Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2018 | Sep. 07, 2018 | Dec. 31, 2017 | |
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, 2018 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,018 | ||
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 | $ 466 | ||
Entity Common Stock, Shares Outstanding | 27,009,420 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | |||
Revenues | $ 1,091,553 | $ 1,197,509 | $ 1,311,917 |
Cost of revenues | 999,617 | 1,116,506 | 1,185,926 |
Gross profit | 91,936 | 81,003 | 125,991 |
Selling, general and administrative expenses | 84,417 | 76,144 | 85,109 |
Goodwill and other intangible asset impairment | 17,998 | 0 | 0 |
Operating income (loss) | (10,479) | 4,859 | 40,882 |
Other income (expense): | |||
Interest expense | (2,600) | (2,211) | (852) |
Interest income | 381 | 132 | 190 |
Other | 550 | (334) | (567) |
Income (loss) before income tax expense | (12,148) | 2,446 | 39,653 |
Provision (benefit) for federal, state and foreign income taxes | (668) | 2,308 | 14,116 |
Net income (loss) | (11,480) | 138 | 25,537 |
Less: Net income (loss) attributable to noncontrolling interest | 0 | 321 | (3,326) |
Net income (loss) attributable to Matrix Service Company | $ (11,480) | $ (183) | $ 28,863 |
Basic earnings (loss) per common share (in dollars per share) | $ (0.43) | $ (0.01) | $ 1.09 |
Diluted earnings (loss) per common share (in dollars per share) | $ (0.43) | $ (0.01) | $ 1.07 |
Weighted average common shares outstanding: | |||
Basic (in shares) | 26,769 | 26,533 | 26,597 |
Diluted (in shares) | 26,769 | 26,533 | 27,100 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Other comprehensive income (loss), net of tax: | |||
Net income (loss) | $ (11,480) | $ 138 | $ 25,537 |
Foreign currency translation loss (net of tax expense (benefit) of ($24), $180 and $236 for the fiscal years ended June 30, 2018, 2017 and 2016, respectively) | (87) | (479) | (919) |
Comprehensive income (loss) | (11,567) | (341) | 24,618 |
Less: Comprehensive income (loss) attributable to noncontrolling interest | 0 | 321 | (3,326) |
Comprehensive income (loss) attributable to Matrix Service Company | $ (11,567) | $ (662) | $ 27,944 |
Consolidated Statements of Com4
Consolidated Statements of Comprehensive Income (Parentheticals) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Foreign currency translation adjustments, tax effect | $ (24) | $ 180 | $ 236 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 64,057 | $ 43,805 |
Accounts receivable, less allowances (2018 - $6,327; 2017 - $9,887) | 203,388 | 210,953 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 76,632 | 91,180 |
Inventories | 5,152 | 3,737 |
Income taxes receivable | 3,359 | 4,042 |
Other current assets | 4,458 | 4,913 |
Total current assets | 357,046 | 358,630 |
Property, plant and equipment, at cost: | ||
Land and buildings | 40,424 | 38,916 |
Construction equipment | 89,036 | 94,298 |
Transportation equipment | 48,339 | 48,574 |
Office equipment and software | 41,236 | 36,556 |
Construction in progress | 1,353 | 5,952 |
Total property, plant and equipment - at cost | 220,388 | 224,296 |
Accumulated depreciation | (147,743) | (144,022) |
Property, plant and equipment - net | 72,645 | 80,274 |
Goodwill | 96,162 | 113,501 |
Other intangible assets | 22,814 | 26,296 |
Deferred income taxes | 4,848 | 3,385 |
Other assets | 4,518 | 3,944 |
Total assets | 558,033 | 586,030 |
Current liabilities: | ||
Accounts payable | 79,439 | 105,649 |
Billings on uncompleted contracts in excess of costs and estimated earnings | 120,740 | 75,127 |
Accrued wages and benefits | 24,375 | 20,992 |
Accrued insurance | 9,080 | 9,340 |
Income taxes payable | 7 | 169 |
Other accrued expenses | 4,824 | 7,699 |
Total current liabilities | 238,465 | 218,976 |
Deferred income taxes | 429 | 128 |
Borrowings under senior revolving credit facility | 0 | 44,682 |
Other liabilities | 296 | 435 |
Total liabilities | 239,190 | 264,221 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock—$.01 par value; 60,000,000 shares authorized; 27,888,217 shares issued as of June 30, 2018 and June 30, 2017; 26,853,823 and 26,600,562 shares outstanding as of June 30, 2018 and June 30, 2017 | 279 | 279 |
Additional paid-in capital | 132,198 | 128,419 |
Retained earnings | 211,494 | 222,974 |
Accumulated other comprehensive loss | (7,411) | (7,324) |
Total stockholders' equity before treasury stock | 336,560 | 344,348 |
Less treasury stock, at cost — 1,034,394 and 1,287,655 shares as of June 30, 2018 and June 30, 2017 | (17,717) | (22,539) |
Total stockholders' equity | 318,843 | 321,809 |
Total liabilities and stockholders' equity | $ 558,033 | $ 586,030 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 6,327 | $ 9,887 |
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 |
Common stock, shares outstanding | 26,853,823 | 26,600,562 |
Treasury stock, shares | 1,034,394 | 1,287,655 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Operating activities: | |||
Net income (loss) | $ (11,480) | $ 138 | $ 25,537 |
Adjustments to reconcile net income to net cash provided (used) by operating activities, net of effects of acquisitions : | |||
Depreciation and amortization | 20,347 | 21,602 | 21,441 |
Goodwill and other intangible asset impairment | 17,998 | 0 | 0 |
Deferred income taxes | (1,186) | (2,556) | 1,871 |
Gain on sale of property, plant and equipment | (662) | (142) | (39) |
Provision for uncollectible accounts | 107 | 1,748 | 6,034 |
Stock-based compensation expense | 8,618 | 7,461 | 6,317 |
Other | 397 | 289 | 240 |
Changes in operating assets and liabilities increasing (decreasing) cash, net of effects from acquisitions: | |||
Accounts receivable | 5,504 | (11,932) | 4,152 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 14,548 | 13,567 | (17,930) |
Inventories | (1,415) | 198 | 606 |
Other assets and liabilities | 369 | (7,641) | 7,380 |
Accounts payable | (25,883) | (37,047) | 14,698 |
Billings on uncompleted contracts in excess of costs and estimated earnings | 45,613 | 5,212 | (38,377) |
Accrued expenses | 1,796 | (9,643) | 1,657 |
Net cash provided (used) by operating activities | 74,671 | (18,746) | 33,587 |
Investing activities: | |||
Acquisitions, net of cash acquired (Note 2) | (1,687) | (40,819) | (13,049) |
Acquisition of property, plant and equipment | (8,711) | (11,908) | (13,939) |
Proceeds from asset sales | 1,062 | 1,308 | 422 |
Net cash used by investing activities | (9,336) | (51,419) | (26,566) |
Financing activities: | |||
Advances under senior revolving credit facility | 85,317 | 126,933 | 10,213 |
Repayments of advances under senior revolving credit facility | (130,248) | (82,251) | (19,017) |
Payment of debt amendment fees | (364) | (1,073) | 0 |
Open market purchase of treasury shares | 0 | 0 | (10,461) |
Issuances of common stock | 317 | 253 | 638 |
Proceeds from issuance of common stock under employee stock purchase plan | 293 | 305 | 335 |
Repurchase of common stock for payment of statutory taxes due on equity-based compensation | (627) | (2,290) | (4,588) |
Capital contributions from noncontrolling interest | 0 | 855 | 10,892 |
Repayment of acquired long-term debt | 0 | 0 | (1,858) |
Net cash provided (used) by financing activities | (45,312) | 42,732 | (13,846) |
Effect of exchange rate changes on cash | 229 | (418) | (758) |
Net increase (decrease) in cash and cash equivalents | 20,252 | (27,851) | (7,583) |
Cash and cash equivalents, beginning of period | 43,805 | 71,656 | 79,239 |
Cash and cash equivalents, end of period | 64,057 | 43,805 | 71,656 |
Other cash flow information: | |||
Cash paid during the period for income taxes | 1,410 | 11,968 | 9,365 |
Cash paid during the period for interest | 2,719 | 1,788 | 881 |
Non-cash investing and financing activities: | |||
Accrued working capital adjustment | 0 | 1,687 | 0 |
Purchases of property, plant and equipment on account | 156 | 483 | 193 |
Assumption of debt from acquisition | $ 0 | $ 0 | $ 1,858 |
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, 2015 | $ 284,554 | $ 279 | $ 123,038 | $ 194,394 | $ (18,489) | $ (5,926) | $ (8,742) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Capital contributions from Non-controlling Interest | 10,892 | 10,892 | |||||
Net income (loss) | 25,537 | ||||||
Other comprehensive loss | (919) | (919) | |||||
Treasury Shares Sold to Employee Stock Purchase Plan | 335 | 177 | 158 | ||||
Exercise of stock options | 638 | 14 | 0 | 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 | |||||
Open market purchase of treasury shares | (10,461) | (10,461) | |||||
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) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income (Loss) Attributable to Parent | 28,863 | 28,863 | |||||
Net Income (Loss) Attributable to Noncontrolling Interest | (3,326) | ||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | 0 | 100 | (100) | ||||
Beginning equity balances, as adjusted | 315,566 | 279 | 127,058 | 223,157 | (26,907) | (6,845) | (1,176) |
Capital contributions from Non-controlling Interest | 855 | 855 | |||||
Net income (loss) | 138 | ||||||
Other comprehensive loss | (479) | (479) | |||||
Treasury Shares Sold to Employee Stock Purchase Plan | 305 | (25) | 330 | ||||
Exercise of stock options | 253 | (317) | 0 | 570 | |||
Issuance of deferred shares | 0 | (5,758) | 5,758 | ||||
Treasury shares repurchased to satisfy tax withholding obligations | (2,290) | (2,290) | |||||
Stock-based compensation expense | 7,461 | 7,461 | |||||
Balances, ending at Jun. 30, 2017 | 321,809 | 279 | 128,419 | 222,974 | (22,539) | (7,324) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income (Loss) Attributable to Parent | (183) | (183) | |||||
Net Income (Loss) Attributable to Noncontrolling Interest | 321 | 321 | |||||
Net income (loss) | (11,480) | ||||||
Other comprehensive loss | (87) | (87) | |||||
Treasury Shares Sold to Employee Stock Purchase Plan | 293 | (130) | 423 | ||||
Exercise of stock options | 317 | (240) | 557 | ||||
Issuance of deferred shares | 0 | (4,469) | 4,469 | ||||
Treasury shares repurchased to satisfy tax withholding obligations | (627) | (627) | |||||
Stock-based compensation expense | 8,618 | 8,618 | |||||
Balances, ending at Jun. 30, 2018 | 318,843 | $ 279 | $ 132,198 | 211,494 | $ (17,717) | $ (7,411) | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income (Loss) Attributable to Parent | (11,480) | $ (11,480) | |||||
Net Income (Loss) Attributable to Noncontrolling Interest | $ 0 |
Consolidated Statements of Cha9
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - shares | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Open market purchase of treasury shares, shares | 0 | 0 | 654,958 |
Employee Stock Purchase Plans, shares | 21,920 | 16,609 | 17,304 |
Exercise of stock options, shares | 31,050 | 24,813 | 68,037 |
Issuance of deferred shares, shares | 253,241 | 396,530 | 631,443 |
Treasury shares repurchased to satisfy tax withholding obligations | 52,950 | 134,535 | 205,504 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Organization and Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and 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 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, 2018 or 2017. 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 and 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, 2018 and 2017. We have cash on deposit at June 30, 2018 with banks in the United States, Canada, South Korea and Australia in excess of Federal Deposit Insurance Corporation ("FDIC"), Canada Deposit Insurance Corporation ("CDIC"), Korea Deposit Insurance Corporation ("KDIC") and Financial Claims Scheme ("FCS") protection limits, respectively. The United States Dollar equivalent of Canadian, South Korean and Australian deposits totaled $5.2 million as of June 30, 2018. 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, which is a level below our reportable segments. We perform our annual test during the fourth quarter of each fiscal year and in any other period in which indicators of impairment warrant additional tests. The goodwill impairment test involves comparing management’s estimate of the fair value of a reporting unit with its carrying value, including goodwill. If the fair value of a reporting unit exceeds its carrying value, then goodwill is not impaired. If the fair value of a reporting unit is less than its carrying value, then goodwill is impaired to the extent of the difference, but the impairment may not exceed the balance of goodwill assigned to that reporting unit. We utilize a discounted cash flow analysis, referred to as an income approach, and market multiples, referred to as a market approach, to determine the estimated fair value of our reporting units. For the income approach, significant judgments and assumptions including forecasted project awards, discount rate, anticipated revenue growth rate, gross margins, operating expenses, working capital needs and capital expenditures are inherent in the 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. For the market approach, significant judgments and assumptions include the selection of guideline companies, forecasted guideline company EBITDA and our forecasted EBITDA. 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 test for reasonableness, we also consider the combined carrying values of our reporting units to our market capitalization. Other Intangible Assets Intangible assets that have finite useful lives are amortized by the straight-line method over their useful lives ranging from 4 years to 15 years. A finite intangible asset is considered impaired when its carrying amount is not recoverable and exceeds the asset's fair value. The carrying amount is deemed unrecoverable if it is greater than the sum of undiscounted cash flows expected to result from use and eventual disposition of the asset. An impairment loss is equal to the excess of the carrying amount over the fair value of the asset. 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, which is calculated using a Monte Carlo model . 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 with forfeitures recorded as they occur. 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, including interim reporting periods within that reporting period. The Company adopted this standard on July 1, 2018 using the modified retrospective method of application. Under the modified retrospective method, revenue recognized on completed contracts is not restated, however contracts in progress are accounted for as if they were under the new standard at inception. Any difference between historical revenue and revenue under the new standard is recorded as a cumulative effect adjustment to retained earnings as of the date of adoption. The Company has completed the analysis of its contracts in progress and noted that the modified retrospective adjustment was immaterial. The Company does not expect the new standard to have a material impact to its financial statements going forward. Accounting Standards Update 2016-02, Leases (Topic 842) and Accounting Standards Update No. 2018-11, Leases (Topic 842) On February 25, 2016, the FASB issued ASU 2016-02 that amends accounting for leases. Under the new guidance, lessees will recognize the following for all leases (with the exception of short-term leases) at the lease 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. Prior to the issuance of ASU 2018-11 in July 2018, lessees and lessors were required to adopt the new standard using 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, even though those leases may have expired before the new standard's effective date. The amendments in ASU 2018-11 provide, among other things, an additional (and optional) transition method to adopt the new leases standard. Under this new transition method, the Company may apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption rather than having to apply the new standard to the earliest comparative period presented in the financial statements. Both amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption of the amendments is permitted, but we do not plan to do so at this time. We are currently assessing the impact of the adoption of the amendments on the Company's results of operations, financial position and cash flows. As of June 30, 2018 the Company had $33.1 million of future minimum lease payments under non-cancelable operating leases, primarily for facilities. See Note 8 - Operating Leases for more information about the timing and amount of future operating lease payments, which we believe is indicative of the materiality of adoption of these amendments to our 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 will change 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. Accounting Standards Update 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting In May 2017, the FASB issued ASU 2017-09 which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as a modification. Entities should apply the modification accounting guidance if the value, vesting conditions or classification of the award changes. ASU 2017-09 is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted and prospective application is required. The adoption of ASU 2017-09 did not have a material impact on our financial position, results of operations or cash flows. |
