MTRX - Earnings call transcript Q1 2025

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Operator

Good morning, and welcome to the Matrix Service Company Conference Call to discuss results for the first quarter of fiscal 2025. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to today's host, Ms. Kellie Smythe, Senior Director of Investor Relations for Matrix Service Company.

Kellie Smythe

Thank you, Stephen. to Company's welcome XXXX Quarter and Call. Earnings morning, Matrix First Service Fiscal Good call Hewitt, Chief include Executive today's on Participants John Kevin Vice Officer; President Cavanah, President Officer. and Financial and Chief and under referred materials Relations webcast be the during The Events matrixservicecompany.com. presentation on to Presentations of today the can found section Investor

of today's Litigation forward-looking may and reminder, make Act Matrix for As statements prospects about the Company remarks Securities on Service a constitute the various of XXXX. call, we that Reform for purposes plans Private future expectations,

in results forward-looking the may and made filings conversation most XX-K factors the reconciliations we corporate extent discussed differ investor by website. to to Relations Actual me I Form opportunities, materially periodic press from measures, various website. contact To our subsequent will our statements Related have releases, be including management, like by on Investor would utilize indicated non-GAAP those to the in recent Service these SEC on in Company provided various annual you company a report if because you with of access and SEC. invite with those Matrix filings the through

the news You up sign to code receive scanning may the QR MTRX on also screen. by

markets, Matrix, believe now we of and is all in -- Turning do. work our the workplace achievable. And moment. our we to at safety environments At challenging work culture is safety the forefront while we

also beyond and extends remember in occupational employee business, the markets safety to employees rise mindful we end safety we workloads important improve, the also just headcounts that far us. those of around our more of than safety. nothing have our our seen It's and that As be important must health and is the fact increase,

concerns. any any regardless sure that or safe and background feel up every of on safety be ideas form people safe unwavering instance, of It to harassment has about focus means or around issues speaking In our discrimination sharing are and from us making noise.

we look and all we make fiscal the over loved In for difference. much make coworkers community. we a as to make your I the and can to forward a safety stronger XXXX, turn so, impact. can choices an do call you yourself, own your ones, must So John individual the now. remember doing Please

John Hewitt

Kellie, you, morning, and good Thank everyone.

As our strong communicated a degree call, fiscal last of billion, beyond. began the and with providing into current on visibility backlog with we year of $X.X us XXXX

We in large start began well summer expected of the capital fiscal year to project up the as comparatively the our a And renewable slow diesel XXXX. as months a work. large of current completion to impact ramp we have due as to

move quarter we expectations. project first results fiscal reflect as the our to execution, first backlog revenue and backlog we to quarter, strong increase expect On our Our maintaining of conversion those exited XXXX. near-record through

and improves, and improved accelerates conversion realize absorption, revenue we will margins. backlog fixed cost As operating leverage

anticipate to The sheet profitability return consistent XXXX. cash with disciplined balance strong, to continue and borrowing management. We a remains company's position to our approach in fiscal

toward approach specialty our on operating value returns-driven Matrix business. foundation long-term Our focus a engineering strategic we for the and as opportunities, model allocation. this capital is lean higher-margin construction and for chapter enter This next focus provides creation

the the that starts, multiple election, awards timing project can and regulatory the current timing and and affect environment customer variables legislative of remain there of including the decisions. Overall, presidential investment

to backlog revenue XX%. and guidance are reaffirming million and fiscal of our pipeline, XX% year-over-year is which of at $XXX XXXX our strength the between a opportunity increase for both Given $XXX we million,

megatrends key for driving our forward, advantages long-term significant services Looking overall the growth strategy. demand provide and our the support

infrastructure. ammonia and demand terminal increasing LNG, and storage continue for teams Our robust to see NGL

and meeting and including a carbon reliability initiatives, feedstocks. resilience, aimed all supply global retrofits, growing for supporting at expansions, greenfield encompasses facilities, enhancing the of assurance demand demand and system This variety lower projects, ensuring low-cost upgrades energy

in basis. for electric During for specialty will to awarded in in by the -- global markets on AI, as upgraded of centers, storage industrial and the were a and engineering LPG to Delaware data the of electrification as with and tank demand construction over contractor, coming mix client provide service The service onshoring a supports manufacturing ammonia facilities of and project completed advanced quarter, tank, vessel XXXX, surge when power in everything, and another decade. River we well partnership support opportunities Partners. diverse This Matrix

our work, and growth geographies. construction short-haul traditional which distribution create which electrical but opportunities and and industrial and all beyond only our electrical traditional transmission includes services, clients also First, substations not interconnects,

