0.38 Diluted EPS: Weighted average shares outstanding – basic 26,387 26,476 Dilutive stock options 50 86 Dilutive nonvested deferred shares 359 488 Diluted weighted average shares 26,796 27,050 Diluted earnings per share $ 0.35 $ 0.37 The following securities are considered antidilutive and have been excluded from the calculation of Diluted EPS: Three Months Ended September 30, September 30, (In thousands) Nonvested deferred shares 78 56 |
Segment Information (Notes)
Segment Information (Notes) | 3 Months Ended |
Sep. 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 aboveground storage tanks (“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 liquefied natural gas (“LNG”), liquid nitrogen/liquid oxygen (“LIN/LOX”), liquid petroleum (“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 footnote included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2016 . Intersegment sales and transfers are recorded at cost; therefore, no intersegment profit or loss is recognized. Segment assets consist primarily of cash and cash equivalents, accounts receivable, costs and estimated earnings in excess of billings on uncompleted contracts, property, plant and equipment, goodwill and other intangible assets. Results of Operations (In thousands) Three Months Ended September 30, September 30, Gross revenues Electrical Infrastructure $ 88,025 $ 65,625 Oil Gas & Chemical 37,828 68,959 Storage Solutions 199,650 144,570 Industrial 22,727 41,335 Total gross revenues $ 348,230 $ 320,489 Less: Inter-segment revenues Oil Gas & Chemical $ 5,286 $ 648 Storage Solutions 128 334 Industrial 1,035 176 Total inter-segment revenues $ 6,449 $ 1,158 Consolidated revenues Electrical Infrastructure $ 88,025 $ 65,625 Oil Gas & Chemical 32,542 68,311 Storage Solutions 199,522 144,236 Industrial 21,692 41,159 Total consolidated revenues $ 341,781 $ 319,331 Gross profit Electrical Infrastructure $ 5,250 $ 4,708 Oil Gas & Chemical 1 5,683 Storage Solutions 26,453 20,232 Industrial 574 3,961 Total gross profit $ 32,278 $ 34,584 Operating income (loss) Electrical Infrastructure $ 1,057 $ 1,200 Oil Gas & Chemical (2,905 ) 1,416 Storage Solutions 16,773 11,549 Industrial (624 ) 936 Total operating income $ 14,301 $ 15,101 Total assets by segment were as follows: September 30, June 30, Electrical Infrastructure $ 143,699 $ 135,298 Oil Gas & Chemical 78,474 91,350 Storage Solutions 238,205 201,875 Industrial 61,826 67,569 Unallocated assets 47,019 68,875 Total segment assets $ 569,223 $ 564,967 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Baillie Tank Equipment, Ltd. [Member] | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |
Schedule of Preliminary Purchase Price Allocation | The following table summarizes the preliminary net purchase price allocation (in thousands): Current assets $ 5,574 Property, plant and equipment 4,347 Goodwill 7,030 Other intangible assets 720 Other assets 233 Total assets acquired 17,904 Current liabilities 1,669 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 |
Uncompleted Contracts (Tables)
Uncompleted Contracts (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Disclosure Customer Contracts Additional Information [Abstract] | |
Gross and Net Amount of Uncompleted Contracts | Gross and net amounts on uncompleted contracts are as follows: September 30, June 30, (in thousands) Costs incurred and estimated earnings recognized on uncompleted contracts $ 2,107,546 $ 1,875,014 Billings on uncompleted contracts 2,054,834 1,829,340 $ 52,712 $ 45,674 Shown in balance sheet as: Costs and estimated earnings in excess of billings on uncompleted contracts $ 105,094 $ 104,001 Billings on uncompleted contracts in excess of costs and estimated earnings 52,382 58,327 $ 52,712 $ 45,674 |
Intangible Assets Including G20
Intangible Assets Including Goodwill (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |
Carrying Value of Goodwill by Segment | The changes in the carrying value of goodwill by segment are as follows: Electrical Infrastructure Oil Gas & Chemical Storage Solutions Industrial Total (In thousands) Net balance at June 30, 2016 $ 42,170 $ 14,008 $ 16,681 $ 5,434 $ 78,293 Purchase price adjustment for BTE (Note 2) — — 88 — 88 Translation adjustment (1) (92 ) — 2 (17 ) (107 ) Net balance at September 30, 2016 $ 42,078 $ 14,008 $ 16,771 $ 5,417 $ 78,274 (1) 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. |
