Q2 2025 Matrix Service Co Earnings Call
Good morning, and welcome to the Matrix Service Company Conference call to discuss results for the second quarter of fiscal 2025.
Currently all participants are in a listen only mode.
We will conduct a question and answer session instructions will be given at that time.
This conference call is being recorded I would now like to turn the conference.
Uh huh.
MS Kellie Smythe senior director of Investor Relations for Matrix Service company.
Olivia: Thank you Olivia.
Olivia: And welcome to matrix service company's second quarter fiscal 2025 earnings call.
Olivia: On today's call include John Hewitt, President and Chief Executive Officer, and Kevin Cavanah, Vice President and Chief Financial Officer, John will provide an overview of financial results and our longer term growth strategy and Kevin will then provide greater detail on the quarter, our balance sheet and the outlook for the rest of the year.
Olivia: Following our prepared remarks, we will open up the call for questions.
Speaker Change: <unk> materials refer to during the webcast today can be found under events and presentations on the Investor Relations section of Matrix Service company Dot com.
Speaker Change: As a reminder, on today's call we may make various remarks about future expectations plans and prospects for matrix service company that constitute forward looking statements for the purposes that the private Securities Litigation Reform Act of 1995.
Speaker Change: Actual results may differ materially from those indicated by these forward looking statements because of various factors, including those discussed in our most.
Speaker Change: Our most recent annual report on Form 10-K, and in subsequent filings made by the company with the SEC.
Speaker Change: Forward looking statements made today are effective only as up today.
The extent, where you get a lot of non-GAAP measures reconciliations will be provided in various press releases periodic SEC filings and on our website.
Speaker Change: All comparisons today are for the same period of the prior year, unless specifically stated with respect to corporate access them desktop marketing opportunities you're invited to contact me through the matrix Service company Investor Relations website.
Speaker Change: Turning now to our safety mountain it at matrix. Our purpose is to build a better future improve quality of life and create long term value for our people business partners shareholders and communities by engineering, constructing and maintaining energy and industrial and infrastructure that improves the quality of life not only for <unk>.
Speaker Change: People in this country, but also around the world infrastructure that provides the energy needs to fuel our home transportation and businesses and serves as the building blocks for creation of clothing medicine technology and leisure activities to name just a few but our purpose is an empty promise if we do not keep the people that touch our jobs.
Speaker Change: Sites in opposite spray from injury, we must execute work with a high degree of quality and above all else safely.
Speaker Change: Our culture of safety starts with the fact that we care about People's mental and physical health. It is what we expect how we lead and what ensures we can deliver on our purpose.
Sean: And behalf of our leadership team I want to thank our employees for your leadership and accountability to safely achieving our purpose I will now turn the call over to Sean.
Sean: Thank you Kelly and good morning, everyone.
Sean: To successfully execute on our diverse project portfolio and have continued to advance work on our backlog of large multi year projects during the second quarter.
Sean: That culminated in a strong organic revenue growth.
Sean: Delivered revenue growth within both our storage and terminal solutions and utility power infrastructure segments. During the second quarter as we continued to drive strong project execution across the organization, having said that I needed to make two key points about the quarter first what's the delay in the award of a major LNG project expected in the second.
Sean: Quarter, but negatively impacted our book to Bill.
Sean: Continue to work towards completion of the contract negotiation and expect that to occur in our third quarter. Once completed we will be able to take this project into backlog, which with other anticipated awards will support our strong third quarter book to Bill.
Sean: Second planned mobilization to site of one of our current major projects and backlog moved to the second half of the year.
Sean: Project is on track with mobilization occurring now with plans to begin active construction before the end of the fiscal year combination of these events while good for the business in the long run.
Sean: That has led us to lower our full year revenue forecast by approximately 5% at the midpoint of our guided range.
Sean: Accordingly, we revised our fiscal 'twenty 25 revenue guidance from a range of 950 to a range of 850 850 million to 900.
Sean: It is important to note that our long term outlook for the business continues to strike.
Sean: <unk> pipeline, which was $5 7 billion at the end of the second quarter has increased to 7 billion through January 2025. This provides further support for the long term outlook for the business and importantly, as our booked projects mature, we expect our visibility on future revenues to improve reducing the very.
Sean: Ability and our backlog to revenue conversion.
