Matrix Service Company (Nasdaq: MTRX) today
reported its financial results for the fourth quarter and year
ended June 30, 2020.
“Matrix is in a strong financial position to
weather continued market challenges, take advantage of growth
opportunities, expand existing services, and enter new end-markets
to meet the evolving business needs of our clients and
communities,” said John R. Hewitt, President and Chief Executive
Officer. “In response to the extreme market conditions of
fiscal 2020, we reduced our cost structure to fit near-term revenue
opportunities without hindering our ability to provide the highest
quality of service now and as market recovery occurs. I am
confident we have taken the right actions to position Matrix to
deliver improving results as market conditions
normalize.”
Update on Company Response to COVID-19
Pandemic
Throughout the course of the COVID-19 pandemic,
the Company's top priority has been to maintain a safe working
environment for all employees, customers and business
partners. Our project teams, in coordination with our
clients, continue to operate under new and enhanced work processes
to integrate guidance from governmental agencies and leading health
organizations to protect the health and safety of everyone on our
job sites while maintaining productivity.
Due to the continuing uncertainty regarding the
current and longer-term economic impacts from the COVID-19
pandemic, the Company undertook a business restructuring and
recovery plan, which was balanced between the need to support
near-term revenue expectations and our long-term view of the
business opportunities. We successfully completed these actions
during the fourth quarter of fiscal 2020 which we expect will save
approximately $45 million in annual overhead costs, make us more
competitive in the marketplace, and help preserve liquidity.
Fourth Quarter Fiscal 2020
Results
Consolidated
Revenue for the fourth quarter ended June 30,
2020 was $195.8 million compared to $398.7 million in the same
period in the prior year. On a segment basis, revenue
decreased by $105.1 million, $40.4 million, $31.0 million and $26.4
million in the Industrial, Oil Gas & Chemical, Electrical
Infrastructure and Storage Solutions segments, respectively.
Consolidated gross profit was $19.2 million for
the fourth quarter of 2020 compared to $43.7 million for the same
period in the prior year. Gross margin for the fourth quarter
of 2020 was 9.8% compared to 11.0% in the same period a year
ago. While project execution in all four operating segments
was strong during the fourth quarter of 2020, gross margin was
negatively impacted in each segment by under recovery of
construction overhead costs due to the sudden reduction in revenue
volumes.
Selling, general and administrative costs were
$19.7 million in the fourth quarter of 2020 compared to $26.3
million in the same period in the prior year. The change is
attributable to incentive compensation costs in the prior fiscal
year and savings from executing the previously announced
restructuring plan in the current fiscal year.
The Company recorded $7.5 million of
restructuring costs in the fourth quarter of 2020 due to actions
taken under our restructuring plan.
Storage Solutions
The Storage Solutions segment represents the
Company’s work related to aboveground storage tanks and full
terminals for crude oil, refined products, LNG and NGLs. The
Company provides services including engineering, fabrication,
procurement, construction, construction management, maintenance and
repair services. In the fourth quarter of 2020, the segment
generated revenue of $122.6 million, compared to $149.1 million in
the same period in the prior year. The gross margin was 10.7%
in fiscal 2020 compared to 13.9% in the same period a year
earlier. Project awards totaled $178.8 million, resulting in
a 1.5 book-to-bill. Backlog at the end of the fourth quarter
of 2020 was $576.7 million.
As a result of the COVID-19 pandemic, global
energy demand, and regulatory issues, we experienced short-term
suspensions of work on a limited number of projects, but work on
most of these projects has resumed. In addition, some project
awards and starts were delayed for durations varying from a few
weeks to a few quarters.
