UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended February 28, 1998
Commission File number 0-l87l6
MATRIX SERVICE COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 73-1352l74
(State of incorporation) (I.R.S. Employer
Identification No.)
l070l E. Ute St., Tulsa, Oklahoma 74ll6-l5l7
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code:
(9l8) 838-8822
Indicate by check mark whether the registrant (l) has filed all
reports required to be filed by Section l3 or l5(d) of the Securities
Exchange Act of 1934 during the preceding l2 months (or for such shorter
period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
As of April 13, 1998, there were 9,491,153 shares of the Company's
common stock, $.01 par value per share, 9,485,120 issued and
shares outstanding.
PART I.- FINANCIAL INFORMATION
ITEM 1. Financial Statements
Matrix Service Company
Condensed Consolidated Statements of Income
(in thousands, except share and per share data)
[CAPTION]
Three Months Ended Nine Months Ended
(unaudited) (unaudited)
----------------------------------------------------
February 28, February 28, February 28, February 28,
1998 1997 * 1998 1997 *
----------------------------------------------------
[MULTIPLIER] 1,000
Revenues $54,431 $39,202 $158,279 $119,397
Cost of revenues 49,156 35,305 143,070 106,825
--------- -------- --------- --------
Gross profit 5,275 3,897 15,209 12,572
Selling, general and
administrative expenses 3,433 2,430 9,055 6,906
Goodwill and noncompete
amortization 181 104 455 313
Mergers, acquisitions,
abandonments and
restructuring cost 6,018 0 6,018 0
--------- -------- --------- --------
Operating income (4,357) 1,363 (319) 5,353
Other income (expense):
Interest income 35 61 105 112
Interest expense (364) (117) (838) (309)
Other 207 26 212 91
--------- -------- --------- --------
Income (loss) from
continuing operations
before income tax expense (4,479) 1,333 (840) 5,247
Provision (benefit)
for federal and
state income tax expense (127) 486 1,175 2,126
--------- -------- --------- --------
Income (loss) from
continuing operations (4,352) 847 (2,015) 3,121
Loss from operations of
Midwest Industrial, less
applicable taxes of
$763, $71, $1,050,
$409 respectively (1,107) (203) (1,722) (891)
Loss from disposal of
Midwest Industrial, less
applicable taxes of
$6,262, $0, $6,262,
$0 respectively (9,198) 0 (9,198) 0
--------- -------- --------- --------
Net income (loss) ($14,657) $644 ($12,935) $2,230
========= ======== ========= ========
Earnings (loss) from
continuing operations
per share of common stock:
Basic ($0.46) $0.09 ($0.21) $0.33
Diluted ($0.46) $0.09 ($0.21) $0.33
Earnings (loss) per share
of common stock:
Basic ($1.55) $0.07 ($1.37) $0.24
Diluted ($1.55) $0.07 ($1.37) $0.23
Weighted average number
of common shares:
Basic 9,437,242 9,325,940 9,412,579 9,320,337
Diluted 9,847,812 9,658,981 9.860,619 9,587,164
<FN>
* Certain amounts have been restated as described in NOTE E and NOTE F.
