Teleconferência de Resultados do 1T do AF2027 da Matrix Service Company (MTRX): Lucratividade e Crescimento das Margens

Principais Destaques

• A Matrix Service Company reportou receita de US$ 219,4 milhões no primeiro trimestre fiscal de 2027, alta de 4% em relação aos US$ 211,9 milhões registrados um ano antes, apesar do adiamento da receita de alguns projetos contratados para trimestres futuros.
• A margem bruta subiu de 6,7% para 8,2%, sustentada por uma execução de projetos mais sólida e melhor recuperação de custos indiretos. O LPA diluído melhorou para US$ 0,22, revertendo o prejuízo de US$ 0,13.
• O EBITDA ajustado aumentou de US$ 2,5 milhões para US$ 7,7 milhões, marcando o terceiro trimestre consecutivo de lucro da companhia.
• O backlog encerrou em US$ 873 milhões em 30 de setembro. As contratações do trimestre somaram US$ 138,8 milhões, resultando em uma relação book-to-bill de 0,6.
• O pipeline de oportunidades expandiu aproximadamente 11%, atingindo US$ 8,2 bilhões, impulsionado pelo crescimento em GNL, geração de energia, infraestrutura elétrica e mineração e minerais.
• A Matrix registrou US$ 222 milhões em liquidez total e anunciou um novo programa de recompra de ações de US$ 25 milhões, após recomprar US$ 2,5 milhões em ações durante o trimestre.

Principais Dados Financeiros

Desempenho Operacional e dos Negócios

Em Soluções de Armazenamento e Terminais, a receita aumentou 12%, para US$ 122,9 milhões, frente a US$ 109,5 milhões. O crescimento foi impulsionado pela maior atividade em tanques especiais e obras associadas de balance-of-plant. A margem bruta subiu de 5,9% para 9,0%, refletindo melhor execução e absorção de custos indiretos.

Em Infraestrutura de Serviços Públicos e Energia, a receita recuou 21%, de US$ 74,5 milhões para US$ 59,1 milhões. A menor atividade em projetos de peak-shaving de gás natural foi parcialmente compensada pelo aumento dos trabalhos em geração de energia. A margem bruta caiu de 9,1% para 8,6% devido ao mix de projetos, sendo parcialmente atenuada pela melhor absorção de custos indiretos.

O segmento conquistou um contrato relevante de geração de energia voltado à infraestrutura de data centers. A administração afirmou que o projeto amplia a exposição da Matrix tanto à geração de energia quanto ao mercado em desenvolvimento de data centers.

Em Instalações Industriais e de Processos, a receita subiu de US$ 27,9 milhões para US$ 37,4 milhões, principalmente em razão do aumento nos trabalhos de mineração e minerais. A margem bruta caiu de 5,1% para 3,7%. O trimestre atual incluiu a resolução de uma disputa com subcontratada referente a um projeto concluído no ano fiscal de 2023. A administração afirmou que o acordo deve reduzir os custos jurídicos previstos para o ano fiscal de 2027.

A companhia também garantiu vários contratos de mineração e minerais durante o trimestre. A Matrix está expandindo recursos de recrutamento, parcerias com escolas técnicas e planos de carreira internos para apoiar sua capacidade de execução, mantendo os padrões de segurança e qualidade.

Perspectivas da Administração

A administração espera que a receita média trimestral no restante do ano fiscal de 2027 supere o nível do primeiro trimestre. O backlog de US$ 873 milhões foi apontado como fator que proporciona visibilidade para um ritmo mais elevado de receita (run rate) e rentabilidade contínua ao longo do restante do ano fiscal.

A empresa espera que o ritmo de contratações de novos projetos se fortaleça no segundo semestre do ano fiscal de 2027. No entanto, a administração afirmou que contratos de maior porte devem apoiar principalmente a receita do ano fiscal de 2028, em vez de contribuir de forma expressiva para o ano fiscal de 2027.

A administração indicou que o nível trimestral normalizado de despesas com SG&A fica entre aproximadamente US$ 15,5 milhões e US$ 16 milhões, dependendo do nível de atividade e da remuneração variável. O resultado do primeiro trimestre foi beneficiado por menores despesas com salários, remunerações e compensação baseada em ações após uma reestruturação organizacional, além de um benefício anual de US$ 1,9 milhão relacionado à contabilização de remuneração em ações liquidada em dinheiro.