Acquisitions
Acquisitions | 12 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions and Disposals Sale of Process Heating Business - Subsequent Event In August 2018, the Company sold non-core assets associated with a business that marketed process heating equipment for $3.7 million in cash, subject to customary final post-closing adjustments. The fiscal 2018 revenues and operating results of the business, which were included in the Oil Gas & Chemical segment, are not material. Purchase of Houston Interests, LLC On December 12, 2016 , the Company completed the acquisition of Houston Interests, LLC ("Houston Interests"), a global solutions company that provides consulting, engineering, design, construction services and systems integration. Houston Interests brings expertise to the Company in natural gas processing; sulfur recovery, processing and handling; liquid terminals, silos and other bulk storage; process plant design; power generation environmental controls and material handling; industrial power distribution; electrical, instrumentation and controls; marine structures; and material handling systems and terminals for cement, sulfur, fertilizer, coal and grain facilities. The business has been included in our Matrix PDM Engineering, Inc. subsidiary, and its operating results impact primarily the Oil Gas & Chemical, Storage Solutions and Industrial segments. The Company purchased all of the equity interests of Houston Interests for $42.5 million, net of working capital adjustments and cash acquired. The consideration paid is as follows (in thousands): Cash paid for equity interest $ 46,000 Cash paid for working capital 6,837 Less: cash acquired (10,331 ) Net purchase price $ 42,506 The Company funded the equity interest portion of the consideration paid from borrowings under the Company's senior secured revolving credit facility (See Note 5). The purchase of working capital was paid with cash on hand. 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 net purchase price allocation (in thousands): Cash and cash equivalents $ 10,331 Accounts receivable 10,273 Costs and estimated earnings in excess of billings on uncompleted contracts 746 Other current assets 454 Current assets 21,804 Property, plant and equipment 942 Goodwill 35,146 Other intangible assets 10,220 Total assets acquired 68,112 Accounts payable 962 Billings on uncompleted contracts in excess of costs and estimated earnings 11,648 Other accrued expenses 2,475 Current liabilities 15,085 Other liabilities 190 Net assets acquired 52,837 Less: cash acquired 10,331 Net purchase price $ 42,506 The goodwill recognized from the acquisition is primarily attributable to the technical expertise of the acquired workforce and the complementary nature of Houston Interests' operations, which the Company believes will enable the combined entity to expand its service offerings and enter new markets. All of the goodwill recognized is deductible for income tax purposes. The Company agreed to pay the previous owners up to $2.6 million for any unused portion of acquired warranty obligations outstanding as of June 30, 2017. This agreement was settled for $1.7 million , which was paid in July 2017. This settlement was reflected as a decrease to the acquired current liabilities and an increase to the net purchase price. The Company incurred $0.6 million of expenses related to closing the acquisition during the fiscal year ended June 30, 2017, which were included within selling, general and administrative expenses in the Consolidated Statements of Income. The unaudited financial information in the table below summarizes the combined results of operations of Matrix Service Company and Houston Interests for the fiscal years ended June 30, 2017 and 2016, on a pro forma basis, as though the companies had been combined as of July 1, 2015. 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, 2015 nor should it be taken as indicative of future consolidated results of operations. Fiscal Years Ended June 30, 2017 June 30, 2016 (In thousands, except per share data) Revenues $ 1,233,372 $ 1,427,313 Net income attributable to Matrix Service Company $ 7,326 $ 32,352 Basic earnings per common share $ 0.28 $ 1.22 Diluted earnings per common share $ 0.27 $ 1.19 The pro forma financial information presented in the table above includes the following adjustments to the combined entities' historical financial statements: • The combined entities recorded approximately $3.3 million of acquisition and integration expenses during the fiscal year ended June 30, 2017, which were transferred in the pro forma earnings to the fiscal year ended June 30, 2016 in order to report them as if they were incurred on July 1, 2015. Pro forma earnings were adjusted to include integration expenses that would have been recognized had the acquisition occurred on July 1, 2015 of $0.8 million and $0.9 million during the fiscal years ended June 30, 2017 and 2016, respectively. • Interest expense for the combined entities was increased by $0.7 million for the fiscal year ended June 30, 2017 and by $1.4 million during the fiscal year ended June 30, 2016. The increase was attributable to the assumption that the Company's borrowings of $46.0 million used to fund a portion of the acquisition had been outstanding as of July 1, 2015. This increase was partially offset by the assumption that Houston Interests' former debt was extinguished as of July 1, 2015. • Depreciation and intangible asset amortization expense for the combined entities was reduced by $1.4 million during the fiscal year ended June 30, 2017 and was increased by $1.8 million during the fiscal year ended June 30, 2016. These adjustments are primarily due to the recognition of amortizable intangible assets as part of the acquisition and the effect of fair value adjustments to acquired property, plant and equipment. • Pro forma earnings were adjusted to include additional income tax expense of $2.0 million and $2.2 million during the fiscal years ended June 30, 2017 and 2016, respectively. Houston Interests was previously an exempt entity and income taxes were not assessed in its historical financial information. 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 near 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 following table summarizes the final 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 Less: 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 Company incurred $1.2 million of expenses related to the acquisition for the fiscal year ended June 30, 2016, which are included within Selling, general and administrative expenses in the Consolidated Statements of Income. |
Customer Contracts
Customer Contracts | 12 Months Ended |
Jun. 30, 2018 | |
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 $ 2,081,799 $ 1,919,054 Billings on uncompleted contracts 2,125,907 1,903,001 $ (44,108 ) $ 16,053 Shown in balance sheet as: Costs and estimated earnings in excess of billings on uncompleted contracts $ 76,632 $ 91,180 Billings on uncompleted contracts in excess of costs and estimated earnings 120,740 75,127 $ (44,108 ) $ 16,053 Progress billings in accounts receivable at June 30, 2018 and June 30, 2017 included retentions to be collected within one year of $25.9 million and $54.3 million , respectively. Contract retentions collectible beyond one year are included in other assets in the Consolidated Balance Sheets and totaled $2.6 million at June 30, 2018 and $1.9 million at June 30, 2017 . Other Our fiscal 2017 results were negatively impacted by an increased cost estimate related to a large project in the Electrical Infrastructure segment, which resulted in a decrease in gross profit. The change in cost estimate resulted from a deterioration in the financial forecast of the project during the third fiscal quarter and was caused by various factors that delayed schedule progress and reduced productivity. At June 30, 2018, the Company's scope of work is complete and the remaining impact of the project on the Company's future results is expected to be insignificant. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Jun. 30, 2018 | |
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) 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 (1) (204 ) — 75 (38 ) (167 ) Net balance at June 30, 2016 42,170 14,008 16,681 5,434 78,293 Purchase of Houston Interests (Note 2) — 19,596 — 15,550 35,146 Acquisition related adjustments — — 88 — 88 Translation adjustment (1) (18 ) — (5 ) (3 ) (26 ) Net balance at June 30, 2017 42,152 33,604 16,764 20,981 113,501 Goodwill impairment (17,281 ) — — — (17,281 ) Translation adjustment (1) (45 ) — (4 ) (9 ) (58 ) Net balance at June 30, 2018 $ 24,826 $ 33,604 $ 16,760 $ 20,972 $ 96,162 (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. We performed our annual goodwill impairment test as of May 31, 2018. The test indicated that the carrying amount of our Electrical Infrastructure reporting unit exceeded its estimated fair value, resulting in an impairment to goodwill of $17.3 million. The impairment was triggered by lower financial projections as a result of the Company's decision to shift its strategy away from EPC power generation projects to smaller, individual packages that better fit the Company's strategy and risk profile, and the recent trend of sluggish maintenance and capital spending by some key clients in our Northeast and Mid-Atlantic high voltage markets. The estimated fair value of the reporting unit was derived by utilizing a combination of discounted cash flow analysis and market multiples. If our market view of project opportunities or gross margin changes, the Company may need to perform an interim analysis, which could result in the recognition of an additional material impairment to goodwill. The Company will continue to monitor the operating results of its reporting units each period and perform additional tests as needed. Other Intangible Assets Information on the carrying value of other intangible assets is as follows: At June 30, 2018 Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount (Years) (In thousands) Intellectual property 9 to 15 $ 2,579 $ (1,603 ) $ 976 Customer based 6 to 15 38,562 (16,763 ) 21,799 Non-compete Agreements 4 1,453 (1,414 ) 39 Trade names — 1,630 (1,630 ) — Total other intangible assets $ 44,224 $ (21,410 ) $ 22,814 At June 30, 2017 Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount (Years) (In thousands) Intellectual property 9 to 15 $ 2,579 $ (1,425 ) $ 1,154 Customer based 1 to 15 38,207 (13,543 ) 24,664 Non-compete agreements 4 to 5 1,453 (1,298 ) 155 Trade name 1 to 3 1,630 (1,307 ) 323 Total other intangible assets $ 43,869 $ (17,573 ) $ 26,296 In June 2018, the Company recorded a $0.7 million impairment to a customer relationship intangible asset associated with an acquisition that was completed in fiscal 2013. The impairment was triggered by lower than anticipated revenue and operating income. The impairment is included in the Oil Gas & Chemical segment and is presented within the Goodwill and other intangible asset impairment caption in the Consolidated Statements of Income. In December 2017, the Company settled a portion of an account receivable with a customer in exchange for $50.0 million of backlog, which the Company expects to recognize as revenue over the next six years. The Company has recognized the backlog as a customer-based intangible asset with an estimated fair value of $2.0 million . The value assigned to the backlog approximated the net book value of the account receivable included in the settlement. The amortization expense will be recognized as the work is completed. Amortization expense totaled $4.8 million , $4.9 million , and $3.6 million in fiscal 2018 , 2017 , and 2016, respectively. We estimate that future amortization of other intangible assets will be as follows (in thousands): For year ending: June 30, 2019 $ 3,699 June 30, 2020 3,688 June 30, 2021 3,669 June 30, 2022 2,821 June 30, 2023 2,369 Thereafter 6,568 Total estimated amortization expense $ 22,814 |
Debt