See Notes to Condensed Consolidated Financial Statements
[MULTIPLIER] 1,000
Matrix Service Company
Condensed Consolidated Balance Sheets
(in thousands)
February 28, May 31,
1998 1997
----------- ----------
(unaudited)
ASSETS:
Current assets:
Cash and cash equivalents $ 2,862 $ 1,877
Accounts receivable 36,385 37,745
Costs and estimated earnings
in excess of billings on
uncompleted contracts 12,825 11,349
Inventories 6,315 4,989
Prepaid expenses 334 456
Deferred tax asset 1,021 1,021
Income tax receivable 7,579 317
-------- --------
Total current assets 67,321 57,754
Investment in undistributed equity
of a foreign joint venture - 174
Property, plant and equipment:
Land and buildings 16,892 15,097
Construction equipment 25,605 24,444
Transportation equipment 8,531 5,504
Furniture and fixtures 3,901 3,164
Construction in progress 640 2,614
-------- --------
55,569 50,823
Less accumulated depreciation 26,367 20,861
-------- --------
Net property, plant and equipment 29,202 29,962
Goodwill, net of accumulated
amortization 12,629 28,721
Other assets 671 261
-------- --------
Total assets $109,823 $116,872
======== ========
See Notes to Condensed Consolidated Financial Statements
[MULTIPLIER] 1,000
Matrix Service Company
Condensed Consolidated Balance Sheets
(in thousands)
February 28, May 31,
1998 1997
------------ ---------
(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 11,022 $ 12,307
Billings on uncompleted contracts in
excess of costs and estimated earnings 7,908 6,325
Accrued expenses 5,900 9,414
Current portion of long-term debt 2,213 1,495
-------- --------
Total current liabilities 27,043 29,541
Long-term debt:
Bank credit agreement 9,750 5,000
Acquisition payable 95 407
Equipment notes payable 35 1
Term note 4,524 954
-------- --------
Total long-term debt 14,404 6,362
Deferred income taxes 4,714 4,757
Stockholders' equity:
Common stock 95 95
Capital in excess of par value 50,903 50,903
Retained earnings 12,982 26,269
Cumulative translation adjustment (183) (145)
-------- --------
Total capital and retained earnings 63,797 77,122
Less:
Treasury shares, at cost 135 910
Total stockholders' equity 63,662 76,212
-------- --------
Total liabilities and
stockholders' equity $109,823 $116,872
======== ========
<FN>
See Notes to Condensed Consolidated Financial Statements
[MULTIPLIER] 1,000
Matrix Service Company
Condensed Consolidated Cash Flow Statements
(in thousands)
Nine Months Ended
(unaudited)
February 28, February 28,
1998 1997 *
------------ ------------
Cash flow from operating activities:
Net income $(12,935) $2,230
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 4,414 3,492
Non-cash write-offs from
restructuring 4,983 -
Discontinued operations:
Loss on disposal, net of tax 9,198 0
Loss from operations, net of tax 1,722 891
Changes in current assets and
liabilities increasing
(decreasing) cash:
Accounts receivable 1,337 (123)
Costs and estimated earnings
in excess of billings on
uncompleted contracts 75 (2,005)
Inventories (302) (730)
Prepaid expenses 89 (75)
Accounts payable (4,931) (989)
Billings on uncompleted
contracts in excess of
costs and estimated earnings 530 1,073
Income taxes 600 987
Accrued liabilities (4,822) (2,393)
Gain or loss on sale of assets 16 (12)
Other 64 (12)
------- -------
Net cash provided by continuing
operations 38 2,334
Net cash provided by
discontinued operations 1,359 1,601
------- -------
Net cash provided by operating
activities 1,397 3,935
Investing activities:
Capital expenditures (1,863) (4,263)
Proceeds from sale of assets 62 117
Acquisition of subsidiary,
net of cash acquired (4,129) 47
Discontinued operations (43) -
Other, net 17 (21)
------- -------
Net cash used in
investing activities (5,956) (4,120)
Matrix Service Company
Condensed Consolidated Cash Flow Statements
(in thousands)
Nine Months Ended
(unaudited)
February 28, February 28,
1998 1997 *
------------ -------------
Financing activities:
Repayment of acquisition payable (201) (397)
Repayment of equipment notes (23) (10)
Issuance under long-term
credit agreement 11,750 4,500
Repayments under long-term
credit agreement (6,407) (4,817)
Additional paid-in capital 1 -
Change in treasury stock 424 101
------- -------
Net cash in financing activities 5,554 (623)
Increase (decrease)in
cash and cash equivalents 985 (808)
Cash and cash equivalents at
beginning of period 1,877 1,899
------- -------
Cash and cash equivalents at
end of period $2,862 $1,091
======= =======
<FN>
* Certain amounts have been restated as described in NOTE E.
See Notes to Condensed Consolidated Financial Statements
MATRIX SERVICE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE A - BASIS OF PRESENTATION
The condensed consolidated financial statements include the accounts of the
Company and its subsidiaries, all of which are wholly-owned. All
significant inter-company balances and transactions have been eliminated in
consolidation.