Second, applied our be of backup the facilities. construction peaking legacy experience can generating in to gas-fired baseload, and generation

balance vessel and of backup is Third, provides the from clearly specialty as and ammonia shaving market-leading fuel project LNG, peak plant use storage with and of capability competition. for differentiated our opportunities Matrix us where the hydrogen

known is our All represented strong approximately demands these in billion. the of remains expertise which pipeline, and for $X enterprise-wide substantial opportunity which at are Matrix require

a Given quarter-to-quarter, of the book-to-bill [ basis. this continue while or book-to-bill trend strength our an of X.X vary expect annual ratio at to ] may pipeline, we greater on

Once and into activities and many smaller long-term many business the capital pursuing visibility projects will we XX- key within awarded, an for parts many to and frame of under to foundation leveraging individual opportunities role lay reminder, are awarded of and maintenance time not that are agreements does the next continued to currently providing bid the XX projects play a SG&A be XX require of complete a expected This costs. include the As to master XX-month construction and overhead revenue. in contracts performed months. these service

increasing and is consistent long-term This financial on long-term guidance, our which includes on turn with backlog to over XXXX year, the clients. plant we fiscal and for with based strong exceptional we note our of year profitability facility focus where execution, including relationships are started creation services, and to messed quality building I'll that, on seeing a record In a focus our our all and project and an Kevin. opportunity levels, turnarounds maintenance shareholders. interest call value With summary, reputation return with we this are fiscal the for our for near area our too on maintaining process safety

Kevin Cavanah

you, Thank John.

diesel of of went perspective. XXXX. XXXX, to year challenging quarter and balance million anticipated the sheet in was for fiscal a which lower mainly completion million about $XXX.X renewable prior first of Revenue backlog made an the compared we due the results, as first year in fiscal the quarter a large from operating comparison. of The $XXX.X This project is as to

declined the to Excluding compared X% year period. this revenue prior when project,

major trend revenue quarters. increasing We expect as capital over next this few the provide to reverse project our itself

XXXX, and volumes revenue and quarter work the bottom in quarter Solutions and maintenance the Utility first of work, from $XX.X shaving LNG large the million quarter XX% Power renewable peak $XX.X fiscal in fiscal million first our with to million over revenue XXXX. compared offset Facilities Process resulting volumes project fiscal from in the a segment quarter due and vessel partially was revenue first Storage in the XXXX compared projects. of first work Industrial segment And in quarter. million A revenue newbuild $XX.X reached tank to first by repair to diesel decline flat of XXXX, to $XX.X first reduced Terminal of million year-over-year in associated $XX.X was quarter in increased X-year compared first increases storage higher in million fiscal quarter for in of and in of projects. the XXXX, segment and fourth Infrastructure LNG specialty of completion to XXXX $XX.X benefiting of the significant fiscal fiscal quarter

temporary given X% fiscal is was in first million funnel. fiscal strong believes the Consolidated quarter The or our and compared of to XXXX opportunity in the first reduction or company $X.X gross million this margin $XX.X of XXXX. backlog X.X% quarter

project costs. the over the the heavy revenue gross of overhead a environment been have all remains for in and by lower in While basis proposal segments enterprise by growth points revenue. of The created to was anticipated as impact impacted construction negatively strong Construction X market under-recovery XXX the were our resources execution quarterly overhead each result demand. of support structured strong margins the segments,

fiscal We expected in overhead fiscal strong structure. business. new negative the XXXX efficient throughout were compared The company the remain as increases cost expenses revenue project of continued The utilization of to to and quarter continues in of focused in XXXX. is SG&A support the quarter-over-quarter our structure, construction leverage growth and $XX.X first overhead million its quarter talent first $XX.X million to diminish market high-quality execution year. on demand impact investing to in the also the and while cost existing

