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 November 30, 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 January 8, 1999, there were 9,638,638 shares of the Company's
common stock, $.01 par value per share, issued and 9,507,388 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 Six Months
Ended November 30 November 30
------------------ ------------------
(unaudited) (unaudited)
------------------ ------------------
1998 1997 * 1998 1997 *
------------------ ------------------
[MULTIPLIER] 1,000
Revenues $55,399 $55,630 $106,001 $103,849
Cost of revenues 50,521 50,766 96,069 93,912
-------- ------- -------- --------
Gross profit 4,878 4,864 9,932 9,937
Selling, general and
administrative expenses 3,212 2,894 6,470 5,623
Goodwill and noncompete
amortization 163 184 326 368
-------- -------- -------- --------
Operating income 1,503 1,786 3,136 3,946
Other income (expense):
Interest expense (268) (237) (645) (475)
Interest income 40 29 158 69
Other income 58 92 134 99
-------- -------- -------- --------
Income from continuing
operations before
income tax expense 1,333 1,670 2,783 3,639
Provision for federal,
state and foreign
income tax expense 310 584 923 1,302
-------- -------- -------- -------
Income from continuing
operations 1,023 1,086 1,860 2,337
Loss from discontinued
operations, net of
tax benefit of
$34,000 and $287,000
respectively - (133) - (615)
-------- -------- -------- --------
Net income $ 1,023 $ 953 $ 1,860 $1,722
======== ======= ======== =========
Earnings from continuing
operations per share
of common stock:
Basic $0.11 $0.12 $0.20 $0.25
Diluted 0.10 0.11 0.18 0.24
Earnings per share of
common stock:
Basic $0.11 $0.10 $0.20 $0.18
Diluted 0.10 0.10 0.18 0.17
Weighted average number
of common shares:
Basic 9,547,837 9,407,526 9,528,804 9,391,552
Diluted 10,240,861 9,851,254 10,262,567 9,903,443
* Certain amounts have been restated as described in Notes B & C.
<FN>
See Notes to Condensed Consolidated Financial Statements
[MULTIPLIER] 1,000
Matrix Service Company
Condensed Consolidated Balance Sheets
(in thousands)
November 30, May 31,
1998 1998
----------- ---------
(unaudited)
ASSETS:
Current assets:
Cash and cash equivalents $ 5,213 $ 2,606
Accounts receivable 40,039 37,165
Costs and estimated earnings
in excess of billings on
uncompleted contracts 13,013 15,340
Inventories 6,378 6,352
Income tax receivable 1,088 5,279
Deferred income taxes 3,010 3,252
Prepaid expenses 327 524
-------- --------
Total current assets 69,068 70,518
Property, plant and equipment at cost:
Land and buildings 16,788 16,481
Construction equipment 23,603 24,092
Transportation equipment 6,397 6,108
Furniture and fixtures 3,227 3,315
Construction in progress 1,458 973
-------- --------
51,473 50,969
Less accumulated depreciation 23,643 22,533
-------- --------
Net property, plant and equipment 27,830 28,436
Goodwill, net of accumulated
amortization of $1,779 and
$1,595 in 1999 and 1998,
respectively 12,934 13,217
Other assets 384 570
-------- --------
Total assets $110,216 $112,741
======== ========
See Notes to Condensed Consolidated Financial Statements
[MULTIPLIER] 1,000
Matrix Service Company
Condensed Consolidated Balance Sheets
(in thousands)
November 30, May 31,
1998 1998
------------ ---------
(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 6,069 $ 12,250
Billings on uncompleted contracts
in excess of costs and
estimated earning 13,661 7,612
Accrued insurance 2,295 2,369
Other accrued expenses 3,629 5,098
Income taxes payable 375 -
Current portion of long-term debt 2,101 2,105
------- -------
Total current liabilities 28,130 29,434
Long-term debt 11,064 13,106
Deferred income taxes 4,948 4,949
------- -------
Stockholders' equity:
Common stock 96 96
Additional paid-in capital 51,582 51,458
Retained earnings 16,026 14,221
Accumulated other
comprehensive income (719) (523)
------- -------
66,985 65,252
Less: Treasury stock, at cost (911) -
------- -------
Total stockholders' equity 66,074 65,252
------- -------
Total liabilities and
stockholders' equity $110,216 $112,741
======== ========
<FN>
See Notes to Condensed Consolidated Financial Statements
[MULTIPLIER] 1,000
Matrix Service Company
Condensed Consolidated Cash Flow Statements
(in thousands)
Six Months Ended
November 30
(unaudited)
1998 1997
-----------------
Cash flow from operating activities:
Net income $1,860 $1,722
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 2,488 3,037
(Gain) loss on sale of equipment (55) -
Changes in current assets and
liabilities increasing
(decreasing) cash:
Accounts receivable (2,874) 717
Costs and estimated earnings
in excess of billings on
uncompleted contracts 2,328 (254)
Inventories (26) 69