Oil Gas & Chemical
The Company’s Oil Gas & Chemical segment
includes revenue associated with refinery maintenance and repair,
capital projects and turnarounds as well as natural gas processing,
sulfur processing and handling, and the strategic growth area in
chemical and petrochemical plants. In the fourth quarter of
2020, the segment generated revenue of $35.1 million, compared to
$75.5 million in the same period in the prior year. The
decrease was primarily due to lower levels of turnaround and
refinery maintenance work. The gross margin was 14.4% in
fiscal 2020 compared to 13.9% in the same period a year
earlier. The fiscal 2020 gross margin benefited from strong
project execution but was partially offset by the under recovery of
construction overhead costs due to lower revenue. Project awards
totaled $23.8 million, resulting in a 0.7 book-to-bill.
Backlog at the end of the fourth quarter of 2020 was $121.0
million.
The short-term impact to the Company's refinery
turnaround and maintenance operations as a result of the global
pandemic has been significant. The impact has been
exacerbated by the timing of the onset of the pandemic during what
is normally a busy spring turnaround season. Although there
have been delays and suspensions of planned seasonal work, in most
cases the revenue volumes are moving out in time, not being
eliminated. The updated start dates on many of the delayed
activities are uncertain and will depend on the needs of our
clients, safety guidelines, and market conditions.
Electrical Infrastructure
The Company's Electrical Infrastructure segment
provides power delivery services, primarily to investor owned
utilities, as well as emergency and storm restoration
services. The Company also provides services in a variety of
power generation facilities including combined cycle and other
natural gas fired power stations. In the fourth quarter of
2020, the segment generated revenue of $22.9 million, compared to
$53.9 million in the same period in the prior year. The
decrease was due to lower levels of power delivery and power
generation work. The gross margin was 4.0% in fiscal 2020
compared to 4.3% in the same period a year earlier. The
fiscal 2020 gross margin benefited from strong project execution
but was offset by the under recovery of construction overhead
caused by low business volumes. Project awards totaled $15.4
million, resulting in a 0.7 book-to-bill. Backlog at the end of the
fourth quarter of 2020 was $34.5 million.
As a result of the COVID-19 pandemic, we have
experienced suspensions of work at certain job sites. We will
continue to assess conditions in the areas we serve and resume
normal operations based on client needs and safety guidelines to
ensure the protection of our employees, subcontractors, and
customers.
Industrial
The Industrial segment consists of work for
various industries, including mining and minerals companies engaged
primarily in the extraction of non-ferrous metals, aerospace and
defense, cement, agriculture, and various industrial
facilities. In the fourth quarter of 2020, the segment
generated revenue of $15.2 million, compared to $120.2 million in
the same period in the prior year. The decrease in revenue is
primarily attributable to our strategic decision to exit the
domestic iron and steel industry early in the third quarter of
2020. Our exit from having a continuous presence in the
domestic iron and steel business is substantially complete. The
gross margin was 1.2% in fiscal 2020 compared to 8.5% in the same
period a year earlier. The fiscal 2020 gross margin benefited
from strong project execution but was offset by the under recovery
of construction overhead caused by trailing costs related to the
exited domestic iron and steel business. Backlog at the end of the
fourth quarter of 2020 was $26.3 million and was comprised of
thermal vacuum chambers, mining and minerals, and miscellaneous
industrial facilities.
Fiscal 2020 Results
Revenue for fiscal 2020 was $1.101 billion
compared to $1.417 billion in fiscal 2019, a decrease of $315.7
million. On a segment basis, consolidated revenue decreased
in the Industrial, Oil Gas & Chemical, and Electrical
Infrastructure segments by $129.6 million, $118.9 million and
$104.5 million, respectively. These decreases were partially
offset by an increase in the Storage Solutions segment of $37.3
million.
Consolidated gross profit was $102.2 million in
fiscal 2020 compared to $132.0 million in fiscal 2019. Gross
margin was 9.3% in both fiscal 2020 and fiscal 2019. The
gross margin in fiscal 2020 was positively impacted by strong
project execution, offset by the under recovery of construction
overhead costs due to lower than anticipated revenue volumes,
particularly in the fourth quarter. Fiscal 2019 was
positively impacted by higher revenue volumes, which led to an over
recovery of construction overhead costs.
