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(Mark One)
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þ
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Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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o
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Delaware
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73-1352174
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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5100 E. Skelly Drive, Suite 500
Tulsa, Oklahoma
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74135
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(Address of Principal Executive Offices)
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(Zip Code)
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1.
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A date contained in the REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM related to their Opinion on Internal Control over Financial Reporting. In that report, the date cross-referencing their September 12, 2018 Opinion on the Financial Statements was inadvertently included as August 30, 2018. That error has been corrected in this Amendment.
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2.
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A date contained in the REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM related to their Opinion on the Financial Statements. In that report, the date cross-referencing their September 12, 2018 Opinion on Internal Control over Financial Reporting was inadvertently included as August 30, 2018. That error has been corrected in this Amendment.
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Page
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Part I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Part II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Part III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Part IV
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Item 15.
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Item 16.
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•
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our ability to generate sufficient cash from operations, access our credit facility, or raise cash in order to meet our short and long-term capital requirements;
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•
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the impact to our business of crude oil, natural gas and other commodity prices;
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•
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amounts and nature of future revenues and margins from each of our segments;
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•
|
the potential impact of the Tax Cuts and Jobs Act on our business;
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•
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trends in the industries we serve;
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•
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the likely impact of new or existing regulations or market forces on the demand for our services;
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•
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expansion and other trends of the industries we serve;
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•
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our expectations with respect to the likelihood of a future impairment; and
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•
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our ability to comply with the covenants in our credit agreement.
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•
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the risk factors discussed in Item 1A of this Annual Report and listed from time to time in our filings with the Securities and Exchange Commission;
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•
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economic, market or business conditions in general and in the oil, gas, power, iron and steel, agricultural and mining industries in particular;
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•
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delays in the commencement of major projects, whether due to permitting issues or other factors;
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•
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reduced creditworthiness of our customer base and the higher risk of non-payment of receivables due to volatility of crude oil and other commodity prices to which our customers' businesses are affected;
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•
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the inherently uncertain outcome of current and future litigation;
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•
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the adequacy of our reserves for claims and contingencies;
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•
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changes in laws or regulations, including the imposition, cancellation or delay of tariffs on imported goods; and
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•
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other factors, many of which are beyond our control.
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•
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fixed-price awards;
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•
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minimum customer commitments on cost plus arrangements; and
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•
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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.
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Electrical
Infrastructure
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Oil Gas &
Chemical
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Storage
Solutions
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Industrial
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Total
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||||||||||
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(In thousands)
|
||||||||||||||||||
Backlog as of June 30, 2017
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$
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162,637
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$
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287,007
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$
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141,551
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$
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91,078
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$
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682,273
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Project awards
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207,251
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263,217
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786,505
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370,903
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1,627,876
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|||||
Revenue recognized
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(255,931
|
)
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|
(322,772
|
)
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(314,696
|
)
|
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(198,154
|
)
|
|
(1,091,553
|
)
|
|||||
Backlog as of June 30, 2018
|
|
$
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113,957
|
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$
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227,452
|
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$
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613,360
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$
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263,827
|
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$
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1,218,596
|
|
Book-to-bill ratio
(1)
|
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0.8
|
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0.8
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2.5
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1.9
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1.5
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(1)
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Calculated by dividing project awards by revenue recognized.
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•
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our estimate of the headcount requirements for various operating units based upon our forecast of the demand for our products and services;
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•
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our ability to maintain our talent base and manage attrition;
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•
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productivity;
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•
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our ability to schedule our portfolio of projects to efficiently utilize our employees and minimize downtime between project assignments; and
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•
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our need to invest time and resources into functions such as training, business development, employee recruiting, and sales that are not chargeable to customer projects.
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•
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supervising the bidding process, including providing estimates of significant cost components, such as material and equipment needs, and the size, productivity and composition of the workforce;
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•
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negotiating contracts;
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•
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supervising project performance, including performance by our employees, subcontractors and other third-party suppliers and vendors;
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•
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estimating costs for completion of contracts that is used to estimate amounts that can be reported as revenues and earnings on the contract under the percentage-of-completion method of accounting;
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•
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negotiating requests for change orders and the final terms of approved change orders; and
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•
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determining and documenting claims by us for increased costs incurred due to the failure of customers, subcontractors and other third-party suppliers of equipment and materials to perform on a timely basis and in accordance with contract terms.
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•
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current or projected commodity prices, including oil, gas, power, steel and mineral prices;
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•
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refining margins;
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•
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the demand for oil, gas and electricity;
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•
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the ability of oil, gas and power companies to generate, access and deploy capital;
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•
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exploration, production and transportation costs;
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•
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interest rates;
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•
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tax incentives, including those for alternative energy projects;
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•
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regulatory restraints on the rates that power companies may charge their customers; and
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•
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local, national and international political and economic conditions.
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•
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current and projected oil and gas prices;
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•
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exploration, extraction, production and transportation costs;
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•
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refining margins;
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•
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the discovery rate, size and location of new oil and gas reserves;
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•
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technological challenges and advances;
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•
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ability to export hydrocarbon products;
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•
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demand for hydrocarbon production; and
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•
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changing taxes, price controls, and laws and regulations.
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•
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contract costs and application of percentage-of-completion accounting;
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•
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provisions for uncollectible receivables from customers for invoiced amounts;
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•
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the amount and collectibility of unapproved change orders and claims against customers;
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•
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provisions for income taxes and related valuation allowances;
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•
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recoverability of goodwill and intangible assets;
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•
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valuation of assets acquired and liabilities assumed in connection with business combinations; and
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•
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accruals for estimated liabilities, including litigation and insurance reserves.
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•
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curtailment of services;
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•
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suspension of operations;
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•
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inability to meet performance schedules in accordance with contracts and potential liability for liquidated damages;
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•
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injuries or fatalities;
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•
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weather related damage to our facilities;
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•
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disruption of information systems;
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•
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inability to receive machinery, equipment and materials at jobsites; and
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•
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loss of productivity.
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•
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the risk factors described in this Item 1A;
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•
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general conditions in our customers’ industries;
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•
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general conditions in the security markets;
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•
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the significant concentration of ownership of our common stock in the hands of a small number of institutional investors;
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•
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a shortfall in operating revenue or net income from that expected by securities analysts and investors; and
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•
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changes in securities analysts’ estimates of our financial performance or the financial performance of our competitors or companies in our industry.
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•
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increased operating costs, including increased legal expenses, insurance, administrative expenses and associated costs incurred in connection with director election contests;
|
•
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uncertainties as to our future direction, which could result in the loss of potential business opportunities and could make it more difficult to attract, retain, or motivate qualified personnel, and strain relationships with investors and customers; and
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•
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reduction or delay in our ability to effectively execute our current business strategy and to implement new strategies.
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Location
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Description of Facility
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Segment
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Interest
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United States:
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Tulsa, Oklahoma
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Corporate headquarters and regional office
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All segments
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Leased
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Bakersfield, California
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Regional office
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All segments
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Leased
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Bellingham, Washington
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Regional office, fabrication facility and warehouse
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Oil Gas & Chemical, Storage Solutions, Industrial
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Owned
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Canonsburg, Pennsylvania
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Regional office
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Electrical Infrastructure, Oil Gas & Chemical, Industrial
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Leased
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Catoosa, Oklahoma
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Fabrication facilities, regional office and warehouse
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Oil Gas & Chemical, Storage Solutions, Industrial
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Leased & Owned
(1)
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Columbus, Ohio
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Regional office
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All segments
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Leased
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Eddystone, Pennsylvania
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Regional office, fabrication facility and warehouse
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All segments
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Leased
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Hammond, Indiana
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Regional office, fabrication facility, and warehouse
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Oil Gas & Chemical, Industrial
|
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Leased
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Houston, Texas
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Regional offices and warehouse
|
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Oil Gas & Chemical, Storage Solutions
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Leased & Owned
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Metairie, Louisiana
|
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Regional office
|
|
All segments
|
|
Leased
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Norco, California
|
|
Regional office and warehouse
|
|
Storage Solutions, Oil Gas & Chemical
|
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Leased
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Orange, California
|
|
Fabrication facility, regional office and warehouse
|
|
Oil Gas & Chemical, Storage Solutions, Industrial
|
|
Leased & Owned
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Pittsburgh, Pennsylvania
|
|
Regional office
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|
All segments
|
|
Leased
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Rahway, New Jersey
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|
Regional office and warehouse
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|
Electrical Infrastructure, Oil Gas & Chemical, Industrial
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|
Leased
|
Sewickley, Pennsylvania
|
|
Regional office
|
|
Oil Gas & Chemical, Storage Solutions, Industrial
|
|
Leased
|
Temperance, Michigan
|
|
Regional office and warehouse
|
|
Storage Solutions
|
|
Owned
|
Tucson, Arizona
|
|
Regional office and warehouse
|
|
Industrial, Storage Solutions, Oil Gas & Chemical
|
|
Leased
|
International:
|
|
|
|
|
|
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Burlington, Ontario, Canada
|
|
Regional office
|
|
Electrical Infrastructure, Industrial, Storage Solutions
|
|
Owned
|
Calgary, Alberta, Canada
|
|
Regional office
|
|
Storage Solutions
|
|
Leased
|
Leduc, Alberta, Canada
|
|
Regional office and warehouse
|
|
Storage Solutions
|
|
Leased
|
Sarnia, Ontario, Canada
|
|
Regional office and warehouse
|
|
Storage Solutions
|
|
Owned
|
Paju-si, Gyeonggi-do, South Korea
|
|
Fabrication facility, regional office and warehouse
|
|
Storage Solutions
|
|
Owned
|
Sydney, New South Wales, Australia
|
|
Regional office
|
|
Storage Solutions
|
|
Leased
|
|
|
|
|
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(1)
|
Certain facilities were constructed by the Company on land acquired through ground leases with renewal options.
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|
|
Fiscal Year 2018
|
|
Fiscal Year 2017
|
||||||||||||
|
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
First quarter
|
|
$
|
15.45
|
|
|
$
|
9.05
|
|
|
$
|
19.57
|
|
|
$
|
15.88
|
|
Second quarter
|
|
18.50
|
|
|
12.76
|
|
|
23.20
|
|
|
16.20
|
|
||||
Third quarter
|
|
20.25
|
|
|
13.00
|
|
|
23.45
|
|
|
15.00
|
|
||||
Fourth quarter
|
|
19.90
|
|
|
13.15
|
|
|
17.70
|
|
|
7.80
|
|
|
|
Total Number
of Shares
Purchased
|
|
Average Price
Paid
Per Share
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
|
|
Maximum Number of
Shares That May Yet
Be Purchased
Under the Plans
or Programs (C)
|
|||||
April 1 to April 30, 2018
|
|
|
|
|
|
|
|
|
|||||
Share Repurchase Program
(A)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,362,398
|
|
|
Employee Transactions
(B)
|
|
39
|
|
|
$
|
15.85
|
|
|
—
|
|
|
|
|
May 1 to May 31, 2018
|
|
|
|
|
|
|
|
|
|||||
Share Repurchase Program
(A)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,362,398
|
|
|
Employee Transactions
(B)
|
|
|
|
|
|
—
|
|
|
|
||||
June 1 to June 30, 2018
|
|
|
|
|
|
|
|
|
|||||
Share Repurchase Program
(A)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,362,398
|
|
|
Employee Transactions
(B)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
(A)
|
Represents shares purchased under our stock buyback program.
|
(B)
|
Represents shares withheld to satisfy the employee’s tax withholding obligation that is incurred upon the vesting of deferred shares granted under the Company’s stock incentive plans.
|
(C)
|
On December 12, 2016, the Board of Directors approved a new stock buyback program (the "December 2016 Program"). Under the December 2016 Program, the Company may repurchase common stock of the Company in any calendar year commencing with calendar year 2016 and continuing through calendar year 2018, up to a maximum of $25.0 million per calendar year. The Company may repurchase its stock from time to time in the open market at prevailing market prices or in privately negotiated transactions. The December 2016 Program will continue through December 31, 2018 unless and until revoked by the Board of Directors. The amount shown as the maximum number of shares that may yet be purchased was calculated using the closing price of our stock on the last trading day of the fiscal period and the cumulative limit of $25.0 million remaining under the program.