a $X.XX to first for quarter million $X.XX loss net company net per fiscal loss $X.X or of XXXX. the the of a of fiscal of first or the million $X.X compared XXXX, had adjusted an share For quarter share

at the $X.X XX-month billion, continued in quarter X.X. The ratio the in in near book-to-bill at a remained and trailing levels X.X. due record project totaled the part $XXX in of backlog. consolidated quarter, discuss segment million first let's quarter, Internal awards to storage Now company's in resulted strength ending Solutions fiscal book-to-bill the backlog XXXX first a of of for

renewed refinery This at years. backlog a than site for where from year a recently also contract been teams X-year more Northwestern on revenue first our includes XX have

coming Industrial related solidifies on-site and our producing previously in long-term our services focused projects construction segment, additional energy It also to years. sustainable fuel. this on refinery's benefits the capital fiscal position which customer had XXXX, While the maintenance reduced turnaround provides opportunities demand contract, labor with and aviation matrix sustainable for refinery this Process program Facilities for

this earlier, overhead SG&A to mentioned the As role play and and John of key MSAs us like individual and costs. a contracts importance allowing construction leverage

our in from balance We sheet our quarter cash quarter, the million in million. and balance operations, increasing position. and the $XXX liquidity remained generated to strong $XX $XXX million a end to liquidity cash Exiting

remains Our at debt position X.

financial continue progress manage revenue we needed support fiscal XXXX. the liquidity will anticipate we strength as positive sheet, have inflection We and the proactively through to to balance

capital minimizing to We return also one on approach maximize business while disciplined time risk. over utilized our capital seeks that allocation, invested a to

take on outlook. to I Finally, a to expand minute our want

$XXX As $XXX revenue million. John mentioned, guidance we our are of to maintaining million

and greenfield continue strong as fiscal variety Terminal to through LNG by is quarter of and Power Infrastructure, through In as load driven funnel. Solutions, facilities, as Utility the projects primarily XXXX reliability, generation of XXXX, we shaving opportunity already expect in backlog move prioritize storage each as upgrades growth trend as activity and and continue terminal in we retrofits. fiscal and to growth. expect revenue expansions, peak power including remainder and a investment increase infrastructure projects, by resilience In LNG, well and encompasses move driven to This mentioned, as ammonia John Storage customers the the and by we driven NGL we projects

and consolidated in revenue, year our already leverage long-term in overhead backlog opportunities. projects as of include The combined This with in also achievement increasing manufacturing benefit excellence we projects allow Process demand second our construction progress from on make industrial AI, continue And advanced to and and expect the project to cost execution segment mix centers, profitability to our in end will towards pursue and power of support we improve targets. markets capture the reshoring. begin the facilities, for structures year, to work financial for season, of and to and that significant diverse on the half turnaround primarily Industrial enter focus will fiscal a improvement SG&A in the and us additional return continued data

questions. This will for prepared open and concludes our remarks, we now

Operator

John question first comes of Sidoti. Franzreb Our Instructions] from of the line [Operator

John Franzreb

tracking? I'd like unusual you to utility especially surprised, quarter. got when with lower but compared in the was Was I that the the business. to revenue guess, anything the little in business, quarter I there a fourth start the

Kevin Cavanah

from quarter. those think first point year. underway, -- this kind expect forward, it revenues segment, the are really in on really rest the quarter-over-quarter down In for no, a And be it's of are around the would -- projects bit think projects and little that. of would we the Utility But we we new I there that timing increasing a starting trend thought the I of

John Franzreb

noticeable a you also just And the that jumped close QX. by Can a quarter, line touch SG&A versus Okay. $XX.X in up to million amount, on $XX bit? million the on sequentially

Kevin Cavanah

Yes.

we do So cost really the around support would the what additions only structure cost overall, we structure are need to try I to continue expect to will be to manage to growth. going to think that. The

was related first So have add of The which which of when to to which our is a quarter quarter, fourth price you resources. the we is stock at primarily LTI, compensation, look tied compensation, incentive lot to didn't stock. difference the the to long-term

million That was I first expectation rest my about $XX based the in to price be increased our compensation would So the when to primary be on driver. quarter increase thinking it's the expect year. the of that fourth our we're quarter, stock from expense. know for range, that going the SG&A, I'd everything