Consolidated SG&A expenses were $86.3
million in fiscal 2020 compared to $94.0 million in fiscal
2019. The decrease in fiscal 2020 was primarily attributable
to significantly lower incentive compensation due to weaker
operating results and savings from executing the restructuring plan
in the last half of fiscal 2020.
The Company recorded non-cash goodwill and other
intangible asset impairments of $38.5 million during the second
quarter of fiscal 2020. In addition, the Company recorded
$14.0 million of restructuring costs in the third and fourth
quarters of fiscal 2020 due to actions taken under our
restructuring plan and our response to the COVID-19 pandemic.
Income Tax Expense
The effective tax rates were 24.6% and 9.7% for
the fourth quarter of 2020 and fiscal 2020, respectively. The
tax benefit in fiscal 2020 was negatively impacted by $3.1 million
of valuation allowances placed on certain deferred tax assets
related to net operating loss carryforwards and other tax credits
primarily in Canada and the non-deductible portion of the goodwill
impairments booked in the second quarter of fiscal 2020 that would
have resulted in a $1.8 million reduction of income tax
expense. These negative impacts were partially offset by $1.8
million of research and development and other tax credits.
The Company estimates that its fiscal 2021 effective tax rate will
be approximately 27.0%.
Backlog
The Company’s backlog as of June 30, 2020 was $758.5
million. Project awards in the fourth quarter of 2020 and
fiscal 2020 totaled $227.2 million and $859.5 million,
respectively, resulting in book-to-bill ratios of 1.2 and 0.8,
respectively.
Financial Position
At June 30, 2020, the Company had a cash balance
of $100.0 million, borrowings of $9.2 million and liquidity of
$193.4 million. Our liquidity continues to be adequate to
fund our near- to intermediate-term needs.
Non-GAAP Financial Measure
(1) Adjusted earnings (loss) per share is a
non-GAAP financial measure which excludes the financial impact of
certain impairment charges, restructuring costs and tax
reserves. See the Non-GAAP Financial Measures section
included at the end of this release for a reconciliation to
earnings per share.
Conference Call Details
In conjunction with the earnings release, Matrix
Service Company will host a conference call / webcast with John R.
Hewitt, President and CEO, and Kevin S. Cavanah, Vice President and
CFO. The call will take place at 10:30 a.m. (Eastern) / 9:30
a.m. (Central) on Thursday, September 3, 2020 and will be
simultaneously broadcast live over the Internet which can be
accessed at the Company’s website at matrixservicecompany.com under
Investor Relations, Events and Presentations. Please allow
extra time prior to the call to visit the site and download the
streaming media software required to listen to the Internet
broadcast. The conference call will be recorded and will be
available for replay within one hour of completion of the live call
and can be accessed following the same link as the live call.
Dial in - Toll-Free 1-888-660-6127Dial in - Toll
1-973-890-8355Audience Passcode 4438155
About Matrix Service Company
Founded in 1984, Matrix Service Company (Nasdaq:
MTRX) is parent to a family of companies that includes Matrix PDM
Engineering, Matrix Service Inc., Matrix NAC, and Matrix Applied
Technologies. Our companies design, build and maintain
infrastructure critical to North America's energy and industrial
markets. Matrix Service Company is headquartered in Tulsa, Oklahoma
with offices located throughout the United States and Canada, as
well as Sydney, Australia and Seoul, South Korea.
The Company reports its financial results based
on four key operating segments: Electrical Infrastructure, Oil Gas
& Chemical, Storage Solutions and Industrial. To learn
more about Matrix Service Company, visit
matrixservicecompany.com.
With a culture driven by its core values of
safety, integrity, stewardship, positive relationships, community
involvement and delivering the best, Matrix has twice been named to
Forbes Top 100 Most Trustworthy Companies in America and is
consistently recognized as a Great Place to Work®.