Sean: Despite the slight reduction in fiscal year 2025 guidance I want to remind our investors of several key points first we expect matrix will generate organic revenue growth in the second half of fiscal 2025 greater than 40% when compared to the second half of fiscal 2024 second because of this revenue growth we expect.
Sean: To return to profitability in the second half of fiscal 2025, given improved fixed cost absorption operating leverage and margin realization third we expect to deliver our full year book to bill of at or greater than one O inspite of the softer bookings this past quarter, our balance sheet and liquidity position was very strong.
Sean: Exited in the second quarter consistent with our disciplined approach to capital management.
Sean: Turning now to an overview of current market conditions across our core energy and industrial infrastructure end markets. We firmly believe the current policy environment is supportive accelerated permitting for large energy and industrial infrastructure projects, including those storage and terminal projects, where matrix as a market leader importantly.
Sean: We have the ability to serve the full continuum of traditional upstream midstream and downstream businesses together with lower carbon energy platforms <unk>.
Sean: Demand for LNG, NGL, and ammonia storage and terminal infrastructure remain very favorable as of January domestic LNG export capacity is on track to grow by 85% more than 21 billion cubic feet per day by 2028, notably there was another 26 billion cubic feet per day of additional LNG export.
Sean: Or capacity that has been either approved by FERC or proposed but has yet to reach up I D.
Sean: Additionally, this more favorable regulatory climate positions matrix to capitalize on growth in power demand and generation over the coming years longer term between 2020, and 2040 U S. Power demand is expected to increase by more than 55%. According to IHS Markit. Our nation is on the precipice of a power <unk>.
Sean: <unk> deficit, which is only growing larger given current consumption trends.
Sean: There are multiple factors underpinning this increase in power demand from industrial and population growth.
Speaker Change: <unk> cloud computing matrix possesses the expertise to not only build the generation infrastructure, but also the fuel storage and delivery facilities due to our brand leading cryogenic market position.
We will play a critical role in its next phase of our nation's economic development.
Speaker Change: Overall, our nation's energy mix is expected to pull from a wide range of sources, including fossil and renewable fuels and longer term nuclear in particular, increasing natural gas demand will continue to play a central role in supporting the growth in global energy consumption, creating a clear need for supply and storage infrastructure that goes with it.
Speaker Change: Looking ahead more than $2 three trillion of domestic infrastructure investment.
Speaker Change: <unk> to occur between now and 2030.
Speaker Change: <unk> is a fraction of this investment spend they will represent a transformational upward inflection in the demand for our business.
Speaker Change: As I said earlier as of December 31, 2024, our pipeline stood at $5 7 billion projects, where we have submitted or plan to submit bids which gives us confidence in achieving a sustainable growth trajectory as we proceed into next year and beyond.
Speaker Change: This pipeline has since grown to more than 7 billion, primarily driven by LNG peak shaving opportunities, where we hold a leading brand position as a reminder, many of the opportunities. We are currently pursuing are expected to be bid and awarded for the next 12 to 18 months once awarded many of these projects will reach completion over a multi year.
Speaker Change: Our period, providing long term visibility to revenue.
Speaker Change: This does not include smaller capital projects that maintenance activities that laid the foundation for any parts of the business and play a key role and leveraging SG&A and construction overhead costs.
Kevin Cavanah: Before turning the call over to Kevin I'll take a moment to highlight the visit or a strategic vision for the business in recent years, our business has created value for our key stakeholders, including our shareholders customers partners communities and employees by focusing on five key strategic pillars. These pillars include our commitment to our culture of say.
Kevin Cavanah: Our performance excellence, expanding and evolving our capabilities to meet the performance requirements of our customers.
Kevin Cavanah: Bidding discipline at backlog growth a focus on margin optimization through cost management rationalization and a return returns driven capital allocation strategy and balance sheet discipline as you look out over the next three years. These pillars can be encapsulated with a strategy that we refer to as win execute and deliver.
Kevin Cavanah: In application. This strategy represents the framework to which we will continue to build a profitable growth platform of scale within our niche engineering and construction verticals by remaining disciplined and focused on our pursuit pricing and contracting project work stab.
Kevin Cavanah: Establishing market share in new vertical while retaining market leadership within current markets.
Kevin Cavanah: Our established track record of delivering projects on time and safely and on budget with high quality and delivering improved operating leverage to support strong profitability cash generation and disciplined capital deployment and.