|
|
|
Fiscal Years Ended
|
|
||||||||||||||||||
|
|
June 30,
2018
(1)
|
|
June 30,
2017 |
|
June 30,
2016 |
|
June 30,
2015 |
|
June 30,
2014 |
|
||||||||||
Revenues
|
|
$
|
1,091,553
|
|
|
$
|
1,197,509
|
|
|
$
|
1,311,917
|
|
|
$
|
1,343,135
|
|
|
$
|
1,263,089
|
|
|
Cost of revenues
|
|
999,617
|
|
|
1,116,506
|
|
|
1,185,926
|
|
|
1,255,765
|
|
|
1,126,616
|
|
|
|||||
Gross profit
|
|
91,936
|
|
|
81,003
|
|
|
125,991
|
|
|
87,370
|
|
|
136,473
|
|
|
|||||
Gross margin %
|
|
8.4
|
%
|
|
6.8
|
%
|
|
9.6
|
%
|
|
6.5
|
%
|
|
10.8
|
%
|
|
|||||
Selling, general and administrative expenses
|
|
84,417
|
|
|
76,144
|
|
|
85,109
|
|
|
78,568
|
|
|
77,866
|
|
|
|||||
Selling, general and administrative %
|
|
7.7
|
%
|
|
6.4
|
%
|
|
6.5
|
%
|
|
5.8
|
%
|
|
6.2
|
%
|
|
|||||
Operating income (loss)
|
|
(10,479
|
)
|
|
4,859
|
|
|
40,882
|
|
|
8,802
|
|
|
58,607
|
|
|
|||||
Operating income (loss) %
|
|
(1.0
|
)%
|
|
0.4
|
%
|
|
3.1
|
%
|
|
0.7
|
%
|
|
4.6
|
%
|
|
|||||
Net income (loss)
|
|
(11,480
|
)
|
|
138
|
|
|
25,537
|
|
|
(1,898
|
)
|
|
36,877
|
|
|
|||||
Net income (loss) attributable to noncontrolling interest
|
|
—
|
|
|
321
|
|
|
(3,326
|
)
|
|
(19,055
|
)
|
|
1,067
|
|
|
|||||
Net income (loss) attributable to Matrix Service Company
|
|
(11,480
|
)
|
|
(183
|
)
|
|
28,863
|
|
|
17,157
|
|
|
35,810
|
|
|
|||||
Earnings (loss) per share-basic
|
|
(0.43
|
)
|
|
(0.01
|
)
|
|
1.09
|
|
|
0.64
|
|
|
1.36
|
|
|
|||||
Earnings (loss) per share-diluted
|
|
(0.43
|
)
|
|
(0.01
|
)
|
|
1.07
|
|
|
0.63
|
|
|
1.33
|
|
|
|||||
Working capital
|
|
118,581
|
|
|
139,654
|
|
|
129,416
|
|
|
114,209
|
|
|
105,687
|
|
|
|||||
Total assets
|
|
558,033
|
|
|
586,030
|
|
|
564,967
|
|
|
561,689
|
|
|
568,932
|
|
|
|||||
Long-term debt
|
|
—
|
|
|
44,682
|
|
|
—
|
|
|
8,804
|
|
|
11,621
|
|
|
|||||
Capital expenditures
|
|
8,711
|
|
|
11,908
|
|
|
13,939
|
|
|
15,773
|
|
|
23,589
|
|
|
|||||
Cash flows provided (used) by operations
|
|
74,671
|
|
|
(18,746
|
)
|
|
33,587
|
|
|
26,240
|
|
|
76,988
|
|
|
|||||
Backlog
|
|
1,218,596
|
|
|
682,273
|
|
|
868,672
|
|
|
1,420,598
|
|
|
915,826
|
|
|
|
|
|
|
|
(1)
|
See Item 8. Financial Statements and Supplementary Data, Note - 4 Goodwill and Other Intangible Assets for a discussion of intangible asset impairment charges totaling $18.0 million included in the Company's fiscal 2018 operating results.
|
•
|
there is a legal basis for the claim;
|
•
|
the additional costs were caused by circumstances that were unforeseen by the Company and are not the result of deficiencies in our performance;
|
•
|
the costs are identifiable or determinable and are reasonable in view of the work performed; and
|
•
|
the evidence supporting the claim is objective and verifiable.
|
|
|
Sensitivity Analysis
|
||||||||||
|
|
Goodwill as of June 30, 2018 (in thousands)
|
|
Headroom
|
|
Decline of 100 Basis Points in Revenue Growth Rate
|
|
Decline of 100 Basis Points in Gross Margin Percentage
|
|
Increase of 100 Basis Points in Discount Rate
|
||
Reporting Unit 1
(1)
|
|
$
|
24,900
|
|
|
0%
|
|
-3%
|
|
-19%
|
|
-8%
|
Reporting Unit 2
|
|
$
|
7,980
|
|
|
15%
|
|
11%
|
|
-21%
|
|
4%
|
Reporting Unit 3
|
|
$
|
6,112
|
|
|
34%
|
|
28%
|
|
-2%
|
|
21%
|
All other reporting units
|
|
$
|
57,170
|
|
|
17% to 292%
|
|
11% to 277%
|
|
1% to 233%
|
|
6% to 254%
|
|
|
|
|
|
(1)
|
We recorded a $17.3 million impairment to this reporting unit, which is described fully in the paragraphs above. As a result, the cushion for this reporting unit is zero since the impairment was the amount by which the carrying amount of the reporting unit exceeded its fair value. Accordingly, an adverse change in one or more of the key assumptions could result in an additional impairment.
|
|
|
Electrical
Infrastructure
|
|
Oil Gas &
Chemical
|
|
Storage
Solutions
|
|
Industrial
|
|
Total
|
||||||||||
Fiscal Year 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated revenues
|
|
$
|
255,931
|
|
|
$
|
322,772
|
|
|
$
|
314,696
|
|
|
$
|
198,154
|
|
|
$
|
1,091,553
|
|
Gross profit
|
|
18,300
|
|
|
33,423
|
|
|
25,778
|
|
|
14,435
|
|
|
91,936
|
|
|||||
Gross profit %
|
|
7.2
|
%
|
|
10.4
|
%
|
|
8.2
|
%
|
|
7.3
|
%
|
|
8.4
|
%
|
|||||
Selling, general and administrative expenses
|
|
17,550
|
|
|
23,908
|
|
|
31,685
|
|
|
11,274
|
|
|
84,417
|
|
|||||
Operating income (loss)
|
|
(16,531
|
)
|
|
8,798
|
|
|
(5,907
|
)
|
|
3,161
|
|
|
(10,479
|
)
|
|||||
Operating income (loss) %
|
|
(6.5
|
)%
|
|
2.7
|
%
|
|
(1.9
|
)%
|
|
1.6
|
%
|
|
(1.0
|
)%
|
|||||
Fiscal Year 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated revenues
|
|
$
|
373,384
|
|
|
$
|
240,523
|
|
|
$
|
481,696
|
|
|
$
|
101,906
|
|
|
$
|
1,197,509
|
|
Gross profit
|
|
7,137
|
|
|
12,675
|
|
|
55,651
|
|
|
5,540
|
|
|
81,003
|
|
|||||
Gross profit %
|
|
1.9
|
%
|
|
5.3
|
%
|
|
11.6
|
%
|
|
5.4
|
%
|
|
6.8
|
%
|
|||||
Selling, general and administrative expenses
|
|
15,446
|
|
|
21,458
|
|
|
32,723
|
|
|
6,517
|
|
|
76,144
|
|
|||||
Operating income (loss)
|
|
(8,309
|
)
|
|
(8,783
|
)
|
|
22,928
|
|
|
(977
|
)
|
|
4,859
|
|
|||||
Operating income (loss) %
|
|
(2.2
|
)%
|
|
(3.7
|
)%
|
|
4.8
|
%
|
|
(1.0
|
)%
|
|
0.4
|
%
|
|||||
Fiscal Year 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated revenues
|
|
$
|
349,011
|
|
|
$
|
249,795
|
|
|
$
|
563,512
|
|
|
$
|
149,599
|
|
|
$
|
1,311,917
|
|
Gross profit
|
|
29,301
|
|
|
18,553
|
|
|
67,843
|
|
|
10,294
|
|
|
125,991
|
|
|||||
Gross profit %
|
|
8.4
|
%
|
|
7.4
|
%
|
|
12.0
|
%
|
|
6.9
|
%
|
|
9.6
|
%
|
|||||
Selling, general and administrative expenses
|
|
18,157
|
|
|
22,056
|
|
|
34,394
|
|
|
10,502
|
|
|
85,109
|
|
|||||
Operating income (loss)
|
|
11,144
|
|
|
(3,503
|
)
|
|
33,449
|
|
|
(208
|
)
|
|
40,882
|
|
|||||
Operating income (loss) %
|
|
3.2
|
%
|
|
(1.4
|
)%
|
|
5.9
|
%
|
|
(0.1
|
)%
|
|
3.1
|
%
|
|||||
Variances Fiscal Year 2018 to Fiscal Year 2017 Increase/(Decrease)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated revenues
|
|
$
|
(117,453
|
)
|
|
$
|
82,249
|
|
|
$
|
(167,000
|
)
|
|
$
|
96,248
|
|
|
$
|
(105,956
|
)
|
Gross profit
|
|
11,163
|
|
|
20,748
|
|
|
(29,873
|
)
|
|
8,895
|
|
|
10,933
|
|
|||||
Selling, general and administrative expenses
|
|
2,104
|
|
|
2,450
|
|
|
(1,038
|
)
|
|
4,757
|
|
|
8,273
|
|
|||||
Operating income
|
|
(8,222
|
)
|
|
17,581
|
|
|
(28,835
|
)
|
|
4,138
|
|
|
(15,338
|
)
|
|||||
Variances Fiscal Year 2017 to Fiscal Year 2016 Increase/(Decrease)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated revenues
|
|
$
|
24,373
|
|
|
$
|
(9,272
|
)
|
|
$
|
(81,816
|
)
|
|
$
|
(47,693
|
)
|
|
$
|
(114,408
|
)
|
Gross profit
|
|
(22,164
|
)
|
|
(5,878
|
)
|
|
(12,192
|
)
|
|
(4,754
|
)
|
|
(44,988
|
)
|
|||||
Selling, general and administrative expenses
|
|
(2,711
|
)
|
|
(598
|
)
|
|
(1,671
|
)
|
|
(3,985
|
)
|
|
(8,965
|
)
|
|||||
Operating income
|
|
(19,453
|
)
|
|
(5,280
|
)
|
|
(10,521
|
)
|
|
(769
|
)
|
|
(36,023
|
)
|
•
|
It does not include impairments to goodwill and other intangible assets. While impairments to intangible assets are non-cash expenses in the period recognized, cash or other consideration was still transferred in exchange for the intangible assets in the period of the acquisition. Any measure that excludes impairments to intangible assets has material limitations since these expenses represent the loss of an asset that was acquired in exchange for cash or other assets.
|
•
|
It does not include interest expense. Because we have borrowed money to finance our operations and to acquire businesses, pay commitment fees to maintain our senior secured revolving credit facility, and incur fees to issue letters of credit under the senior secured revolving credit facility, interest expense is a necessary and ongoing part of our costs and has assisted us in generating revenue. Therefore, any measure that excludes interest expense has material limitations.
|
•
|
It does not include income taxes. Because the payment of income taxes is a necessary and ongoing part of our operations, any measure that excludes income taxes has material limitations.
|
•
|
It does not include depreciation or amortization expense. Because we use capital and intangible assets to generate revenue, depreciation and amortization expense is a necessary element of our cost structure. Therefore, any measure that excludes depreciation or amortization expense has material limitations.