This release contains forward-looking statements
that are made in reliance upon the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. These statements
are generally accompanied by words such as “anticipate,”
“continues,” “expect,” “forecast,” “outlook,” “believe,”
“estimate,” “should” and “will” and words of similar effect that
convey future meaning, concerning the Company’s operations,
economic performance and management’s best judgment as to what may
occur in the future. Future events involve risks and uncertainties
that may cause actual results to differ materially from those we
currently anticipate. The actual results for the current and future
periods and other corporate developments will depend upon a number
of economic, competitive and other influences, including the
successful implementation of the Company's business improvement
plan and the factors discussed in the “Risk Factors” and “Forward
Looking Statements” sections and elsewhere in the Company’s reports
and filings made from time to time with the Securities and Exchange
Commission. Many of these risks and uncertainties are beyond the
control of the Company, and any one of which, or a combination of
which, could materially and adversely affect the results of the
Company's operations and its financial condition. We undertake no
obligation to update information contained in this release, except
as required by law.
For more information, please contact:
Kevin S. CavanahVice President and CFOT: 918-838-8822Email:
kcavanah@matrixservicecompany.com
Kellie SmytheSenior Director, Investor RelationsT:
918-359-8267Email: ksmythe@matrixservicecompany.com
Matrix Service
CompanyConsolidated Statements of
Income(In thousands, except per share
data)
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
June 30, 2020 |
|
June 30, 2019 |
|
June 30, 2020 |
|
June 30, 2019 |
Revenue |
|
$ |
195,837 |
|
|
$ |
398,714 |
|
|
$ |
1,100,938 |
|
|
$ |
1,416,680 |
|
Cost of revenue |
|
176,604 |
|
|
354,976 |
|
|
998,762 |
|
|
1,284,729 |
|
Gross profit |
|
19,233 |
|
|
43,738 |
|
|
102,176 |
|
|
131,951 |
|
Selling, general and
administrative expenses |
|
19,702 |
|
|
26,349 |
|
|
86,276 |
|
|
94,021 |
|
Goodwill and other intangible
asset impairment |
|
— |
|
|
— |
|
|
38,515 |
|
|
— |
|
Restructuring costs |
|
7,451 |
|
|
— |
|
|
14,010 |
|
|
— |
|
Operating income (loss) |
|
(7,920 |
) |
|
17,389 |
|
|
(36,625 |
) |
|
37,930 |
|
Other income (expense): |
|
|
|
|
|
|
|
|
Interest expense |
|
(366 |
) |
|
(342 |
) |
|
(1,597 |
) |
|
(1,296 |
) |
Interest income |
|
23 |
|
|
304 |
|
|
1,270 |
|
|
1,167 |
|
Other |
|
676 |
|
|
29 |
|
|
308 |
|
|
611 |
|
Income (loss) before income tax
expense |
|
(7,587 |
) |
|
17,380 |
|
|
(36,644 |
) |
|
38,412 |
|
Provision (benefit) for federal,
state and foreign income taxes |
|
(1,865 |
) |
|
4,568 |
|
|
(3,570 |
) |
|
10,430 |
|
Net income (loss) |
|
$ |
(5,722 |
) |
|
$ |
12,812 |
|
|
$ |
(33,074 |
) |
|
$ |
27,982 |
|
Basic earnings (loss) per common
share |
|
$ |
(0.22 |
) |
|
$ |
0.48 |
|
|
$ |
(1.24 |
) |
|
$ |
1.04 |
|
Diluted earnings (loss) per
common share |
|
$ |
(0.22 |
) |
|
$ |
0.47 |
|
|
$ |
(1.24 |
) |
|
$ |
1.01 |
|
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
26,140 |
|
|