Prepaid expenses 197 (74)
Accounts payable (7,065) (2,948)
Billings on uncompleted
contracts in excess of
costs and estimated earnings 6,048 1,642
Taxes and other accruals 4,150 (4,899)
Other (37) (5)
------ ------
Net cash provided (used) by
operating activities 7,014 (993)
Cash flow from investing activities:
Capital expenditures (1,638) (1,433)
Proceeds from sale of equipment 79 50
Acquisition of subsidiary,
net of cash acquired - (4,182)
------- -------
Net cash used in investing
activities (1,559) (5,565)
Matrix Service Company
Condensed Consolidated Cash Flow Statements
(in thousands)
Six Months Ended
November 30,
(unaudited)
1998 1997
------ ------
Cash flows from financing activities:
Issuance of acquisition notes - 286
Repayment of acquisition payables (38) (281)
Repayment of equipment notes (9) (14)
Issuance oflong-term debt 3,000 10,750
Repayment of long-term debt (5,000) (6,042)
Purchase of treasury stock (985) 144
Issuance of stock 198 -
------- -------
Net cash provided (used)
in financing activities (2,834) 4,843
Effect of exchange rate
changes on cash (14) -
------- -------
Increase (decrease) in cash
and cash equivalents 2,607 (1,715)
Cash and cash equivalents at beginning
of period 2,606 1,877
------- -------
Cash and cash equivalents at end
of period $5,213 $ 162
======= =======
<FN>
See Notes to Condensed Consolidated Financial Statements
MATRIX SERVICE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
NOTE A - BASIS OF PRESENTATION
The 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 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,
1998, 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 - 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") and
discontinue to operate in the markets that Midwest had historically
participated. All assets of Midwest have been disposed of or
absorbed by other operating units. The Company abandoned this
business entirely. The cost to terminate Midwest's operations
resulted in a charge of $15.5 million, before income tax benefit of
$6.3 million, which includes the write-off of $14.6 million of
goodwill. The operating results of Midwest for the prior period is
reported as discontinued operations.
Summarized operating results of the discontinued operations are as
follows:
Three months Six months
ended ended
----------------- -----------------
November 30, November 30,
1997 1997
----------------- -----------------
(In Thousands) (In Thousands)
Revenues $6,386 $7,687
Loss from discontinued operations 133 615
Loss from discontinued operations per
share of common stock:
Basic ($.01) ($.06)
Diluted ($.01) ($.06)
NOTE C - 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.
NOTE D - REPORTING COMPREHENSIVE INCOME
As of June 1, 1998, the Company adopted Statement 130, Reporting
Comprehensive Income. Statement 130 establishes new rules for the
reporting and display of comprehensive income and its components;
however, the adoption of Statement 130 had no impact on the
Company's net income or stockholders' equity. Statement 130
requires foreign currency translation adjustments, which prior to
adoption were reported separately in stockholders' equity, to be
included in other comprehensive income. Prior period financial
statements have been reclassified to conform to the requirements of
Statement 130.
For the quarter ended November 30, 1998, total comprehensive income
was $1.1 million as compared to $899 thousand for the same period
ended November 30, 1997. For the six months ended November 30,
1998 total comprehensive income was $1.7 million as compared to
$1.6 million for the six months ended November 30, 1997. Other
comprehensive income and accumulated other comprehensive income
consisted of foreign currency translation adjustments.
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Results of Operations
Three Months Ended November 30, 1998 Compared to Three Months Ended
November 30, 1997
Revenues for the quarter ended November 30, 1998 were $55.4 million
as compared to revenues of $55.6 million for the quarter ended
November 30, 1997, representing a decrease of approximately $231
thousand. The decrease is due primarily to a reduction in water
tank business on the West Coast and a reduction in capital projects
in the Northwest. Revenues, however, were up for the repair and
maintenance business due to a strong demand for this type of work
in the market combined with the strategic alliances the Company has
formed with major petrochemical companies. The refinery turnaround
backlog for the Northwest is expected to increase because of an
increase in customer activity. Backlog Company wide at November
30, 1998 was $71.3 million as compared to $67.3 million at November
30, 1997.