|
|
Fiscal Years Ended
|
||||||||||
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2016 |
||||||
|
(in thousands)
|
||||||||||
Net income (loss) attributable to Matrix Service Company
|
$
|
(11,480
|
)
|
|
$
|
(183
|
)
|
|
$
|
28,863
|
|
Goodwill and other intangible asset impairment
|
17,998
|
|
|
—
|
|
|
—
|
|
|||
Interest expense
|
2,600
|
|
|
2,211
|
|
|
852
|
|
|||
Provision (benefit) for federal, state and foreign income taxes
|
(668
|
)
|
|
2,308
|
|
|
14,116
|
|
|||
Depreciation and amortization
|
20,347
|
|
|
21,602
|
|
|
21,441
|
|
|||
Adjusted EBITDA
|
$
|
28,797
|
|
|
$
|
25,938
|
|
|
$
|
65,272
|
|
Liquidity as of June 30, 2017
|
$
|
122,206
|
|
Net increase in cash
|
20,252
|
|
|
Increase in credit facility capacity constraint
|
(20,649
|
)
|
|
Net repayments on credit facility
|
44,931
|
|
|
Increase in letters of credit outstanding
|
(29,248
|
)
|
|
Foreign currency translation of outstanding borrowings
|
(249
|
)
|
|
Liquidity as of June 30, 2018
|
$
|
137,243
|
|
•
|
Changes in costs and estimated earnings in excess of billings on uncompleted contracts and billings on uncompleted contracts in excess of costs due to contract terms that determine the timing of billings to customers and the collection of those billings:
|
•
|
Some cost plus and fixed price customer contracts are billed based on milestones which may require us to incur significant expenditures prior to collections from our customers.
|
•
|
Time and material contracts are normally billed in arrears. Therefore, we are routinely required to carry these costs until they can be billed and collected.
|
•
|
Some of our large construction projects may require significant cash retentions or security in the form of letters of credit. The timing of collection of retentions is often uncertain.
|
•
|
Other changes in working capital.
|
•
|
Capital expenditures.
|
•
|
Acquisitions and disposals of businesses.
|
•
|
Strategic investments in new operations.
|
•
|
Purchases of shares under our stock buyback program.
|
•
|
Contract disputes which can be significant.
|
•
|
Collection issues, including those caused by weak commodity prices or other factors which can lead to credit deterioration of our customers
|
•
|
Capacity constraints under our senior secured revolving credit facility and remaining in compliance with all covenants contained in the Credit Agreement
|
•
|
Cash on hand outside of the United States that cannot be repatriated without incremental taxation
|
Net Cash Provided by Operating Activities
|
|||
(In thousands)
|
|||
|
|||
Net income
|
$
|
(11,480
|
)
|
Goodwill and other intangible asset impairment
|
17,998
|
|
|
Non-cash expenses
|
28,410
|
|
|
Deferred income tax
|
(1,186
|
)
|
|
Cash effect of changes in working capital, net of acquisitions
|
40,532
|
|
|
Other
|
397
|
|
|
Net cash provided by operating activities
|
$
|
74,671
|
|
•
|
Accounts receivable, net of bad debt expense recognized during the period and the settlement of $2.0 million of accounts receivable in exchange for backlog (see Item 1. Financial Statements and Supplementary Data, Note 4 - Intangible Assets Including Goodwill), decreased by
$5.5 million
during fiscal 2018, which increased cash flows from operating activities. The variance is primarily attributable to the timing of billing and collections and a decline in business volumes compared to the prior year.
|
•
|
Costs and estimated earnings in excess of billings on uncompleted contracts ("CIE") decreased
$14.5 million
while billings on uncompleted contracts in excess of costs and estimated earnings ("BIE") increased
$45.6 million
, both of which increased cash flows from operating activities. The changes were due to the timing of invoice billings and collections. CIE and BIE balances can experience significant day-to-day fluctuations based on contract terms, the timing of when job costs are incurred, the invoicing of those job costs to the customer and subsequent cash collection, and other factors.
|
•
|
Accounts payable decreased by
$25.9 million
, which reduced cash flows from operating activities. The decrease was primarily due to the timing of payments and lower volumes of work in fiscal 2018 compared to the prior year.
|
•
|
Our Leverage Ratio, determined as of the end of each fiscal quarter, may not exceed 3.00 to 1.00.
|
•
|
We are required to maintain a Fixed Charge Coverage Ratio, determined as of the end of each fiscal quarter, greater than or equal to 1.25 to 1.00.
|
•
|
Asset dispositions (other than dispositions in which all of the net cash proceeds therefrom are reinvested into the Company and dispositions of inventory and obsolete or unneeded equipment in the ordinary course of business) are limited to $20.0 million per 12-month period.
|
•
|
The ABR or the Adjusted LIBO Rate, in the case of revolving loans denominated in U.S. Dollars;
|
•
|
The Canadian Prime Rate or the CDOR rate, in the case of revolving loans denominated in Canadian Dollars;
|
•
|
The Adjusted LIBO Rate, in the case of revolving loans denominated in Pounds Sterling or Australian Dollars; or
|
•
|
The EURIBO Rate, in the case of revolving loans denominated in Euros,
|
•
|
exclude non-cash stock-based compensation expense,
|
•
|
include pro forma EBITDA of acquired businesses as if the acquisition occurred at the beginning of the previous four quarters, and
|
•
|
exclude certain other extraordinary items, as defined in the Credit Agreement.
|
|
|
June 30,
2018 |
|
June 30,
2017 |
||||
|
|
(In thousands)
|
||||||
Senior secured revolving credit facility
|
|
$
|
300,000
|
|
|
$
|
300,000
|
|
Capacity constraint due to the Leverage Ratio
|
|
189,741
|
|
|
169,092
|
|
||
Capacity under the senior secured revolving credit facility
|
|
110,259
|
|
|
130,908
|
|
||
Borrowings outstanding
|
|
—
|
|
|
44,682
|
|
||
Letters of credit
|
|
37,073
|
|
|
7,825
|
|
||
Availability under the senior secured revolving credit facility
|
|
$
|
73,186
|
|
|
$
|
78,401
|
|
|
|
Expiration Period
|
||||||||||||||||||
|
|
Less than 1
Year
|
|
1–3 Years
|
|
3–5 Years
|
|
More than 5
Years
|
|
Total
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Letters of credit
(1)
|
|
$
|
28,474
|
|
|
$
|
15,734
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
44,208
|
|
Surety bonds
|
|
268,384
|
|
|
18,190
|
|
|
1,538
|
|
|
—
|
|
|
288,112
|
|
|||||
Total
|
|
$
|
296,858
|
|
|
$
|
33,924
|
|
|
$
|
1,538
|
|
|
$
|
—
|
|
|
$
|
332,320
|
|
|
|
|
|
|
(1)
|
All letters of credit issued under our senior secured revolving credit facility are in support of our workers’ compensation insurance programs or certain construction contracts. The letters of credit that support our workers’ compensation programs are expected to renew annually through the term of our senior secured revolving credit facility. The letters of credit that support construction contracts will expire within a year. Our Credit Agreement allows exclusion of letters of credit that support our workers' compensation programs when calculating availability under the credit facility.
|
|
|
Contractual Obligations by Expiration Period
|
||||||||||||||||||
|
|
Less than 1
Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than 5
Years
|
|
Total
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Operating leases
|
|
$
|
7,541
|
|
|
$
|
12,143
|
|
|
$
|
7,218
|
|
|
$
|
6,201
|
|
|
$
|
33,103
|
|
Purchase obligations
|
|
1,495
|
|
|
1,975
|
|
|
—
|
|
|
—
|
|
|
3,470
|
|
|||||
Total contractual obligations
|
|
$
|
9,036
|
|
|
$
|
14,118
|
|
|
$
|
7,218
|
|
|
$
|
6,201
|
|
|
$
|
36,573
|
|
•
|
The ABR or the Adjusted LIBO Rate, in the case of revolving loans denominated in U.S. Dollars;
|
•
|
The Canadian Prime Rate or the CDOR rate, in the case of revolving loans denominated in Canadian Dollars;
|
•
|
The Adjusted LIBO Rate, in the case of revolving loans denominated in Pounds Sterling or Australian Dollars; or
|
•
|
The EURIBO Rate, in the case of revolving loans denominated in Euros,
|
Financial Statements of the Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
/S/ John R. Hewitt
|
|
|
|
/S/ Kevin S. Cavanah
|
John R. Hewitt
|
|
|
|
Kevin S. Cavanah
|
President and Chief Executive Officer
|
|
|
|
Vice President and Chief Financial Officer
|
|
||||||||||||
|
|
Fiscal Years Ended
|
||||||||||
|
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2016 |
||||||
Revenues
|
|
$
|
1,091,553
|
|
|
$
|
1,197,509
|
|
|
$
|
1,311,917
|
|
Cost of revenues
|
|
999,617
|
|
|
1,116,506
|
|
|
1,185,926
|
|
|||
Gross profit
|
|
91,936
|
|
|
81,003
|
|
|
125,991
|
|
|||
Selling, general and administrative expenses
|
|
84,417
|
|
|
76,144
|
|
|
85,109
|
|
|||
Goodwill and other intangible asset impairment
|
|
17,998
|
|
|
—
|
|
|
—
|
|
|||
Operating income (loss)
|
|
(10,479
|
)
|
|
4,859
|
|
|
40,882
|
|
|||
Other income (expense):
|
|
|
|
|
|
|
||||||
Interest expense
|
|
(2,600
|
)
|
|
(2,211
|
)
|
|
(852
|
)
|
|||
Interest income
|
|
381
|
|
|
132
|
|
|
190
|
|
|||
Other
|
|
550
|
|
|
(334
|
)
|
|
(567
|
)
|
|||
Income (loss) before income tax expense
|
|
(12,148
|
)
|
|
2,446
|
|
|
39,653
|
|
|||
Provision (benefit) for federal, state and foreign income taxes
|
|
(668
|
)
|
|
2,308
|
|
|
14,116
|
|
|||
Net income (loss)
|
|
(11,480
|
)
|
|
138
|
|
|
25,537
|
|
|||
Less: Net income (loss) attributable to noncontrolling interest
|
|
—
|
|
|
321
|
|
|
(3,326
|
)
|
|||
Net income (loss) attributable to Matrix Service Company
|
|
$
|
(11,480
|
)
|
|
$
|
(183
|
)
|
|
$
|
28,863
|
|
Basic earnings (loss) per common share
|
|
$
|
(0.43
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
1.09
|
|
Diluted earnings (loss) per common share
|
|
$
|
(0.43
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
1.07
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
26,769
|
|
|
26,533
|
|
|
26,597
|
|
|||
Diluted
|
|
26,769
|
|
|
26,533
|
|
|
27,100
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2016 |
||||||
Net income (loss)
|
|
$
|
(11,480
|
)
|
|
$
|
138
|
|
|
$
|
25,537
|
|
Other comprehensive loss, net of tax:
|
|
|
|
|
|
|
||||||
Foreign currency translation loss (net of tax expense (benefit) of ($24), $180 and $236 for the fiscal years ended June 30, 2018, 2017 and 2016, respectively)
|
|
(87
|
)
|
|
(479
|
)
|
|
(919
|
)
|
|||
Comprehensive income (loss)
|
|
(11,567
|
)
|
|
(341
|
)
|
|
24,618
|
|
|||
Less: Comprehensive income (loss) attributable to noncontrolling interest
|
|
—
|
|
|
321
|
|
|
(3,326
|
)
|
|||
Comprehensive income (loss) attributable to Matrix Service Company
|
|
$
|
(11,567
|
)
|
|
$
|
(662
|
)
|
|
$
|
27,944
|
|
|
|
June 30,
2018 |
|
June 30,
2017 |
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
64,057
|
|
|
$
|
43,805
|
|
Accounts receivable, less allowances (2018 - $6,327; 2017 - $9,887)
|
|
203,388
|
|
|
210,953
|
|
||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
|
76,632
|
|
|
91,180
|
|
||
Inventories
|
|
5,152
|
|
|
3,737
|
|
||
Income taxes receivable
|
|
3,359
|
|
|
4,042
|
|
||
Other current assets
|
|
4,458
|
|
|
4,913
|
|
||
Total current assets
|
|
357,046
|
|
|
358,630
|