Debt | 12 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt On February 8, 2017, the Company entered into the Fourth Amended and Restated Credit Agreement (the "Credit Agreement"), by and among the Company and certain foreign subsidiaries, as Borrowers, various subsidiaries of the Company, as Guarantors, JPMorgan Chase Bank, N.A., as Administrative Agent, Sole Lead Arranger and Sole Bookrunner, and the other Lenders party thereto. The Credit Agreement provides for a five-year senior secured revolving credit facility of $300.0 million that expires February 8, 2022 . 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 Leverage Ratio, determined as of the end of each fiscal quarter, may not exceed 3.00 to 1.00 . • We are required to maintain a Fixed Charge Coverage Ratio, determined as of the end of each fiscal quarter, greater than or equal to 1.25 to 1.00 . • Asset dispositions (other than dispositions in which all of the net cash proceeds therefrom are reinvested into the Company and dispositions of inventory and obsolete or unneeded equipment in the ordinary course of business) are limited to $20.0 million per 12-month period. The credit facility includes a sub-facility for revolving loans denominated in Australian Dollars, Canadian Dollars, Euros and Pounds Sterling in an aggregate amount not to exceed the U.S. Dollar equivalent of $75.0 million and a $200.0 million sublimit for letters of credit. Each revolving borrowing under the Credit Agreement will bear interest at a rate per annum equal to: • The ABR or the Adjusted LIBO Rate, in the case of revolving loans denominated in U.S. Dollars; • The Canadian Prime Rate or the CDOR rate, in the case of revolving loans denominated in Canadian Dollars; • The Adjusted LIBO Rate, in the case of revolving loans denominated in Pounds Sterling or Australian Dollars; or • The EURIBO Rate, in the case of revolving loans denominated in Euros, in each case, plus the Applicable Margin, which is based on the Company's Leverage Ratio. The Applicable Margin on ABR loans ranges between 0.625% and 1.625% . The Applicable Margin for Adjusted LIBO, EURIBO and CDOR loans ranges between 1.625% and 2.625% and the Applicable Margin for Canadian Prime Rate loans ranges between 2.125% and 3.125% . The unused credit facility fee is between 0.25% and 0.45% based on the Leverage Ratio. The Credit Agreement includes a Leverage Ratio covenant, which provides that Consolidated Funded Indebtedness, as of the end of any fiscal quarter, may not exceed 3.0 times Consolidated EBITDA, as defined in the Credit Agreement, over the previous four quarters. For the four quarters ended June 30, 2018 , Consolidated EBITDA was $36.8 million . Consolidated Funded Indebtedness, as defined in the Credit Agreement, at June 30, 2018 was $37.1 million . Availability under the senior secured revolving credit facility is as follows: June 30, June 30, (In thousands) Senior secured revolving credit facility $ 300,000 $ 300,000 Capacity constraint due to the Leverage Ratio 189,741 169,092 Capacity under the senior secured revolving credit facility 110,259 130,908 Letters of credit issued 37,073 7,825 Borrowings outstanding — 44,682 Availability under the senior secured revolving credit facility $ 73,186 $ 78,401 The Company is in compliance with all other affirmative, negative, and financial covenants under the Credit Agreement. At June 30, 2018, the Company was at the lowest margin tier for all categories of loans and the unused revolving credit facility fee under the Credit Agreement. The carrying value of the senior secured revolving credit facility approximates its fair value at each balance sheet date. |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Tax Cuts and Jobs Act The Tax Cuts and Jobs Act (the "Act") was enacted on December 22, 2017. The Act makes broad and complex changes to the U.S. tax code, which have affected our current results and will affect our future results. The following were significant changes in the tax code that became effective for the Company beginning January 1, 2018: • reducing the Company's U.S. federal corporate income tax rate from 35% to a blended rate of 28.06% for fiscal 2018 as stipulated by the Internal Revenue Code for companies using a June 30 fiscal year end and to 21% for fiscal years thereafter; • generally eliminating U.S. federal income tax on dividends from foreign subsidiaries; • requiring current inclusion in U.S. federal taxable income of certain earnings of controlled foreign corporations; • allowing full expensing of certain assets placed in service from September 27, 2017 and before January 1, 2023; • restricting further deductibility of executive performance compensation in excess of $1.0 million ; and • disallowing certain entertainment expenses. The following are significant changes in the tax code that are effective for the Company beginning July 1, 2018: • eliminating the deduction for domestic production activity; • limiting the annual deduction for business interest; • taxing global intangible low-tax income; • allowing a deduction for domestically earned foreign intangible income; and • establishing a new base erosion and anti-abuse tax on payments between U.S. taxpayers and foreign related parties. The SEC staff issued SAB 118 which provides guidance on accounting for the tax effects of the Act. SAB 118 provides a measurement period that should not extend beyond one year from the Act’s enactment date for companies to complete the accounting under ASC 740. As of June 30, 2018, we have not completed our accounting for the tax effect of the Act. In accordance with SAB 118 and as discussed below, we have reflected the income tax effects of the those items where the accounting is complete; have recorded a provisional amount with regards for those items where the accounting is not complete but we have made a reasonable estimate; and have continued to account for items based on our existing accounting under ASC 740 in those areas where we have not been able to make a reasonable estimate. Accounting Complete Deferred Taxes Remeasurement We remeasured our domestic deferred tax assets and liabilities based on the rates at which we expect them to reverse in the future. Section 15 of the Internal Revenue Code stipulates that our fiscal year ending June 30, 2018 will have a blended U.S. federal corporate income tax rate of 28.06%, which is based on the applicable tax rates before and after the Act and the number of days in the tax year. Therefore, domestic deferred taxes reversing prior to July 1, 2018 will be taxed based on the blended rate and reversals occurring thereafter will be taxed at the new 21% tax rate. As of June 30, 2018, we have completed the remeasurement of our domestic deferred tax assets and liabilities which resulted in an income tax benefit of $0.5 million , which is included in Provision (benefit) for federal, state and foreign income taxes in the Consolidated Statements of Income. Accounting not Complete - Provisional Amount Recorded One-time Transition Tax on Unpatriated Earnings of Certain Foreign Subsidiaries The Act includes a one-time transition tax based on our total post-1986 foreign earnings and profits (E&P) which we have previously deferred from U.S. income taxes. We have not completed the calculations surrounding this tax, but based on our preliminary calculations, our foreign subsidiaries have overall negative E&P. Therefore, we do not anticipate incurring tax related to this provision of the Act since any return of assets would be a return of capital, not earnings. Due to the preliminary nature of our calculations, no additional income taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax and any outside basis difference inherent in these entities as these amounts continue to be indefinitely reinvested in foreign operations. Accounting not Complete - Using Existing Accounting Under ASC 740 Valuation Allowances on Foreign Tax Credit Carryforwards We are currently assessing and have not completed our analysis of how various aspects of the Act such as deemed repatriation of foreign income, global intangible low taxes income ("GILTI") inclusions, and new categories of foreign tax credits affect our ability to utilize our existing foreign tax credit carryforwards before they expire. Currently we have stated our foreign tax credits at the amount at which we are more likely than not to realize the tax benefit before consideration of the tax law changes under the Act. Our completed analysis may result in an increased valuation allowance against our current foreign tax credit carryforwards. Indefinite Reinvestment Assertion Currently we do not provide for outside basis differences under the indefinite reinvestment assertion of ASC 740-30. Our complete analysis of the Act may require us to provide for additional taxes to basis differences or withholding taxes on remitted foreign earnings. GILTI The Act creates a new requirement that certain income earned by controlled foreign corporations must be included currently in the gross income of the U.S. shareholder. Because of the complexity of the new GILTI rules, we are continuing to evaluate this provision of the Act and the application of ASC 740. Under US GAAP, we are allowed to make an accounting policy choice of either: 1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred or 2) factoring such amounts into the measurement of our deferred taxes. Our selection of an accounting policy will depend, in part, on analyzing our global income and the expected GILTI inclusions that, in turn, depend on our estimated future results of global operations. As such, we are not yet able to reasonably estimate the effect of the potential GILTI tax on our financial statements and have not made a policy decision regarding whether to recorded deferred tax on GILTI. Sources of pretax income (loss) Fiscal Years Ended June 30, June 30, June 30, (In thousands) Domestic $ (2,656 ) $ 19,763 $ 33,986 Foreign (9,492 ) (17,317 ) 5,667 Total $ (12,148 ) $ 2,446 $ 39,653 Components of the provision for income tax expense (benefit) Fiscal Years Ended June 30, June 30, June 30, (In thousands) Current: Federal $ (121 ) $ 6,522 $ 9,930 State 135 (185 ) 2,570 Foreign 504 (1,509 ) (262 ) 518 4,828 12,238 Deferred: Federal 1,093 618 887 State (590 ) 101 67 Foreign (1,689 ) (3,239 ) 924 (1,186 ) (2,520 ) 1,878 $ (668 ) $ 2,308 $ 14,116 Reconciliation between the expected income tax provision applying the domestic federal statutory tax rate and the reported income tax provision Fiscal Years Ended June 30, June 30, June 30, (In thousands) Expected provision (benefit) for federal income taxes at the statutory rate $ (3,408 ) $ 857 $ 13,879 State income taxes, net of federal benefit 247 808 1,827 Impairment of non-deductible goodwill (1) 2,342 — — Charges without tax benefit 1,100 1,741 2,187 Change in valuation allowance 1,173 1,295 311 Excess tax expense (benefit) on stock-based compensation (2) 511 (496 ) — Remeasurement of deferred taxes (3) (455 ) — — IRC S199 deduction — (749 ) (999 ) Research and development and other tax credits (1,665 ) (1,626 ) (1,928 ) Foreign tax differential (10 ) 1,496 (815 ) Noncontrolling interest — (112 ) 1,164 Change in uncertain tax positions (7 ) (22 ) (569 ) Adjustment to tax accounts (435 ) (924 ) (786 ) Other (61 ) 40 (155 ) Provision (benefit) for federal, state and foreign income taxes $ (668 ) $ 2,308 $ 14,116 (1) Relates to a $17.3 million impairment of goodwill, which included $8.3 million of non-deductible goodwill. See Note 4 - Goodwill and Other Intangible Assets for more information about the impairment. (2) This represents the amount recognized for excess tax benefits upon the vesting or exercise of nonvested deferred share awards and stock options, respectively, for which the Company expects to receive an income tax deduction. The Company adopted ASU 2016-09 in fiscal 2017, which required that excess tax benefits and tax deficiencies be recognized as part of the provision for income taxes. (3) This represents the remeasurement of deferred taxes in connection with Tax Cuts and Jobs Act - see Deferred Taxes Remeasurement paragraph above. Significant components of the Company’s deferred tax assets and liabilities June 30, June 30, (In thousands) Deferred tax assets: Warranty reserve $ 206 $ 312 Bad debt reserve 1,629 3,869 Paid-time-off accrual 575 821 Insurance reserve 1,608 2,284 Legal reserve 27 82 Net operating loss benefit and credit carryforwards 10,169 9,332 Valuation allowance (1,638 ) (1,719 ) Accrued compensation and pension 758 1,346 Stock compensation expense on nonvested deferred shares 2,733 3,731 Accrued losses 171 340 Foreign currency translation and other 1,066 1,080 Total deferred tax assets 17,304 21,478 Deferred tax liabilities: Tax over book depreciation 8,137 11,446 Tax over book amortization 702 3,325 Branch future liability 3,018 2,538 Receivable holdbacks and other 1,028 912 Total deferred tax liabilities 12,885 18,221 Net deferred tax asset $ 4,419 $ 3,257 As reported in the Consolidated Balance Sheets June 30, June 30, (In thousands) Deferred income tax assets 4,848 3,385 Deferred income tax liabilities (429 ) (128 ) Net deferred tax asset $ 4,419 $ 3,257 Operating loss and tax credit carryforwards 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, 2018 and June 30, 2017 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: Operating Loss Carryforwards Expiration Period Amount (in thousands) State net operating losses June 2023 to June 2038 $ 22,230 Foreign net operating losses December 2029; June 2032 to June 2037 $ 20,733 Tax Credit Carryforwards Expiration Period Amount (in thousands) State tax credits June 2018 to June 2033 $ 679 Federal foreign tax credits June 2019 to June 2025 $ 1,244 Foreign tax credits June 2035 to June 2037 $ 668 Other 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 2013. At June 30, 2018 , the Company updated its evaluation of its open tax years in all known jurisdictions. We have recorded a $0.5 million liability as of June 30, 2018 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, 2018 | |
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, 2018 and June 30, 2017 , costs and estimated earnings in excess of billings on uncompleted contracts included revenues for unapproved change orders and claims of $15.0 million and $11.0 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, 2018 | |
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, 2018 total $33.1 million and are payable as follows: fiscal 2019 — $7.5 million ; fiscal 2020 — $6.7 million ; fiscal 2021 — $5.5 million ; fiscal 2022 — $4.4 million ; fiscal 2023 — $2.9 million and thereafter— $6.2 million . Operating lease expense was $8.6 million , $7.9 million and $6.6 million for the fiscal years ended June 30, 2018 , June 30, 2017 and June 30, 2016 , respectively. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Jun. 30, 2018 | |
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, 2018 or June 30, 2017 . Treasury Shares On December 12, 2016, the Board of Directors approved a stock buyback program (the "December 2016 Program"), which replaced the previous program that had been in place since November 2014. Under the December 2016 Program, the Company may repurchase common stock of the Company in any calendar year commencing with calendar year 2016 and continuing through calendar year 2018, up to a maximum of $25.0 million per calendar year. The Company may repurchase its stock from time to time in the open market at prevailing market prices or in privately negotiated transactions. The December 2016 Program will continue through December 31, 2018 unless and until it is modified or revoked by the Board of Directors. No shares have been repurchased under the December 2016 Program as of June 30, 2018. In addition to the stock buyback program, the Company may withhold shares of common stock to satisfy the tax withholding obligations upon vesting of an employee’s deferred shares. Matrix withheld 52,950 and 134,535 shares of common stock during fiscal 2018 and 2017, respectively, to satisfy these obligations. These shares were returned to the Company’s pool of treasury shares. The Company has 1,034,394 treasury shares as of June 30, 2018 and intends to utilize these treasury shares in connection with equity awards under the Company’s stock incentive plans and for sales to the Employee Stock Purchase Plan. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Total stock-based compensation expense for the fiscal years ended June 30, 2018 , June 30, 2017 , and June 30, 2016 was $8.6 million , $7.5 million and $6.3 million , respectively. Measured but unrecognized stock-based compensation expense at June 30, 2018 was $12.9 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 Company recognized excess tax expense of $0.5 million related to stock-based compensation vesting for the fiscal year ended June 30, 2018 and recognized excess tax benefits of $0.5 million and $3.2 million for the fiscal years ended June 30, 2017 and June 30, 2016 , respectively. Plan Information In November 2016, the Company's stockholders approved the Matrix Service Company 2016 Stock and Incentive Compensation Plan (the "2016 Plan"), which provides stock-based and cash-based incentives for officers, directors and other key employees. 