26,807 |
|
|
26,621 |
|
|
26,891 |
|
Diluted |
|
26,140 |
|
|
27,521 |
|
|
26,621 |
|
|
27,587 |
|
Matrix Service
CompanyConsolidated Balance
Sheets(In thousands)
|
|
June 30, 2020 |
|
June 30, 2019 |
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
100,036 |
|
|
$ |
89,715 |
|
Accounts receivable, less allowances (2020 - $905; 2019 -
$923) |
|
160,671 |
|
|
218,432 |
|
Costs and estimated earnings in excess of billings on uncompleted
contracts |
|
59,548 |
|
|
96,083 |
|
Inventories |
|
6,460 |
|
|
8,017 |
|
Income taxes receivable |
|
3,919 |
|
|
29 |
|
Other current assets |
|
4,526 |
|
|
5,034 |
|
Total current assets |
|
335,160 |
|
|
417,310 |
|
Property, plant and equipment, at
cost: |
|
|
|
|
Land and buildings |
|
42,695 |
|
|
41,179 |
|
Construction equipment |
|
94,154 |
|
|
91,793 |
|
Transportation equipment |
|
55,864 |
|
|
52,526 |
|
Office equipment and software |
|
39,356 |
|
|
43,632 |
|
Construction in progress |
|
4,427 |
|
|
7,619 |
|
Total property, plant and equipment - at cost |
|
236,496 |
|
|
236,749 |
|
Accumulated depreciation |
|
(155,748 |
) |
|
(157,414 |
) |
Property, plant and equipment - net |
|
80,748 |
|
|
79,335 |
|
Operating lease right-of-use
assets |
|
21,375 |
|
|
— |
|
Goodwill |
|
60,369 |
|
|
93,368 |
|
Other intangible assets |
|
8,837 |
|
|
19,472 |
|
Deferred income taxes |
|
5,988 |
|
|
2,683 |
|
Other assets |
|
4,833 |
|
|
21,226 |
|
Total assets |
|
$ |
517,310 |
|
|
$ |
633,394 |
|
Matrix Service
CompanyConsolidated Balance Sheets
(continued)(In thousands, except share
data)
|
|
|
|
|
|
|
June 30, 2020 |
|
June 30, 2019 |
Liabilities and stockholders’ equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
73,094 |
|
|
$ |
114,647 |
|
Billings on uncompleted contracts in excess of costs and estimated
earnings |
|
63,889 |
|
|
105,626 |
|
Accrued wages and benefits |
|
16,205 |
|
|
38,357 |
|
Accrued insurance |
|
7,301 |
|
|
9,021 |
|
Operating lease liabilities |
|
7,568 |
|
|
— |
|
Income taxes payable |
|
— |
|
|
2,517 |
|
Other accrued expenses |
|
7,890 |
|
|
5,331 |
|
Total current liabilities |
|
175,947 |
|
|
275,499 |
|
Deferred income taxes |
|
61 |
|
|
298 |
|
Operating lease liabilities |
|
19,997 |
|
|
— |
|
Borrowings under senior secured revolving credit facility |
|
9,208 |
|
|
5,347 |
|
Other liabilities |
|
4,208 |
|
|
293 |
|
Total liabilities |
|
209,421 |
|
|
281,437 |
|
Commitments and
contingencies |
|
|
|
|
Stockholders’ equity: |
|
|
|
|
Common stock—$.01 par value; 60,000,000 shares authorized;
27,888,217 shares issued as of June 30, 2020 and June 30,
2019; 26,141,528 and 26,807,203 shares outstanding as of June 30,
2020 and June 30, 2019 |
|
279 |
|
|
279 |
|
Additional paid-in capital |
|
138,966 |
|
|
137,712 |
|
Retained earnings |
|
206,402 |
|
|
239,476 |
|
Accumulated other comprehensive income |
|
(8,373 |
) |
|
(7,751 |
) |
|
|
337,274 |
|
|
369,716 |
|
Less treasury stock, at cost — 1,746,689 and 1,081,014 shares as of
June 30, 2020 and June 30, 2019 |
|
(29,385 |
) |
|
(17,759 |
) |
Total stockholders' equity |
|
307,889 |
|
|
351,957 |
|
Total liabilities and
stockholders’ equity |
|
$ |
517,310 |
|
|
$ |
633,394 |
|
Results of Operations(In
thousands)
|
|
|
|
|
|
|
|
|
Electrical Infrastructure |