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with Rule 10-0l of Regulation S-X for interim
financial statements required to be filed with the Securities and Exchange
Commission and do not include all information and footnotes required by
generally accepted accounting principles for complete financial statements.
However, the information furnished reflects all adjustments, consisting
only of normal recurring adjustments which are, in the opinion of
management, necessary for a fair statement of the results for the interim
periods.
The accompanying financial statements should be read in conjunction with
the audited financial statements for the year ended May 3l, 1997, included
in the Company's Annual Report on Form 10-K for the year then ended. The
Company's business is seasonal; therefore, results for any interim period
may not necessarily be indicative of future operating results.
NOTE B - BUSINESS ACQUISITIONS
On June 17, 1997, the Company acquired all of the outstanding common stock
of General Service Corporation and its affiliated companies, Maintenance
Services, Inc., Allentech, Inc., and Environmental Protection Services
(collectively "GSC") for up to $7.8 million, subject to certain
adjustments. The purchase price consisted of $4.75 million in cash and a
$250 thousand, prime rate (currently 8.25%) promissory note payable in 12
equal quarterly installments. In addition, the stockholders of GSC are
entitled to receive in the future up to an additional $2.75 million in cash
if GSC satisfies certain earnings requirements. Under the provision of the
contract the stockholders have the right to elect 70% of the earnout amount
upon change of control of the Company. The transaction was accounted for as
a purchase and created approximately $3.0 million of goodwill and non-
competition covenants.
NOTE C - RECENT EVENT
On December 16, 1997, the Company and ITEQ, Inc. ("ITEQ") entered into a
Plan and Agreement of Merger whereby ITEQ agreed to acquire the Company.
On January 19, 1998 the Company and ITEQ mutually agreed to terminate the
Plan and Purchase Agreement of Merger, due to unanticipated difficulties in
connection with the expected integration of personnel from divergent
corporate cultures.
NOTE D - MERGERS, ACQUISITIONS, ABANDONMENTS AND RESTRUCTURING
During the third quarter of fiscal year 1998, the Company adopted a plan
for restructuring of operations to reduce costs, eliminate duplication of
facilities and improve efficiencies. The plan included closing fabrication
shops in Newark, Delaware and Rancocas, New Jersey and moving these
operations to a more efficient and geographically centered facility in
Bristol, Pennsylvania. Additionally, the Company closed a fabrication shop
at Elkston, Maryland. The production from the Maryland facility, which was
principally elevated water tanks, will be provided by the Company's Newnan,
Georgia plant. (The facilities located in Delaware, New Jersey,
Pennsylvania and Maryland were all leased facilities.) The Company is
selling real estate that is not being utilized in Mississauga, Canada, and
the Company is also discontinuing certain product lines that are no longer
profitable. As a result of these restructuring activities, the Company
recorded a non-recurring charge of $6.0 million. Included in this amount
are:, 1) costs for combining operations, eliminating duplications, and
abandonment and disposal of non-producing assets of $5.2 million, 2)
severance, relocation and other benefit costs of $604 thousand, 3)
integration and business reorganization costs of $64 thousand, 4) costs
related to the terminated merger agreement with ITEQ, Inc. including
investment banking fees, legal and accounting fees of $167 thousand.
Approximately $5.0 million of the asset write-down was non-cash.
NOTE E - DISCONTINUED OPERATIONS
During the third quarter of fiscal year 1998 the board of directors
approved a plan whereby the Company would discontinue the operations of
Midwest Industrial Contractors, Inc. ("Midwest"). The Company will in an
orderly manner discontinue to operate in the markets that Midwest has
historically participated. The tools, equipment and real estate of $1.4
million will be sold or utilized by other operating units of the Company.
On February 12, 1998, the Company entered into an agreement to sell certain
assets of Midwest Industrial Contractors, Inc. to a group of Midwest
employees. The Company is in the process of completing all open contracts
and disposing of all assets. The Company will abandon this business
entirely. The cost to terminate Midwest operations will result in a charge
of approximately $15.5 million before income taxes including $14.6 million
of goodwill. The operating results for the current periods are reported as
discontinued operations. All prior period financial information has been
restated to reflect the discontinued operations of Midwest.