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 2016 Plan, the 2012 Stock and Incentive Compensation Plan ("2012 Plan") was frozen with the exception of normal vesting and other activity associated with awards previously granted under the 2012 Plan. However, shares awarded under the 2012 Plan that are subsequently forfeited or net settled for tax withholding purposes are returned to the treasury share pool and become available for grant under the 2016 Plan. The 2012 Plan was preceded by the 2004 Stock Incentive Plan ("2004 Plan"), which was frozen upon approval of the 2012 Plan with the exception of normal vesting, forfeiture and other activity associated with awards previously granted under the 2004 Plan. Awards totaling 1,800,000 shares have been authorized under the 2016 Plan. At June 30, 2018 there were 1,145,949 shares available for grant under the 2016 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 2018, 2017, or 2016. Stock option activity and related information for the fiscal year ended June 30, 2018 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, 2017 97,250 4.4 $ 10.19 $ — Granted — — Exercised (31,050 ) $ 10.19 $ 287 Canceled — — Outstanding at June 30, 2018 66,200 3.4 $ 10.19 $ 540 Vested at June 30, 2018 66,200 3.4 $ 10.19 $ 540 Exercisable at June 30, 2018 66,200 3.4 $ 10.19 $ 540 The total intrinsic value of stock options exercised during fiscal 2017 and 2016 was $0.3 million and $0.7 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 equal annual installments beginning one year after the grant date. Director awards vest one year after the grant date. • 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 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 in stock. As of June 30, 2018 , there are approximately 183,000 , and 275,000 performance units that are scheduled to vest in fiscal 2020 , and fiscal 2021 , respectively, assuming target performance. There were approximately 127,000 performance units that were scheduled to vest in fiscal 2019 at target performance, but total shareholder return during the performance period did not meet the threshold performance and the performance units were forfeited. 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 stock options is determined based on the Black-Scholes option pricing model. The grant date fair value of the market-based awards is calculated using a Monte Carlo model . For the fiscal 2018 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 fiscal year ended June 30, 2018 is as follows: Shares Weighted Average Grant Date Fair Value per Share Nonvested shares at June 30, 2017 995,353 $ 21.65 Shares granted 715,539 $ 13.64 Shares vested and released (253,241 ) $ 19.60 Shares canceled (91,604 ) $ 31.42 Nonvested shares at June 30, 2018 1,366,047 $ 17.18 There were 516,969 and 370,490 deferred shares granted in fiscal 2017 and 2016 with average grant date fair values of $19.80 and $20.77 , respectively. There were 396,530 and 631,443 deferred shares that vested and were released in fiscal 2017 and 2016 with weighted average fair values of $18.24 and $22.34 per share, respectively. |
Earnings per Common Share
Earnings per Common Share | 12 Months Ended |
Jun. 30, 2018 | |
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: Fiscal Years Ended June 30, June 30, June 30, (In thousands, except per share data) Basic EPS: Net income (loss) attributable to Matrix Service Company $ (11,480 ) $ (183 ) $ 28,863 Weighted average shares outstanding 26,769 26,533 26,597 Basic earnings (loss) per share $ (0.43 ) $ (0.01 ) $ 1.09 Diluted EPS: Weighted average shares outstanding—basic 26,769 26,533 26,597 Dilutive stock options — — 68 Dilutive nonvested deferred shares — — 435 Diluted weighted average shares 26,769 26,533 27,100 Diluted earnings (loss) per share $ (0.43 ) $ (0.01 ) $ 1.07 The following securities are considered antidilutive and have been excluded from the calculation of diluted earnings (loss) per share: Fiscal Years Ended June 30, June 30, June 30, (In thousands of shares) Stock options 31 43 — Nonvested deferred shares 424 430 56 Total antidilutive securities 455 473 56 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [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 $5.8 million , $5.5 million , and $5.0 million for the fiscal years ended June 30, 2018, 2017 and 2016, 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, 2018 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 2018 2017 2018 2017 2016 (In thousands) Boilermaker-Blacksmith National Pension Trust 48-6168020/001 Yellow Described below (2) Yes $ 8,525 $ 7,098 $ 7,658 No Described below (1) Joint Pension Fund Local Union 164 IBEW 22-6031199/001 Yellow Described below (2) Yes 2,391 2,709 2,635 No 5/31/2021 Joint Pension Fund of Local Union No 102 22-1615726/001 Green Green N/A 2,489 2,392 3,063 No 5/31/2019 IBEW Local 456 Pension Plan 22-6238995/001 Green Green N/A 6,005 2,777 1,168 No 5/31/2021 Local 351 IBEW Pension Plan 22-3417366/001 Green Green N/A 1,187 2,796 5,018 No 12/4/2021 Steamfitters Local Union No 420 Pension Plan 23-2004424/001 Red Red Yes 1,558 2,234 1,265 Yes 4/30/2020 IBEW Local Union 98 Pension Plan 23-1990722/001 Red Described below (2) Yes 1,106 1,519 1,653 Yes 5/29/2020 Indiana Laborers Pension Fund 35-6027150/001 Described below (2) Described below (2) Described below (2) 3,542 2,458 2,320 Described below (2) 5/31/2019 Iron Workers Mid-America Pension Plan 36-6488227/001 Green Green N/A 4,412 1,785 2,248 No 5/31/2019 Pipe Fitters Retirement Fund, Local 597 62-6105084/001 Green Green N/A 3,682 2,563 2,377 No 5/31/2019 Contributions to other multiemployer plans 19,827 20,378 16,606 Total contributions made $ 54,724 $ 48,709 $ 46,011 (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 128, which have collective bargaining agreements that expire on December 31, 2019 and December 31, 2020, respectively. (2) For the Boilermaker-Blacksmith National Pension Trust, Local 164 IBEW Pension Plan, Local 98 IBEW Pension Plan and the Indiana Laborers Pension Fund, the Company has not received a funding notification that covers one or both of the Company's fiscal years 2018 and 2017 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 these plans have not submitted any Critical or Endangered Status Notices to the Department of Labor for calendar years that we have not received notification. The Critical or Endangered Status Notices can be accessed at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/public-disclosure/2018-funding-status-notices. 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 from the Company at the current 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 21,920 shares issued in fiscal 2018, 16,609 shares in fiscal 2017, and 17,304 shares in fiscal 2016. |
Segment Information
Segment Information | 12 Months Ended |
Jun. 30, 2018 | |
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 consists of high voltage services provided to investor owned utilities, including construction of new substations, upgrades of existing substations, short-run transmission line installations, distribution upgrades and maintenance, as well as emergency and storm restoration services. We also provide construction and maintenance services to a variety of power generation facilities, such as combined cycle plants, and natural gas fired power stations. The Oil, Gas & Chemical segment serves customers primarily in the downstream and midstream petroleum industries who are engaged in refining crude oil and processing, fractionating, and marketing of natural gas and natural gas liquids. We also perform work in the petrochemical, upstream petroleum, and sulfur extraction, recovery and processing markets. Our services include turnarounds, plant maintenance, engineering and capital construction. We also offer industrial cleaning services including hydro-blasting, hydro-excavating, advanced chemical cleaning and vacuum services. The Storage Solutions segment consists of work related to aboveground storage tanks and terminals. Also included in this segment are cryogenic and other specialty storage tanks and terminals including liquefied natural gas, liquid nitrogen/liquid oxygen, liquid petroleum, other specialty vessels such as spheres as well as marine structures and truck and rail loading/offloading facilities. Our services include engineering, fabrication and construction, maintenance and repair, which includes planned and emergency services of both tanks and full terminals. 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 consists of work for integrated iron and steel companies, major mining and minerals companies engaged primarily in the extraction of copper, as well as other companies in aerospace and defense, cement, agriculture and grain, food and other industries. Our services include engineering, fabrication and construction, maintenance and repair, which includes planned and emergency services. We also design instrumentation and control systems and offer specialized expertise in the design and construction of bulk material handling systems. 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 is recognized. Segment assets consist primarily of 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) Electrical Infrastructure Oil Gas & Chemical Storage Solutions Industrial Unallocated Corporate Total Fiscal Year ended June 30, 2018 Gross revenues $ 255,931 $ 324,546 $ 319,106 $ 198,155 $ — $ 1,097,738 Less: inter-segment revenues — 1,774 4,410 1 — 6,185 Consolidated revenues 255,931 322,772 314,696 198,154 — 1,091,553 Gross profit 18,300 33,423 25,778 14,435 — 91,936 Operating income (loss) (16,531 ) 8,798 (5,907 ) 3,161 — (10,479 ) Segment assets 161,207 111,064 149,695 58,816 77,251 558,033 Capital expenditures 493 1,514 3,346 — 3,358 8,711 Depreciation and amortization expense 4,359 5,904 6,623 3,461 — 20,347 Fiscal Year ended June 30, 2017 Gross revenues $ 373,384 $ 247,423 $ 483,254 $ 103,449 $ — $ 1,207,510 Less: inter-segment revenues — 6,900 1,558 1,543 — 10,001 Consolidated revenues 373,384 240,523 481,696 101,906 — 1,197,509 Gross profit 7,137 12,675 55,651 5,540 — 81,003 Operating income (loss) (8,309 ) (8,783 ) 22,928 (977 ) — 4,859 Segment assets 183,351 129,177 166,742 53,754 53,006 586,030 Capital expenditures 1,390 829 2,017 38 7,634 11,908 Depreciation and amortization expense 5,198 6,299 7,277 2,828 — 21,602 Fiscal Year 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 Geographical information is as follows: Revenues Fiscal Years Ended June 30, June 30, June 30, (In thousands) United States $ 981,292 $ 961,049 $ 1,127,893 Canada 104,208 228,625 178,603 Other international 6,053 7,835 5,421 $ 1,091,553 $ 1,197,509 $ 1,311,917 Long-Lived Assets June 30, June 30, June 30, (In thousands) United States $ 174,241 $ 193,164 $ 158,970 Canada 13,738 21,419 19,915 Other international 13,008 12,817 10,636 $ 200,987 $ 227,400 $ 189,521 Information about Significant Customers Significant Customers as a Percentage of Segment Revenues Consolidated Electrical Infrastructure Oil Gas & Chemical Storage Solutions Industrial Fiscal Year ended June 30, 2018 Customer one 11.4 % — % — % — % 62.9 % Customer two 8.6 % — % 29.0 % — % — % Customer three 6.4 % 26.5 % — % 0.6 % — % Customer four 6.0 % 25.4 % — % — % — % Customer five 4.2 % — % 12.0 % 2.2 % — % Customer six 3.2 % — % 10.8 % — % — % Customer seven 3.2 % — % — % 10.9 % — % Customer eight 3.0 % 12.9 % — % — % — % Customer nine 2.7 % — % — % — % 14.7 % Customer ten 2.3 % 10.0 % — % — % — % Fiscal Year ended June 30, 2017 Customer one 19.5 % — % — % 48.5 % — % Customer two 15.3 % 46.0 % — % 2.4 % — % Customer three 5.2 % — % 25.8 % — % — % Customer four 4.2 % — % 20.7 % — % — % Customer five 4.0 % 12.7 % — % — % — % Customer six 2.7 % — % — % — % 31.7 % Customer seven 2.2 % — % — % — % 25.8 % Fiscal Year ended June 30, 2016 Customer one 14.8 % 38.9 % — % 10.2 % — % Customer two 10.6 % — % — % 24.7 % — % Customer three 8.3 % — % — % 19.3 % — % Customer four 4.4 % 16.6 % — % — % — % Customer five 4.2 % — % — % — % 36.9 % Customer six 3.9 % — % 20.2 % — % — % Customer seven 3.8 % 14.4 % — % — % — % Customer eight 3.4 % 12.7 % — % — % — % Customer nine 2.3 % — % — % — % 20.1 % Customer ten 2.1 % — % 11.2 % — % — % Customer eleven 1.6 % — % — % — % 14.0 % |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) Quarterly Financial Data (Unaudited) | 12 Months Ended |
Jun. 30, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | Matrix Service Company Quarterly Financial Data (Unaudited) Fiscal Years Ended June 30, 2018 and June 30, 2017 First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands, except per share amounts) Fiscal Year 2018 Revenues $ 269,910 $ 282,911 $ 245,645 $ 293,087 Gross profit 28,891 26,703 14,891 21,451 Operating income (loss) 7,321 5,174 (5,862 ) (17,112 ) Net income (loss) 3,824 4,532 (5,153 ) (14,683 ) Earnings (loss) per common share: Basic 0.14 0.17 (0.19 ) (0.55 ) Diluted 0.14 0.17 (0.19 ) (0.55 ) Fiscal Year 2017 Revenues $ 341,781 $ 312,655 $ 251,237 $ 291,836 Gross profit (loss) 32,278 28,212 (2,614 ) 23,127 Operating income (loss) 14,301 8,237 (21,210 ) 3,531 Net income (loss) attributable to Matrix Service Company 9,342 5,250 (13,821 ) (954 ) Earnings (loss) per common share: Basic 0.35 0.20 (0.52 ) (0.04 ) Diluted 0.35 0.20 (0.52 ) (0.04 ) 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, 2018 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Valuation and Qualifying Accounts | Matrix Service Company Schedule II—Valuation and Qualifying Accounts June 30, 2018 , June 30, 2017 , and June 30, 2016 (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 2018 Deducted from asset accounts: Allowance for doubtful accounts $ 9,887 $ 107 $ — $ (3,667 ) (A) $ 6,327 Valuation reserve for deferred tax assets 1,719 1,020 — (1,101 ) (B) 1,638 Total $ 11,606 $ 1,127 $ — $ (4,768 ) $ 7,965 Fiscal Year 2017 Deducted from asset accounts: Allowance for doubtful accounts $ 8,403 $ 1,748 $ — $ (264 ) (C) $ 9,887 Valuation reserve for deferred tax assets 424 1,295 — — 1,719 Total $ 8,827 $ 3,043 $ — $ (264 ) $ 11,606 Fiscal Year 2016 Deducted from asset accounts: Allowance for doubtful accounts $ 561 $ 6,065 $ 1,808 (D) $ (31 ) (E) $ 8,403 Valuation reserve for deferred tax assets 115 311 — (2 ) 424 Total $ 676 $ 6,376 $ 1,808 $ (33 ) $ 8,827 (A) Relates to the reversal of reserved account receivable that was fully settled with cash and future backlog. See Note 4 - Goodwill and Other Intangible Assets for more information about the settlement. (B) Relates to $795 of stock-based compensation expense recognized in fiscal 2018 that was not deductible for tax purposes due to not meeting a market condition vesting requirement and to $306 of foreign tax credits that expired. (C) Relates to a $180 receivable written off against allowance for doubtful accounts, a $60 reclassification of reserves to billings on uncompleted contracts in excess of costs and estimated earnings and a $24 currency translation adjustment. (D) Relates to a reclassification of reserves that were initially recorded in billings on uncompleted contracts in excess of costs and estimated earnings. (E) Receivables written off against allowance for doubtful accounts. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and 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 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, 2018 or 2017. |
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 and 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, 2018 and 2017. We have cash on deposit at June 30, 2018 with banks in the United States, Canada, South Korea and Australia in excess of Federal Deposit Insurance Corporation ("FDIC"), Canada Deposit Insurance Corporation ("CDIC"), Korea Deposit Insurance Corporation ("KDIC") and Financial Claims Scheme ("FCS") protection limits, respectively. The United States Dollar equivalent of Canadian, South Korean and Australian deposits totaled $5.2 million as of June 30, 2018. |