Carrying Value of Other Intangible Assets | Information on the carrying value of other intangible assets is as follows: At September 30, 2016 Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount (Years) (In thousands) Intellectual property 9 to 15 $ 2,579 $ (1,291 ) $ 1,288 Customer-based 1.5 to 15 28,113 (10,227 ) 17,886 Non-compete agreements 4 to 5 1,453 (1,138 ) 315 Trade names 3 to 5 1,615 (953 ) 662 Total amortizing intangible assets $ 33,760 $ (13,609 ) $ 20,151 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 amortizing intangible assets $ 33,826 $ (12,827 ) $ 20,999 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Period ending: Remainder of Fiscal 2017 $ 2,482 Fiscal 2018 2,935 Fiscal 2019 2,582 Fiscal 2020 2,572 Fiscal 2021 2,552 Fiscal 2022 1,705 Thereafter 5,323 Total estimated remaining amortization expense at September 30, 2016 $ 20,151 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Availability Under the Senior Credit Facility | Availability under the senior revolving credit facility was as follows: September 30, June 30, (In thousands) Senior revolving credit facility $ 200,000 $ 200,000 Capacity constraint due to the Senior Leverage Ratio 24,395 20,138 Capacity under the credit facility 175,605 179,862 Borrowings outstanding 17,186 — Letters of credit 20,784 20,755 Availability under the senior revolving credit facility $ 137,635 $ 159,107 |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The computation of basic and diluted earnings per share is as follows: Three Months Ended September 30, September 30, (In thousands, except per share data) Basic EPS: Net income attributable to Matrix Service Company $ 9,342 $ 9,941 Weighted average shares outstanding 26,387 26,476 Basic earnings per share $ 0.35 $ 0.38 Diluted EPS: Weighted average shares outstanding – basic 26,387 26,476 Dilutive stock options 50 86 Dilutive nonvested deferred shares 359 488 Diluted weighted average shares 26,796 27,050 Diluted earnings per share $ 0.35 $ 0.37 |
Antidilutive Securities Excluded from the Calculation of Diluted EPS | The following securities are considered antidilutive and have been excluded from the calculation of Diluted EPS: Three Months Ended September 30, September 30, (In thousands) Nonvested deferred shares 78 56 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Results of Operations | Results of Operations (In thousands) Three Months Ended September 30, September 30, Gross revenues Electrical Infrastructure $ 88,025 $ 65,625 Oil Gas & Chemical 37,828 68,959 Storage Solutions 199,650 144,570 Industrial 22,727 41,335 Total gross revenues $ 348,230 $ 320,489 Less: Inter-segment revenues Oil Gas & Chemical $ 5,286 $ 648 Storage Solutions 128 334 Industrial 1,035 176 Total inter-segment revenues $ 6,449 $ 1,158 Consolidated revenues Electrical Infrastructure $ 88,025 $ 65,625 Oil Gas & Chemical 32,542 68,311 Storage Solutions 199,522 144,236 Industrial 21,692 41,159 Total consolidated revenues $ 341,781 $ 319,331 Gross profit Electrical Infrastructure $ 5,250 $ 4,708 Oil Gas & Chemical 1 5,683 Storage Solutions 26,453 20,232 Industrial 574 3,961 Total gross profit $ 32,278 $ 34,584 Operating income (loss) Electrical Infrastructure $ 1,057 $ 1,200 Oil Gas & Chemical (2,905 ) 1,416 Storage Solutions 16,773 11,549 Industrial (624 ) 936 Total operating income $ 14,301 $ 15,101 Total assets by segment were as follows: September 30, June 30, Electrical Infrastructure $ 143,699 $ 135,298 Oil Gas & Chemical 78,474 91,350 Storage Solutions 238,205 201,875 Industrial 61,826 67,569 Unallocated assets 47,019 68,875 Total segment assets $ 569,223 $ 564,967 |
Basis of Presentation Basis of
Basis of Presentation Basis of Presentation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ||
Effect of new accounting standard compared to old standard | $ 0.4 | |
Effect of adoption of new accounting standard compared to old standard, EPS | $ 0.01 | |