Riscos e Pontos de Atenção

• A relação book-to-bill no primeiro trimestre fiscal foi de 0,6, refletindo o volume mais moderado de contratações esperado para o primeiro semestre do ano fiscal de 2027.
• O momento de decisão de grandes clientes continua incerto e foge ao controle da companhia.
• Parte da receita de projetos já contratados foi postergada para trimestres futuros durante o período.
• A forte demanda por projetos está gerando pressão sobre a mão de obra, a disponibilidade de trabalhadores e outros recursos.
• A receita de Infraestrutura de Serviços Públicos e Energia continua sendo afetada pelo menor volume de projetos de peak-shaving de gás natural.

Destaques da Sessão de Perguntas e Respostas

Sobre as despesas com SG&A, a administração afirmou que o nível de despesas do primeiro trimestre não deve ser tratado como uma taxa contínua de execução (run rate), já que a remuneração em ações liquidada em dinheiro e a remuneração variável podem gerar oscilações trimestrais. A gestão apontou o intervalo de US$ 15,5 milhões a US$ 16 milhões como uma faixa trimestral mais representativa.

Ao abordar a baixa relação book-to-bill, a administração destacou diversas grandes oportunidades cujas decisões dos clientes devem ocorrer mais adiante no ano fiscal de 2027, incluindo projetos de armazenamento ligados a GNL. Também enfatizou um mix mais amplo de projetos menores voltados apenas à construção, reparo e manutenção, que podem iniciar as obras e gerar receita mais rapidamente do que grandes projetos de EPC.

A administração afirmou que o pipeline de US$ 8,2 bilhões é diversificado em GNL, LGN, geração de energia, infraestrutura elétrica e mineração e minerais, reduzindo a dependência de qualquer projeto ou mercado final específico.

Transcrição Completa da Teleconferência de Resultados

Transcrição completa da teleconferência de resultados

Comentários da administração

Operator

Good morning, and welcome to the Matrix Service Company conference call to discuss results for the first quarter of fiscal 2027. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Mr. Patrick Roberts, Director of Corporate Development and Investor Relations of Matrix Service Company.

Patrick Roberts

Thank you, and good morning, everyone. Welcome to Matrix Service Company's First Quarter Fiscal 2027 Earnings Call. Participants on today's call include Chief Executive Officer, Shawn Payne; Interim Chief Financial Officer, A.J. Smith; and Chief Financial Officer-elect Dominic Savarino. Following our prepared remarks, we will open the call up for questions.

The presentation materials referred to during the webcast today can be found under Events and Presentations on the Investor Relations section of matrixservicecompany.com. As a reminder, on today's call, we may make various remarks about future expectations, plans and prospects for Matrix Service Company that constitute forward-looking statements for the purposes of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements because of various factors, including those discussed in our most recent annual report on Form 10-K and in subsequent filings made by the company with the SEC.

The forward-looking statements made today are effective only as of today. To the extent we utilize non-GAAP measures, reconciliations will be provided in various press releases, periodic SEC filings and on our website.

On our last call, I highlighted a project that showcased the depth of our capabilities and the type of complex work Matrix is built to deliver. I'd like to continue that practice today because it provides useful context around the markets we serve and how Matrix has evolved. While many investors may still associate Matrix primarily with storage tanks, today's Matrix supports critical infrastructure across a much broader set of end markets, including power generation, LNG and NGLs, utilities, mining and minerals and increasingly data centers.

One area that illustrates this evolution particularly well is the power sector. For decades, Matrix has supported customers through the construction and maintenance of critical power facilities and systems. Our capabilities extend across power generation facilities, substations and other supporting systems. These capabilities are becoming increasingly important as electrical demand continues to grow and customers seek greater certainty of supply. Whether through additional generation capacity, backup power systems or on-site LNG fuel infrastructure, organizations are investing in solutions that enhance reliability and resiliency.

We continue to see strong growth in our opportunity pipeline associated with these specialized services. That demand comes from a diverse customer base that includes public utilities, private utilities, power producers, industrial customers and energy companies. More recently, we have also begun supporting the rapidly expanding data center market, providing these same services for customer-owned energy and power assets as developers and owners look for ways to secure reliable power, greater certainty of supply and enhanced operational resiliency.

