Earnings Results Analysis: Matrix Service Company (NASDAQ: MTRX)

On Tuesday, Shares of Matrix Service Company (NASDAQ: MTRX) inclined 2.31% to $20.79. The stock opened its trade at $20.31 and after floating in a price range of $20.15 to $21.06; the stock grabbed the investor’s attention and traded 93,597 shares as compared to its average daily volume of 195.12K shares. The stock’s institutional ownership stands at 94.00%.

Matrix Service Company (MTRX) recently stated its financial results for the fourth quarter and year ended June 30, 2018.

Fourth Quarter Fiscal 2018 Results:

Revenue for the fourth quarter ended June 30, 2018 was $293.10M contrast to $291.80M in the same quarter a year earlier.  On a segment basis, revenue increased $34.70M and $17.00M in the Industrial and Storage Solutions segments, respectively.  These increases were driven mainly by higher volumes of iron and steel work in the Industrial segment and higher volumes of tank construction work in the Storage Solutions segment. These increases were mostly offset by a decrease of $47.40M in the Electrical Infrastructure segment because of a reduction in power generation capital construction work and lower high voltage volumes.

Consolidated gross profit was $21.50M in the three months ended June 30, 2018 contrast to $23.10M in the three months ended June 30, 2017.  Gross margin for the fourth quarter of fiscal 2018 was 7.3% contrast to 7.9% in the same period a year earlier as both periods were influenced by lower direct margin opportunities formerly booked in a challenging market environment.

Selling, general and administrative costs were $20.60M in the fourth quarter of fiscal 2018 contrast to $19.60M in the same period a year earlier.

Fiscal 2018 Results:

Revenue for the fiscal year ended June 30, 2018 was $1.0920B contrast to $1.1980B in the same period a year earlier, a decrease of $106.00M.  On a segment basis, revenue reduced in the Storage Solutions and Electrical Infrastructure segments by $167.00M and $117.50M, respectively, which were partially offset by higher revenues in the Industrial and Oil Gas & Chemical segments of $96.30M and $82.30M, respectively.  The decrease in Storage Solutions segment revenue is mainly the result of delays in project awards during fiscal 2017 and the first half of fiscal 2018.  The decrease in Electrical Infrastructure segment revenue is because of a reduction in power generation capital construction work and lower high voltage volumes.  The increase in Industrial segment revenue is mainly attributable to improved market conditions for our iron and steel customers.  Oil Gas & Chemical segment revenue increased mainly as a result of higher construction volumes, combined with an improved turnaround and maintenance environment.

Consolidated gross profit was $91.90M in fiscal 2018 contrast to $81.00M in fiscal 2017.  Fiscal 2018 gross margin was 8.4% contrast 6.8% in fiscal 2017.  The increase in gross margin in fiscal 2018 is mainly attributable to the financial impact of a large power generation project in the Electrical Infrastructure segment in fiscal 2017 and better recovery of overhead costs in fiscal 2018.

Consolidated SG&A expenses were $84.40M in fiscal 2018 contrast to $76.10M in fiscal 2017.  The increase in fiscal 2018 is mainly attributable to overhead associated with a fiscal 2017 acquisition that expanded the Company’s engineering business, as well as higher project pursuit costs across the business.

Backlog:

The June 30, 2018 backlog balance increased $536.30M to $1.2190B, a 79% increase, as a result of strong project awards, particularly in the Storage Solutions and Industrial segments. This balance compares to $682.30M at June 30, 2017 and $914.20M at March 31, 2018.  Project awards in the three months ended June 30, 2018 totaled $597.50M contrast to $262.90M during the same period a year ago, a boost of 127.3%.  Project awards for the fiscal year ended June 30, 2018 totaled $1.6280B contrast to $1.0610B during the same period a year ago, a boost of 53.5%.

Financial Position:

At June 30, 2018, the Company has zero outstanding debt, a cash balance of $64.10M and liquidity of $137.20M.

Earnings Guidance:

The strength of our backlog and opportunity pipeline, tempered by the wind up of these projects will drive continuous improvement of our top and bottom line performance as we move through the fiscal year.  The Company anticipates fiscal 2019 revenue to be between $1.2500B and $1.3500B and earnings to be between $0.85 and $1.15 per fully diluted share.

MTRX has a market value of $557.90M while its EPS was booked as $-0.45 in the last 12 months. The stock has 26.84M shares outstanding. In the profitability analysis, the company has gross profit margin of 8.40% while net profit margin was -1.10%. Beta value of the company was 1.03; beta is used to measure riskiness of the security. Analyst recommendation for this stock stands at 2.00.

Chad Pitman

Chad Pitman

I am Chad Pitman and I focus on breaking news stories and ensuring we (“Stocks Market Cap”) offer timely reporting on some of the most recent stories released through market wires about “Emerging Stocks”. I have formerly spent over 3 years as a trader in U.S. Stock Market and is now semi-stepped down. I work on a full time basis for stocksmarketcap.com specializing in quicker moving active shares with a short term view on investment opportunities and trends.

Leave a Reply

Your email address will not be published. Required fields are marked *