John Franzreb

along I what's recall, where I John, small it is improving. your going think that is Can remarks, price to that? prepared maybe in talk demand an from what just on project the Maybe you And small of it most competitive? something was overview projects was there? Because just lines

John Hewitt

Yes.

maintenance the I at I project think we increasing the I a level. do, we don't we're -- demand think just do that demand work know stable is the that work the work necessarily in smaller there. general,

their we're in of with we through some think is X our here I things demand while refiners contract maintenance we're And and the some fiscal 'XX, that refinery work. suppliers. changes trying of to some and message going had lower those

that now. through We're

the little And visibility, for specifically little that weekly, not into, in business that from on as better well, maintenance a we so on has basis. we to we've basis a but noted, be maintenance monthly got better refinery opportunities expect on work this visibility that see clients our carry capital only to to a activity with and Kevin add X some I as had of a them think long-term year, will stabilized

John Franzreb

question, queue. And Understood. get in it. X I'll the Got last just back

of the a would thoughts and both and it your the thoughts administration. as the Just negative, It your to general on hear takes, be basis. in see changeover positive you go-forward nice puts about

John Hewitt

Yes.

from trade perspective. the about they're says what each difficult the probably that global My and look do, change will think for side what net be it's economically planning us a to handicap sense a between administrations perspective. to in is from business I positive

Reduction go be reduced on will and of hydrogen laws. be in infrastructure environment to the happen be perspective for up Inflation that's how a to tax which investment. that our Act, to going projects -- from opinion, lot think think, to tax supports a targeting seen it's I to the my yet related legislative ends whole IRA, yet where going And clients, what's more renewable good and for opportunities seen, up I a regulatory the on related probably tax to opening

the would And projects on sense waiting be a markets. there'll lot give across the immediate a my us for will I FERC that for our have happen. LNG of the So got new But queue for canceling take be of in think and that of be of impact export. been we've pause permits sort to couple and for lingering

expect we That the And so first on canceled. the X soon after that things gets be inauguration. will soon the of

think we be on would so a good long-term a that And basis thing.

good think drives I is backlog again, awards that that our timing us. for from always -- long-term a So something but will be and basis,

Operator

from the of Thielman question of Davidson. comes next Our line Brent D.A.

Brent Thielman

I little to hesitation is revenue I maybe there's forward stronger just guess was moving a little Or little of is of the book And I wasn't a kind in especially if simply just given bit things John, lower a was guess here? there due burn election? this it just surprise timing levels. to to quarter, wondering

John Hewitt

quarter. more couple it's first got anticipated X likely Yes. We've I got going that to cycle. bigger so the be award mean, of the create of second projects. of to more quarter but timing. a least the had momentum hit We lot projects quarterly those in in We've at ones on, a now

we're relates think mixed is as And whole election timing to a of that the said, to cycle, couple -- to that agnostic with. what of clients happens. pretty waiting live kind so -- the I clients, of And other kind to and yes, were business had timing we of around opinions our this other But the whoever awards a specifically that's we the of just from some extent, see from -- want well, some standpoint. it

think. hard got reflected So would little be sure I'm decision-making, of to some to I it's the say. in a bit

Brent Thielman

look, would mean, just I in is which year, contemplated for And here, the guess, expecting start which of the what revenue you're great. context you're Understood. Yes. retaining, I be given seemingly full

in can here. of to you there this projecting of ramp terms big that is speak you're progress think anything sort I else

You're can I some kind just projects Kevin, that around and up, to think confidence picking be giving relay John see on helpful you really of there, I think, starting or range. more would anything

John Hewitt

Yes.

of we up us. hold those up -- major permitting at our had capital to from permitting notice trying get handicap start issues to with lot I projects issues completed, point, proceed were that would they some they that So were to tied where and than we some think then a while -- this full would clients that had our sooner was of

So working to into on longer the sites job while and procurement, had getting we than expected. -- delayed engineering the certainly we are on was

positive resolved more And couple of so in this -- next so X was lot I the projects. those the we in year out a the over as have on years the that quarter quarter certainly about up to clarity of the of of probably X and think got now work look ability we things our that the ramp