New Accounting Pronouncement or Change in Accounting Principle, Description of Prior-period Information Retrospectively Adjusted | The amendments relating to the presentation of excess tax benefits and tax deficiencies in the statement of cash flows were applied retrospectively. The effect of the retrospective adjustment was to eliminate the presentation of an operating cash outflow and a financing cash inflow for excess tax benefits on exercised stock options and vesting of deferred shares. These eliminations reduced both net cash used by operating activities and net cash provided by financing activities by less than $0.1 million for the three months ended September 30, 2015. Net cash flows did not change as a result of the retrospective adjustment. |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | Feb. 01, 2016 | Sep. 30, 2016 | Jun. 30, 2016 |
Business Acquisition [Line Items] | |||
Goodwill | $ 78,274 | $ 78,293 | |
Baillie Tank Equipment, Ltd. [Member] | |||
Business Acquisition [Line Items] | |||
Current assets | $ 5,574 | ||
Property, plant and equipment | 4,347 | ||
Goodwill | 7,030 | ||
Other intangible assets | 720 | ||
Other assets | 233 | ||
Total assets acquired | 17,904 | ||
Current liabilities | 1,669 | ||
Deferred income taxes | 329 | ||
Long-term debt | 1,858 | ||
Other long-term liabilities | 407 | ||
Net assets acquired | 13,641 | ||
Cash acquired | 592 | ||
Business Combination, Consideration Transferred | $ 13,049 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) - Baillie Tank Equipment, Ltd. [Member] - USD ($) $ in Thousands | Feb. 01, 2016 | Sep. 30, 2016 |
Business Acquisition [Line Items] | ||
Business Acquisition, Effective Date of Acquisition | Feb. 1, 2016 | |
Business Acquisition, Name of Acquired Entity | Baillie Tank Equipment, Ltd. (“BTE”) | |
Business Combination, Consideration Transferred | $ 13,049 | |
Economic purchase price | $ 15,400 | |
Acquisition costs | $ 800 | |
Revenue of Acquiree since Acquisition Date, Actual | 1,000 | |
Earnings of Acquiree since Acquisition Date, Actual | $ 400 |
Uncompleted Contracts - Gross a
Uncompleted Contracts - Gross and Net Amounts of Uncompleted Contracts (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Jun. 30, 2016 |
Disclosure Customer Contracts Additional Information [Abstract] | ||
Costs incurred and estimated earnings recognized on uncompleted contracts | $ 2,107,546 | $ 1,875,014 |
Billings on uncompleted contracts | 2,054,834 | 1,829,340 |
Total | 52,712 | 45,674 |
Shown on balance sheet as: | ||
Costs and estimated earnings in excess of billings on uncompleted contracts | 105,094 | 104,001 |
Billings on uncompleted contracts in excess of costs and estimated earnings | 52,382 | 58,327 |
Total | $ 52,712 | $ 45,674 |
Uncompleted Contracts - Additio
Uncompleted Contracts - Additional Information (Detail) - USD ($) $ in Millions | Sep. 30, 2016 | Jun. 30, 2016 |
Customer Contracts [Line Items] | ||
Contract Receivable Retainage, Due in Next Twelve Months | $ 43.2 | $ 29.7 |
Contract Receivable Retainage, Due after Next Twelve Months | $ 0.3 |
Intangible Assets Including G29
Intangible Assets Including Goodwill - Carrying Value of Goodwill By Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2016 | Feb. 01, 2016 | ||
Goodwill [Line Items] | |||
Goodwill | $ 78,293 | ||
Goodwill [Roll Forward] | |||
Net balance at June 30, 2015 | 78,293 | ||
Goodwill, Purchase Accounting Adjustments | 88 | ||
Translation adjustment | [1] | (107) | |
Net balance at September 30, 2016 | 78,274 | ||
Electrical Infrastructure [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 42,170 | ||
Goodwill [Roll Forward] | |||
Net balance at June 30, 2015 | 42,170 | ||
Goodwill, Purchase Accounting Adjustments | 0 | ||
Translation adjustment | [1] | (92) | |
Net balance at September 30, 2016 | 42,078 | ||
Oil Gas & Chemical [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 14,008 | ||
Goodwill [Roll Forward] | |||
Net balance at June 30, 2015 | 14,008 | ||
Goodwill, Purchase Accounting Adjustments | 0 | ||
Translation adjustment | 0 | ||
Net balance at September 30, 2016 | 14,008 | ||
Storage Solutions [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 16,681 | ||
Goodwill [Roll Forward] | |||
Net balance at June 30, 2015 | 16,681 | ||
Goodwill, Purchase Accounting Adjustments | 88 | ||
Translation adjustment | [1] | 2 | |
Net balance at September 30, 2016 | 16,771 | ||
Industrial [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 5,434 | ||