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, which is a level below our reportable segments. We perform our annual test during the fourth quarter of each fiscal year and in any other period in which indicators of impairment warrant additional tests. The goodwill impairment test involves comparing management’s estimate of the fair value of a reporting unit with its carrying value, including goodwill. If the fair value of a reporting unit exceeds its carrying value, then goodwill is not impaired. If the fair value of a reporting unit is less than its carrying value, then goodwill is impaired to the extent of the difference, but the impairment may not exceed the balance of goodwill assigned to that reporting unit. We utilize a discounted cash flow analysis, referred to as an income approach, and market multiples, referred to as a market approach, to determine the estimated fair value of our reporting units. For the income approach, significant judgments and assumptions including forecasted project awards, discount rate, anticipated revenue growth rate, gross margins, operating expenses, working capital needs and capital expenditures are inherent in the 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. For the market approach, significant judgments and assumptions include the selection of guideline companies, forecasted guideline company EBITDA and our forecasted EBITDA. 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 test for reasonableness, we also consider the combined carrying values of our reporting units to our market capitalization. |
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 4 years to 15 years. A finite intangible asset is considered impaired when its carrying amount is not recoverable and exceeds the asset's fair value. The carrying amount is deemed unrecoverable if it is greater than the sum of undiscounted cash flows expected to result from use and eventual disposition of the asset. An impairment loss is equal to the excess of the carrying amount over the fair value of the asset. 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, which is calculated using a Monte Carlo model . 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 with forfeitures recorded as they occur. |
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, including interim reporting periods within that reporting period. The Company adopted this standard on July 1, 2018 using the modified retrospective method of application. Under the modified retrospective method, revenue recognized on completed contracts is not restated, however contracts in progress are accounted for as if they were under the new standard at inception. Any difference between historical revenue and revenue under the new standard is recorded as a cumulative effect adjustment to retained earnings as of the date of adoption. The Company has completed the analysis of its contracts in progress and noted that the modified retrospective adjustment was immaterial. The Company does not expect the new standard to have a material impact to its financial statements going forward. Accounting Standards Update 2016-02, Leases (Topic 842) and Accounting Standards Update No. 2018-11, Leases (Topic 842) On February 25, 2016, the FASB issued ASU 2016-02 that amends accounting for leases. Under the new guidance, lessees will recognize the following for all leases (with the exception of short-term leases) at the lease 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. Prior to the issuance of ASU 2018-11 in July 2018, lessees and lessors were required to adopt the new standard using 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, even though those leases may have expired before the new standard's effective date. The amendments in ASU 2018-11 provide, among other things, an additional (and optional) transition method to adopt the new leases standard. Under this new transition method, the Company may apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption rather than having to apply the new standard to the earliest comparative period presented in the financial statements. Both amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption of the amendments is permitted, but we do not plan to do so at this time. We are currently assessing the impact of the adoption of the amendments on the Company's results of operations, financial position and cash flows. As of June 30, 2018 the Company had $33.1 million of future minimum lease payments under non-cancelable operating leases, primarily for facilities. See Note 8 - Operating Leases for more information about the timing and amount of future operating lease payments, which we believe is indicative of the materiality of adoption of these amendments to our 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 will change 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. Accounting Standards Update 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting In May 2017, the FASB issued ASU 2017-09 which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as a modification. Entities should apply the modification accounting guidance if the value, vesting conditions or classification of the award changes. ASU 2017-09 is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted and prospective application is required. The adoption of ASU 2017-09 did not have a material impact on our financial position, results of operations or cash flows. |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Houston Interests, LLC [Member] | |
Business Acquisition [Line Items] | |
Consideration transferred [Table Text Block] | The Company purchased all of the equity interests of Houston Interests for $42.5 million, net of working capital adjustments and cash acquired. The consideration paid is as follows (in thousands): Cash paid for equity interest $ 46,000 Cash paid for working capital 6,837 Less: cash acquired (10,331 ) Net purchase price $ 42,506 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the net purchase price allocation (in thousands): Cash and cash equivalents $ 10,331 Accounts receivable 10,273 Costs and estimated earnings in excess of billings on uncompleted contracts 746 Other current assets 454 Current assets 21,804 Property, plant and equipment 942 Goodwill 35,146 Other intangible assets 10,220 Total assets acquired 68,112 Accounts payable 962 Billings on uncompleted contracts in excess of costs and estimated earnings 11,648 Other accrued expenses 2,475 Current liabilities 15,085 Other liabilities 190 Net assets acquired 52,837 Less: cash acquired 10,331 Net purchase price $ 42,506 |
Business Acquisition, Pro Forma Information | The unaudited financial information in the table below summarizes the combined results of operations of Matrix Service Company and Houston Interests for the fiscal years ended June 30, 2017 and 2016, on a pro forma basis, as though the companies had been combined as of July 1, 2015. 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, 2015 nor should it be taken as indicative of future consolidated results of operations. Fiscal Years Ended June 30, 2017 June 30, 2016 (In thousands, except per share data) Revenues $ 1,233,372 $ 1,427,313 Net income attributable to Matrix Service Company $ 7,326 $ 32,352 Basic earnings per common share $ 0.28 $ 1.22 Diluted earnings per common share $ 0.27 $ 1.19 |
Baillie Tank Equipment, Ltd. [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 $ 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 Less: cash acquired 592 Net purchase price $ 13,049 |
Customer Contracts (Tables)
Customer Contracts (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
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 $ 2,081,799 $ 1,919,054 Billings on uncompleted contracts 2,125,907 1,903,001 $ (44,108 ) $ 16,053 Shown in balance sheet as: Costs and estimated earnings in excess of billings on uncompleted contracts $ 76,632 $ 91,180 Billings on uncompleted contracts in excess of costs and estimated earnings 120,740 75,127 $ (44,108 ) $ 16,053 |
Goodwill and Other Intangible28
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
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) 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 (1) (204 ) — 75 (38 ) (167 ) Net balance at June 30, 2016 42,170 14,008 16,681 5,434 78,293 Purchase of Houston Interests (Note 2) — 19,596 — 15,550 35,146 Acquisition related adjustments — — 88 — 88 Translation adjustment (1) (18 ) — (5 ) (3 ) (26 ) Net balance at June 30, 2017 42,152 33,604 16,764 20,981 113,501 Goodwill impairment (17,281 ) — — — (17,281 ) Translation adjustment (1) (45 ) — (4 ) (9 ) (58 ) Net balance at June 30, 2018 $ 24,826 $ 33,604 $ 16,760 $ 20,972 $ 96,162 |
Carrying value of other intangible assets | Information on the carrying value of other intangible assets is as follows: At June 30, 2018 Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount (Years) (In thousands) Intellectual property 9 to 15 $ 2,579 $ (1,603 ) $ 976 Customer based 6 to 15 38,562 (16,763 ) 21,799 Non-compete Agreements 4 1,453 (1,414 ) 39 Trade names — 1,630 (1,630 ) — Total other intangible assets $ 44,224 $ (21,410 ) $ 22,814 At June 30, 2017 Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount (Years) (In thousands) Intellectual property 9 to 15 $ 2,579 $ (1,425 ) $ 1,154 Customer based 1 to 15 38,207 (13,543 ) 24,664 Non-compete agreements 4 to 5 1,453 (1,298 ) 155 Trade name 1 to 3 1,630 (1,307 ) 323 Total other intangible assets $ 43,869 $ (17,573 ) $ 26,296 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Amortization expense totaled $4.8 million , $4.9 million , and $3.6 million in fiscal 2018 , 2017 , and 2016, respectively. We estimate that future amortization of other intangible assets will be as follows (in thousands): For year ending: June 30, 2019 $ 3,699 June 30, 2020 3,688 June 30, 2021 3,669 June 30, 2022 2,821 June 30, 2023 2,369 Thereafter 6,568 Total estimated amortization expense $ 22,814 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Availability under the senior credit facility | June 30, June 30, (In thousands) Senior secured revolving credit facility $ 300,000 $ 300,000 Capacity constraint due to the Leverage Ratio 189,741 169,092 Capacity under the senior secured revolving credit facility 110,259 130,908 Letters of credit issued 37,073 7,825 Borrowings outstanding — 44,682 Availability under the senior secured revolving credit facility $ 73,186 $ 78,401 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of sources of pretax income | Sources of pretax income (loss) Fiscal Years Ended June 30, June 30, June 30, (In thousands) Domestic $ (2,656 ) $ 19,763 $ 33,986 Foreign (9,492 ) (17,317 ) 5,667 Total $ (12,148 ) $ 2,446 $ 39,653 |
Components of the provision for income taxes | Components of the provision for income tax expense (benefit) Fiscal Years Ended June 30, June 30, June 30, (In thousands) Current: Federal $ (121 ) $ 6,522 $ 9,930 State 135 (185 ) 2,570 Foreign 504 (1,509 ) (262 ) 518 4,828 12,238 Deferred: Federal 1,093 618 887 State (590 ) 101 67 Foreign (1,689 ) (3,239 ) 924 (1,186 ) (2,520 ) 1,878 $ (668 ) $ 2,308 $ 14,116 |
Difference between expected income tax provision applying domestic federal statutory tax rate and reported income tax provision | Reconciliation between the expected income tax provision applying the domestic federal statutory tax rate and the reported income tax provision Fiscal Years Ended June 30, June 30, June 30, (In thousands) Expected provision (benefit) for federal income taxes at the statutory rate $ (3,408 ) $ 857 $ 13,879 State income taxes, net of federal benefit 247 808 1,827 Impairment of non-deductible goodwill (1) 2,342 — — Charges without tax benefit 1,100 1,741 2,187 Change in valuation allowance 1,173 1,295 311 Excess tax expense (benefit) on stock-based compensation (2) 511 (496 ) — Remeasurement of deferred taxes (3) (455 ) — — IRC S199 deduction — (749 ) (999 ) Research and development and other tax credits (1,665 ) (1,626 ) (1,928 ) Foreign tax differential (10 ) 1,496 (815 ) Noncontrolling interest — (112 ) 1,164 Change in uncertain tax positions (7 ) (22 ) (569 ) Adjustment to tax accounts (435 ) (924 ) (786 ) Other (61 ) 40 (155 ) Provision (benefit) for federal, state and foreign income taxes $ (668 ) $ 2,308 $ 14,116 (1) Relates to a $17.3 million impairment of goodwill, which included $8.3 million of non-deductible goodwill. See Note 4 - Goodwill and Other Intangible Assets for more information about the impairment. (2) This represents the amount recognized for excess tax benefits upon the vesting or exercise of nonvested deferred share awards and stock options, respectively, for which the Company expects to receive an income tax deduction. The Company adopted ASU 2016-09 in fiscal 2017, which required that excess tax benefits and tax deficiencies be recognized as part of the provision for income taxes. (3) This represents the remeasurement of deferred taxes in connection with Tax Cuts and Jobs Act - see Deferred Taxes Remeasurement paragraph above. |
Significant components of Company's deferred tax assets and liabilities | Significant components of the Company’s deferred tax assets and liabilities June 30, June 30, (In thousands) Deferred tax assets: Warranty reserve $ 206 $ 312 Bad debt reserve 1,629 3,869 Paid-time-off accrual 575 821 Insurance reserve 1,608 2,284 Legal reserve 27 82 Net operating loss benefit and credit carryforwards 10,169 9,332 Valuation allowance (1,638 ) (1,719 ) Accrued compensation and pension 758 1,346 Stock compensation expense on nonvested deferred shares 2,733 3,731 Accrued losses 171 340 Foreign currency translation and other 1,066 1,080 Total deferred tax assets 17,304 21,478 Deferred tax liabilities: Tax over book depreciation 8,137 11,446 Tax over book amortization 702 3,325 Branch future liability 3,018 2,538 Receivable holdbacks and other 1,028 912 Total deferred tax liabilities 12,885 18,221 Net deferred tax asset $ 4,419 $ 3,257 |
Significant components of Company's deferred tax assets and liabilities as reported in consolidated balance sheets | As reported in the Consolidated Balance Sheets June 30, June 30, (In thousands) Deferred income tax assets 4,848 3,385 Deferred income tax liabilities (429 ) (128 ) Net deferred tax asset $ 4,419 $ 3,257 |
Summary of Operating Loss Carryforwards | Operating Loss Carryforwards Expiration Period Amount (in thousands) State net operating losses June 2023 to June 2038 $ 22,230 Foreign net operating losses December 2029; June 2032 to June 2037 $ 20,733 |
Summary of Tax Credit Carryforwards | Tax Credit Carryforwards Expiration Period Amount (in thousands) State tax credits June 2018 to June 2033 $ 679 Federal foreign tax credits June 2019 to June 2025 $ 1,244 Foreign tax credits June 2035 to June 2037 $ 668 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock option activity and related information | Stock option activity and related information for the fiscal year ended June 30, 2018 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, 2017 97,250 4.4 $ 10.19 $ — Granted — — Exercised (31,050 ) $ 10.19 $ 287 Canceled — — Outstanding at June 30, 2018 66,200 3.4 $ 10.19 $ 540 Vested at June 30, 2018 66,200 3.4 $ 10.19 $ 540 Exercisable at June 30, 2018 66,200 3.4 $ 10.19 $ 540 |
Nonvested deferred share activity | Nonvested deferred share activity for the fiscal year ended June 30, 2018 is as follows: Shares Weighted Average Grant Date Fair Value per Share Nonvested shares at June 30, 2017 995,353 $ 21.65 Shares granted 715,539 $ 13.64 Shares vested and released (253,241 ) $ 19.60 Shares canceled (91,604 ) $ 31.42 Nonvested shares at June 30, 2018 1,366,047 $ 17.18 |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted earnings per share | The computation of basic and diluted EPS is as follows: Fiscal Years Ended June 30, June 30, June 30, (In thousands, except per share data) Basic EPS: Net income (loss) attributable to Matrix Service Company $ (11,480 ) $ (183 ) $ 28,863 Weighted average shares outstanding 26,769 26,533 26,597 Basic earnings (loss) per share $ (0.43 ) $ (0.01 ) $ 1.09 Diluted EPS: Weighted average shares outstanding—basic 26,769 26,533 26,597 Dilutive stock options — — 68 Dilutive nonvested deferred shares — — 435 Diluted weighted average shares 26,769 26,533 27,100 Diluted earnings (loss) per share $ (0.43 ) $ (0.01 ) $ 1.07 |