Loss from discontinued operations per share of common stock:
Three Months Ended Nine Months Ended
--------------------------------------------------------------------------
February 28,1998 February 28, 1997 February 28, 1998 February 28, 1997
--------------------------------------------------------------------------
Basic ($1.09) ($ .02) ($1.16) ($ .09)
Diluted ($1.09) ($ .02) ($1.16) ($ .10)
NOTE F - EARNINGS PER SHARE OF COMMON STOCK
In 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, Earnings per Share. Statement 128
replaced the previously reported primary and fully diluted earnings per
share with basic and diluted earnings per share. Unlike primary earnings
per share, basic earnings per share excludes any dilutive effects of
options, warrants, and convertible securities. Diluted earnings per share
is very similar to the previously reported fully diluted earnings per
share. All earnings per share amounts for all periods have been presented,
and where necessary, restated to conform to the Statement 128 requirements.
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Results of Operations
Three Months Ended February 28, 1998 Compared With The Three Months Ended
February 28, 1997
General Service Corporation ("GSC") was acquired by Matrix Service Company
(the "Company") on June 17, 1997. Accordingly, the results of operations
of GSC for the quarter are included for the current period, but none of
GSC's operations are included in the prior year period.
Revenues for the quarter ended February 28, 1998 were $54.4 million as
compared to revenues of $39.2 million for the quarter ended February 28,
1997, representing an increase as compared with the same period in 1997 of
$15.2 million or 39%. The increase is due to the inclusion of GSC revenues
and increased revenues from capital projects in the Northwest from the
refinery division.
Gross profit increased to $5.3 million for the quarterly period ended
February 28, 1998 from gross profit of $3.9 million for the quarterly
period ended February 28, 1997, an increase of approximately $1.4 million
or 35%. Gross profit as a percentage of revenues decreased to 9.7% for the
1998 period from 9.9% for the 1997 period. The decrease in gross profit as
a percentage of revenue for the current period as compared with the prior
period is due to pricing pressure on new construction contracts for above
ground tanks, principally in the Southeast part of the United States.
Selling, general and administrative expenses increased to $3.4 million for
the quarterly period ended February 28, 1998 as compared to $2.4 million
for the quarterly period ended February 28, 1997, an increase of $1.0
thousand or 41%. Selling, general and administrative expenses as a
percentage of revenues increased to 6.3% for the current period as compared
to 6.2% for the prior period. The increase in selling, general and
administrative expenses for the period is due mainly to the inclusion of
GSC.
For the quarterly period ended February 28, 1998, the Company recorded a
non-recurring charge of $6.0 million. This charge resulted from a plan
adopted by the Company for restructuring of operations to reduce costs,
eliminate duplications of facilities and improve efficiencies - See NOTE D
to the financial statements.
Operating income decreased to a $4.4 million loss for the quarterly period
ended February 28, 1998 from income of $1.4 million for the quarterly
period ended February 28, 1997. Operating income for the quarterly period
ending February 28, 1998 increased by $298 thousand over the same period
for the prior year, when the non-recurring charge of $6.0 million is not
considered for the current period. This increase is due to increased gross
profit, offset by increases in selling, general and administrative
expenses.
Interest expense increased $247 thousand, or 211%, to $364 thousand for the
quarterly period ended February 28, 1998 from $117 thousand of interest
expense for the quarterly period ended February 28, 1997. The increase
resulted from an increased level of borrowing under the Company's credit
facility as a result of borrowings for the acquisition of GSC, and
increased advances under the revolving credit facility.
Income (loss) from continuing operations resulted in a $4.4 million loss
for the quarterly period ending February 28, 1998 as compared to income
from continuing operations $847 thousand for the period ending February 28,
1997. The decrease resulted from non-recurring costs of $6.0 million - See
NOTE D to the financial statements and losses resulting from the
discontinuance of "Midwest" - See NOTE E to the financial statements.
During the quarter ending February 28, 1998 the directors of the Company
approved a plan whereby the Company would discontinue the operations of
"Midwest" - See NOTE E to the financial statements.