Goodwill [Roll Forward] | |||
Net balance at June 30, 2015 | 5,434 | ||
Goodwill, Purchase Accounting Adjustments | 0 | ||
Translation adjustment | [1] | (17) | |
Net balance at September 30, 2016 | $ 5,417 | ||
Baillie Tank Equipment, Ltd. [Member] | |||
Goodwill [Line Items] | |||
Goodwill | $ 7,030 | ||
[1] | . |
Intangible Assets Including G30
Intangible Assets Including Goodwill - Carrying Value of Other Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Jun. 30, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 33,760 | $ 33,826 |
Accumulated Amortization | (13,609) | (12,827) |
Net Carrying Amount | 20,151 | 20,999 |
Total intangible assets, net carrying amount | 20,151 | 20,999 |
Intellectual Property [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 2,579 | 2,579 |
Accumulated Amortization | (1,291) | (1,246) |
Net Carrying Amount | 1,288 | 1,333 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 28,113 | 28,179 |
Accumulated Amortization | (10,227) | (9,655) |
Net Carrying Amount | 17,886 | 18,524 |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 1,453 | 1,453 |
Accumulated Amortization | (1,138) | (1,102) |
Net Carrying Amount | 315 | 351 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 1,615 | 1,615 |
Accumulated Amortization | (953) | (824) |
Net Carrying Amount | $ 662 | $ 791 |
Intangible Assets Including G31
Intangible Assets Including Goodwill - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 800 | $ 800 | |
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 33,760 | $ 33,826 | |
Intellectual Property [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 2,579 | 2,579 | |
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 28,113 | 28,179 | |
Noncompete Agreements [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | 1,453 | 1,453 | |
Trade Names [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | $ 1,615 | $ 1,615 |
Intangible Assets Including G32
Intangible Assets Including Goodwill Future Expected Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Jun. 30, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Amortization Expense, Remainder of Fiscal Year | $ 2,482 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 2,935 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 2,582 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 2,572 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 2,552 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 1,705 | |
Finite-Lived Intangible Assets, Amortization Expense, after Year Five | 5,323 | |
Finite-Lived Intangible Assets, Net | $ 20,151 | $ 20,999 |
Debt - Additional Information (
Debt - Additional Information (Detail) $ in Thousands | 3 Months Ended | |
Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | |
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Document Period End Date | Sep. 30, 2016 | |
Credit Agreement Term | 5 years | |
Senior secured revolving credit facility | $ 200,000 | $ 200,000 |
mtrx_LineOfCreditFacilityExpirationDate | Mar. 13, 2019 | |
Senior Leverage Ratio, Maximum | 2.50 | |
Senior Leverage Ratio, Minimum | 1 | |
Fixed Charge Coverage Ratio, Maximum | 1.25 | |
Fixed Charge Coverage Ratio, Minimum | 1 | |
Amount of 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% | |
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%. | |
Maximum limit of consolidated funded indebtedness | 2.5 | |
Consolidated EBITDA as defined in the Credit Agreement | $ 70,200 | |
Consolidated funded indebtedness | $ 30,100 | |
Minimum [Member] | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Unused Credit Facility Fee | 0.20% | |
Maximum [Member] | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Unused Credit Facility Fee | 0.35% | |
CDOR Rate [Member] | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Basis spread on variable rate basis | 0.10% | |
Canadian Prime Rate [Member] | ||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||
Variable rate basis | CDOR | |
Basis spread on variable rate basis | 1.00% |
Debt - Availability Under The S
Debt - Availability Under The Senior Credit Facility (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Jun. 30, 2016 |
Debt Disclosure [Abstract] | ||
Senior credit facility | $ 200,000 | $ 200,000 |