Matrix's experience in power generation, backup fuel, electrical systems and construction execution positions us well to participate in that growth. Most recently, we were awarded a project in this space, which Shawn will discuss in more detail in his remarks. What these opportunities demonstrate is the versatility of Matrix's capabilities. Whether supporting LNG, power generation, electrical infrastructure, mining and minerals, or data centers, we are able to leverage the same core strengths across multiple end markets where critical infrastructure investment continues to grow. Regardless of the market we serve, our focus remains unchanged, delivering projects safely with quality and in a manner that creates value for our customers and shareholders.

With that, I'll turn the call over to Shawn.

Shawn Payne

Thank you, Patrick, and good morning, everyone. Before discussing our first quarter results, I'd like to welcome Dominic Savarino to Matrix as Senior Vice President and Chief Financial Officer, effective tomorrow, November 6. Following a comprehensive search, we selected Dominic because he brings a combination of financial leadership and operational experience that is particularly well suited to Matrix.

He has built his career in engineering, construction, energy and industrial infrastructure businesses and has held roles in both financial leadership and with direct operational and P&L responsibility. That experience gives him a strong understanding of how financial discipline, project execution, commercial strategy and risk management come together to drive profitable growth. His perspective will be especially valuable as we continue executing on our win, execute, deliver strategy and position Matrix for its next phase of growth. We are excited to have Dominic on the team and look forward to his contributions.

Now to the quarter. As I discussed last quarter, win, execute, deliver is how we run the company. It turns our strategy into everyday choices about what we pursue, how we work, how we allocate resources and the results we create. Over the past 18 months, we've taken meaningful actions to improve execution, create a more efficient operating model and drive consistent profitability as we grow. Today, I want to focus on how those actions are strengthening our business and translating into better results. Under the win pillar of our strategy, our focus is on building a stronger business by improving the quality and diversity of our backlog, strengthening customer relationships and expanding into attractive end markets.

Since we last reported, our opportunity pipeline has increased from approximately $7.4 billion to $8.2 billion. Importantly, that growth is not concentrated in a single market. We have seen expansion across all of our segments, including LNG, power generation, electrical infrastructure and mining and minerals, reinforcing our confidence in both the demand environment and the opportunities ahead. The breadth of this growth reflects the continued diversification of our business and gives us a stronger, more balanced opportunity set from which to drive profitable growth. We are already seeing tangible results from this approach. This quarter, we were awarded a meaningful power generation project supporting data center infrastructure.

This project is particularly significant because it aligns several strategic priorities for Matrix. It expands our participation in the growing power generation market, strengthens our position in the rapidly developing data center ecosystem, and it also demonstrates the continued importance of construction-only opportunities in supporting a stable and diversified revenue base. As another example of our win strategy in action, we continue to see strong momentum in the mining and minerals space. In addition to the significant award we discussed last quarter, we secured several awards in Q1 with another important client in multiple facilities specifically targeted under our strategic growth plan.

Under the execute pillar of our strategy, our focus is on creating value through safe, disciplined and consistent project delivery. We continue to see encouraging results from the operational discipline we've implemented across the business. Project execution remains solid, and we are seeing greater consistency in how opportunities are evaluated, risks are managed and the work is delivered. During the quarter, we advanced several initiatives designed to strengthen the decision-making process and increase accountability throughout the project life cycle.

Another important component of execution is workforce development. Capturing the opportunities ahead requires not only the right projects, but the right people to deliver them safely and successfully. We have established a more coordinated enterprise-wide approach to recruiting, developing and retaining craft and supervisory talent, including adding field recruiting resources and strengthening our trade school relationships and internal career paths. These efforts are supporting our execution capacity while upholding our rigorous safety and quality standards. Ultimately, the objective of win and execute is to deliver. Deliver means producing consistent results, generating sustainable, profitable growth and creating long-term value for our shareholders, customers, employees and communities.

While we are still early on this journey, our third consecutive quarter of profitability is a clear indicator of the progress we are making. During the quarter, we also purchased $2.5 million of our shares. This effort is consistent with the deliver pillar of our strategy related to disciplined capital allocation and creating long-term shareholder value.