|
Oil Gas & Chemical |
|
Storage Solutions |
|
Industrial |
|
Total |
Three Months Ended
June 30, 2020 |
|
|
|
|
|
|
|
|
|
|
Gross revenue |
|
$ |
22,917 |
|
|
$ |
35,583 |
|
|
$ |
123,193 |
|
|
$ |
15,231 |
|
|
$ |
196,924 |
|
Less: inter-segment
revenue |
|
— |
|
|
468 |
|
|
576 |
|
|
43 |
|
|
1,087 |
|
Consolidated revenue |
|
22,917 |
|
|
35,115 |
|
|
122,617 |
|
|
15,188 |
|
|
195,837 |
|
Gross profit |
|
919 |
|
|
5,044 |
|
|
13,094 |
|
|
176 |
|
|
19,233 |
|
Restructuring costs |
|
1,841 |
|
|
2,441 |
|
|
296 |
|
|
2,873 |
|
|
7,451 |
|
Operating income (loss) |
|
$ |
(2,737 |
) |
|
$ |
(1,571 |
) |
|
$ |
2,476 |
|
|
$ |
(6,088 |
) |
|
$ |
(7,920 |
) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, 2019 |
|
|
|
|
|
|
|
|
|
|
Gross revenue |
|
$ |
53,874 |
|
|
$ |
75,568 |
|
|
$ |
149,543 |
|
|
$ |
120,239 |
|
|
$ |
399,224 |
|
Less: inter-segment
revenue |
|
— |
|
|
23 |
|
|
487 |
|
|
— |
|
|
510 |
|
Consolidated revenue |
|
53,874 |
|
|
75,545 |
|
|
149,056 |
|
|
120,239 |
|
|
398,714 |
|
Gross profit |
|
2,315 |
|
|
10,469 |
|
|
20,736 |
|
|
10,218 |
|
|
43,738 |
|
Intangible asset impairments
and restructuring costs |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Operating income (loss) |
|
$ |
(309 |
) |
|
$ |
4,089 |
|
|
$ |
8,726 |
|
|
$ |
4,883 |
|
|
$ |
17,389 |
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
June 30, 2020 |
|
|
|
|
|
|
|
|
|
|
Gross revenue |
|
$ |
112,890 |
|
|
$ |
203,404 |
|
|
$ |
562,439 |
|
|
$ |
228,827 |
|
|
$ |
1,107,560 |
|
Less: inter-segment
revenue |
|
— |
|
|
2,454 |
|
|
3,240 |
|
|
928 |
|
|
6,622 |
|
Consolidated revenue |
|
112,890 |
|
|
200,950 |
|
|
559,199 |
|
|
227,899 |
|
|
1,100,938 |
|
Gross profit (loss) |
|
(1,105 |
) |
|
15,822 |
|
|
71,934 |
|
|
15,525 |
|
|
102,176 |
|
Intangible asset impairments
and restructuring costs |
|
27,855 |
|
|
3,850 |
|
|
1,296 |
|
|
19,524 |
|
|
52,525 |
|
Operating income (loss) |
|
$ |
(36,503 |
) |
|
$ |
(7,328 |
) |
|
$ |
27,306 |
|
|
$ |
(20,100 |
) |
|
$ |
(36,625 |
) |
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
June 30, 2019 |
|
|
|
|
|
|
|
|
|
|
Gross revenue |
|
$ |
217,417 |
|
|
$ |
322,065 |
|
|
$ |
524,330 |
|
|
$ |
357,464 |
|
|
$ |
1,421,276 |
|
Less: inter-segment
revenue |
|
— |
|
|
2,198 |
|
|
2,398 |
|
|
— |
|
|
4,596 |
|
Consolidated revenue |
|
217,417 |
|
|
319,867 |
|
|
521,932 |
|
|
357,464 |
|
|
1,416,680 |
|
Gross profit |
|
15,470 |
|
|
35,987 |
|
|
56,011 |
|
|
24,483 |
|
|
131,951 |
|
Intangible asset impairments
and restructuring costs |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Operating income |
|
$ |
3,668 |
|
|
$ |
12,984 |
|
|
$ |
14,097 |
|
|
$ |
7,181 |
|
|
$ |
37,930 |
|
Backlog
We define backlog as the total dollar amount of
revenue that we expect to recognize as a result of performing work
that has been awarded to us through a signed contract, limited
notice to proceed or other type of assurance that we consider
firm. The following arrangements are considered firm:
- fixed-price awards;
- minimum customer commitments on cost plus arrangements;
and
- certain time and material arrangements in which the estimated
value is firm or can be estimated with a reasonable amount of
certainty in both timing and amounts.