Capacity Constraint Due To Senior Leverage Ratio | 24,395 | 20,138 |
Line Of Credit Facility Maximum Borrowing Capacity After Consideration Of Capacity Constraint | 175,605 | 179,862 |
Line of Credit Facility, Amount Outstanding | 17,186 | 0 |
Letters of credit subject to the credit facility | 20,784 | 20,755 |
Availability under the senior credit facility | $ 137,635 | $ 159,107 |
Income Taxes Income Taxes (Deta
Income Taxes Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||
Effective Income Tax Rate Reconciliation, Percent | 33.60% | 34.30% |
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount | $ 0.3 | $ 0.5 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions | Sep. 30, 2016 | Jun. 30, 2016 |
Power Generation Project Unapproved Change Orders and Claims [Line Items] | ||
Unapproved change orders and claims | $ 26.2 | $ 10.3 |
Unapproved Change Orders On Power Generation Project [Member] | ||
Power Generation Project Unapproved Change Orders and Claims [Line Items] | ||
Unapproved change orders and claims | 5.8 | |
Claim On Power Generation Project [Member] | ||
Power Generation Project Unapproved Change Orders and Claims [Line Items] | ||
Unapproved change orders and claims | $ 11.4 |
Earnings per Common Share - Com
Earnings per Common Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share, Basic [Abstract] | ||
Net income | $ 9,342 | $ 9,941 |
Weighted average shares outstanding - basic (shares) | 26,387 | 26,476 |
Basic EPS (US$ per share) | $ 0.35 | $ 0.38 |
Earnings Per Share, Diluted [Abstract] | ||
Dilutive stock options | 50 | 86 |
Dilutive nonvested deferred shares | 359 | 488 |
Diluted weighted average shares (shares) | 26,796 | 27,050 |
Diluted EPS (US$ per share) | $ 0.35 | $ 0.37 |
Earnings per Common Share - Ant
Earnings per Common Share - Antidilutive Securities Excluded from the Calculation of Diluted Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Nonvested Deferred Shares [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total antidilutive securities | 78 | 56 |
Segment Information - Results o
Segment Information - Results of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | |||
Gross revenues | $ 348,230 | $ 320,489 | |
Consolidated revenues | 341,781 | 319,331 | |
Gross profit | 32,278 | 34,584 | |
Operating income | 14,301 | 15,101 | |
Segment assets | 569,223 | $ 564,967 | |
Goodwill | 78,274 | 78,293 | |
Electrical Infrastructure [Member] | |||
Segment Reporting Information [Line Items] | |||
Gross revenues | 88,025 | 65,625 | |
Consolidated revenues | 88,025 | 65,625 | |
Gross profit | 5,250 | 4,708 | |
Operating income | 1,057 | 1,200 | |
Segment assets | 143,699 | 135,298 | |
Goodwill | 42,078 | 42,170 | |
Oil Gas & Chemical [Member] | |||
Segment Reporting Information [Line Items] | |||
Gross revenues | 37,828 | 68,959 | |
Consolidated revenues | 32,542 | 68,311 | |
Gross profit | 1 | 5,683 | |
Operating income | (2,905) | 1,416 | |
Segment assets | 78,474 | 91,350 | |
Goodwill | 14,008 | 14,008 | |
Storage Solutions [Member] | |||
Segment Reporting Information [Line Items] | |||
Gross revenues | 199,650 | 144,570 | |
Consolidated revenues | 199,522 | 144,236 | |
Gross profit | 26,453 | 20,232 | |
Operating income | 16,773 | 11,549 | |
Segment assets | 238,205 | 201,875 | |
Goodwill | 16,771 | 16,681 | |
Industrial [Member] | |||
Segment Reporting Information [Line Items] | |||
Gross revenues | 22,727 | 41,335 | |
Consolidated revenues | 21,692 | 41,159 | |
Gross profit | 574 | 3,961 | |
Operating income | (624) | 936 | |
Segment assets | 61,826 | 67,569 | |
Goodwill | 5,417 | 5,434 | |
Other Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Segment assets | 47,019 | $ 68,875 | |
Intersegment Eliminations [Member] | |||
Segment Reporting Information [Line Items] | |||
Gross revenues | 6,449 | 1,158 | |
Intersegment Eliminations [Member] | Oil Gas & Chemical [Member] | |||
Segment Reporting Information [Line Items] | |||
Gross revenues | 5,286 | 648 | |
Intersegment Eliminations [Member] | Storage Solutions [Member] | |||
Segment Reporting Information [Line Items] | |||
Gross revenues | 128 | 334 | |
Intersegment Eliminations [Member] | Industrial [Member] | |||
Segment Reporting Information [Line Items] | |||
Gross revenues | $ 1,035 | $ 176 |