And ability most much us, that the revenues, part, a so the holding things I chunks big for role drive in higher of the pretty out get way. that going there, the for our think really to of backlog to our up we're are

to quarters year here fiscal of see why And the so through a XXXX. better you're through we that's in frankly, this course feel the revenues consistent and, about going increase into succeeding

support see going a of more also increased a That's is And we're on based which opportunities that, we've that's normal our pipeline. that's of to segments. all book seeing work also revenues. got for again, support business, top strong thing, more on going We timing our there. to And opportunity to across what but

Brent Thielman

X John, maybe just more. Okay.

any with yes, lifted and but still I results, things consensus lot You moratorium I there much might you did that's you think to of guess going opportunity there here speak the a in other frame is certainly, that terminals, there? how work things up pursuing predict happen. a tied to election to on to LNG try you're to of that being out that be relative to way maybe have some

John Hewitt

From a on hundred long dollars' basis, I be opportunity the -- a of us there's a a perspective, for worth couple term could more. from on an quite basis, of probably think near-term near-term work bit million

export terminals, these around projects storage So LNG to as larger-scale tank. those in we've consistently our role is the be said going

projects to start, job they providing those get disciplined sites, we and to larger be some get as expect for could work or those that whether maybe EPC on whatever. contractors would work to potentially, funded for structural storage released so the in cases, be work other some of pricing And mechanical and the or

of think I So I opportunity, grow it's a in released, projects hundred pipeline. couple think will said, opportunity as I the the million for us get bucks. But near-term our those like maybe

Operator

Our back next John question, we'll Franzreb Sidoti. welcome with

John Franzreb

you your wind other the touching side and to a it's Yes. solar the exposure markets? I guess renewable little talk worth argument the bit flip of and on just about here. Could

John Hewitt

direct Yes. any to We and solar. exposure have wind really don't

solar I mean installing is current that we're in in by backlog or our material So or opportunity were what putting there's in wind farms. we're pipeline turbines not our -- nothing that

some 'XX and So through we renewable a in generation, that right? we some So the was the exposure there's pretty electrical And 'XX. said, probably work fuels, sizable there's we completed like do that's the -- renewable so but -- in Northeast. indirect of project

looking -- create that production those think can't turnaround of with opportunity that but we've set got of pipeline. those we find opportunities what in fuel provide and on And I our are our sustainable we and have fuels. some create a to renewable it the some in volume clients fuels an refinery to ways of to of are I other speak but is to services where is, and the or renewable involvement clients aviation around of that more basis opportunity some lines maintenance

it work your that I a fuels, I sense have sustainable and don't aviation in the And doesn't. that administration know effect we renewable have think in will going is we that market standpoint, the us sense change change. think my X question from see opportunities probably of And a that does role fuels to where to So there. I the at? for is, I that's part

John Franzreb

reallocated of revenues as you to ramp some just Got projects personnel execute? the I that staffing think some to able as some it. does look you I'm be are And businesses. of Or overhead? Do to kind the that add start about what you from up. curious going you'd to process to levels need? recognize How to other have have you But

John Hewitt

Yes.

been our up the see in our the from to execute opportunity to the sure they resources projects construction has overhead the in taken we've but opportunities perspective, those or an we not that organization we've months go our and either jobs. the booked is we focus to opportunity add of directly and the in pipeline, work, overhead talent XX as got ramp last lot only main here So we've as to are taken over make some on as the in costs there we and a execution future

And been or so construction need. finding than which but it that smarter project is managers normal. market cost resources has would are is historically, we or we schedulers, people are those I say or engineers, the the engineers disciplined whether tighter

Operator

it to to Instructions] Kellie Smythe questions I'm I for would time. [Operator showing now this turn remarks. no at further like closing back

Kellie Smythe

you. Thank

website. to Matrix As Relations a conversation management, me Company you'd a have if Service reminder, Investor with like through please contact

to much sign the screen. MTRx You up time. for also may the news Thank your on very by scanning code receive your QR you

Operator

Thank in the does you program. participation conference. conclude for This your today's

now may You disconnect.

Matrix Service (MTRX) 7 Nov 242025 Q1 Earnings call transcript