Gross profit was $4.9 million for the quarter ended November 30,
1998 as well as for the same quarterly period in 1997. Gross
profit as a percentage of revenues also remained stable at 8.7% for
the two periods. For the repair and maintenance division, gross
margins strengthened considerably during the current quarter over
the same period last year. The improved margins were a result of
greater demand for this type of work and company wide strategic
alliances and partnering agreements with customers as well as
consolidation of East Coast operations. These improvements were
offset somewhat by a decrease in margins in the water tank
business. The elevated water tank market is becoming increasingly
competitive and margins have deteriorated. Although revenues were
up for the elevated water tank division for the quarter ended
November 1998 as compared to the same period last year, margins
deteriorated due to reduced margin potential in the bid process as
well as less than optimum project management. General management
has changed and new project management has been hired with improved
results anticipated in the third and fourth quarters of 1999. In
addition, the flat bottom water tank division intends to pursue the
growing markets of petrochemical tanks and stainless steel wine
tanks.
Selling, general and administrative expenses increased to $3.2
million for the quarter ended November 30, 1998 from $2.9 million
for the comparable quarter in 1997, an increase of $318 thousand or
approximately 11.0% and representing as a percentage of revenues,
an increase to 5.8% for the 1998 period from 5.2% for the 1997
period. The increase is primarily due to additional job supervisory
and technical personnel, costs related to operational software
implementation, Year 2000 compliance and the re-classification of
certain components of selling, general and administrative expenses
by a recently acquired division. These classifications were brought
into alignment with the rest of the Company effective June 1, 1998.
Operating income decreased to $1.5 million for the quarter ended
November 30, 1998 from income of $1.8 million for the comparable
quarter of the prior year, or a decrease of $283 thousand. The
decline was due to higher selling, general and administrative
expense.
Provision for income taxes for the quarter ended November 30, 1998
decreased to $310 thousand as compared to $584 thousand for the
quarter ended November 30, 1997, due to lower operating results and
an adjustment to deferred tax assets.
Income from continuing operations decreased to $1.0 million for the
current quarter from $1.1 million for the comparable quarter of the
prior year. The decrease was due principally to increased selling,
general and administrative expense offset partially by an
adjustment to deferred tax assets.
During the quarter ended February 28, 1998 the directors of the
Company approved a plan whereby the Company would discontinue the
operations of "Midwest" - See Note B to the consolidated financial
statements.
Net income for the quarter ended November 30, 1998 was $1.0 million
as compared to net income of $953 thousand for the same period
ended November 30, 1997, which included $133 thousand loss from
discontinued operations.
Six Months Ended November 30, 1998 Compared to Six Months Ended
November 30, 1997
Revenues for the six months ended November 30, 1998 were $106.0
million as compared to revenues of $103.8 million for the six
months ended November 30, 1997, an increase of approximately $2.2
million. Increased revenues from repair and maintenance nationwide
and refinery turnaround work in the Northwest were partially offset
by a decline in capital project work in the Northwest and the water
tank business on the West Coast.
Gross profit was $9.9 million for the six months ended November 30,
1998 as well as for the same six months ended November 30, 1997.
Gross profit as a percentage of revenues was 9.4% for the current
six months as compared to 9.6% for the same six months ended
November 30, 1997. Gross margins declined primarily due to a
major weakness in elevated and flat bottom water tanks due to
intensified competition and less than optimum project management,
offset somewhat by significant strength in margins on tank repair
and maintenance and refinery turnaround work.
Selling, general and administrative expenses increased to $6.5
million for the six months ended November 30, 1998 from expenses of
$5.6 million for the six months ended November 30, 1997, an
increase of $847 thousand or approximately 15.1% over the prior
period. As a percentage of revenues, selling, general and
administrative expenses increased to 6.1% for the 1998 period from
5.4% for the 1997 period. The increase is primarily due to
additional job supervisory and technical personnel, costs related
to operational software implementation, Year 2000 compliance and
the re-classification of certain components of selling, general and
administrative expenses by a recently acquired division. These
classifications were brought into alignment with the rest of the
Company effective June 1, 1998.
Operating income decreased to $3.1 million for the six months ended
November 30, 1998 from income of $3.9 million for the same period
ended November 30, 1998, or a decrease of $810 thousand. The
decline was due to higher selling, general and administrative
expense and slightly lower gross margins.
Provision for income taxes for the six months ended November 30,
1998 decreased to $923 thousand as compared to $1.3 million for the
same period ended November 30, 1997. The decrease of $379 thousand
is due to lower income and an adjustment to deferred tax assets.