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 (loss) per share: Fiscal Years Ended June 30, June 30, June 30, (In thousands of shares) Stock options 31 43 — Nonvested deferred shares 424 430 56 Total antidilutive securities 455 473 56 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
Multiemployer Pension Plans | Our participation in significant plans for the fiscal year ended June 30, 2018 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 2018 2017 2018 2017 2016 (In thousands) Boilermaker-Blacksmith National Pension Trust 48-6168020/001 Yellow Described below (2) Yes $ 8,525 $ 7,098 $ 7,658 No Described below (1) Joint Pension Fund Local Union 164 IBEW 22-6031199/001 Yellow Described below (2) Yes 2,391 2,709 2,635 No 5/31/2021 Joint Pension Fund of Local Union No 102 22-1615726/001 Green Green N/A 2,489 2,392 3,063 No 5/31/2019 IBEW Local 456 Pension Plan 22-6238995/001 Green Green N/A 6,005 2,777 1,168 No 5/31/2021 Local 351 IBEW Pension Plan 22-3417366/001 Green Green N/A 1,187 2,796 5,018 No 12/4/2021 Steamfitters Local Union No 420 Pension Plan 23-2004424/001 Red Red Yes 1,558 2,234 1,265 Yes 4/30/2020 IBEW Local Union 98 Pension Plan 23-1990722/001 Red Described below (2) Yes 1,106 1,519 1,653 Yes 5/29/2020 Indiana Laborers Pension Fund 35-6027150/001 Described below (2) Described below (2) Described below (2) 3,542 2,458 2,320 Described below (2) 5/31/2019 Iron Workers Mid-America Pension Plan 36-6488227/001 Green Green N/A 4,412 1,785 2,248 No 5/31/2019 Pipe Fitters Retirement Fund, Local 597 62-6105084/001 Green Green N/A 3,682 2,563 2,377 No 5/31/2019 Contributions to other multiemployer plans 19,827 20,378 16,606 Total contributions made $ 54,724 $ 48,709 $ 46,011 (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 128, which have collective bargaining agreements that expire on December 31, 2019 and December 31, 2020, respectively. (2) For the Boilermaker-Blacksmith National Pension Trust, Local 164 IBEW Pension Plan, Local 98 IBEW Pension Plan and the Indiana Laborers Pension Fund, the Company has not received a funding notification that covers one or both of the Company's fiscal years 2018 and 2017 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 these plans have not submitted any Critical or Endangered Status Notices to the Department of Labor for calendar years that we have not received notification. The Critical or Endangered Status Notices can be accessed at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/public-disclosure/2018-funding-status-notices. |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Results of Operations | Results of Operations (In thousands) Electrical Infrastructure Oil Gas & Chemical Storage Solutions Industrial Unallocated Corporate Total Fiscal Year ended June 30, 2018 Gross revenues $ 255,931 $ 324,546 $ 319,106 $ 198,155 $ — $ 1,097,738 Less: inter-segment revenues — 1,774 4,410 1 — 6,185 Consolidated revenues 255,931 322,772 314,696 198,154 — 1,091,553 Gross profit 18,300 33,423 25,778 14,435 — 91,936 Operating income (loss) (16,531 ) 8,798 (5,907 ) 3,161 — (10,479 ) Segment assets 161,207 111,064 149,695 58,816 77,251 558,033 Capital expenditures 493 1,514 3,346 — 3,358 8,711 Depreciation and amortization expense 4,359 5,904 6,623 3,461 — 20,347 Fiscal Year ended June 30, 2017 Gross revenues $ 373,384 $ 247,423 $ 483,254 $ 103,449 $ — $ 1,207,510 Less: inter-segment revenues — 6,900 1,558 1,543 — 10,001 Consolidated revenues 373,384 240,523 481,696 101,906 — 1,197,509 Gross profit 7,137 12,675 55,651 5,540 — 81,003 Operating income (loss) (8,309 ) (8,783 ) 22,928 (977 ) — 4,859 Segment assets 183,351 129,177 166,742 53,754 53,006 586,030 Capital expenditures 1,390 829 2,017 38 7,634 11,908 Depreciation and amortization expense 5,198 6,299 7,277 2,828 — 21,602 Fiscal Year 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 |
Summary of revenues and long lived assets according to geographic areas | Geographical information is as follows: Revenues Fiscal Years Ended June 30, June 30, June 30, (In thousands) United States $ 981,292 $ 961,049 $ 1,127,893 Canada 104,208 228,625 178,603 Other international 6,053 7,835 5,421 $ 1,091,553 $ 1,197,509 $ 1,311,917 Long-Lived Assets June 30, June 30, June 30, (In thousands) United States $ 174,241 $ 193,164 $ 158,970 Canada 13,738 21,419 19,915 Other international 13,008 12,817 10,636 $ 200,987 $ 227,400 $ 189,521 |
Schedule of Revenue by Major Customers by Reporting Segments | Information about Significant Customers Significant Customers as a Percentage of Segment Revenues Consolidated Electrical Infrastructure Oil Gas & Chemical Storage Solutions Industrial Fiscal Year ended June 30, 2018 Customer one 11.4 % — % — % — % 62.9 % Customer two 8.6 % — % 29.0 % — % — % Customer three 6.4 % 26.5 % — % 0.6 % — % Customer four 6.0 % 25.4 % — % — % — % Customer five 4.2 % — % 12.0 % 2.2 % — % Customer six 3.2 % — % 10.8 % — % — % Customer seven 3.2 % — % — % 10.9 % — % Customer eight 3.0 % 12.9 % — % — % — % Customer nine 2.7 % — % — % — % 14.7 % Customer ten 2.3 % 10.0 % — % — % — % Fiscal Year ended June 30, 2017 Customer one 19.5 % — % — % 48.5 % — % Customer two 15.3 % 46.0 % — % 2.4 % — % Customer three 5.2 % — % 25.8 % — % — % Customer four 4.2 % — % 20.7 % — % — % Customer five 4.0 % 12.7 % — % — % — % Customer six 2.7 % — % — % — % 31.7 % Customer seven 2.2 % — % — % — % 25.8 % Fiscal Year ended June 30, 2016 Customer one 14.8 % 38.9 % — % 10.2 % — % Customer two 10.6 % — % — % 24.7 % — % Customer three 8.3 % — % — % 19.3 % — % Customer four 4.4 % 16.6 % — % — % — % Customer five 4.2 % — % — % — % 36.9 % Customer six 3.9 % — % 20.2 % — % — % Customer seven 3.8 % 14.4 % — % — % — % Customer eight 3.4 % 12.7 % — % — % — % Customer nine 2.3 % — % — % — % 20.1 % Customer ten 2.1 % — % 11.2 % — % — % Customer eleven 1.6 % — % — % — % 14.0 % |
Quarterly Financial Data (Una35
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Data (Unaudited) | Matrix Service Company Quarterly Financial Data (Unaudited) Fiscal Years Ended June 30, 2018 and June 30, 2017 First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands, except per share amounts) Fiscal Year 2018 Revenues $ 269,910 $ 282,911 $ 245,645 $ 293,087 Gross profit 28,891 26,703 14,891 21,451 Operating income (loss) 7,321 5,174 (5,862 ) (17,112 ) Net income (loss) 3,824 4,532 (5,153 ) (14,683 ) Earnings (loss) per common share: Basic 0.14 0.17 (0.19 ) (0.55 ) Diluted 0.14 0.17 (0.19 ) (0.55 ) Fiscal Year 2017 Revenues $ 341,781 $ 312,655 $ 251,237 $ 291,836 Gross profit (loss) 32,278 28,212 (2,614 ) 23,127 Operating income (loss) 14,301 8,237 (21,210 ) 3,531 Net income (loss) attributable to Matrix Service Company 9,342 5,250 (13,821 ) (954 ) Earnings (loss) per common share: Basic 0.35 0.20 (0.52 ) (0.04 ) Diluted 0.35 0.20 (0.52 ) (0.04 ) 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) $ in Millions | 12 Months Ended |
Jun. 30, 2018USD ($) | |
Property, Plant and Equipment [Line Items] | |
Restricted cash | $ 0.3 |
Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life of intangible assets | 4 years |
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 |
International [Member] | |
Property, Plant and Equipment [Line Items] | |
Cash | $ 5.2 |
Summary of Significant Accoun37
Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Impact of New Accounting Pronouncement) (Details) $ in Millions | 12 Months Ended |
Jun. 30, 2018USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 33.1 |
Acquisitions (Details Textual)
Acquisitions (Details Textual) - USD ($) $ in Thousands | Jul. 03, 2017 | Dec. 12, 2016 | Feb. 01, 2016 | Feb. 01, 2016 | Aug. 31, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2018 | Jun. 30, 2015 |
Business Acquisition [Line Items] | |||||||||
Goodwill | $ 113,501 | $ 78,293 | $ 96,162 | $ 71,518 | |||||
Houston Interests, LLC [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Net purchase price | $ 42,506 | ||||||||
Business Acquisition, Effective Date of Acquisition | Dec. 12, 2016 | ||||||||
Net assets acquired | $ 52,837 | ||||||||
Tax deductible goodwill | $ 35,146 | ||||||||
Warranty reserve working capital provision | $ 2,600 | ||||||||
Settlement of warranty reserve | $ 1,687 | ||||||||
Acquisition-related expenses | $ 600 | ||||||||
Baillie Tank Equipment, Ltd. [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Net purchase price | $ 13,049 | ||||||||
Business Acquisition, Effective Date of Acquisition | Feb. 1, 2016 | ||||||||
Net assets acquired | 13,641 | $ 13,641 | |||||||
Goodwill | $ 7,030 | $ 7,030 | |||||||
Acquisition-related expenses | $ 1,200 | ||||||||
Subsequent Event [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Proceeds from Divestiture of Businesses | $ 3,700 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 12, 2016 | Feb. 01, 2016 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 |
Business Acquisition [Line Items] | ||||||
Acquisition Related Adjustment for Final Working Capital Settlement | $ 88 | |||||
Accrued working capital adjustment | $ 0 | 1,687 | $ 0 | |||
Goodwill | $ 96,162 | 113,501 | 78,293 | $ 71,518 | ||
Houston Interests, LLC [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Net purchase price | $ 42,506 | |||||
Cash paid for equity interest | 46,000 | |||||
Acquisition Related Adjustment for Final Working Capital Settlement | 6,837 | |||||
Cash consideration paid | 42,506 | |||||
Accounts receivable | 10,273 | |||||
Costs and estimated earnings in excess of billings on uncompleted contracts | 746 | |||||
Other current assets | 454 | |||||
Current assets | 21,804 | |||||
Property, plant and equipment | 942 | |||||
Tax deductible goodwill | 35,146 | |||||
Other intangible assets | 10,220 | |||||
Total assets acquired | 68,112 | |||||
Accounts payable | 962 | |||||
Billings on uncompleted contracts in excess of costs and estimated earnings | 11,648 | |||||
Other accrued expenses | 2,475 | |||||
Current liabilities | 15,085 | |||||
Other liabilities | 190 | |||||
Net assets acquired | 52,837 | |||||
Cash acquired | $ 10,331 | |||||
Pro Forma Information: | ||||||
Revenues | 1,233,372 | 1,427,313 | ||||
Net income attributable to Matrix Service Company | $ 7,326 | $ 32,352 | ||||
Basic earnings per common share (in dollars per share) | $ 0.28 | $ 1.22 | ||||
Diluted earnings per common share (in dollars per share) | $ 0.27 | $ 1.19 | ||||
Pro forma acquisition costs | $ 3,300 | |||||
Pro forma acquisition costs, amortized over time | 800 | $ 900 | ||||
Pro forma interest expense | 700 | 1,400 | ||||
Pro forma depreciation and amortization expense | 1,400 | 1,800 | ||||
Pro forma income tax expense | $ 2,000 | $ 2,200 | ||||
Baillie Tank Equipment, Ltd. [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Net purchase price | $ 13,049 | |||||
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 |
Customer Contracts (Details)
Customer Contracts (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Gross and net amount of uncompleted contracts | ||
Costs and estimated earnings recognized on uncompleted contracts | $ 2,081,799 | $ 1,919,054 |
Billings on uncompleted contracts | 2,125,907 | 1,903,001 |
Total | (44,108) | 16,053 |
Shown on balance sheet as: | ||
Costs and estimated earnings in excess of billings on uncompleted contracts | 76,632 | 91,180 |
Billings on uncompleted contracts in excess of costs and estimated earnings | 120,740 | 75,127 |
Total | $ (44,108) | $ 16,053 |
Customer Contracts (Details Tex
Customer Contracts (Details Textual) - USD ($) $ in Millions | Jun. 30, 2018 | Jun. 30, 2017 |
Business Acquisition [Line Items] | ||
Contract Receivable Retainage, Next Twelve Months | $ 25.9 | $ 54.3 |
Contract Receivable Retainage, after Next Twelve Months | $ 2.6 | $ 1.9 |
Goodwill and Other Intangible42
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Carrying value of goodwill by segment | |||
Net Goodwill | $ 113,501 | $ 78,293 | $ 71,518 |
Acquisition Related Adjustment for Final Working Capital Settlement | 88 | ||
Goodwill resulting from purchase | 35,146 | 6,942 | |
Goodwill impairment | (17,281) | ||
Translation adjustment | (58) | (26) | (167) |
Net Goodwill | 96,162 | 113,501 | 78,293 |
Electrical Infrastructure [Member] | |||
Carrying value of goodwill by segment | |||
Net Goodwill | 42,152 | 42,170 | 42,374 |
Acquisition Related Adjustment for Final Working Capital Settlement | 0 | ||
Goodwill resulting from purchase | 0 | 0 | |
Goodwill impairment | (17,281) | ||
Translation adjustment | (45) | (18) | (204) |
Net Goodwill | 24,826 | 42,152 | 42,170 |
Oil Gas & Chemical [Member] | |||
Carrying value of goodwill by segment | |||
Net Goodwill | 33,604 | 14,008 | 14,008 |
Acquisition Related Adjustment for Final Working Capital Settlement | 0 | ||
Goodwill resulting from purchase | 19,596 | 0 | |
Goodwill impairment | 0 | ||
Translation adjustment | 0 | 0 | 0 |
Net Goodwill | 33,604 | 33,604 | 14,008 |
Storage Solutions [Member] | |||
Carrying value of goodwill by segment | |||
Net Goodwill | 16,764 | 16,681 | 9,664 |
Acquisition Related Adjustment for Final Working Capital Settlement | 88 | ||
Goodwill resulting from purchase | 0 | 6,942 | |
Goodwill impairment | 0 | ||
Translation adjustment | (4) | (5) | 75 |
Net Goodwill | 16,760 | 16,764 | 16,681 |
Industrial [Member] | |||
Carrying value of goodwill by segment | |||
Net Goodwill | 20,981 | 5,434 | 5,472 |
Acquisition Related Adjustment for Final Working Capital Settlement | 0 | ||
Goodwill resulting from purchase | 15,550 | 0 | |
Goodwill impairment | 0 | ||
Translation adjustment | (9) | (3) | (38) |
Net Goodwill | $ 20,972 | $ 20,981 | $ 5,434 |
Goodwill and Other Intangible43
Goodwill and Other Intangible Assets (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of Intangible Assets | $ 4,800 | $ 4,900 | $ 3,600 |
Carrying value of other intangible assets | |||
Gross carrying amount | 44,224 | 43,869 | |
Accumulated amortization | (21,410) | (17,573) | |
Net carrying amount | 22,814 | 26,296 | |
Intangible assets, net, excluding Goodwill | $ 22,814 | 26,296 | |
Minimum [Member] | |||
Carrying value of other intangible assets | |||
Useful life of intangible assets | 4 years | ||
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 | 2,579 | |
Accumulated amortization | (1,603) | (1,425) | |
Net carrying amount | $ 976 | $ 1,154 | |
Intellectual Property [Member] | Minimum [Member] | |||
Carrying value of other intangible assets | |||
Useful life of intangible assets | 9 years | 9 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 | $ 38,562 | $ 38,207 | |
Accumulated amortization | (16,763) | (13,543) | |
Net carrying amount | $ 21,799 | $ 24,664 | |
Customer based [Member] | Minimum [Member] | |||
Carrying value of other intangible assets | |||
Useful life of intangible assets | 6 years | 1 year | |
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 | |||
Useful life of intangible assets | 4 years | ||
Gross carrying amount | $ 1,453 | $ 1,453 | |
Accumulated amortization | (1,414) | (1,298) | |
Net carrying amount | 39 | $ 155 | |
Noncompete Agreements [Member] | Minimum [Member] | |||
Carrying value of other intangible assets | |||
Useful life of intangible assets | 4 years | ||
Noncompete Agreements [Member] | Maximum [Member] | |||
Carrying value of other intangible assets | |||
Useful life of intangible assets | 5 years | ||
Trade Names [Member] | |||
Carrying value of other intangible assets | |||
Gross carrying amount | 1,630 | $ 1,630 | |
Accumulated amortization | (1,630) | (1,307) | |
Net carrying amount | $ 0 | $ 323 | |
Trade Names [Member] | Minimum [Member] | |||
Carrying value of other intangible assets | |||
Useful life of intangible assets | 1 year | ||
Trade Names [Member] | Maximum [Member] | |||
Carrying value of other intangible assets | |||
Useful life of intangible assets | 3 years |