Net loss for the quarterly period ending February 28, 1998 was $14.7
million as compared to net income of $644 thousand for the same period
ending February 28, 1997. This decrease resulted from non-recurring costs
of $6.0 million reduced by $816 thousand tax benefit - See NOTE D to the
financial statements and losses from discontinued operations of $10.3
million net of income tax - See NOTE E to the financial statements.
Nine Months Ended February 28, 1998 Compared With The Nine Months Ended
February 28, 1997
General Service Corporation ("GSC") was acquired by Matrix Service Company
(the "Company") on June 17, 1997. Accordingly, the results of operations
of GSC for eight and one-half months are included for the current period,
but none of GSC's operations are included in the prior year nine month
period.
Revenues for the nine months ended February 28, 1998 were $158.3 million as
compared to revenues of $119.4 million for the nine months ended February
28, 1997, representing an increase of approximately $38.9 million or 33%.
The increase is due to the inclusion of GSC revenues and increased revenues
from capital projects in the Northwest from the refinery division.
Gross profit increased to $15.2 million for the nine months ended February
28, 1998 from gross profit of $12.6 million for the nine months ended
February 28, 1997. Gross profit as a percentage of revenues decreased to
9.6% for the 1998 period from 10.5% for the 1997 period. The decrease in
gross profit as a percentage of revenues for the current period as compared
with the prior period is due to pricing pressure on new construction
contracts for above ground tanks, principally in the Southeast part of the
United States.
Selling, general and administrative expenses increased to $9.1 million for
the nine months ended February 28, 1998 compared to $6.9 million for the
nine months ended February 28, 1997, an increase of $2.1 million or
approximately 31%. Selling, general and administrative expenses as a
percentage of revenues decreased to 5.7% for the current period as compared
with 5.8% for the 1997 period.
Included in the nine month period ended February 28, 1998, the Company
recorded a non-recurring charge of $6.0 million. This charge resulted from
a plan adopted by the Company for restructuring of operations to reduce
costs, eliminate duplications of facilities and improve efficiencies - See
NOTE D to the financial statements.
Operating income decreased to a $319 thousand loss for the nine month
period ended February 28, 1998 from income of $5.4 million for the nine
month period ended February 28, 1997. Operating income for the quarterly
nine month ending February 28, 1998 increased by $346 thousand over the
same period for the prior year, when the non-recurring charge of $6.0
million is not considered for the current period. This increase is due to
increased gross profit, offset in part by increases in selling, general and
administrative expenses.
Interest expense increased $529 thousand, or 171%, to $838 thousand for the
nine month period ended February 28, 1998 from $309 thousand of interest
expense for the nine month period ended February 28, 1997. The increase
resulted from an increased level of borrowing under the Company's credit
facility as a result of borrowings for the acquisition of GSC, and
increased advances under the revolving credit facility.
Income (loss) from continuing operations resulted in a $2.0 million loss
for the nine month period ending February 28, 1998 as compared to income
from continuing operations of $3.1 million for the nine month period ending
February 28, 1997. The decrease resulted from non-recurring costs of $6.0
million.
Loss from discontinued operations. During the nine month period ending
February 28, 1998 the directors of the Company approved a plan whereby the
Company would discontinue the operations of "Midwest" - See NOTE E to the
financial statements.
Net income (loss) for the nine month period ending February 28, 1998 was
$12.9 million as compared to net income of $2.2 million for the nine month
period ending February 28, 1997. This decrease resulted from non-recurring
costs of $6.0 million reduced by $816 thousand tax benefit - See NOTE D to
the financial statements and losses from discontinued operations of $10.9
million net of income tax - See NOTE E to the financial statements.
