Matrix Service Reports 16% Revenue Decline, Widened Losses in Q3 2024

MATRIX SERVICE CO reported a decline in financial performance for the three months ended September 30, 2024, with total revenue of $165.6 million, down 16% from $197.7 million in the same period of 2023. This decrease was primarily attributed to the completion of a significant renewable diesel project, which impacted the Process and Industrial Facilities segment, where revenues fell by 58% to $31.4 million. Conversely, the Utility and Power Infrastructure segment saw a notable increase in revenue, rising 73% to $55.9 million, driven by higher volumes in LNG peak shaving projects.

Gross profit for the quarter also decreased, totaling $7.8 million compared to $11.9 million in the prior year, reflecting a gross margin decline from 6.0% to 4.7%. The operating loss widened to $(10.8) million, up from $(5.3) million in the previous year, while the net loss increased significantly to $(9.2) million from $(3.2) million, resulting in a basic loss per share of $(0.33), compared to $(0.12) in the same quarter of 2023.

The company’s liquidity position improved, with cash and cash equivalents rising to $124.6 million as of September 30, 2024, up from $115.6 million at the end of the previous quarter. Total current assets also increased to $308.9 million, while total liabilities rose to $313.6 million, up from $287.2 million. Retained earnings decreased to $24.7 million from $33.9 million, and total stockholders' equity fell to $156.5 million from $164.2 million.

MATRIX Service operates through three segments: Storage and Terminal Solutions, Utility and Power Infrastructure, and Process and Industrial Facilities. The Storage and Terminal Solutions segment reported revenues of $78.2 million, a decrease of 13% due to reduced volume in flat bottom tank projects. The company’s backlog remains strong at approximately $1.4 billion, with a trailing twelve-month book-to-bill ratio of 1.1x, indicating a robust pipeline of projects.

Strategically, the company sold a facility in Burlington, Ontario, generating net proceeds of $2.7 million and a gain of $2.5 million. The company continues to maintain compliance with its asset-based credit agreement, which has a maximum loan amount of $90 million and requires a minimum of $25 million in restricted cash. As of September 30, 2024, the borrowing base under this facility was $61.4 million, with $4.8 million in letters of credit outstanding.