Goodwill and Other Intangible44
Goodwill and Other Intangible Assets (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Impairment of Intangible Assets, Finite-lived | $ 700 | ||
Backlog received in exchange for settled account receivable | 50,000 | ||
Acquired Finite-lived Intangible Asset, Residual Value | 2,000 | ||
Amortization expense | 4,800 | $ 4,900 | $ 3,600 |
June 30, 2019 | 3,699 | ||
June 30, 2020 | 3,688 | ||
June 30, 2021 | 3,669 | ||
June 30, 2022 | 2,821 | ||
June 30, 2023 | 2,369 | ||
Thereafter | 6,568 | ||
Net carrying amount | $ 22,814 | $ 26,296 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Availability under senior credit facility | ||
Senior revolving credit facility | $ 300,000 | $ 300,000 |
Capacity Constraint Due To Senior Leverage Ratio | 189,741 | 169,092 |
Line Of Credit Facility Maximum Borrowing Capacity After Consideration Of Capacity Constraint | 110,259 | 130,908 |
Borrowings outstanding | 0 | 44,682 |
Letters of credit issued | 37,073 | 7,825 |
Availability under the senior credit facility | $ 73,186 | $ 78,401 |
Debt (Details Textual)
Debt (Details Textual) | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Jun. 30, 2018USD ($)Rate | Jun. 30, 2017USD ($) | |
Debt (Textual) [Abstract] | |||
Senior revolving credit facility | $ | $ 300,000,000 | $ 300,000,000 | |
Line of Credit Facility, Expiration Date | Feb. 8, 2022 | ||
Leverage Ratio, Maximum | 3 | ||
Leverage Ratio, Minimum | 1 | ||
Fixed Charge Coverage Ratio, Maximum | 1.25 | ||
Fixed Charge Coverage Ratio, Minimum | 1 | ||
Limit on asset dispositions | $ | $ 20 | ||
Sublimit on Australian Dollar, Canadian Dollar, Euro and Pounds Sterling | $ | 75 | ||
Sublimit on letters of credit under the credit facility | $ | $ 200 | ||
Additional Margin on alternate base rate loans, Minimum | 0.625% | ||
Additional Margin on alternate base rate loans, Maximum | 1.625% | ||
Line Of Credit Basis Spread On Adjusted LIBO, EURIBO and CDOR Minimum | 1.625% | ||
Line Of Credit Basis Spread On Adjusted LIBO, EURIBO and CDOR Maximum | 2.625% | ||
Line Of Credit Basis Spread On Canadian Prime Rate Minimum | 2.125% | ||
Line Of Credit Basis Spread On Canadian Prime Rate Maximum | 3.125% | ||
Maximum limit of consolidated funded indebtedness | 3 | ||
Consolidated EBITDA as defined in the Credit Agreement | $ | $ 36,800,000 | ||
Consolidated Funded Indebtedness | $ | $ 37,100,000 | ||
Subsequent Events [Abstract] | |||
Subsequent Event, Description | |||
Minimum [Member] | |||
Debt (Textual) [Abstract] | |||
Unused Credit Facility Fee | 0.25% | ||
Maximum [Member] | |||
Debt (Textual) [Abstract] | |||
Unused Credit Facility Fee | 0.45% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Components of pretax income | |||
Domestic | $ (2,656) | $ 19,763 | $ 33,986 |
Foreign | (9,492) | (17,317) | 5,667 |
Income (loss) before income tax expense | $ (12,148) | $ 2,446 | $ 39,653 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Current: | |||
Federal | $ (121) | $ 6,522 | $ 9,930 |
State | 135 | (185) | 2,570 |
Foreign | 504 | (1,509) | (262) |
Total | 518 | 4,828 | 12,238 |
Deferred: | |||
Federal | 1,093 | 618 | 887 |
State | (590) | 101 | 67 |
Foreign | (1,689) | (3,239) | 924 |
Total | (1,186) | (2,520) | 1,878 |
Provision (benefit) for federal, state and foreign income taxes | $ (668) | $ 2,308 | $ 14,116 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Difference between expected income tax provision applying domestic federal statutory tax rate and reported income tax provision | |||
Expected provision (benefit) for federal income taxes at the statutory rate | $ (3,408) | $ 857 | $ 13,879 |
State income taxes, net of federal benefit | 247 | 808 | 1,827 |
Impairment of non-deductible goodwill | 2,342 | 0 | 0 |
Charges without tax benefit | 1,100 | 1,741 | 2,187 |
Change in valuation allowance | 1,173 | 1,295 | 311 |
Excess tax benefits on stock-based compensation | 511 | (496) | 0 |
Remeasurement of deferred taxes | (455) | 0 | 0 |
IRS S199 deduction | 0 | (749) | (999) |
Research and development and other tax credits | (1,665) | (1,626) | (1,928) |
Foreign tax differential | (10) | 1,496 | (815) |
Noncontrolling interest | 0 | (112) | 1,164 |
Change in uncertain tax positions | (7) | (22) | (569) |
Adjustment to tax accounts | (435) | (924) | (786) |
Other | (61) | 40 | (155) |
Provision (benefit) for federal, state and foreign income taxes | $ (668) | $ 2,308 | $ 14,116 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Deferred tax assets: | ||
Warranty reserve | $ 206 | $ 312 |
Bad debt reserve | 1,629 | 3,869 |
Paid time-off accrual | 575 | 821 |
Insurance reserve | 1,608 | 2,284 |
Legal reserve | 27 | 82 |
Net operating loss benefit and credit carryforwards | 10,169 | 9,332 |
Valuation allowance | (1,638) | (1,719) |
Accrued compensation and pension | 758 | 1,346 |
Stock compensation expense on nonvested deferred shares | 2,733 | 3,731 |
Accrued losses | 171 | 340 |
Foreign currency translation and other | 1,066 | 1,080 |
Total deferred tax assets | 17,304 | 21,478 |
Deferred tax liabilities: | ||
Tax over book depreciation | 8,137 | 11,446 |
Tax over book amortization | 702 | 3,325 |
Branch future liability | 3,018 | 2,538 |
Receivable holdbacks and other | 1,028 | 912 |
Total deferred tax liabilities | 12,885 | 18,221 |
Net deferred tax asset | $ 4,419 | $ 3,257 |
Income Taxes (Details 4)
Income Taxes (Details 4) - USD ($) $ in Thousands | Jun. 30, 2018 | Jun. 30, 2017 |
Significant components of Company's deferred tax assets and liabilities as reported in consolidated balance sheets | ||
Deferred income tax assets | $ 4,848 | $ 3,385 |
Deferred income tax liabilities | (429) | (128) |
Net deferred tax asset | $ 4,419 | $ 3,257 |
Income Taxes Income Taxes (Deta
Income Taxes Income Taxes (Details 5) $ in Thousands | 12 Months Ended |
Jun. 30, 2018USD ($) | |
State tax credit carryforward [Member] | |
Tax Credit Carryforward [Line Items] | |
Tax Credit Carryforward, Description | June 2018 to June 2033 |
Tax Credit Carryforward, Amount | $ 679 |
Federal tax credit carryforward [Member] | |
Tax Credit Carryforward [Line Items] | |
Tax Credit Carryforward, Description | June 2019 to June 2025 |
Tax Credit Carryforward, Amount | $ 1,244 |
Foreign tax credit carryforward [Member] | |
Tax Credit Carryforward [Line Items] | |
Tax Credit Carryforward, Description | June 2035 to June 2037 |
Tax Credit Carryforward, Amount | $ 668 |
Income Taxes Income Taxes (De53
Income Taxes Income Taxes (Details 6) $ in Thousands | 12 Months Ended |
Jun. 30, 2018USD ($) | |
State and Local Jurisdiction [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards, Limitations on Use | June 2023 to June 2038 |
Operating Loss Carryforwards | $ 22,230 |
Foreign Tax Authority [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards, Limitations on Use | December 2029; June 2032 to June 2037 |
Operating Loss Carryforwards | $ 20,733 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) $ in Millions | 12 Months Ended |
Jun. 30, 2018USD ($)Rate | |
Income Tax Disclosure [Abstract] | |
Prior federal income tax rate | 35.00% |
Blended income tax rate | 28.06% |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | 21.00% |
Restriction of deductibility of certain executive compensation | $ | $ 1 |
Liability for Uncertain Tax Positions, Noncurrent | $ | $ 0.5 |
Contingencies (Details Textual)
Contingencies (Details Textual) - USD ($) $ in Millions | Jun. 30, 2018 | Jun. 30, 2017 |
Commitments and Contingencies Disclosure [Abstract] | ||
Claims related to unapproved change orders | $ 15 | $ 11 |
Operating Leases (Details Textu
Operating Leases (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Leases [Abstract] | |||
Future minimum operating lease payable, in total | $ 33.1 | ||
Minimum operating lease payable, Fiscal 2019 | 7.5 | ||
Minimum operating lease payable, Fiscal 2020 | 6.7 | ||
Minimum operating lease payable, Fiscal 2021 | 5.5 | ||
Minimum operating lease payable, Fiscal 2022 | 4.4 | ||
Minimum operating lease payable, Fiscal 2023 | 2.9 | ||
Minimum operating lease payable, Thereafter | 6.2 | ||
Operating lease expense | $ 8.6 | $ 7.9 | $ 6.6 |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Equity, Class of Treasury Stock [Line Items] | |||
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 | ||
Payments for Repurchase of Common Stock | $ 0 | $ 0 | $ (10,461) |
Treasury stock, shares | 1,034,394 | 1,287,655 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Stock option activity and related information | |||
Number of options outstanding at June 30, 2017 | 97,250 | ||
Number of options granted | 0 | ||
Number of options exercised | (31,050) | (24,813) | (68,037) |
Number of options cancelled | 0 | ||
Number of options outstanding at June 30, 2018 | 66,200 | 97,250 | |
Number of options vested or expected to vest at June 30, 2018 | 66,200 | ||
Number of options exercisable at June 30, 2018 | 66,200 | ||
Weighted average remaining contractual life | 3 years 5 months | 4 years 5 months | |
Weighted average remaining contractual life vested or expected to vest at June 30, 2018 | 3 years 5 months | ||
Weighted average remaining contractual life exercisable at June 30, 2018 | 3 years 5 months | ||
Weighted average exercise price at June 30, 2017 | $ 10.19 | ||
Weighted average exercise price granted | 0 | ||
Weighted average exercise price exercised | 10.19 | ||
Weighted average exercise price cancelled | 0 | ||
Weighted average exercise price at June 30, 2018 | 10.19 | $ 10.19 | |
Weighted average exercise price vested or expected to vest at June 30, 2018 | 10.19 | ||
Weighted average exercise price exercisable at June 30, 2018 | $ 10.19 | ||
Aggregate intrinsic value outstanding at June 30, 2017 | $ 540 | $ 0 | |
Aggregate intrinsic value exercised | 287 | 300 | $ 700 |
Aggregate intrinsic value outstanding at June 30, 2018 | 540 | $ 0 | |
Aggregate intrinsic value vested or expected to be vest at June 30, 2018 | 540 | ||
Aggregate intrinsic value exercisable at June 30, 2018 | $ 540 |
Stock-Based Compensation (Det59
Stock-Based Compensation (Details 2) - $ / shares | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Stock options information | ||
Stock options outstanding, option outstanding | 66,200 | 97,250 |
Stock options outstanding weighted average remaining contractual life | 3 years 5 months | 4 years 5 months |
Stock options exercisable option outstanding | 66,200 | |
Stock options exercisable weighted average exercise price | $ 10.19 | |
Stock options exercisable weighted average remaining contractual life | 3 years 5 months |
Stock-Based Compensation (Det60
Stock-Based Compensation (Details 3) | 12 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Nonvested deferred share activity | |
Nonvested shares at June 30, 2017 | shares | 995,353 |
Shares granted | shares | 715,539 |
Shares vested and released | shares | (253,241) |
Shares cancelled | shares | (91,604) |
Nonvested shares at June 30, 2018 | shares | 1,366,047 |
Weighted average grant date fair value per share at June 30, 2017 | $ / shares | $ 21.65 |
Weighted average grant date fair value per share granted | $ / shares | 13.64 |
Weighted average grant date fair value per share vested and released | $ / shares | 19.60 |
Weighted average grant date fair value per share cancelled | $ / shares | 31.42 |
Weighted average grant date fair value per share at June 30, 2018 | $ / shares | $ 17.18 |
Stock-Based Compensation (Det61
Stock-Based Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 8,618 | $ 7,461 | $ 6,317 |
Unrecognized stock-based compensation expense | $ 12,900 | ||
Weighted average period | 1 year 8 months | ||
Stock based compensation expense recognized tax | $ 500 | 500 | 3,200 |
Common stock grant expiration term | 10 years | ||
Total intrinsic value of stock option | $ 287 | $ 300 | $ 700 |
Vesting period | 3 years | ||
Deferred shares granted | 516,969 | 370,490 | |
Average grant date fair value | $ 19.80 | $ 20.77 | |
Deferred shares vested and released | 396,530 | 631,443 | |
Weighted average fair value | $ 18.24 | $ 22.34 | |
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 | ||
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 2019 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Minimum threshold shares scheduled to vest for performance based shares | 127,000 | ||
Vest in 2020 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Minimum threshold shares scheduled to vest for performance based shares | 183,000 | ||
Vest in 2021 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Minimum threshold shares scheduled to vest for performance based shares | 275,000 | ||
Matrix Service Company 2016 Stock and Incentive Compensation Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share awards authorized | 1,800,000 | ||
Share awards grant | 1,145,949 |
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, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Basic EPS: | |||||||||||
Net income (loss) | $ (14,683) | $ (5,153) | $ 4,532 | $ 3,824 | $ (954) | $ (13,821) | $ 5,250 | $ 9,342 | $ (11,480) | $ (183) | $ 28,863 |
Weighted average shares outstanding | 26,769 | 26,533 | 26,597 | ||||||||
Basic earnings (loss) per common share (in dollars per share) | $ (0.55) | $ (0.19) | $ 0.17 | $ 0.14 | $ (0.04) | $ (0.52) | $ 0.20 | $ 0.35 | $ (0.43) | $ (0.01) | $ 1.09 |
Diluted EPS: | |||||||||||
Weighted average shares outstanding | 26,769 | 26,533 | 26,597 | ||||||||
Dilutive stock options | 0 | 0 | 68 | ||||||||
Dilutive nonvested deferred shares | 0 | 0 | 435 | ||||||||
Diluted weighted average shares | 26,769 | 26,533 | 27,100 | ||||||||
Diluted earnings (loss) per common share (in dollars per share) | $ (0.55) | $ (0.19) | $ 0.17 | $ 0.14 | $ (0.04) | $ (0.52) | $ 0.20 | $ 0.35 | $ (0.43) | $ (0.01) | $ 1.07 |
Earnings per Common Share (De63
Earnings per Common Share (Details 1) - shares shares in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Antidilutive Securities Excluded From Computation Of Diluted Earnings Per Share | |||
Antidilutive securities | 455 | 473 | 56 |
Stock Options [Member] | |||
Antidilutive Securities Excluded From Computation Of Diluted Earnings Per Share | |||
Antidilutive securities | 31 | 43 | 0 |
Nonvested Deferred Shares [Member] | |||
Antidilutive Securities Excluded From Computation Of Diluted Earnings Per Share | |||
Antidilutive securities | 424 | 430 | 56 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Multiemployer Pension Plans | |||
Total contributions made | $ 54,724 | $ 48,709 | $ 46,011 |
Contributions to other multiemployer plans | $ 19,827 | $ 20,378 | 16,606 |
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 | ||
Multiemployer Plans, Certified Zone Status, Description | Yellow | Described below (2) | |
FIP/RP Status Pending or Implemented | Implemented | ||
Total contributions made | $ 8,525 | $ 7,098 | 7,658 |
Multiemployer Plan, Surcharge | No | ||
Joint Pension Fund Local Union One Six Four Ibew [Member] | |||
Multiemployer Pension Plans | |||
EIN/Pension Plan Number | 22-6031199/001 | ||
Multiemployer Plans, Certified Zone Status, Description | Yellow | Described below (2) | |
FIP/RP Status Pending or Implemented | Implemented | ||
Total contributions made | $ 2,391 | $ 2,709 | 2,635 |
Multiemployer Plan, Surcharge | No | ||
Expiration Date of Collective-Bargaining Agreement | May 31, 2021 | ||
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 | $ 2,489 | $ 2,392 | 3,063 |
Surcharge Imposed | No | ||
Expiration Date of Collective-Bargaining Agreement | May 31, 2019 | ||
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 | Green | |
FIP/RP Status Pending or Implemented | NA | ||
Total contributions made | $ 6,005 | $ 2,777 | 1,168 |
Surcharge Imposed | No | ||
Expiration Date of Collective-Bargaining Agreement | May 31, 2021 | ||