|
||
Property, plant and equipment, at cost:
|
|
|
|
|
||||
Land and buildings
|
|
40,424
|
|
|
38,916
|
|
||
Construction equipment
|
|
89,036
|
|
|
94,298
|
|
||
Transportation equipment
|
|
48,339
|
|
|
48,574
|
|
||
Office equipment and software
|
|
41,236
|
|
|
36,556
|
|
||
Construction in progress
|
|
1,353
|
|
|
5,952
|
|
||
Total property, plant and equipment - at cost
|
|
220,388
|
|
|
224,296
|
|
||
Accumulated depreciation
|
|
(147,743
|
)
|
|
(144,022
|
)
|
||
Property, plant and equipment - net
|
|
72,645
|
|
|
80,274
|
|
||
Goodwill
|
|
96,162
|
|
|
113,501
|
|
||
Other intangible assets
|
|
22,814
|
|
|
26,296
|
|
||
Deferred income taxes
|
|
4,848
|
|
|
3,385
|
|
||
Other assets
|
|
4,518
|
|
|
3,944
|
|
||
Total assets
|
|
$
|
558,033
|
|
|
$
|
586,030
|
|
|
|
|
|
|
|
|
June 30,
2018 |
|
June 30,
2017 |
||||
Liabilities and stockholders’ equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
79,439
|
|
|
$
|
105,649
|
|
Billings on uncompleted contracts in excess of costs and estimated earnings
|
|
120,740
|
|
|
75,127
|
|
||
Accrued wages and benefits
|
|
24,375
|
|
|
20,992
|
|
||
Accrued insurance
|
|
9,080
|
|
|
9,340
|
|
||
Income taxes payable
|
|
7
|
|
|
169
|
|
||
Other accrued expenses
|
|
4,824
|
|
|
7,699
|
|
||
Total current liabilities
|
|
238,465
|
|
|
218,976
|
|
||
Deferred income taxes
|
|
429
|
|
|
128
|
|
||
Borrowings under senior secured revolving credit facility
|
|
—
|
|
|
44,682
|
|
||
Other liabilities
|
|
296
|
|
|
435
|
|
||
Total liabilities
|
|
239,190
|
|
|
264,221
|
|
||
Commitments and contingencies
|
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
||||
Common stock—$.01 par value; 60,000,000 shares authorized; 27,888,217 shares issued as of June 30, 2018 and June 30, 2017; 26,853,823 and 26,600,562 shares outstanding as of June 30, 2018 and June 30, 2017
|
|
279
|
|
|
279
|
|
||
Additional paid-in capital
|
|
132,198
|
|
|
128,419
|
|
||
Retained earnings
|
|
211,494
|
|
|
222,974
|
|
||
Accumulated other comprehensive loss
|
|
(7,411
|
)
|
|
(7,324
|
)
|
||
|
|
336,560
|
|
|
344,348
|
|
||
Less treasury stock, at cost — 1,034,394 and 1,287,655 shares as of June 30, 2018 and June 30, 2017
|
|
(17,717
|
)
|
|
(22,539
|
)
|
||
Total stockholders' equity
|
|
318,843
|
|
|
321,809
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
558,033
|
|
|
$
|
586,030
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2016 |
||||||
Operating activities:
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
$
|
(11,480
|
)
|
|
$
|
138
|
|
|
$
|
25,537
|
|
Adjustments to reconcile net income to net cash provided (used) by operating activities, net of effects of acquisitions:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
20,347
|
|
|
21,602
|
|
|
21,441
|
|
|||
Goodwill and other intangible asset impairment
|
|
17,998
|
|
|
—
|
|
|
—
|
|
|||
Deferred income tax
|
|
(1,186
|
)
|
|
(2,556
|
)
|
|
1,871
|
|
|||
Gain on sale of property, plant and equipment
|
|
(662
|
)
|
|
(142
|
)
|
|
(39
|
)
|
|||
Provision for uncollectible accounts
|
|
107
|
|
|
1,748
|
|
|
6,034
|
|
|||
Stock-based compensation expense
|
|
8,618
|
|
|
7,461
|
|
|
6,317
|
|
|||
Other
|
|
397
|
|
|
289
|
|
|
240
|
|
|||
Changes in operating assets and liabilities increasing (decreasing) cash, net of effects from acquisitions:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
5,504
|
|
|
(11,932
|
)
|
|
4,152
|
|
|||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
|
14,548
|
|
|
13,567
|
|
|
(17,930
|
)
|
|||
Inventories
|
|
(1,415
|
)
|
|
198
|
|
|
606
|
|
|||
Other assets and liabilities
|
|
369
|
|
|
(7,641
|
)
|
|
7,380
|
|
|||
Accounts payable
|
|
(25,883
|
)
|
|
(37,047
|
)
|
|
14,698
|
|
|||
Billings on uncompleted contracts in excess of costs and estimated earnings
|
|
45,613
|
|
|
5,212
|
|
|
(38,377
|
)
|
|||
Accrued expenses
|
|
1,796
|
|
|
(9,643
|
)
|
|
1,657
|
|
|||
Net cash provided (used) by operating activities
|
|
74,671
|
|
|
(18,746
|
)
|
|
33,587
|
|
|||
Investing activities:
|
|
|
|
|
|
|
||||||
Acquisitions, net of cash acquired (Note 2)
|
|
(1,687
|
)
|
|
(40,819
|
)
|
|
(13,049
|
)
|
|||
Acquisition of property, plant and equipment
|
|
(8,711
|
)
|
|
(11,908
|
)
|
|
(13,939
|
)
|
|||
Proceeds from asset sales
|
|
1,062
|
|
|
1,308
|
|
|
422
|
|
|||
Net cash used by investing activities
|
|
$
|
(9,336
|
)
|
|
$
|
(51,419
|
)
|
|
$
|
(26,566
|
)
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2016 |
||||||
Financing activities:
|
|
|
|
|
|
|
||||||
Advances under senior secured revolving credit facility
|
|
$
|
85,317
|
|
|
$
|
126,933
|
|
|
$
|
10,213
|
|
Repayments of advances under senior secured revolving credit facility
|
|
(130,248
|
)
|
|
(82,251
|
)
|
|
(19,017
|
)
|
|||
Payment of debt amendment fees
|
|
(364
|
)
|
|
(1,073
|
)
|
|
—
|
|
|||
Open market purchase of treasury shares
|
|
—
|
|
|
—
|
|
|
(10,461
|
)
|
|||
Issuances of common stock
|
|
317
|
|
|
253
|
|
|
638
|
|
|||
Proceeds from issuance of common stock under employee stock purchase plan
|
|
293
|
|
|
305
|
|
|
335
|
|
|||
Repurchase of common stock for payment of statutory taxes due on equity-based compensation
|
|
(627
|
)
|
|
(2,290
|
)
|
|
(4,588
|
)
|
|||
Capital contributions from noncontrolling interest
|
|
—
|
|
|
855
|
|
|
10,892
|
|
|||
Repayment of acquired long-term debt
|
|
—
|
|
|
—
|
|
|
(1,858
|
)
|
|||
Net cash provided (used) by financing activities
|
|
(45,312
|
)
|
|
42,732
|
|
|
(13,846
|
)
|
|||
Effect of exchange rate changes on cash
|
|
229
|
|
|
(418
|
)
|
|
(758
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
|
20,252
|
|
|
(27,851
|
)
|
|
(7,583
|
)
|
|||
Cash and cash equivalents, beginning of period
|
|
43,805
|
|
|
71,656
|
|
|
79,239
|
|
|||
Cash and cash equivalents, end of period
|
|
$
|
64,057
|
|
|
$
|
43,805
|
|
|
$
|
71,656
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
|
||||||
Income taxes
|
|
$
|
1,410
|
|
|
$
|
11,968
|
|
|
$
|
9,365
|
|
Interest
|
|
$
|
2,719
|
|
|
$
|
1,788
|
|
|
$
|
881
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
|
||||||
Accrued acquisition working capital adjustment (Note 2)
|
|
$
|
—
|
|
|
$
|
1,687
|
|
|
$
|
—
|
|
Purchases of property, plant and equipment on account
|
|
$
|
156
|
|
|
$
|
483
|
|
|
$
|
193
|
|
Assumption of debt from acquisition (Note 2)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,858
|
|
|
|
Common
Stock
|
|
Additional
Paid-In Capital
|
|
Retained
Earnings
|
|
Treasury
Stock
|
|
Accumulated
Other
Comprehensive
Income(Loss)
|
|
Non- Controlling Interest
|
|
Total
|
||||||||||||||
Balances, July 1, 2015
|
|
$
|
279
|
|
|
$
|
123,038
|
|
|
$
|
194,394
|
|
|
$
|
(18,489
|
)
|
|
$
|
(5,926
|
)
|
|
$
|
(8,742
|
)
|
|
$
|
284,554
|
|
Capital contributions from noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,892
|
|
|
10,892
|
|
|||||||
Net income (loss)
|
|
—
|
|
|
—
|
|
|
28,863
|
|
|
—
|
|
|
—
|
|
|
(3,326
|
)
|
|
25,537
|
|
|||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(919
|
)
|
|
—
|
|
|
(919
|
)
|
|||||||
Treasury Shares sold to Employee Stock Purchase Plan (17,304 shares)
|
|
—
|
|
|
177
|
|
|
—
|
|
|
158
|
|
|
—
|
|
|
—
|
|
|
335
|
|
|||||||
Exercise of stock options (68,037 shares)
|
|
—
|
|
|
14
|
|
|
—
|
|
|
624
|
|
|
—
|
|
|
—
|
|
|
638
|
|
|||||||
Issuance of deferred shares (631,443 shares)
|
|
—
|
|
|
(5,849
|
)
|
|
—
|
|
|
5,849
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Treasury shares repurchased to satisfy tax withholding obligations (205,504 shares)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,588
|
)
|
|
—
|
|
|
—
|
|
|
(4,588
|
)
|
|||||||
Tax effect of exercised stock options and vesting of deferred shares
|
|
—
|
|
|
3,261
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,261
|
|
|||||||
Open market purchases of treasury shares (654,958 shares)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,461
|
)
|
|
—
|
|
|
—
|
|
|
(10,461
|
)
|
|||||||
Stock-based compensation expense
|
|
—
|
|
|
6,317
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,317
|
|
|||||||
Balances, June 30, 2016
|
|
279
|
|
|
126,958
|
|
|
223,257
|
|
|
(26,907
|
)
|
|
(6,845
|
)
|
|
(1,176
|
)
|
|
315,566
|
|
|||||||
Retrospective adjustment for change in accounting for stock-based compensation forfeitures upon adoption of ASU 2016-09
|
|
—
|
|
|
100
|
|
|
(100
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Balances, July 1, 2016, as adjusted
|
|
279
|
|
|
127,058
|
|
|
223,157
|
|
|
(26,907
|
)
|
|
(6,845
|
)
|
|
(1,176
|
)
|
|
315,566
|
|
|||||||
Capital contributions from noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
855
|
|
|
855
|
|
|||||||
Net income (loss)
|
|
—
|
|
|
—
|
|
|
(183
|
)
|
|
—
|
|
|
—
|
|
|
321
|
|
|
138
|
|
|||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(479
|
)
|
|
—
|
|
|
(479
|
)
|
|||||||
Treasury Shares sold to Employee Stock Purchase Plan (16,609 shares)
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
|
330
|
|
|
—
|
|
|
—
|
|
|
305
|
|
|||||||
Exercise of stock options (24,813 shares)
|
|
—
|
|
|
(317
|
)
|
|
—
|
|
|
570
|
|
|
—
|
|
|
—
|
|
|
253
|
|
|||||||
Issuance of deferred shares (396,530 shares)
|
|
—
|
|
|
(5,758
|
)
|
|
—
|
|
|
5,758
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Treasury shares repurchased to satisfy tax withholding obligations (134,535 shares)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,290
|
)
|
|
—
|
|
|
—
|
|
|
(2,290
|
)
|
|||||||
Stock-based compensation expense
|
|
—
|
|
|
7,461
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,461
|
|
|||||||
Balances, June 30, 2017
|
|
279
|
|
|
128,419
|
|
|
222,974
|
|
|
(22,539
|
)
|
|
(7,324
|
)
|
|
—
|
|
|
321,809
|
|
|||||||
Net income (loss)
|
|
—
|
|
|
—
|
|
|
(11,480
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,480
|
)
|
|||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(87
|
)
|
|
—
|
|
|
(87
|
)
|
|||||||
Treasury Shares Sold to Employee Stock Purchase Plan (21,920 shares)
|
|
—
|
|
|
(130
|
)
|
|
—
|
|
|
423
|
|
|
—
|
|
|
—
|
|
|
293
|
|
|||||||
Exercise of stock options (31,050 shares)
|
|
—
|
|
|
(240
|
)
|
|
—
|
|
|
557
|
|
|
—
|
|
|
—
|
|
|
317
|
|
|||||||
Issuance of deferred shares (253,241 shares)
|
|
—
|
|
|
(4,469
|
)
|
|
—
|
|
|
4,469
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Treasury shares repurchased to satisfy tax withholding obligations (52,950 shares)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(627
|
)
|
|
—
|
|
|
—
|
|
|
(627
|
)
|
|||||||
Stock-based compensation expense
|
|
—
|
|
|
8,618
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,618
|
|
|||||||
Balances, June 30, 2018
|
|
$
|
279
|
|
|
$
|
132,198
|
|
|
$
|
211,494
|
|
|
$
|
(17,717
|
)
|
|
$
|
(7,411
|
)
|
|
$
|
—
|
|
|
$
|
318,843
|
|
•
|
there is a legal basis for the claim;
|
•
|
the additional costs were caused by circumstances that were unforeseen by the Company and are not the result of deficiencies in our performance;
|
•
|
the costs are identifiable or determinable and are reasonable in view of the work performed; and
|
•
|
the evidence supporting the claim is objective and verifiable.