Kevin Cavanah: In summary, halfway through fiscal 2025, we continue to advance our strategic priorities as we returned to profitability our commercial focus on large complex projects across the energy and industrial landscape position matrix to capitalize on what we expect will be at a historic period for domestic infrastructure investment over the next decade.
Kevin Cavanah: Our proven ability to service the full project lifecycle from engineering and fabrication to construction and maintenance to provide customers with a turnkey solution that continues to drive high customer retention with approximately 90% of historical revenue derived from repeat customers. Looking ahead, we intend to pursue a combination of organic.
Kevin Cavanah: And complimentary inorganic growth to build a specialty E&C platform of scale with high value engine energy and industrial infrastructure markets consistent with our focus on long term value creation for our shareholders with that I will turn the call over to Kevin.
Kevin Cavanah: Thank you John.
Kevin Cavanah: On an overall basis, the second quarter with as we anticipated last quarter. We stated we expected revenue to increase over the next few quarters.
Kevin Cavanah: Increased sales commenced as our revenue grew to $187 2 million in the second quarter, an increase of 7% over the prior year. This also represents a 13% increase over the first quarter of fiscal 2025.
Kevin Cavanah: Growth is being driven by the storage and terminal solutions.
Kevin Cavanah: And utility and power infrastructure segments, we expect those segments to continue to drive strong revenue growth throughout the second half of fiscal 2025.
Kevin Cavanah: Gross margin was $10 9 million or five 8% in the second quarter compared to $10 6 million or 6% in the prior year period.
Kevin Cavanah: Execution was strong overall.
Kevin Cavanah: With both the utility and power infrastructure and storage as thermal solutions segments, leading the way.
Kevin Cavanah: Gross margins continue to be impacted by the under recovery of construction overhead cost.
Kevin Cavanah: But the impact is decreasing as revenue ramps.
Kevin Cavanah: Stretching overhead resources have been structured to support the strong market demand and anticipated revenue growth also.
Kevin Cavanah: While supporting continued a high quality project execution and efficient utilization cost structure.
Kevin Cavanah: The quarterly impact was approximately 440 basis points in the current quarter.
Kevin Cavanah: Which is improved from the prior year period was over 600 basis points, we expect the negative impact to continue to decrease in the <unk>.
Kevin Cavanah: Second half of fiscal 2025 as revenue increases.
Kevin Cavanah: SG&A expenses were $17 3 million in the second quarter and is in line with our normal run rate, we will continue to considerably manage our cost structure as we execute our growth strategy.
Kevin Cavanah: Second quarter. The company had a net loss of $5 5 million or <unk> 20 per share compared to a net loss of $2 9 million or <unk> <unk> per share in the prior year, which included a gain on the sale of the facility excluding the gain in the prior year adjusted net loss was $4 9 million or <unk> 18 per share.
Kevin Cavanah: Moving to the to the segments.
Kevin Cavanah: Storage and terminal solutions segment revenue increased 53% to $95 5 million in the second quarter compared to $62 4 million in the prior year due to increased volume of work with specialty vessels.
Kevin Cavanah: And LNG storage.
Kevin Cavanah: The gross margin was seven 6% in the second quarter compared to two 9% last year.
Kevin Cavanah: Both periods benefited from strong project execution, the increase was driven by construction overhead recovery, which improved as a result of the significantly higher revenues.
Kevin Cavanah: Prior year margins were negatively impacted by over 700 basis points from under recovery compared to approximately 300 basis points in the current period.
Kevin Cavanah: <unk> quarterly revenue continues to increase through the rest of the year the company expects to achieve full recovery of construction overhead.
Kevin Cavanah: The utility and power and infrastructure segment revenue increased 52% to $61 1 billion in the second quarter.
Kevin Cavanah: Compared to $40 1 million last year.
Kevin Cavanah: Benefiting from higher volumes of work associated with the LNG peak shaving projects, partially offset by decreases in power delivery work.
Kevin Cavanah: An improved mix of work drove gross margin to five 6% in the second quarter compared to three 5% last year.
Similar to storage and terminal solutions growth in revenue in the second half of fiscal 2025 should drive improved overhead recovery and gross margin performance.
Kevin Cavanah: As expected process and industrial facilities segment revenue decrease in the second quarter to $30 6 million compared to $71 3 million in the prior year.