Income from continuing operations decreased to $1.9 million for the
six months ended November 30, 1998 from net income of $2.3 million
for the comparable period in 1997. The decrease of $477 thousand
was due principally to lower operating income as discussed above.
Net income for the six months ended November 30, 1998 increased to
$1.9 million from $1.7 million for the same period ended November
30, 1997. The increase was due to the loss recorded for the six
months ended November 30, 1997 related to discontinued operations.
Liquidity and Capital Resources
The Company has financed its operations recently with cash
generated by operations and advances under the Company's credit
facility. The Company has a credit facility, amended and restated
October 22, 1998, with a commercial bank under which the Company
may borrow a total of $30.0 million. The Company may borrow up to
$20 million under a revolving credit agreement based on the level
of the Company's eligible receivables. The agreement provides for
interest at the Prime Rate or a LIBOR based option, and matures on
October 31, 2000. At November 30, 1998, the interest rate was 6.3%
and the outstanding advances under the revolver totaled $4.5
million. The original credit facility also provided for a term
loan up to $10 million. On March 1, 1998, a term loan in the
original amount of $10.0 million was made to the Company and was
due on February 28, 2003 and was to be repaid in 60 equal payments
that began on March 1, 1998. The amended agreement term loan
amount is restated at $8.8 with the repayment schedule and due date
remaining the same per the original agreement. The term loan is at
a fixed rate of 7.5% established in an interest rate swap agreement
entered into with the bank on February 1, 1998. The outstanding
balance of the term loan at November 30, 1998 was $8.5 million.
Operations of the Company provided $7.0 million of cash for the
three months ended November 30, 1998 as compared with cash used by
operations of $993 thousand for the three months ended November 30,
1997, representing an increase of approximately $8.0 million. The
increase was due to an increase in costs in excess of billings of
$2.6 million, an increase in billings in excess of costs of $4.4
million, an increase in tax and other accruals of $9.0 million
offset by decrease in accounts receivable of $3.6 million and a
decrease in accounts payable of $4.1 million. The decrease in
accounts payable is in part due to a change in Company policy of
paying suppliers somewhat earlier to help negotiate better pricing
with the Company vendors.
Capital expenditures during the three-month period ended November
30, 1998 totaled approximately $1.6 million. Of this amount, $424
thousand was used to purchase trucks for field operations and $691
thousand was used to purchase welding, construction and fabrication
equipment. The Company also invested $523 thousand in computer
equipment for operations and automated drafting. The Company has
budgeted approximately $4.5 million for the remainder of fiscal
1999 for capital expenditures including a new enterprise-wide
management information system.
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 1999 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.
Other
Year 2000 Impact
The Year 2000 issue creates a significant problem with business
automation for businesses, government agencies, and all computer
users. A significant number of applications in use today use two
digit years and can fail between now and January 1, 2000.
State of Readiness. The Company is sensitive to the growing concern
associated with the inception of the new millennium and its impact
on the business marketplace. In an effort to retain its ability to
provide on-going quality products and services to its customers,
the Company is actively pursuing Year 2000 compliance for all of
its computer systems.
Assessment. The Company has completed its inventory and assessment
efforts, which included a comprehensive review of its business
systems. The assessment focused on the identification of automated
business areas and electronic processes.
Based on assessment results, the Company has determined that it
will be required to modify, upgrade or replace only a limited
number of its systems so that its business areas will function
properly with respect to dates in the year 2000 and thereafter.
The Company estimates the impact of Year 2000 issues on non-IT
Systems to have no material impact on the operations of the
business. Non-IT Systems include systems with embedded technology
containing programmed instructions running via processor chips.
Project Timetable. The Company believes that with the planned
modifications to existing software and conversions to new software,
the Year 2000 issue will not pose significant operation problems
for its computer systems.
The Company has minimal third party interface systems; however,
communications have been initiated with significant suppliers and
large customers to determine the extent to which the Company's
systems are vulnerable to those third parties' failure to remediate
their own Year 2000 issues.
The Company has completed its inventory and assessment activities.
Of the systems identified more than 50% have been remedied and
implemented into the production environment. The Company expects
that the remaining systems will be upgraded, tested and implemented
by the fourth quarter of fiscal 1999, which is prior to any
anticipated impact on its operating systems.
Anticipated Cost. The anticipated costs of the Year 2000 project
has been estimated at $200 thousand, of which approximately 40%
will be capitalized. The remaining 60% is being expensed as
incurred and is not expected to have a material effect on the
results of operations. Any non-compliant hardware is dated and
would ordinarily be scheduled for replacement.