So, in summary, we have a clear strategy, a stronger operating foundation and a leaner, more efficient cost structure. We are a stronger company today with meaningful opportunities ahead and the focus, discipline and capabilities to convert those opportunities into consistent profitable growth and long-term shareholder value. As Dominic officially assumes the Chief Financial Officer position tomorrow, A.J. Smith will be reviewing our first quarter financial results today.

With that, I will turn the call over to A.J.

Andrew John Smith

Thanks, Shawn. Our results this quarter reflect the continued momentum behind our win, execute, deliver framework, culminating in the third straight quarter of profitable performance. During the first quarter, despite some revenue from several booked projects slipping into future quarters, revenue increased 4% to $219.4 million compared to $211.9 million in the first quarter of fiscal 2026. We expect quarterly revenue levels for the remainder of the year to be on average higher than in the first quarter.

Gross profit was $18.1 million, or 8.2% of revenue, during the quarter compared to $14.2 million, or 6.7% of revenue, for the first quarter of fiscal 2026. Gross margins during the period benefited from strong project execution and improved overhead recovery. SG&A expenses were $13.3 million in the first quarter of fiscal 2027, or 6% of revenue. SG&A decreased by $3 million compared to the prior year period due in part to lower salary and wage expense and stock compensation expense resulting from our organizational restructuring plan. Additionally, SG&A decreased $1.9 million year-over-year due to the variable accounting for cash-settled stock-based compensation.

As a result of our higher revenue, higher gross margins and lower SG&A expense, the company had positive EPS during the quarter of $0.22 compared to a loss of $0.13 per share in the prior year quarter. On an adjusted basis, EPS was $0.23 per share compared to an adjusted net loss of $0.01 per share in the prior year period. Adjusted EBITDA also improved to $7.7 million in the first quarter compared to $2.5 million in the first quarter of last year.

Moving to the segments. Storage and Terminal Solutions segment revenue increased 12% to $122.9 million in the first quarter of fiscal 2027 compared to $109.5 million in the first quarter of fiscal 2026, driven by an increased volume of work for specialty tanks and the associated balance of plant work. Gross margin was 9% in the first quarter of fiscal 2027 compared to 5.9% in the first quarter of fiscal 2026. Segment gross margin was driven by improved project execution overall as well as improvement in overhead cost absorption. Utility and Power Infrastructure segment revenue decreased 21% to $59.1 million in the first quarter of fiscal 2027 compared to $74.5 million in the first quarter of fiscal 2026 due to a decrease in volume of work for natural gas peak shaving projects, partially offset by an increase in power generation work. Gross margin was 8.6% in the first quarter of fiscal 2027 compared to 9.1% for the first quarter of fiscal 2026, a decrease of 0.5%, primarily due to mix of work, partially offset by improved overhead cost absorption.

Process and Industrial Facilities segment revenue increased to $37.4 million in the first quarter of fiscal 2027 compared to $27.9 million in the first quarter of fiscal 2026, primarily due to increased revenue volumes for mining and minerals work. Gross margin was 3.7% in the first quarter of fiscal 2027 compared to 5.1% in the first quarter of fiscal 2026. Current quarter margins were impacted by the resolution of a subcontractor dispute for a project originally completed in fiscal 2023. While resulting in a decrease in segment margins in the current quarter, the impact is a net positive for the business based on savings of anticipated fiscal 2027 legal costs.

Moving to backlog. During the quarter, project awards were $138.8 million, resulting in a book-to-bill of 0.6. Awards in the Utility and Power Infrastructure segment include the award of a meaningful power generation project supporting data center infrastructure that Shawn previously mentioned. As we've noted in previous quarters, we believe award activity will pick back up in the second half of our fiscal 2027, but those awards will primarily solidify our fiscal 2028 revenue base. Our backlog as of September 30 of $873 million provides clear visibility into improved revenue run rate through the remainder of the fiscal year, along with continued profitability.

We continue to maintain a strong balance sheet and liquidity position. Total liquidity is $222 million, including $182 million of unrestricted cash and $39 million of borrowing availability under our credit facility. With our liquidity position, we executed $2.5 million of share buybacks during the quarter. Also this week, we amended our credit facility to expand our annual stock repurchase limit, and our Board approved a new buyback program of $25 million, which expires in 2 years. We will opportunistically repurchase stock under the program based on market conditions and our liquidity position.