For long-term maintenance contracts with no
minimum commitments and other established customer agreements, we
include only the amounts that we expect to recognize as revenue
over the next 12 months. For arrangements in which we have
received a limited notice to proceed, we include the entire scope
of work in our backlog if we conclude that the likelihood of the
full project proceeding as high. For all other arrangements,
we calculate backlog as the estimated contract amount less revenue
recognized as of the reporting date.
Three Months Ended June 30, 2020
The following table provides a summary of changes in our backlog
for the three months ended June 30, 2020:
|
|
Electrical Infrastructure |
|
Oil Gas & Chemical |
|
Storage Solutions |
|
Industrial |
|
Total |
|
|
(In thousands) |
Backlog as of March 31, 2020 |
|
$ |
42,099 |
|
|
$ |
132,278 |
|
|
$ |
520,483 |
|
|
$ |
32,196 |
|
|
$ |
727,056 |
|
Project awards |
|
15,355 |
|
|
23,792 |
|
|
178,838 |
|
|
9,261 |
|
|
227,246 |
|
Revenue recognized |
|
(22,917 |
) |
|
(35,115 |
) |
|
(122,617 |
) |
|
(15,188 |
) |
|
(195,837 |
) |
Backlog as of June 30, 2020 |
|
$ |
34,537 |
|
|
$ |
120,955 |
|
|
$ |
576,704 |
|
|
$ |
26,269 |
|
|
$ |
758,465 |
|
Book-to-bill ratio(1) |
|
0.7 |
|
|
0.7 |
|
|
1.5 |
|
|
0.6 |
|
|
1.2 |
|
(1) Calculated by dividing project awards by
revenue recognized.
Twelve Months Ended June 30, 2020
The following table provides a summary of changes in our backlog
for the twelve months ended June 30, 2020:
|
|
Electrical Infrastructure |
|
Oil Gas & Chemical |
|
Storage Solutions |
|
Industrial |
|
Total |
|
|
(In thousands) |
Backlog as of June 30, 2019 |
|
$ |
73,883 |
|
|
$ |
134,563 |
|
|
$ |
641,295 |
|
|
$ |
248,608 |
|
|
$ |
1,098,349 |
|
Project awards |
|
73,544 |
|
|
194,013 |
|
|
494,608 |
|
|
97,364 |
|
|
859,529 |
|
Project cancellations(1) |
|
— |
|
|
(6,671 |
) |
|
— |
|
|
(91,804 |
) |
|
(98,475 |
) |
Revenue recognized |
|
(112,890 |
) |
|
(200,950 |
) |
|
(559,199 |
) |
|
(227,899 |
) |
|
(1,100,938 |
) |
Backlog as of June 30,
2020 |
|
$ |
34,537 |
|
|
$ |
120,955 |
|
|
$ |
576,704 |
|
|
$ |
26,269 |
|
|
$ |
758,465 |
|
Book-to-bill ratio(2) |
|
0.7 |
|
|
1.0 |
|
|
0.9 |
|
|
0.4 |
|
|
0.8 |
|
(1) Industrial cancellations related to the deterioration of our
relationship with a key customer in the iron and steel industry and
the subsequent cancellation of work, the cancellation of a coke
battery project in Canada, and cancellation of work due to the
final wind-down of our domestic iron and steel maintenance business
following our strategic decision to exit the business.