Contingency Plans. Despite the best planning and execution efforts,
the Company is working from the premise that some issues will not
be uncovered, and that some issues that are uncovered will not be
successfully resolved. In an effort to manage and mitigate this
risk exposure, the Company has developed a risk management and
contingency plan for its critical operations.
In addition to the Company's remediation strategy, a new
enterprise-wide management information system has been purchased as
a replacement for the core financial and operational systems. The
project is scheduled to begin during the third quarter of fiscal
1999 and has an estimated duration of nine months. The scope of
this project has been maintained separately and independent of the
Year 2000 efforts. If the existing remediation strategy fails,
this project could be escalated to mitigate any material business
disruptions.
While the Company believes its efforts are adequate to address its
Year 2000 issues, there can be no guarantee that all Year 2000
issues will be anticipated and corrected and that the systems of
other companies on which the Company's systems and operations rely
will be converted on a timely basis; failure of all significant
Year 2000 issues to be corrected could have a material adverse
effect on the Company.
Certain Factors Influencing Results and Accuracy of Forward-Looking
Statements
This Quarterly Report contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933.
Discussions containing such forward-looking statements may be found
in the material set forth under "Business" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," as well as within the Quarterly Report generally. In
addition, when used in this Quarterly Report, the words "believes",
"anticipates", "expects" and similar expressions are intended to
identify forward-looking statements.
In the normal course of its business, the Company, in an effort to
help keep it stockholders and the public informed about the
Company's operations, may from time to time issue certain
statements, either in writing or orally, that contain or may
contain forward-looking information. Generally, these statements
relate to business plans or strategies, projected or anticipated
benefits or other consequences of such plans or strategies, or
projections involving anticipated revenues, earnings or other
aspects of operating results. Such forward-looking statements are
subject to a number of risks and uncertainties. As noted elsewhere
in this Quarterly Report and the Annual Report (10K) for the year
ended May 31, 1998, all phases of the Company's operations are
subject to a number of uncertainties, risks and other influences,
many of which are beyond the control of the Company, and any one of
which, or a combination of which, could materially affect the
results of the Company's operations and whether forward-looking
statements made by the Company ultimately prove to be accurate.
Fluctuations in Quarterly Results. The operating results of
hydrocarbon process services may be subject to significant
quarterly fluctuations, affected primarily by the timing of planned
maintenance projects at customers' facilities. Generally, the
Company's turnaround projects are undertaken in two primary
periods-February through May and September through November-when
refineries typically shut down certain operating units to make
changes to adjust to seasonal shifts in product demand. As a
result, the Company's quarterly operating results can fluctuate
materially. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations of the Company."
PART II
OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders:
The Company's annual meeting of stockholders was held in Tulsa,
Oklahoma at 10:00 a.m. local time, on Wednesday, October 28, 1998.
Proxies for the meeting were solicited pursuant to Regulation 14
under the Securities Exchange Act of 1934, as amended. There was
no solicitation in opposition to the nominees for election as
directors as listed in the proxy statement, and all nominees were
elected.
Out of a total of 9,571,638 shares of the Company's common stock
outstanding and entitled to vote, 9,166,208 shares were present at
the meeting in person or by proxy, representing approximately 95.4
percent. Matters voted upon at the meeting were as follows:
Election of six directors to serve on the Company's board of
directors. Messrs. Rinehart, Lee, Bradley, Peterson, Wood and Zink
were elected to serve until the 1999 Annual Meeting. The vote
tabulation with respect to each nominee was as follows:
Nominee For Authority Withheld
- -----------------------------------------------------------
Martin L. Rinehart 9,139,984 26,224
C. William Lee 9,140,084 26,124
Hugh E. Bradley 9,133,684 32,524
Robert A. Peterson 9,133,534 32,674
William P. Wood 9,140,084 26,124
John S. Zink 9,139,984 26,224
There were 9,151,359 shares voted for the ratification of the
appointment of Ernst & Young LLP as the Company's independent
public accountants, with 9,199 shares voted against, 5,650
abstentions, and zero broker non-votes.
ITEM 6. Exhibits and Reports on Form 8-K:
Exhibit 10 - Fourth Amendment to Credit Agreement, dated October
22, 1998, by and among the Company and its subsidiaries, and Bank
One, Oklahoma, N. A.
Exhibit 11 - Computation of earnings per share.
Exhibit 27 - Financial Data Schedule.
Reports on Form 8-K: None
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: January 11, 1999
By: /s/Michael J. Hall
--------------------
Michael J. Hall
Vice President-Finance
Chief Financial Officer