|
Cash paid for equity interest
|
$
|
46,000
|
|
Cash paid for working capital
|
6,837
|
|
|
Less: cash acquired
|
(10,331
|
)
|
|
Net purchase price
|
$
|
42,506
|
|
Cash and cash equivalents
|
$
|
10,331
|
|
Accounts receivable
|
10,273
|
|
|
Costs and estimated earnings in excess of billings on uncompleted contracts
|
746
|
|
|
Other current assets
|
454
|
|
|
Current assets
|
21,804
|
|
|
Property, plant and equipment
|
942
|
|
|
Goodwill
|
35,146
|
|
|
Other intangible assets
|
10,220
|
|
|
Total assets acquired
|
68,112
|
|
|
Accounts payable
|
962
|
|
|
Billings on uncompleted contracts in excess of costs and estimated earnings
|
11,648
|
|
|
Other accrued expenses
|
2,475
|
|
|
Current liabilities
|
15,085
|
|
|
Other liabilities
|
190
|
|
|
Net assets acquired
|
52,837
|
|
|
Less: cash acquired
|
10,331
|
|
|
Net purchase price
|
$
|
42,506
|
|
|
Fiscal Years Ended
|
|||||
|
June 30, 2017
|
June 30, 2016
|
||||
|
(In thousands, except per share data)
|
|||||
Revenues
|
$
|
1,233,372
|
|
$
|
1,427,313
|
|
Net income attributable to Matrix Service Company
|
$
|
7,326
|
|
$
|
32,352
|
|
Basic earnings per common share
|
$
|
0.28
|
|
$
|
1.22
|
|
Diluted earnings per common share
|
$
|
0.27
|
|
$
|
1.19
|
|
•
|
The combined entities recorded approximately
$3.3 million
of acquisition and integration expenses during the fiscal year ended June 30, 2017, which were transferred in the pro forma earnings to the fiscal year ended June 30, 2016 in order to report them as if they were incurred on July 1, 2015. Pro forma earnings were adjusted to include integration expenses that would have been recognized had the acquisition occurred on July 1, 2015 of
$0.8 million
and
$0.9 million
during the fiscal years ended June 30, 2017 and 2016, respectively.
|
•
|
Interest expense for the combined entities was increased by
$0.7 million
for the fiscal year ended June 30, 2017 and by
$1.4 million
during the fiscal year ended June 30, 2016. The increase was attributable to the assumption that the Company's borrowings of $46.0 million used to fund a portion of the acquisition had been outstanding as of July 1, 2015. This increase was partially offset by the assumption that Houston Interests' former debt was extinguished as of July 1, 2015.
|
•
|
Depreciation and intangible asset amortization expense for the combined entities was reduced by
$1.4 million
during the fiscal year ended June 30, 2017 and was increased by
$1.8 million
during the fiscal year ended June 30, 2016. These adjustments are primarily due to the recognition of amortizable intangible assets as part of the acquisition and the effect of fair value adjustments to acquired property, plant and equipment.
|
•
|
Pro forma earnings were adjusted to include additional income tax expense of
$2.0 million
and
$2.2 million
during the fiscal years ended June 30, 2017 and 2016, respectively. Houston Interests was previously an exempt entity and income taxes were not assessed in its historical financial information.
|
Current assets
|
$
|
5,574
|
|
Property, plant and equipment
|
4,347
|
|
|
Goodwill
|
7,030
|
|
|
Other intangible assets
|
720
|
|
|
Other assets
|
233
|
|
|
Total assets acquired
|
17,904
|
|
|
Current liabilities
|
1,669
|
|
|
Deferred income taxes
|
329
|
|
|
Long-term debt
|
1,858
|
|
|
Other liabilities
|
407
|
|
|
Net assets acquired
|
13,641
|
|
|
Less: cash acquired
|
592
|
|
|
Net purchase price
|
$
|
13,049
|
|
|
|
June 30,
2018 |
|
June 30,
2017 |
||||
|
|
(In thousands)
|
||||||
Costs and estimated earnings recognized on uncompleted contracts
|
|
$
|
2,081,799
|
|
|
$
|
1,919,054
|
|
Billings on uncompleted contracts
|
|
2,125,907
|
|
|
1,903,001
|
|
||
|
|
$
|
(44,108
|
)
|
|
$
|
16,053
|
|
Shown in balance sheet as:
|
|
|
|
|
||||
Costs and estimated earnings in excess of billings on uncompleted contracts
|
|
$
|
76,632
|
|
|
$
|
91,180
|
|
Billings on uncompleted contracts in excess of costs and estimated earnings
|
|
120,740
|
|
|
75,127
|
|
||
|
|
$
|
(44,108
|
)
|
|
$
|
16,053
|
|
|
|
Electrical
Infrastructure
|
|
Oil Gas &
Chemical
|
|
Storage
Solutions
|
|
Industrial
|
|
Total
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Net balance at June 30, 2015
|
|
$
|
42,374
|
|
|
$
|
14,008
|
|
|
$
|
9,664
|
|
|
$
|
5,472
|
|
|
$
|
71,518
|
|
Purchase of BTE (Note 2)
|
|
—
|
|
|
—
|
|
|
6,942
|
|
|
—
|
|
|
6,942
|
|
|||||
Translation adjustment
(1)
|
|
(204
|
)
|
|
—
|
|
|
75
|
|
|
(38
|
)
|
|
(167
|
)
|
|||||
Net balance at June 30, 2016
|
|
42,170
|
|
|
14,008
|
|
|
16,681
|
|
|
5,434
|
|
|
78,293
|
|
|||||
Purchase of Houston Interests (Note 2)
|
|
—
|
|
|
19,596
|
|
|
—
|
|
|
15,550
|
|
|
35,146
|
|
|||||
Acquisition related adjustments
|
|
—
|
|
|
—
|
|
|
88
|
|
|
—
|
|
|
88
|
|
|||||
Translation adjustment
(1)
|
|
(18
|
)
|
|
—
|
|
|
(5
|
)
|
|
(3
|
)
|
|
(26
|
)
|
|||||
Net balance at June 30, 2017
|
|
42,152
|
|
|
33,604
|
|
|
16,764
|
|
|
20,981
|
|
|
113,501
|
|
|||||
Goodwill impairment
|
|
(17,281
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,281
|
)
|
|||||
Translation adjustment
(1)
|
|
(45
|
)
|
|
—
|
|
|
(4
|
)
|
|
(9
|
)
|
|
(58
|
)
|
|||||
Net balance at June 30, 2018
|
|
$
|
24,826
|
|
|
$
|
33,604
|
|
|
$
|
16,760
|
|
|
$
|
20,972
|
|
|
$
|
96,162
|
|
|
|
|
|
|
(1)
|
The translation adjustments relate to the periodic translation of Canadian Dollar and South Korean Won denominated goodwill recorded as a part of prior acquisitions in Canada and South Korea, in which the local currency was determined to be the functional currency.
|
|
|
|
|
At June 30, 2018
|
||||||||||
|
|
Useful Life
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
||||||
|
|
(Years)
|
|
(In thousands)
|
||||||||||
Intellectual property
|
|
9 to 15
|
|
$
|
2,579
|
|
|
$
|
(1,603
|
)
|
|
$
|
976
|
|
Customer based
|
|
6 to 15
|
|
38,562
|
|
|
(16,763
|
)
|
|
21,799
|
|
|||
Non-compete Agreements
|
|
4
|
|
1,453
|
|
|
(1,414
|
)
|
|
39
|
|
|||
Trade names
|
|
—
|
|
1,630
|
|
|
(1,630
|
)
|
|
—
|
|
|||
Total other intangible assets
|
|
|
|
$
|
44,224
|
|
|
$
|
(21,410
|
)
|
|
$
|
22,814
|
|
|
|
|
|
At June 30, 2017
|
||||||||||
|
|
Useful Life
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
||||||
|
|
(Years)
|
|
(In thousands)
|
||||||||||
Intellectual property
|
|
9 to 15
|
|
$
|
2,579
|
|
|
$
|
(1,425
|
)
|
|
$
|
1,154
|
|
Customer based
|
|
1 to 15
|
|
38,207
|
|
|
(13,543
|
)
|
|
24,664
|
|
|||
Non-compete agreements
|
|
4 to 5
|
|
1,453
|
|
|
(1,298
|
)
|
|
155
|
|
|||
Trade name
|
|
1 to 3
|
|
1,630
|
|
|
(1,307
|
)
|
|
323
|
|
|||
Total other intangible assets
|
|
|
|
$
|
43,869
|
|
|
$
|
(17,573
|
)
|
|
$
|
26,296
|
|
•
|
Our Leverage Ratio, determined as of the end of each fiscal quarter, may not exceed
3.00
to
1.00
.
|
•
|
We are required to maintain a Fixed Charge Coverage Ratio, determined as of the end of each fiscal quarter, greater than or equal to
1.25
to
1.00
.
|
•
|
Asset dispositions (other than dispositions in which all of the net cash proceeds therefrom are reinvested into the Company and dispositions of inventory and obsolete or unneeded equipment in the ordinary course of business) are limited to
$20.0
million per 12-month period.
|
•
|
The ABR or the Adjusted LIBO Rate, in the case of revolving loans denominated in U.S. Dollars;
|
•
|
The Canadian Prime Rate or the CDOR rate, in the case of revolving loans denominated in Canadian Dollars;
|
•
|
The Adjusted LIBO Rate, in the case of revolving loans denominated in Pounds Sterling or Australian Dollars; or
|
•
|
The EURIBO Rate, in the case of revolving loans denominated in Euros,
|
|
|
June 30,
2018 |
|
June 30,
2017 |
||||
|
|
(In thousands)
|
||||||
Senior secured revolving credit facility
|
|
$
|
300,000
|
|
|
$
|
300,000
|
|
Capacity constraint due to the Leverage Ratio
|
|
189,741
|
|
|
169,092
|
|
||
Capacity under the senior secured revolving credit facility
|
|
110,259
|
|
|
130,908
|
|
||
Letters of credit issued
|
|
37,073
|
|
|
7,825
|
|
||
Borrowings outstanding
|
|
—
|
|
|
44,682
|
|
||
Availability under the senior secured revolving credit facility
|
|
$
|
73,186
|
|
|
$
|
78,401
|
|
•
|
reducing the Company's U.S. federal corporate income tax rate from
35%
to a blended rate of
28.06%
for fiscal 2018 as stipulated by the Internal Revenue Code for companies using a June 30 fiscal year end and to
21%
for fiscal years thereafter;
|
•
|
generally eliminating U.S. federal income tax on dividends from foreign subsidiaries;
|
•
|
requiring current inclusion in U.S. federal taxable income of certain earnings of controlled foreign corporations;
|
•
|
allowing full expensing of certain assets placed in service from September 27, 2017 and before January 1, 2023;
|
•
|
restricting further deductibility of executive performance compensation in excess of
$1.0 million
; and
|
•
|
disallowing certain entertainment expenses.
|
•
|
eliminating the deduction for domestic production activity;
|
•
|
limiting the annual deduction for business interest;
|
•
|
taxing global intangible low-tax income;
|
•
|
allowing a deduction for domestically earned foreign intangible income; and
|
•
|
establishing a new base erosion and anti-abuse tax on payments between U.S. taxpayers and foreign related parties.