Kevin Cavanah: Primarily due to the completion of a large renewable diesel project and lower revenue volumes for thermal vacuum chambers.
Kevin Cavanah: Gross margin was one 2% in the second quarter compared to nine 3% last year gross.
Kevin Cavanah: Gross margins decreased due to changes in the mix of work, including significantly less new construction revenue as well as an increase in the under recovery of construction overhead costs due to lower revenues. The company believes this reduction is temporary given our strong backlog.
Speaker Change: Can bundle.
Speaker Change: Before we move away from operating results. There are few high level takeaways I want to review first revenue level is critical to our earnings.
Speaker Change: Growth has started in the second quarter continuing through the remainder of fiscal 2025 seconds.
Speaker Change: <unk> execution has been strong focus on project execution continues and the margin opportunity within our backlog of $1 3 billion and our opportunity funnel continues to support a long term consolidated gross margin target of 10% to 12%.
Speaker Change: The company continues to proactively manage its cost structure in order to achieve improved leverage as revenue grows.
Speaker Change: Construction overhead recovery has been a significant issue.
Speaker Change: <unk> has started and will continue consistent with revenue growth leverage of SG&A as a percentage of revenue will also improve as revenue grows.
Speaker Change: Finally, the combination of these items will drive the improved.
Speaker Change: Performance towards our long term financial targets, we are seeking.
Now, let's discuss backlog, which stands at $1 3 billion as of December 31, 2024, and remains elevated on a historical basis.
Speaker Change: Project Awards totaled $90 5 million in the second quarter, resulting in a book to bill ratio of <unk>.
Speaker Change: Five times for the quarter and a trailing 12 month book to Bill ratio of <unk> nine times.
Speaker Change: While the timing of project awards impacted the first half of fiscal 2025, we believe early third quarter award activity in.
Speaker Change: And the market environment provide for a strong second half of awards supportive of our goals of $1 billion.
Speaker Change: In fiscal 2025 project awards, and a book to Bill above one.
Speaker Change: Moving to the balance sheet net cash provided by operating activities. During the first half of fiscal 2025 was $45 $5 million. This growth is primarily the result of payments from customers associated with active projects in backlog, which demonstrates the certainty of our backlog.
Speaker Change: <unk> provides a positive indicator for the future.
Speaker Change: This includes our outlook. This also increases our total liquidity of $211 7 million liquidity is comprised of $156 8 million of unrestricted cash and cash equivalents of $54 9 million of borrowing availability under the credit facility.
Speaker Change: The company also has $45 million of restricted cash.
Speaker Change: Port the facility and our debt position remains at zero.
Speaker Change: We will continue to proactively manage the balance sheet.
Speaker Change: And have the financial strength and liquidity needed to support the positive revenue inflection as we progress through the remainder of fiscal 2025. We also utilize a disciplined approach to capital allocation on that seeks to maximize our return on invested capital over time, while minimizing business risk.
This concludes our prepared remarks, we will we're open for questions.
Speaker Change: Thank you and as a reminder to ask a question you will need to press star one on your Charlestown and wait for your name to be announced.
Speaker Change: Please standby, while we compile the Q&A roster.
Speaker Change: And we have a question from.
Speaker Change: <unk> <unk> with D. A Davidson your line is now open.
Speaker Change: Hi, Good morning, Thank you for your time.
Speaker Change: Okay.
Speaker Change: Alright.
Speaker Change: With the guidance reduction, which business or business segments.
Speaker Change: The 50 million revenue adjustment.
Speaker Change: Reflect this push out.
That was primarily in the storage and terminal solutions segment.
Speaker Change: And just.
Speaker Change: And in terms of just knowing where about this at this project.
Speaker Change: We're in the process of deep project development are you guys.
Speaker Change: So the.
Speaker Change: Project was awarded.
Speaker Change: We've in the last fiscal year.
Speaker Change: We have been working on engineering working through procurement.
Speaker Change: And we had anticipated mobilizing to site earlier, and where we are now mobilizing to site and but it's not an indication our project health.
Speaker Change: Various factors that have kept.
Speaker Change: Come together.
Speaker Change: On the client side and our side.
Speaker Change: The scheduling schedule is laid out for us too.