Liquidity and Capital Resources
The Company has financed its operations recently with cash generated by
operations and advances under the Company's credit facility. Until amended
as described in the following paragraph, the Company had a credit facility
with a commercial bank under which the Company could borrow a total of
$25.0 million. The Company could have borrowed up to $15.0 million under a
revolving credit facility agreement based on the level of the Company's
eligible receivables. The agreement provided for interest at the Prime
Rate minus three quarters of one percent (3/4 of 1%), or a LIBOR based
option of LIBOR plus one and one quarter percent (1 and 1/4%), and matures
on October 31, 1999. At February 28, 1998, the interest rate was 7.125%
and the outstanding advances under the revolving credit facility totaled
$9.75 million. The credit facility also provided for two term loans of up
to $5.0 million each. On October 5, 1994 and June 19, 1997 term loans of
$4.9 million and $5.0 million, respectively, were made to the Company. The
1994 term loan was to be due on August 31, 1999 and was to be repaid in 54
equal payments beginning in March 1995 at an interest rate based upon the
Prime Rate or a LIBOR option. The 1997 term loan is due January 23, 2002
and was to be repaid in 54 equal payments beginning January 7, 1998 at an
interest rate based upon the prime rate or a LIBOR option. At February 28,
1998, the interest rate on the term loans was 7.625%, and the outstanding
balances were $1.7 million and $4.9 million, respectively.
On March 1, 1998, the Company and the commercial bank entered into an
amendment to the credit agreement, whereby the Company may borrow a total
of $30.0 million. The amended agreement provides for a $20.0 million
revolving credit facility based on the level of the Company's eligible
receivables. The agreement provides for an interest rate based on a prime
or a LIBOR option and matures October 31, 1999. The credit facility also
provides for a $10.0 million term loan, due February 28, 2003. On March 1,
1998, the Company rolled the balance from the two existing term loans of
$1.7 million and $4.9 million respectively, plus $3.4 million from the
revolving line of credit into this facility. In conjunction with this term
note on March 1, 1998, the Company entered into an Interest Rate Swap
Agreement with a commercial bank, effectively providing a fixed interest
rate of 7.5% for the five year period of the term loan.
Operations of the Company provided $1.4 million of cash for the nine months
ended February 28, 1998 as compared with providing cash of $3.9 million for
the nine months ending February 28, 1997, representing a decrease of
approximately $2.5 million. The decrease was primarily a result of
operating losses of $12.9 million offset by a net change of $15.8 million
of non-cash expenses of amortization and depreciation, write-offs from
restructuring and discontinued operations, net of tax benefits, a decrease
in accounts payable of $3.9 million, and a decrease in other accrued
liabilities of $2.4 million, offset by a change in accounts receivable of
$1.5 million, a change in inventory of $428 thousand and a change in costs
and earnings in excess of billings of $2.1 million.
Capital expenditures during the nine month period ended February 28, 1998
totaled approximately $1.9 million. Of this amount approximately $875
thousand was used to purchase welding and construction equipment and $360
thousand was used to purchase transportation equipment for field
operations. In the same period the Company invested approximately $621
thousand for office expansion for support of field operations. In
addition, the Company has currently budgeted approximately $1.7 million for
additional capital expenditures, primarily to be used to purchase
construction equipment, during the remainder of fiscal year 1998. The
Company expects to be able to finance any such expenditures with available
working capital.
The Company believes that its existing funds, amounts available for
borrowing under its credit facility, and cash generated by operations will
be sufficient to meet the Company's working capital needs at least through
fiscal 1998 and possibly thereafter unless significant expansions of
operations not now planned are undertaken, in which case the Company
anticipates it would arrange additional financing as a part of any such
expansion.
PART II
OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K:
A. Exhibit 10.1 - Third Amendment to Credit Agreement
B. Exhibit 10.2 - Interest Rate Swap
C. Exhibit 11 - Computation of earnings per share.
D. Reports on Form 8-K:
1. The Company filed a Form 8-K, dated December 16, 1997, reporting that
on December 16, 1997 the Company entered into a Plan and Agreement
of Merger by and among the Company, ITEQ Sub. Corp. and ITEQ, Inc.
2. The Company filed a Form 8-K dated January 19, 1998, reporting that
on January 19, 1998 the Company and ITEQ, Inc. entered into an
agreement whereby the companies have mutually agreed to terminate
the Plan and Agreement of Merger Agreement dated December 16, 1997.
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MATRIX SERVICE COMPANY
Date: April 14, 1998
By: /s/C. William Lee
------------------
C. William Lee
Vice President-Finance
Chief Financial Officer
Signing on behalf of the registrant and
as the registrant's chief financial officer.