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2016 |
||||||
|
|
(In thousands)
|
||||||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
(121
|
)
|
|
$
|
6,522
|
|
|
$
|
9,930
|
|
State
|
|
135
|
|
|
(185
|
)
|
|
2,570
|
|
|||
Foreign
|
|
504
|
|
|
(1,509
|
)
|
|
(262
|
)
|
|||
|
|
518
|
|
|
4,828
|
|
|
12,238
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
1,093
|
|
|
618
|
|
|
887
|
|
|||
State
|
|
(590
|
)
|
|
101
|
|
|
67
|
|
|||
Foreign
|
|
(1,689
|
)
|
|
(3,239
|
)
|
|
924
|
|
|||
|
|
(1,186
|
)
|
|
(2,520
|
)
|
|
1,878
|
|
|||
|
|
$
|
(668
|
)
|
|
$
|
2,308
|
|
|
$
|
14,116
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2016 |
||||||
|
|
(In thousands)
|
||||||||||
Expected provision (benefit) for federal income taxes at the statutory rate
|
|
$
|
(3,408
|
)
|
|
$
|
857
|
|
|
$
|
13,879
|
|
State income taxes, net of federal benefit
|
|
247
|
|
|
808
|
|
|
1,827
|
|
|||
Impairment of non-deductible goodwill
(1)
|
|
2,342
|
|
|
—
|
|
|
—
|
|
|||
Charges without tax benefit
|
|
1,100
|
|
|
1,741
|
|
|
2,187
|
|
|||
Change in valuation allowance
|
|
1,173
|
|
|
1,295
|
|
|
311
|
|
|||
Excess tax expense (benefit) on stock-based compensation
(2)
|
|
511
|
|
|
(496
|
)
|
|
—
|
|
|||
Remeasurement of deferred taxes
(3)
|
|
(455
|
)
|
|
—
|
|
|
—
|
|
|||
IRC S199 deduction
|
|
—
|
|
|
(749
|
)
|
|
(999
|
)
|
|||
Research and development and other tax credits
|
|
(1,665
|
)
|
|
(1,626
|
)
|
|
(1,928
|
)
|
|||
Foreign tax differential
|
|
(10
|
)
|
|
1,496
|
|
|
(815
|
)
|
|||
Noncontrolling interest
|
|
—
|
|
|
(112
|
)
|
|
1,164
|
|
|||
Change in uncertain tax positions
|
|
(7
|
)
|
|
(22
|
)
|
|
(569
|
)
|
|||
Adjustment to tax accounts
|
|
(435
|
)
|
|
(924
|
)
|
|
(786
|
)
|
|||
Other
|
|
(61
|
)
|
|
40
|
|
|
(155
|
)
|
|||
Provision (benefit) for federal, state and foreign income taxes
|
|
$
|
(668
|
)
|
|
$
|
2,308
|
|
|
$
|
14,116
|
|
|
|
|
|
|
(1)
|
Relates to a $17.3 million impairment of goodwill, which included $8.3 million of non-deductible goodwill. See Note 4 - Goodwill and Other Intangible Assets for more information about the impairment.
|
(2)
|
This represents the amount recognized for excess tax benefits upon the vesting or exercise of nonvested deferred share awards and stock options, respectively, for which the Company expects to receive an income tax deduction. The Company adopted ASU 2016-09 in fiscal 2017, which required that excess tax benefits and tax deficiencies be recognized as part of the provision for income taxes.
|
(3)
|
This represents the remeasurement of deferred taxes in connection with Tax Cuts and Jobs Act - see Deferred Taxes Remeasurement paragraph above.
|
|
|
June 30,
2018 |
|
June 30,
2017 |
||||
|
|
(In thousands)
|
||||||
Deferred tax assets:
|
|
|
|
|
||||
Warranty reserve
|
|
$
|
206
|
|
|
$
|
312
|
|
Bad debt reserve
|
|
1,629
|
|
|
3,869
|
|
||
Paid-time-off accrual
|
|
575
|
|
|
821
|
|
||
Insurance reserve
|
|
1,608
|
|
|
2,284
|
|
||
Legal reserve
|
|
27
|
|
|
82
|
|
||
Net operating loss benefit and credit carryforwards
|
|
10,169
|
|
|
9,332
|
|
||
Valuation allowance
|
|
(1,638
|
)
|
|
(1,719
|
)
|
||
Accrued compensation and pension
|
|
758
|
|
|
1,346
|
|
||
Stock compensation expense on nonvested deferred shares
|
|
2,733
|
|
|
3,731
|
|
||
Accrued losses
|
|
171
|
|
|
340
|
|
||
Foreign currency translation and other
|
|
1,066
|
|
|
1,080
|
|
||
Total deferred tax assets
|
|
17,304
|
|
|
21,478
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Tax over book depreciation
|
|
8,137
|
|
|
11,446
|
|
||
Tax over book amortization
|
|
702
|
|
|
3,325
|
|
||
Branch future liability
|
|
3,018
|
|
|
2,538
|
|
||
Receivable holdbacks and other
|
|
1,028
|
|
|
912
|
|
||
Total deferred tax liabilities
|
|
12,885
|
|
|
18,221
|
|
||
Net deferred tax asset
|
|
$
|
4,419
|
|
|
$
|
3,257
|
|
|
|
June 30,
2018 |
|
June 30,
2017 |
||||
|
|
(In thousands)
|
||||||
Deferred income tax assets
|
|
4,848
|
|
|
3,385
|
|
||
Deferred income tax liabilities
|
|
(429
|
)
|
|
(128
|
)
|
||
Net deferred tax asset
|
|
$
|
4,419
|
|
|
$
|
3,257
|
|
Operating Loss Carryforwards
|
Expiration Period
|
Amount (in thousands)
|
||
State net operating losses
|
June 2023 to June 2038
|
$
|
22,230
|
|
Foreign net operating losses
|
December 2029; June 2032 to June 2037
|
$
|
20,733
|
|
Tax Credit Carryforwards
|
Expiration Period
|
Amount (in thousands)
|
||
State tax credits
|
June 2018 to June 2033
|
$
|
679
|
|
Federal foreign tax credits
|
June 2019 to June 2025
|
$
|
1,244
|
|
Foreign tax credits
|
June 2035 to June 2037
|
$
|
668
|
|
|
|
Number of
Options
|
|
Weighted-Average
Remaining
Contractual Life
|
|
Weighted-Average
Exercise Price
|
|
Aggregate
Intrinsic Value
|
|||||
|
|
|
|
(Years)
|
|
|
|
(In thousands)
|
|||||
Outstanding at June 30, 2017
|
|
97,250
|
|
|
4.4
|
|
$
|
10.19
|
|
|
$
|
—
|
|
Granted
|
|
—
|
|
|
|
|
—
|
|
|
|
|||
Exercised
|
|
(31,050
|
)
|
|
|
|
$
|
10.19
|
|
|
$
|
287
|
|
Canceled
|
|
—
|
|
|
|
|
—
|
|
|
|
|||
Outstanding at June 30, 2018
|
|
66,200
|
|
|
3.4
|
|
$
|
10.19
|
|
|
$
|
540
|
|
Vested at June 30, 2018
|
|
66,200
|
|
|
3.4
|
|
$
|
10.19
|
|
|
$
|
540
|
|
Exercisable at June 30, 2018
|
|
66,200
|
|
|
3.4
|
|
$
|
10.19
|
|
|
$
|
540
|
|
•
|
Time-based awards—Employee awards generally vest in
four
equal annual installments beginning
one
year after the grant date. Director awards vest one year after the grant date.
|
•
|
Market-based awards—These awards are in the form of performance units which vest
3 years
after the grant date only if the Company’s common stock achieves certain levels of total shareholder return when compared to the total shareholder return of a peer group of companies as selected by the Compensation Committee of the Board of Directors. The payout can range from
zero
to
200%
of the original award depending on the Company's relative total shareholder return during the performance period. These awards are settled in stock. As of
June 30, 2018
, there are approximately
183,000
, and
275,000
performance units that are scheduled to vest in
fiscal 2020
, and
fiscal 2021
, respectively, assuming target performance. There were approximately
127,000
performance units that were scheduled to vest in fiscal 2019 at target performance, but total shareholder return during the performance period did not meet the threshold performance and the performance units were forfeited.
|
|
|
Shares
|
|
Weighted Average Grant
Date Fair Value per Share
|
|||
Nonvested shares at June 30, 2017
|
|
995,353
|
|
|
$
|
21.65
|
|
Shares granted
|
|
715,539
|
|
|
$
|
13.64
|
|
Shares vested and released
|
|
(253,241
|
)
|
|
$
|
19.60
|
|
Shares canceled
|
|
(91,604
|
)
|
|
$
|
31.42
|
|
Nonvested shares at June 30, 2018
|
|
1,366,047
|
|
|
$
|
17.18
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2016 |
||||||
|
|
(In thousands, except per share data)
|
||||||||||
Basic EPS:
|
|
|
|
|
|
|
||||||
Net income (loss) attributable to Matrix Service Company
|
|
$
|
(11,480
|
)
|
|
$
|
(183
|
)
|
|
$
|
28,863
|
|
Weighted average shares outstanding
|
|
26,769
|
|
|
26,533
|
|
|
26,597
|
|
|||
Basic earnings (loss) per share
|
|
$
|
(0.43
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
1.09
|
|
Diluted EPS:
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding—basic
|
|
26,769
|
|
|
26,533
|
|
|
26,597
|
|
|||
Dilutive stock options
|
|
—
|
|
|
—
|
|
|
68
|
|
|||
Dilutive nonvested deferred shares
|
|
—
|
|
|
—
|
|
|
435
|
|
|||
Diluted weighted average shares
|
|
26,769
|
|
|
26,533
|
|
|
27,100
|
|
|||
Diluted earnings (loss) per share
|
|
$
|
(0.43
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
1.07
|
|
|
|
Fiscal Years Ended
|
|||||||
|
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2016 |
|||
|
|
(In thousands of shares)
|
|||||||
Stock options
|
|
31
|
|
|
43
|
|
|
—
|
|
Nonvested deferred shares
|
|
424
|
|
|
430
|
|
|
56
|
|
Total antidilutive securities
|
|
455
|
|
|
473
|
|
|
56
|
|
•
|
Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.
|
•
|
If a participating employer discontinues contributions to a plan, the unfunded obligations of the plan may be borne by the remaining participating employers.
|
•
|
If a participating employer chooses to stop participating in a plan, a withdrawal liability may be created based on the unfunded vested benefits for all employees in the plan.