Speaker Change: For us to mobilize the site and a lot of the heavy spend for these these large projects come with the construction and so the movement of that mobilization into the back half of our fiscal year.
Pushes that pushes revenue out into succeeding.
Speaker Change: Succeeding years.
Speaker Change: So nothing projects good shape healthy clients good backlog good thanks, Jeff.
Speaker Change: The timing issue of one.
Speaker Change: When we finally decided to mobilize mobilized the site.
Speaker Change: Perfect.
Speaker Change: And just going back to the guidance how confident are you guys in reaching profitability in the second half of 2025.
Speaker Change: In other words do you expect any other work delays to create some sort of fluctuations in your revenue growth.
Speaker Change: So I think we feel we feel pretty good about the ability to grow our continue growing our revenue quarter over quarter as we move out in time as we grow that revenue that all.
Speaker Change: Battle.
Speaker Change: Support is.
Speaker Change: Kevin It's arrow in his remarks will support absorption of overheads and then there's a return to profitability and so we're we feel pretty good about the ability of the organization to two to return to a property profitable run rate within the back half of the year.
Speaker Change: Thank you and one last one for me on <unk>.
Energy project.
Speaker Change: You guys expect.
Speaker Change: To move to the third quarter of this fiscal year.
Speaker Change: Yes.
Speaker Change: How do you guys see your backlog grows through the second half given that we went down from $1 4 billion to $1 three.
Speaker Change: And moving into fiscal 'twenty six.
Speaker Change: What is the what do you guys expect to be the baseline.
Speaker Change: Yes, I think one thing its couple of things that we talked about all the time to.
Speaker Change: Our book to bills quarter over quarter isn't always a linear thing right because we because we don't always control the award dynamics in timing from our clients. Obviously, we have feedback from them. During the sales of proposal process on how thats going to flow through their organizations. We do the best we can to try to handicap.
Speaker Change: GAAP that but you know.
Speaker Change: Like I said, we've said in the past you could have a couple of quarters, where we're going to be below one and then you can move into the next quarter because of the where the timing is for awards and that next quarter's book to bill could be a too.
Speaker Change: And so I think the book to Bill ratio for US has to be worked on a long term basis. We've got an exceptionally strong opportunity pipeline as we noted here by the end of January acquired over $7 billion.
Speaker Change: And a big chunk of that opportunity pipeline is right within our where our strong branding position is in that marketplace and cryogenic storage facilities for a variety of energy sources and so we feel we feel good about where we are and our ability to continue to win and book work. So that'd be one thing.
Speaker Change: <unk>.
Speaker Change: We're at $1 3 billion.
Speaker Change: Backlog versus 141456 months ago, 1.3 is a pretty good backlog level for our business and so I don't know what the historical picture looks like it's up there in <unk>.
Speaker Change: And some of the high levels that we've had as an organization. So we've got strong backlog, we have a normal booking cadence every quarter, a smaller capital projects and maintenance activity.
Speaker Change: Boxing Burns on a regular basis and we've got an exceptionally strong opportunity pipeline and work is right in our wheelhouse. So I think our ability to maintain or build our backlog here as we move through subsequent quarters through this fiscal year and beyond.
Speaker Change: Really really good.
Speaker Change: And it's going to probably going to be only limited by how much work can we actually take on.
Speaker Change: Got it and just one last one for me.
Speaker Change: From based on what you just said.
Speaker Change: Can you provide a little more color into the type of conversations you're having with your clients I guess any contact center D types of opportunities that the current environment.
Speaker Change: Is setting up for you guys.
Speaker Change: I think our clients in general, especially around our energy clients are feel good about where the energy environment the regulatory environment.
Speaker Change: Global demand for their products and so.
I think the first half of the year a little bit of.
Speaker Change: Probably anomaly I think people were we to some extent will probably concerned about the change of administration and what that regulatory environment will look like coming into the new calendar year.
Speaker Change: So.
Speaker Change: While none of our clients' assets with cyclically that that the presidential election cycle was affecting their decision, making but I think the.
Speaker Change: I think it's only natural natural for that to be one of our one of there.
Speaker Change: Are there risk profiles are making decisions but.
Speaker Change: All that being said I think our our client base the clients that make up <unk>.
Speaker Change: <unk> part of our opportunity pipeline feel positive about their.
Speaker Change: Their businesses are positive about where they are planning to invest our capital.