Local 351 IBEW Pension Plan [Member] | |||
Multiemployer Pension Plans | |||
EIN/Pension Plan Number | 22-3417366/001 | ||
Multiemployer Plans, Certified Zone Status, Description | Green | Green | |
FIP/RP Status Pending or Implemented | Implemented | ||
Total contributions made | $ 1,187 | $ 2,796 | 5,018 |
Multiemployer Plan, Surcharge | No | ||
Expiration Date of Collective-Bargaining Agreement | Dec. 4, 2021 | ||
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 | $ 1,558 | $ 2,234 | 1,265 |
Surcharge Imposed | Yes | ||
Expiration Date of Collective-Bargaining Agreement | Apr. 30, 2020 | ||
IBEW Local Union Nine Eight Pension Plan [Member] | |||
Multiemployer Pension Plans | |||
EIN/Pension Plan Number | 23-1990722/001 | ||
Multiemployer Plans, Certified Zone Status, Description | Red | Described below (2) | |
FIP/RP Status Pending or Implemented | Implemented | ||
Total contributions made | $ 1,106 | $ 1,519 | 1,653 |
Multiemployer Plan, Surcharge | Yes | ||
Expiration Date of Collective-Bargaining Agreement | May 29, 2020 | ||
Indiana Laborers Pension Fund [Domain] | |||
Multiemployer Pension Plans | |||
EIN/Pension Plan Number | 35-6027150/001 | ||
Multiemployer Plans, Certified Zone Status, Description | Described below (2) | Described below (2) | |
FIP/RP Status Pending or Implemented | Implemented | ||
Total contributions made | $ 3,542 | $ 2,458 | 2,320 |
Multiemployer Plan, Surcharge | Described below (2) | ||
Expiration Date of Collective-Bargaining Agreement | May 31, 2019 | ||
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 | $ 4,412 | $ 1,785 | 2,248 |
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 | |||
FIP/RP Status Pending or Implemented | Implemented | ||
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 | $ 3,682 | $ 2,563 | $ 2,377 |
Surcharge Imposed | No | ||
Expiration Date of Collective-Bargaining Agreement | May 31, 2019 |
Employee Benefit Plans (Detai65
Employee Benefit Plans (Details Textual) - USD ($) | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
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 | $ 5,800,000 | $ 5,500,000 | $ 5,000,000 |
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 | 21,920 | 16,609 | 17,304 |
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, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Results of Operations | |||||||||||
Gross revenues | $ 1,097,738 | $ 1,207,510 | $ 1,316,466 | ||||||||
Less: Inter-segment revenues | $ 293,087 | $ 245,645 | $ 282,911 | $ 269,910 | $ 291,836 | $ 251,237 | $ 312,655 | $ 341,781 | 1,091,553 | 1,197,509 | 1,311,917 |
Revenues | 293,087 | 245,645 | 282,911 | 269,910 | 291,836 | 251,237 | 312,655 | 341,781 | 1,091,553 | 1,197,509 | 1,311,917 |
Gross profit | 21,451 | 14,891 | 26,703 | 28,891 | 23,127 | (2,614) | 28,212 | 32,278 | 91,936 | 81,003 | 125,991 |
Operating income (loss) | (17,112) | $ (5,862) | $ 5,174 | $ 7,321 | 3,531 | $ (21,210) | $ 8,237 | $ 14,301 | (10,479) | 4,859 | 40,882 |
Segment assets | 558,033 | 586,030 | 558,033 | 586,030 | 564,967 | ||||||
Capital expenditures | 8,711 | 11,908 | 13,939 | ||||||||
Depreciation and amortization | 20,347 | 21,602 | 21,441 | ||||||||
Electrical Infrastructure [Member] | |||||||||||
Results of Operations | |||||||||||
Gross revenues | 255,931 | 373,384 | 349,011 | ||||||||
Less: Inter-segment revenues | 255,931 | 373,384 | 349,011 | ||||||||
Revenues | 255,931 | 373,384 | 349,011 | ||||||||
Gross profit | 18,300 | 7,137 | 29,301 | ||||||||
Operating income (loss) | (16,531) | (8,309) | 11,144 | ||||||||
Segment assets | 161,207 | 183,351 | 161,207 | 183,351 | 135,298 | ||||||
Capital expenditures | 493 | 1,390 | 1,611 | ||||||||
Depreciation and amortization | 4,359 | 5,198 | 5,008 | ||||||||
Oil Gas & Chemical [Member] | |||||||||||
Results of Operations | |||||||||||
Gross revenues | 324,546 | 247,423 | 252,973 | ||||||||
Less: Inter-segment revenues | 322,772 | 240,523 | 249,795 | ||||||||
Revenues | 322,772 | 240,523 | 249,795 | ||||||||
Gross profit | 33,423 | 12,675 | 18,553 | ||||||||
Operating income (loss) | 8,798 | (8,783) | (3,503) | ||||||||
Segment assets | 111,064 | 129,177 | 111,064 | 129,177 | 91,350 | ||||||
Capital expenditures | 1,514 | 829 | 1,481 | ||||||||
Depreciation and amortization | 5,904 | 6,299 | 4,811 | ||||||||
Storage Solutions [Member] | |||||||||||
Results of Operations | |||||||||||
Gross revenues | 319,106 | 483,254 | 564,738 | ||||||||
Less: Inter-segment revenues | 314,696 | 481,696 | 563,512 | ||||||||
Revenues | 314,696 | 481,696 | 563,512 | ||||||||
Gross profit | 25,778 | 55,651 | 67,843 | ||||||||
Operating income (loss) | (5,907) | 22,928 | 33,449 | ||||||||
Segment assets | 149,695 | 166,742 | 149,695 | 166,742 | 201,875 | ||||||
Capital expenditures | 3,346 | 2,017 | 3,882 | ||||||||
Depreciation and amortization | 6,623 | 7,277 | 8,124 | ||||||||
Industrial [Member] | |||||||||||
Results of Operations | |||||||||||
Gross revenues | 198,155 | 103,449 | 149,744 | ||||||||
Less: Inter-segment revenues | 198,154 | 101,906 | 149,599 | ||||||||
Revenues | 198,154 | 101,906 | 149,599 | ||||||||
Gross profit | 14,435 | 5,540 | 10,294 | ||||||||
Operating income (loss) | 3,161 | (977) | (208) | ||||||||
Segment assets | 58,816 | 53,754 | 58,816 | 53,754 | 67,569 | ||||||
Capital expenditures | 0 | 38 | 104 | ||||||||
Depreciation and amortization | 3,461 | 2,828 | 3,498 | ||||||||
Unallocated Corporate [Member] | |||||||||||
Results of Operations | |||||||||||
Segment assets | $ 77,251 | $ 53,006 | 77,251 | 53,006 | 68,875 | ||||||
Capital expenditures | 3,358 | 7,634 | 6,861 | ||||||||
Intersegment Eliminations [Member] | |||||||||||
Results of Operations | |||||||||||
Less: Inter-segment revenues | 6,185 | 10,001 | 4,549 | ||||||||
Revenues | 6,185 | 10,001 | 4,549 | ||||||||
Intersegment Eliminations [Member] | Electrical Infrastructure [Member] | |||||||||||
Results of Operations | |||||||||||
Less: Inter-segment revenues | 0 | 0 | 0 | ||||||||
Revenues | 0 | 0 | 0 | ||||||||
Intersegment Eliminations [Member] | Oil Gas & Chemical [Member] | |||||||||||
Results of Operations | |||||||||||
Less: Inter-segment revenues | 1,774 | 6,900 | 3,178 | ||||||||
Revenues | 1,774 | 6,900 | 3,178 | ||||||||
Intersegment Eliminations [Member] | Storage Solutions [Member] | |||||||||||
Results of Operations | |||||||||||
Less: Inter-segment revenues | 4,410 | 1,558 | 1,226 | ||||||||
Revenues | 4,410 | 1,558 | 1,226 | ||||||||
Intersegment Eliminations [Member] | Industrial [Member] | |||||||||||
Results of Operations | |||||||||||
Less: Inter-segment revenues | 1 | 1,543 | 145 | ||||||||
Revenues | $ 1 | $ 1,543 | $ 145 |
Segment Information (Details 1)
Segment Information (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Summary of revenues and long lived assets according to geographic areas | |||||||||||
Revenues | $ 293,087 | $ 245,645 | $ 282,911 | $ 269,910 | $ 291,836 | $ 251,237 | $ 312,655 | $ 341,781 | $ 1,091,553 | $ 1,197,509 | $ 1,311,917 |
Long-Lived Assets | 200,987 | 227,400 | 200,987 | 227,400 | 189,521 | ||||||
UNITED STATES | |||||||||||
Summary of revenues and long lived assets according to geographic areas | |||||||||||
Revenues | 981,292 | 961,049 | 1,127,893 | ||||||||
Long-Lived Assets | 174,241 | 193,164 | 174,241 | 193,164 | 158,970 | ||||||
CANADA | |||||||||||
Summary of revenues and long lived assets according to geographic areas | |||||||||||
Revenues | 104,208 | 228,625 | 178,603 | ||||||||
Long-Lived Assets | 13,738 | 21,419 | 13,738 | 21,419 | 19,915 | ||||||
Other international [Member] | |||||||||||
Summary of revenues and long lived assets according to geographic areas | |||||||||||
Revenues | 6,053 | 7,835 | 5,421 | ||||||||
Long-Lived Assets | $ 13,008 | $ 12,817 | $ 13,008 | $ 12,817 | $ 10,636 |
Segment Information (Details Te
Segment Information (Details Textual) | 12 Months Ended | ||
Jun. 30, 2018Rate | Jun. 30, 2017Rate | Jun. 30, 2016Rate | |
Customer One [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 11.40% | 19.50% | 14.80% |
Customer Two [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 8.60% | 15.30% | 10.60% |
Customer Three [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 6.40% | 5.20% | 8.30% |
Customer Four [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 6.00% | 4.20% | 4.40% |
Customer Five [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 4.20% | 4.00% | 4.20% |
Customer Six [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 3.20% | 2.70% | 3.90% |
Customer Seven [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 3.20% | 2.20% | 3.80% |
Customer Eight [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 3.00% | 3.40% | |
Customer Nine [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 2.70% | 2.30% | |
Customer Ten [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 2.30% | 2.10% | |
Customer Eleven [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 1.60% | ||
Electrical Infrastructure [Member] | Customer One [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 0.00% | 38.90% |
Electrical Infrastructure [Member] | Customer Two [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 46.00% | 0.00% |
Electrical Infrastructure [Member] | Customer Three [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 26.50% | 0.00% | 0.00% |
Electrical Infrastructure [Member] | Customer Four [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 25.40% | 0.00% | 16.60% |
Electrical Infrastructure [Member] | Customer Five [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 12.70% | 0.00% |
Electrical Infrastructure [Member] | Customer Six [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 0.00% | 0.00% |
Electrical Infrastructure [Member] | Customer Seven [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 0.00% | 14.40% |
Electrical Infrastructure [Member] | Customer Eight [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 12.90% | 12.70% | |
Electrical Infrastructure [Member] | Customer Nine [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 0.00% | |
Electrical Infrastructure [Member] | Customer Ten [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 10.00% | 0.00% | |
Electrical Infrastructure [Member] | Customer Eleven [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | ||
Oil Gas & Chemical [Member] | Customer One [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 0.00% | 0.00% |
Oil Gas & Chemical [Member] | Customer Two [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 29.00% | 0.00% | 0.00% |
Oil Gas & Chemical [Member] | Customer Three [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 25.80% | 0.00% |
Oil Gas & Chemical [Member] | Customer Four [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 20.70% | 0.00% |
Oil Gas & Chemical [Member] | Customer Five [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 12.00% | 0.00% | 0.00% |
Oil Gas & Chemical [Member] | Customer Six [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 10.80% | 0.00% | 20.20% |
Oil Gas & Chemical [Member] | Customer Seven [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 0.00% | 0.00% |
Oil Gas & Chemical [Member] | Customer Eight [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 0.00% | |
Oil Gas & Chemical [Member] | Customer Nine [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 0.00% | |
Oil Gas & Chemical [Member] | Customer Ten [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 11.20% | |
Oil Gas & Chemical [Member] | Customer Eleven [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | ||
Storage Solutions [Member] | Customer One [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 48.50% | 10.20% |
Storage Solutions [Member] | Customer Two [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 2.40% | 24.70% |
Storage Solutions [Member] | Customer Three [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.60% | 0.00% | 19.30% |
Storage Solutions [Member] | Customer Four [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 0.00% | 0.00% |
Storage Solutions [Member] | Customer Five [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 2.20% | 0.00% | 0.00% |
Storage Solutions [Member] | Customer Six [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 0.00% | 0.00% |
Storage Solutions [Member] | Customer Seven [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 10.90% | 0.00% | 0.00% |
Storage Solutions [Member] | Customer Eight [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 0.00% | |
Storage Solutions [Member] | Customer Nine [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 0.00% | |
Storage Solutions [Member] | Customer Ten [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 0.00% | |
Storage Solutions [Member] | Customer Eleven [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | ||
Industrial [Member] | Customer One [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 62.90% | 0.00% | 0.00% |
Industrial [Member] | Customer Two [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 0.00% | 0.00% |
Industrial [Member] | Customer Three [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 0.00% | 0.00% |
Industrial [Member] | Customer Four [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 0.00% | 0.00% |
Industrial [Member] | Customer Five [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 0.00% | 36.90% |
Industrial [Member] | Customer Six [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 31.70% | 0.00% |
Industrial [Member] | Customer Seven [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 25.80% | 0.00% |
Industrial [Member] | Customer Eight [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 0.00% | |
Industrial [Member] | Customer Nine [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 14.70% | 20.10% | |
Industrial [Member] | Customer Ten [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Revenue | 0.00% | 0.00% | |
Industrial [Member] | Customer Eleven [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, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 293,087 | $ 245,645 | $ 282,911 | $ 269,910 | $ 291,836 | $ 251,237 | $ 312,655 | $ 341,781 | $ 1,091,553 | $ 1,197,509 | $ 1,311,917 |
Gross profit (loss) | 21,451 | 14,891 | 26,703 | 28,891 | 23,127 | (2,614) | 28,212 | 32,278 | 91,936 | 81,003 | 125,991 |
Operating income (loss) | (17,112) | (5,862) | 5,174 | 7,321 | 3,531 | (21,210) | 8,237 | 14,301 | (10,479) | 4,859 | 40,882 |
Net income (loss) | $ (14,683) | $ (5,153) | $ 4,532 | $ 3,824 | $ (954) | $ (13,821) | $ 5,250 | $ 9,342 | $ (11,480) | $ (183) | $ 28,863 |
Basic earnings (loss) per common share (in dollars per share) | $ (0.55) | $ (0.19) | $ 0.17 | $ 0.14 | $ (0.04) | $ (0.52) | $ 0.20 | $ 0.35 | $ (0.43) | $ (0.01) | $ 1.09 |
Diluted earnings (loss) per common share (in dollars per share) | $ (0.55) | $ (0.19) | $ 0.17 | $ 0.14 | $ (0.04) | $ (0.52) | $ 0.20 | $ 0.35 | $ (0.43) | $ (0.01) | $ 1.07 |
Valuation and Qualifying Acco70
Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 11,606 | $ 8,827 | $ 676 |
Charged to Costs and Expenses | 1,127 | 3,043 | 6,376 |
Charged to Other Accounts | 0 | 0 | 1,808 |
Deductions | (4,768) | (264) | (33) |
Balance at End of Period | 7,965 | 11,606 | 8,827 |
SEC Schedule, 12-09, Allowance, Credit Loss [Member] | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 9,887 | 8,403 | 561 |
Charged to Costs and Expenses | 107 | 1,748 | 6,065 |
Charged to Other Accounts | 0 | 0 | 1,808 |
Deductions | (3,667) | (264) | (31) |
Balance at End of Period | 6,327 | 9,887 | 8,403 |
SEC Schedule, 12-09, Valuation Allowance, Deferred Tax Asset [Member] | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 1,719 | 424 | 115 |
Charged to Costs and Expenses | 1,020 | 1,295 | 311 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions | (1,101) | 0 | (2) |
Balance at End of Period | $ 1,638 | $ 1,719 | $ 424 |