|
Pension Fund
|
|
EIN/Pension
Plan Number
|
|
Pension
Protection Act
Zone Status
|
|
FIP/RP
Status
Pending or
Implemented
|
|
Company Contributions
Fiscal Year
|
|
Surcharge
Imposed
|
|
Expiration
Date of
Collective-
Bargaining
Agreement
|
|||||||||||
2018
|
2017
|
|
2018
|
|
2017
|
|
2016
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
|
|
|
||||||||||
Boilermaker-Blacksmith National Pension Trust
|
|
48-6168020/001
|
|
Yellow
|
Described below (2)
|
|
Yes
|
|
$
|
8,525
|
|
|
$
|
7,098
|
|
|
$
|
7,658
|
|
|
No
|
|
Described below (1)
|
Joint Pension Fund Local Union 164 IBEW
|
|
22-6031199/001
|
|
Yellow
|
Described below (2)
|
|
Yes
|
|
2,391
|
|
|
2,709
|
|
|
2,635
|
|
|
No
|
|
5/31/2021
|
|||
Joint Pension Fund of Local Union No 102
|
|
22-1615726/001
|
|
Green
|
Green
|
|
N/A
|
|
2,489
|
|
|
2,392
|
|
|
3,063
|
|
|
No
|
|
5/31/2019
|
|||
IBEW Local 456 Pension Plan
|
|
22-6238995/001
|
|
Green
|
Green
|
|
N/A
|
|
6,005
|
|
|
2,777
|
|
|
1,168
|
|
|
No
|
|
5/31/2021
|
|||
Local 351 IBEW Pension Plan
|
|
22-3417366/001
|
|
Green
|
Green
|
|
N/A
|
|
1,187
|
|
|
2,796
|
|
|
5,018
|
|
|
No
|
|
12/4/2021
|
|||
Steamfitters Local Union No 420 Pension Plan
|
|
23-2004424/001
|
|
Red
|
Red
|
|
Yes
|
|
1,558
|
|
|
2,234
|
|
|
1,265
|
|
|
Yes
|
|
4/30/2020
|
|||
IBEW Local Union 98 Pension Plan
|
|
23-1990722/001
|
|
Red
|
Described below (2)
|
|
Yes
|
|
1,106
|
|
|
1,519
|
|
|
1,653
|
|
|
Yes
|
|
5/29/2020
|
|||
Indiana Laborers Pension Fund
|
|
35-6027150/001
|
|
Described below (2)
|
Described below (2)
|
|
Described below (2)
|
|
3,542
|
|
|
2,458
|
|
|
2,320
|
|
|
Described below (2)
|
|
5/31/2019
|
|||
Iron Workers Mid-America Pension Plan
|
|
36-6488227/001
|
|
Green
|
Green
|
|
N/A
|
|
4,412
|
|
|
1,785
|
|
|
2,248
|
|
|
No
|
|
5/31/2019
|
|||
Pipe Fitters Retirement Fund, Local 597
|
|
62-6105084/001
|
|
Green
|
Green
|
|
N/A
|
|
3,682
|
|
|
2,563
|
|
|
2,377
|
|
|
No
|
|
5/31/2019
|
|||
|
|
|
|
Contributions to other multiemployer plans
|
|
19,827
|
|
|
20,378
|
|
|
16,606
|
|
|
|
|
|
||||||
|
|
|
|
Total contributions made
|
|
$
|
54,724
|
|
|
$
|
48,709
|
|
|
$
|
46,011
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Our employees are members of several Boilermaker unions that participate in the Boilermaker-Blacksmith National Pension Trust. The most significant of these unions are Boilermakers Local 374 and Boilermakers Local 128, which have collective bargaining agreements that expire on December 31, 2019 and December 31, 2020, respectively.
|
(2)
|
For the Boilermaker-Blacksmith National Pension Trust, Local 164 IBEW Pension Plan, Local 98 IBEW Pension Plan and the Indiana Laborers Pension Fund, the Company has not received a funding notification that covers one or both of the Company's fiscal years 2018 and 2017 during the preparation of this Form 10-K. Under Federal pension law, if a multiemployer pension plan is determined to be in critical or endangered status, the plan must provide notice of this status to participants, beneficiaries, the bargaining parties, the Pension Benefit Guaranty Corporation, and the Department of Labor. The Company also observed that these plans have not submitted any Critical or Endangered Status Notices to the Department of Labor for calendar years that we have not received notification. The Critical or Endangered Status Notices can be accessed at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/public-disclosure/2018-funding-status-notices.
|
|
|
Electrical
Infrastructure
|
|
Oil Gas &
Chemical
|
|
Storage
Solutions
|
|
Industrial
|
|
Unallocated Corporate
|
|
Total
|
||||||||||||
Fiscal Year ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross revenues
|
|
$
|
255,931
|
|
|
$
|
324,546
|
|
|
$
|
319,106
|
|
|
$
|
198,155
|
|
|
$
|
—
|
|
|
$
|
1,097,738
|
|
Less: inter-segment revenues
|
|
—
|
|
|
1,774
|
|
|
4,410
|
|
|
1
|
|
|
—
|
|
|
6,185
|
|
||||||
Consolidated revenues
|
|
255,931
|
|
|
322,772
|
|
|
314,696
|
|
|
198,154
|
|
|
—
|
|
|
1,091,553
|
|
||||||
Gross profit
|
|
18,300
|
|
|
33,423
|
|
|
25,778
|
|
|
14,435
|
|
|
—
|
|
|
91,936
|
|
||||||
Operating income (loss)
|
|
(16,531
|
)
|
|
8,798
|
|
|
(5,907
|
)
|
|
3,161
|
|
|
—
|
|
|
(10,479
|
)
|
||||||
Segment assets
|
|
161,207
|
|
|
111,064
|
|
|
149,695
|
|
|
58,816
|
|
|
77,251
|
|
|
558,033
|
|
||||||
Capital expenditures
|
|
493
|
|
|
1,514
|
|
|
3,346
|
|
|
—
|
|
|
3,358
|
|
|
8,711
|
|
||||||
Depreciation and amortization expense
|
|
4,359
|
|
|
5,904
|
|
|
6,623
|
|
|
3,461
|
|
|
—
|
|
|
20,347
|
|
||||||
Fiscal Year ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross revenues
|
|
$
|
373,384
|
|
|
$
|
247,423
|
|
|
$
|
483,254
|
|
|
$
|
103,449
|
|
|
$
|
—
|
|
|
$
|
1,207,510
|
|
Less: inter-segment revenues
|
|
—
|
|
|
6,900
|
|
|
1,558
|
|
|
1,543
|
|
|
—
|
|
|
10,001
|
|
||||||
Consolidated revenues
|
|
373,384
|
|
|
240,523
|
|
|
481,696
|
|
|
101,906
|
|
|
—
|
|
|
1,197,509
|
|
||||||
Gross profit
|
|
7,137
|
|
|
12,675
|
|
|
55,651
|
|
|
5,540
|
|
|
—
|
|
|
81,003
|
|
||||||
Operating income (loss)
|
|
(8,309
|
)
|
|
(8,783
|
)
|
|
22,928
|
|
|
(977
|
)
|
|
—
|
|
|
4,859
|
|
||||||
Segment assets
|
|
183,351
|
|
|
129,177
|
|
|
166,742
|
|
|
53,754
|
|
|
53,006
|
|
|
586,030
|
|
||||||
Capital expenditures
|
|
1,390
|
|
|
829
|
|
|
2,017
|
|
|
38
|
|
|
7,634
|
|
|
11,908
|
|
||||||
Depreciation and amortization expense
|
|
5,198
|
|
|
6,299
|
|
|
7,277
|
|
|
2,828
|
|
|
—
|
|
|
21,602
|
|
||||||
Fiscal Year ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross revenues
|
|
$
|
349,011
|
|
|
$
|
252,973
|
|
|
$
|
564,738
|
|
|
$
|
149,744
|
|
|
$
|
—
|
|
|
$
|
1,316,466
|
|
Less: inter-segment revenues
|
|
—
|
|
|
3,178
|
|
|
1,226
|
|
|
145
|
|
|
—
|
|
|
4,549
|
|
||||||
Consolidated revenues
|
|
349,011
|
|
|
249,795
|
|
|
563,512
|
|
|
149,599
|
|
|
—
|
|
|
1,311,917
|
|
||||||
Gross profit
|
|
29,301
|
|
|
18,553
|
|
|
67,843
|
|
|
10,294
|
|
|
—
|
|
|
125,991
|
|
||||||
Operating income (loss)
|
|
11,144
|
|
|
(3,503
|
)
|
|
33,449
|
|
|
(208
|
)
|
|
—
|
|
|
40,882
|
|
||||||
Segment assets
|
|
135,298
|
|
|
91,350
|
|
|
201,875
|
|
|
67,569
|
|
|
68,875
|
|
|
564,967
|
|
||||||
Capital expenditures
|
|
1,611
|
|
|
1,481
|
|
|
3,882
|
|
|
104
|
|
|
6,861
|
|
|
13,939
|
|
||||||
Depreciation and amortization expense
|
|
5,008
|
|
|
4,811
|
|
|
8,124
|
|
|
3,498
|
|
|
—
|
|
|
21,441
|
|
|
|
Revenues
|
||||||||||
|
|
Fiscal Years Ended
|
||||||||||
|
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2016 |
||||||
|
|
(In thousands)
|
||||||||||
United States
|
|
$
|
981,292
|
|
|
$
|
961,049
|
|
|
$
|
1,127,893
|
|
Canada
|
|
104,208
|
|
|
228,625
|
|
|
178,603
|
|
|||
Other international
|
|
6,053
|
|
|
7,835
|
|
|
5,421
|
|
|||
|
|
$
|
1,091,553
|
|
|
$
|
1,197,509
|
|
|
$
|
1,311,917
|
|
|
|
Long-Lived Assets
|
||||||||||
|
|
June 30,
2018 |
|
June 30,
2017 |
|
June 30,
2016 |
||||||
|
|
(In thousands)
|
||||||||||
United States
|
|
$
|
174,241
|
|
|
$
|
193,164
|
|
|
$
|
158,970
|
|
Canada
|
|
13,738
|
|
|
21,419
|
|
|
19,915
|
|
|||
Other international
|
|
13,008
|
|
|
12,817
|
|
|
10,636
|
|
|||
|
|
$
|
200,987
|
|
|
$
|
227,400
|
|
|
$
|
189,521
|
|
|
|
Significant Customers as a Percentage of Segment Revenues
|
|||||||||||||
|
|
Consolidated
|
|
Electrical
Infrastructure
|
|
Oil Gas &
Chemical
|
|
Storage
Solutions
|
|
Industrial
|
|||||
Fiscal Year ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|||||
Customer one
|
|
11.4
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
62.9
|
%
|
Customer two
|
|
8.6
|
%
|
|
—
|
%
|
|
29.0
|
%
|
|
—
|
%
|
|
—
|
%
|
Customer three
|
|
6.4
|
%
|
|
26.5
|
%
|
|
—
|
%
|
|
0.6
|
%
|
|
—
|
%
|
Customer four
|
|
6.0
|
%
|
|
25.4
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Customer five
|
|
4.2
|
%
|
|
—
|
%
|
|
12.0
|
%
|
|
2.2
|
%
|
|
—
|
%
|
Customer six
|
|
3.2
|
%
|
|
—
|
%
|
|
10.8
|
%
|
|
—
|
%
|
|
—
|
%
|
Customer seven
|
|
3.2
|
%
|
|
—
|
%
|
|
—
|
%
|
|
10.9
|
%
|
|
—
|
%
|
Customer eight
|
|
3.0
|
%
|
|
12.9
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Customer nine
|
|
2.7
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
14.7
|
%
|
Customer ten
|
|
2.3
|
%
|
|
10.0
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Fiscal Year ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|||||
Customer one
|
|
19.5
|
%
|
|
—
|
%
|
|
—
|
%
|
|
48.5
|
%
|
|
—
|
%
|
Customer two
|
|
15.3
|
%
|
|
46.0
|
%
|
|
—
|
%
|
|
2.4
|
%
|
|
—
|
%
|
Customer three
|
|
5.2
|
%
|
|
—
|
%
|
|
25.8
|
%
|
|
—
|
%
|
|
—
|
%
|
Customer four
|
|
4.2
|
%
|
|
—
|
%
|
|
20.7
|
%
|
|
—
|
%
|
|
—
|
%
|
Customer five
|
|
4.0
|
%
|
|
12.7
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Customer six
|
|
2.7
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
31.7