Cancellations in the Oil Gas & Chemical segment consist of
turnaround work transferred to a local contractor as a result of
COVID-19 precautions.(2) Calculated by dividing project awards by
revenue recognized.
Non-GAAP Financial Measures
In order to more clearly depict the core
profitability of the Company, the following table presents our net
income (loss) and earnings (loss) per fully diluted share for the
fourth quarter and fiscal year ended 2020 after adjusting for
certain impairment charges, restructuring costs, and tax
reserves:
Reconciliation of Adjusted Net Income
(Loss) and Diluted Earnings (Loss) per Common
Share(1)(In thousands, except per share
data)
|
|
|
|
|
|
Three Months Ended June 30, 2020 |
|
Fiscal Year Ended June 30, 2020 |
|
|
Amount of
Charge |
|
Income Tax Effect
of Charge |
|
Net Income
(Loss) |
|
Earnings (Loss)
Per Diluted
Share |
|
Net Income
(Loss) |
|
Earnings (Loss)
Per Diluted
Share |
Net loss per
common share, as reported |
|
|
|
|
|
$ |
(5,722 |
) |
|
$ |
(0.22 |
) |
|
$ |
(33,074 |
) |
|
$ |
(1.24 |
) |
Restructuring costs incurred |
|
$ |
14,010 |
|
$ |
(3,369 |
) |
|
5,544 |
|
|
0.21 |
|
|
10,641 |
|
|
0.39 |
|
Electrical Infrastructure segment goodwill impairment |
|
24,900 |
|
(4,889 |
) |
|
— |
|
|
— |
|
|
20,011 |
|
|
0.74 |
|
Industrial segment goodwill and other intangible asset
impairment |
|
13,615 |
|
(2,803 |
) |
|
— |
|
|
— |
|
|
10,812 |
|
|
0.40 |
|
Valuation allowance placed on a deferred tax asset |
|
2,417 |
|
— |
|
|
— |
|
|
— |
|
|
2,417 |
|
|
0.09 |
|
Adjustment for dilutive effect of using basic shares for net
loss |
|
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
0.02 |
|
Adjusted net
income (loss) and diluted earnings (loss) per common
share |
|
|
|
|
|
$ |
(178 |
) |
|
$ |
(0.01 |
) |
|
$ |
10,807 |
|
|
$ |
0.40 |
|
Weighted average
common shares outstanding - diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
As reported |
|
|
|
|
|
|
|
26,140 |
|
|
|
|
26,621 |
|
Previously anti-dilutive common shares |
|
|
|
|
|
|
|
— |
|
|
|
|
490 |
|
Adjusted weighted average common shares outstanding - diluted |
|
|
|
|
|
|
|
26,140 |
|
|
|
|
27,111 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) This table presents non-GAAP financial
measures of our adjusted net income (loss) and adjusted diluted
earnings (loss) per common share for the fourth quarter and fiscal
year ended 2020. The most directly comparable financial
measures are net loss and net loss per common share, respectively,
presented in the Consolidated Statements of Income. We have
presented these non-GAAP financial measures because we believe they
more clearly depict the core operating results of the Company
during the periods presented and provide a more comparable measure
of the Company's operating results to other companies considered to
be in similar businesses. Since adjusted net income (loss)
and adjusted diluted earnings (loss) per common share are not
measures of performance calculated in accordance with GAAP, they
should be considered in addition to, rather than as a substitute
for, the most directly comparable GAAP financial measures.
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