With that, I will turn the call back to Shawn for a few additional comments.

Shawn Payne

Thank you, A.J. Before moving to Q&A, I want to thank A.J. for his leadership and dedication while serving as Interim Chief Financial Officer while we conducted our search for a new CFO. A.J. helped ensure continuity and stability during an important period of transition for Matrix. A.J.'s contributions have been invaluable, and I appreciate his continued partnership.

With that, I'd like to open up the call for questions.

Operator

[Operator Instructions] Our first question will be coming from the line of John Franzreb of Sidoti.

Perguntas e respostas

John Franzreb

Welcome aboard, Dominic. I'd like to start with the recent results, particularly the SG&A line. It was down rather noticeably. You kind of called out some of those based on change in the share price. But you also said that there's an organizational restructuring. So, I'm kind of curious how much of the change in SG&A is temporary? And how much of it is it on a permanent basis?

Andrew John Smith

Yes, I'll take this one. So, our SG&A run rate, I think, like you mentioned, was impacted by some of the variable expense rate versus cash stock-based compensation. I think there's always going to be some variability in that line. But, generally speaking, a good run rate probably $15.5 million to $16 million a quarter, depending on activity levels and variable compensation.

John Franzreb

Got it. Got it. And it's hard to ignore the book-to-bill profile. Can you talk a little bit, particularly what's going on in storage, what you're seeing there and maybe a little bit about the competitive landscape and how that's shaping out?

Shawn Payne

Yes, you bet, John. Yes. So, I know the book-to-bill is relatively low. We've discussed that over the last few quarters, right? We expected the award activity to be lighter in the first half of fiscal '27. I'll say that we have several large opportunities that are progressing towards customer decision points later in the fiscal year. And we think that's really going to strengthen the award activity in the second half. Some of those projects are storage, particularly LNG-related. Also, I should note there, those larger awards aren't expected to contribute really meaningfully to full year '27 revenues.

So, our focus with those is really on positioning the business for fiscal 2028. I think also important there is while we can't control the timing -- the exact timing of the customer decisions, larger or small projects, what really gives us confidence there is the strength and the breadth of our opportunity set. As we said on the call, our pipeline increased approximately 11%, up to $8.2 billion with opportunities across LNG, NGLs, power generation, electrical infrastructure and mining and minerals. So, important to note there that we're not dependent on any single project or single project end market.

And then lastly, John, just tell you there that we're also seeing a broader mix of smaller, quick construction projects, like construction-only work and also repair and maintenance work. That's important to us because with those projects, we can convert that revenue faster, we can get to the field faster. And that's one of our strategies, right, is to provide a more consistent baseload of activity to make sure we have that work during the ebbs and flows of some of the large EPC works. So, I think together with those 2 things, those 2 factors, it really gives us a balanced path to rebuilding backlog and entering into fiscal '28 from a stronger position.

John Franzreb

Yes. And just to clarify a bit the competitive landscape, I mean, maybe you could give some color what the margin profile is on new jobs being written today versus, say, 6 months ago? Any kind of color there you could provide would be helpful.

Shawn Payne

Yes. I would -- it really depends on what we're bidding. We're into a lot of different things, different markets, certainly different customers, different contract types. But I would say, in general, there's a lot of demand right now, obviously, going on, a lot of projects that's putting pressure on labor, workforce and just general resources. Typically, when that happens, what you see, John, is the margin on those projects, particularly larger projects.

Operator

[Operator Instructions] Seeing there are no more questions in the queue, and I'm going to pass the call back over to Patrick for closing remarks. Please go ahead.

Patrick Roberts

Thank you, everyone, for your participation today. Matrix Service Company will be participating in the upcoming Northland Growth Conference on December 16. If you will be attending, we welcome the opportunity to visit with you. Additionally, if you would like to have a conversation with management, please contact me through the Matrix Service Company Investor Relations website. You may also sign up to receive MTRX news by scanning the QR code on your screen.

Again, thank you for your time today.

Operator

Thank you for participating in today's program. You may now disconnect.