|
%
|
Customer seven
|
|
2.2
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
25.8
|
%
|
Fiscal Year ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|||||
Customer one
|
|
14.8
|
%
|
|
38.9
|
%
|
|
—
|
%
|
|
10.2
|
%
|
|
—
|
%
|
Customer two
|
|
10.6
|
%
|
|
—
|
%
|
|
—
|
%
|
|
24.7
|
%
|
|
—
|
%
|
Customer three
|
|
8.3
|
%
|
|
—
|
%
|
|
—
|
%
|
|
19.3
|
%
|
|
—
|
%
|
Customer four
|
|
4.4
|
%
|
|
16.6
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Customer five
|
|
4.2
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
36.9
|
%
|
Customer six
|
|
3.9
|
%
|
|
—
|
%
|
|
20.2
|
%
|
|
—
|
%
|
|
—
|
%
|
Customer seven
|
|
3.8
|
%
|
|
14.4
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Customer eight
|
|
3.4
|
%
|
|
12.7
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Customer nine
|
|
2.3
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
20.1
|
%
|
Customer ten
|
|
2.1
|
%
|
|
—
|
%
|
|
11.2
|
%
|
|
—
|
%
|
|
—
|
%
|
Customer eleven
|
|
1.6
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
14.0
|
%
|
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
|
|
(In thousands, except per share amounts)
|
||||||||||||||
Fiscal Year 2018
|
|
|
||||||||||||||
Revenues
|
|
$
|
269,910
|
|
|
$
|
282,911
|
|
|
$
|
245,645
|
|
|
$
|
293,087
|
|
Gross profit
|
|
28,891
|
|
|
26,703
|
|
|
14,891
|
|
|
21,451
|
|
||||
Operating income (loss)
|
|
7,321
|
|
|
5,174
|
|
|
(5,862
|
)
|
|
(17,112
|
)
|
||||
Net income (loss)
|
|
3,824
|
|
|
4,532
|
|
|
(5,153
|
)
|
|
(14,683
|
)
|
||||
Earnings (loss) per common share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
0.14
|
|
|
0.17
|
|
|
(0.19
|
)
|
|
(0.55
|
)
|
||||
Diluted
|
|
0.14
|
|
|
0.17
|
|
|
(0.19
|
)
|
|
(0.55
|
)
|
||||
Fiscal Year 2017
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
$
|
341,781
|
|
|
$
|
312,655
|
|
|
$
|
251,237
|
|
|
$
|
291,836
|
|
Gross profit (loss)
|
|
32,278
|
|
|
28,212
|
|
|
(2,614
|
)
|
|
23,127
|
|
||||
Operating income (loss)
|
|
14,301
|
|
|
8,237
|
|
|
(21,210
|
)
|
|
3,531
|
|
||||
Net income (loss) attributable to Matrix Service Company
|
|
9,342
|
|
|
5,250
|
|
|
(13,821
|
)
|
|
(954
|
)
|
||||
Earnings (loss) per common share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
0.35
|
|
|
0.20
|
|
|
(0.52
|
)
|
|
(0.04
|
)
|
||||
Diluted
|
|
0.35
|
|
|
0.20
|
|
|
(0.52
|
)
|
|
(0.04
|
)
|
|
|
|
|
|
COL. A
|
|
COL. B
|
|
COL. C
ADDITIONS
|
|
COL. D
|
|
|
COL. E
|
||||||||||||
|
|
Balance at
Beginning of
Period
|
|
Charged to
Costs and
Expenses
|
|
Charged to Other Accounts—Describe
|
|
Deductions—Describe
|
|
|
Balance at
End of
Period
|
||||||||||
Fiscal Year 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deducted from asset accounts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
|
$
|
9,887
|
|
|
$
|
107
|
|
|
$
|
—
|
|
|
$
|
(3,667
|
)
|
(A)
|
|
$
|
6,327
|
|
Valuation reserve for deferred tax assets
|
|
1,719
|
|
|
1,020
|
|
|
—
|
|
|
(1,101
|
)
|
(B)
|
|
1,638
|
|
|||||
Total
|
|
$
|
11,606
|
|
|
$
|
1,127
|
|
|
$
|
—
|
|
|
$
|
(4,768
|
)
|
|
|
$
|
7,965
|
|
Fiscal Year 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deducted from asset accounts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
|
$
|
8,403
|
|
|
$
|
1,748
|
|
|
$
|
—
|
|
|
$
|
(264
|
)
|
(C)
|
|
$
|
9,887
|
|
Valuation reserve for deferred tax assets
|
|
424
|
|
|
1,295
|
|
|
—
|
|
|
—
|
|
|
|
1,719
|
|
|||||
Total
|
|
$
|
8,827
|
|
|
$
|
3,043
|
|
|
$
|
—
|
|
|
$
|
(264
|
)
|
|
|
$
|
11,606
|
|
Fiscal Year 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deducted from asset accounts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
|
$
|
561
|
|
|
$
|
6,065
|
|
|
$
|
1,808
|
|
(D)
|
$
|
(31
|
)
|
(E)
|
|
$
|
8,403
|
|
Valuation reserve for deferred tax assets
|
|
115
|
|
|
311
|
|
|
—
|
|
|
(2
|
)
|
|
|
424
|
|
|||||
Total
|
|
$
|
676
|
|
|
$
|
6,376
|
|
|
$
|
1,808
|
|
|
$
|
(33
|
)
|
|
|
$
|
8,827
|
|
|
|
|
|
|
(A)
|
Relates to the reversal of reserved account receivable that was fully settled with cash and future backlog. See Note 4 - Goodwill and Other Intangible Assets for more information about the settlement.
|
(B)
|
Relates to $795 of stock-based compensation expense recognized in fiscal 2018 that was not deductible for tax purposes due to not meeting a market condition vesting requirement and to $306 of foreign tax credits that expired.
|
(C)
|
Relates to a $180 receivable written off against allowance for doubtful accounts, a $60 reclassification of reserves to billings on uncompleted contracts in excess of costs and estimated earnings and a $24 currency translation adjustment.
|
(D)
|
Relates to a reclassification of reserves that were initially recorded in billings on uncompleted contracts in excess of costs and estimated earnings.
|
(E)
|
Receivables written off against allowance for doubtful accounts.
|
2
|
|
|
|
|
|
|
|
3.1
|
|
|
|
|
|
|
|
3.2
|
|
|
|
|
|
|
|
3.3
|
|
|
|
|
|
|
|
3.4
|
|
|
|
|
|
|
|
3.5
|
|
|
|
|
|
|
|
P4
|
|
|
Specimen Common Stock Certificate (Exhibit 4.1 to the Company’s Registration Statement on Form S-1 (File No. 33-36081) filed July 26, 1990, P).
|
|
|
|
|
+10.1
|
|
|
|
|
|
|
|
+10.2
|
|
|
|
|
|
|
|
+10.3
|
|
|
|
|
|
|
|
+10.4
|
|
|
|
|
|
|
|
+10.5
|
|
|
|
|
|
|
|
+ 10.6
|
|
|
|
|
|
|
Matrix Service Company
|
||
|
|
|
|
|||
Date : September 19, 2018
|
|
|
|
By:
|
|
/S/ John R. Hewitt
|
|
|
|
|
|
|
John R. Hewitt, President and
Chief Executive Officer
|
|
|
|
|
|
Signatures
|
|
Title
|
|
Date
|
|
|
|
|
|
/S/ Tom E. Maxwell
|
|
Chairman of the Board of Directors
|
|
September 19, 2018
|
Tom E. Maxwell
|
|
|
|
|
|
|
|
|
|
/S/ John R. Hewitt
|
|
President, Chief Executive Officer and Director
|
|
September 19, 2018
|
John R. Hewitt
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/S/ Kevin S. Cavanah
|
|
Vice President
and Chief Financial Officer
|
|
September 19, 2018
|
Kevin S. Cavanah
|
|
(Principal Accounting and
Principal Financial Officer)
|
|
|
|
|
|
|
|
/S/ Martha Z. Carnes
|
|
Director
|
|
September 19, 2018
|
Martha Z. Carnes
|
|
|
|
|
|
|
|
|
|
/S/ John D. Chandler
|
|
Director
|
|
September 19, 2018
|
John D. Chandler
|
|
|
|
|
|
|
|
|
|
/S/ John W. Gibson
|
|
Director
|
|
September 19, 2018
|
John W. Gibson
|
|
|
|
|
|
|
|
|
|
/S/ Liane K. Hinrichs
|
|
Director
|
|
September 19, 2018
|
Liane K. Hinrichs
|
|
|
|
|
|
|
|
|
|
/S/ James H. Miller
|
|
Director
|
|
September 19, 2018
|
James H. Miller
|
|
|
|
|
|
|
|
|
|
/S/ Jim W. Mogg
|
|
Director
|
|
September 19, 2018
|
Jim W. Mogg
|
|
|
|
|
ROIC Level
|
Average ROIC
|
Percentage of Performance Cash Award for Which
Conditions are Satisfied
|
|
|
|
|
|
|
|
Threshold ROIC Goal
|
__%
|
___%
|
||
|
|
|
|
|
Target ROIC Goal
|
|
__%
|
___%
|
|
Maximum ROIC Goal
|
|
__%
|
___%
|
1.
|
I have reviewed this Amendment No. 1 to the Annual Report on Form 10-K/A of Matrix Service Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
September 19, 2018
|
|
|
|
|
/s/ John R. Hewitt
|
|
|
John R. Hewitt
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Amendment No. 1 to the Annual Report on Form 10-K/A of Matrix Service Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
September 19, 2018
|
|
|
|
|
/s/ Kevin S. Cavanah
|
|
|
Kevin S. Cavanah
|
|
|
Vice President and Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
September 19, 2018
|
|
|
|
|
/s/ John R. Hewitt
|
|
|
John R. Hewitt
|
|
|
President and Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
September 19, 2018
|
|
|
|
|
/s/ Kevin S. Cavanah
|
|
|
Kevin S. Cavanah
|
|
|
Vice President and Chief Financial Officer
|
Mine or Operating Name/MSHA Identification Number
|
Section 104 S&S Citations
(1)
|
Section 104(b) Orders
(2)
|
Section 104(d) Citations and Orders
(3)
|
Section 110(b)(2) Violations
(4)
|
Section 107(a) Orders
(5)
|
Total Dollar Value of MSHA Assessments Proposed ($)
|
Total Number of Mining Related Fatalities
|
Received Notice of Pattern of Violations Under Section 104(e)
(6)
(yes/no)
|
Received Notice of Potential to Have Pattern of Violations Under Section 104(e)
(7)
(yes/no)
|
Total Number of Legal Actions Pending as of Last Day of Period
|
Total Number of Legal Actions Initiated During Period
|
Total Number of Legal Actions Resolved During Period
|
Freeport McMoran Morenci Inc. 02-00024
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
No
|
No
|
—
|
—
|
—
|
Freeport McMoran Safford Inc. 02-03131
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
No
|
No
|
—
|
—
|
—
|
Big Island Mine & Refinery 48-00154
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
No
|
No
|
—
|
—
|
—
|
Solvay Chemicals Inc. 48-01295
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
No
|
No
|
—
|
—
|
—
|
Permanente Cement Plant & Quarry 04-04075
|
—
|
—
|
—
|
—
|
—
|
$472
|
—
|
No
|
No
|
—
|
—
|
—
|