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Mar 31, 2022
Matrix Service Q3 2022 Earnings Report
Reported a net loss and experienced impacts from project delays, but saw backlog and awards increase.
Key Takeaways
Matrix Service Company reported a net loss of $34.9 million, or $1.30 per fully diluted share, for the third quarter of fiscal 2022. Revenue was $177.0 million. Project awards totaled $179.7 million, resulting in a book-to-bill ratio of 1.0. Backlog increased to $594.2 million.
Project awards in the quarter totaled $179.7 million, bringing year-to-date awards to $638.7 million, an 81% increase compared to the first nine months of the prior year.
Backlog increased to $594.2 million, a 28% increase compared to the start of the fiscal year.
The company had liquidity of $86.8 million and no debt.
Third quarter revenue was $177.0 million, and the loss per fully diluted share was $1.30; adjusted loss per fully diluted share was $0.50, excluding one-time non-cash items.
Matrix Service
Matrix Service
Forward Guidance
The company expects material increases in backlog over the next two quarters as larger energy infrastructure projects are awarded, driven by the need for reliable natural gas supply and enhanced energy security.
Positive Outlook
- Near-term project pipeline should lead to material increases in backlog over the next two quarters.
- Larger energy infrastructure projects are expected to be awarded.
- Long-term need for reliable natural gas supply.
- Recent global events underscore the urgency of accelerating these projects.
- Expect projects to materialize over the next six months.
Challenges Ahead
- Revenue volume and financial performance have been impacted by delays in project starts on certain projects in backlog.
- Delays in awards of larger project work.
- Gross margin (loss) was (1.0%) in the third quarter of fiscal 2022 primarily due to under recovered overheads as well as an increase in forecasted cost on two projects won in the very competitive environment during the height of the pandemic.
- In the Storage and Terminals Solutions segment, a gross margin (loss) of (0.9%) for the quarter was primarily the result of under recovered overheads and the execution of smaller competitively priced capital projects.
- In the Process and Industrial Facilities segment, third quarter gross margin (loss) of (0.6%) was primarily due to an increase in forecasted costs to complete a midstream gas processing project.