Speaker Change: I appreciate it thank you so much.
Speaker Change: Ill back in the call.
Speaker Change: Thank you.
John Hewitt: Our next question coming from the line of John <unk> with Sidoti <unk> Company. Your line is now open.
Speaker Change: Good morning, John and Kevin Thanks for taking the questions.
Speaker Change: I'd like to circle back to the deferred revenue.
Speaker Change: Just two quick points of clarification, it was a singular job.
Speaker Change: And B you expect that to be realized early on in fiscal 2026 or is it spread out maybe more so in the fiscal year.
Speaker Change: I'm not sure we know the timing of that John I would say, probably its going to be spread into.
Speaker Change: Q1 and Q2.
Speaker Change: And was that a singular job.
Speaker Change: Yes, I mean, we are always every quarter have revenues moving around things move up things move back they have a tendency to sort of balance.
Speaker Change: Those things out, but what we look into the year at that.
Speaker Change: A significant things that are moving that are moving around.
Speaker Change: That job sort of highlights itself.
Speaker Change: And so from the perspective of the need for us to kind of re look at what our revenues are going to be for the full year that job kind of stood out and so it's not going away jobs are going away. It's just like I said in our prepared remarks.
Speaker Change: When we get into the construction side of the overall these project, that's really where the big the big flow of revenue really starts to ramp up.
Speaker Change: And so.
Speaker Change: The delay in our moving on site groups. Those revenues are all that's all good news kind of a good news bad news thing.
Speaker Change: Understood.
Speaker Change: And regarding your expectations.
Our expectation for return to profitability in the second half given the revenue landscape is your comfort level more so in the fourth quarter than in the third.
Speaker Change: Yes.
Speaker Change: It's more in the fourth quarter because.
Speaker Change: Talked about is the ramp right. So we had 13% growth.
Scott: The second quarter over the first quarter, we're going to continue to ramp up as we go through the year to start doesn't always pop up in the third quarter. So fourth quarter is obviously going to be higher revenue of the two quarters and so it's Scott.
Speaker Change: More profit in it.
Scott: And then the third.
Scott: Understood, Kevin and I believe in your prepared remarks, you still.
Adjusted optimism to have a gross margin profile in that 10% to 12% range.
Speaker Change: I'm just curious on the new jobs written are you seeing any.
Better margins than say storage and weaker margins in process.
Speaker Change: Is there any disconnect relative to some of the historical bandwidth as far as the gross margin profiles are concerned.
Speaker Change: So my view there is that the demand for.
Speaker Change: Our services.
Speaker Change: The size of the projects, which limits our competition.
Speaker Change: The amount of spending that we think our clients are going to be looking to do to take advantage of their archives.
Speaker Change: It's going to allow us to maintain a very strong.
Our margin profile in our projects.
Speaker Change: And so I think we're entering a market where our ability to win their bright job with the right.
Speaker Change: Financial profile is improving.
John Hewitt: Understood that's good news John.
John Hewitt: You talked about the opportunity pipeline.
John Hewitt: Jumping intra quarter to $7 billion from five points at the end of last quarter.
John Hewitt: Just curious if these.
John Hewitt: A few large jobs that would be built into the pipeline or is it.
John Hewitt: A plethora of smaller jobs can you maybe provide some of the color that cause.
John Hewitt: Attractive increase.
John Hewitt: Yes, I don't.
John Hewitt: So we've got.
Speaker Change: Project moving in and out of that pipeline on a fairly regular basis, where they buy.
John Hewitt: I had a bad debit lost of work.
John Hewitt: To put it out for job could be canceled, but overall the trend has been steady to up.
John Hewitt: The Big change I think from what we saw for Q2 to Q3 was the addition, or LNG peak shaving kind of projects.
John Hewitt: And that which we we've got a very strong market position in their domestic domestically.
John Hewitt: And.
John Hewitt: And I'm sure there is some some other smaller projects mixed in with that.
John Hewitt: However, they BMO ammonia worker.
John Hewitt: Starting to see some resurgence.
Speaker Change: Combining space.
John Hewitt: We're certainly seeing some activity.
John Hewitt: Start to.
John Hewitt: Raised its head around power generation opportunities whether thats the.
John Hewitt: <unk> power Gen equipment, or fueling and storage associated with that so I think it was a pretty big mix, but I would say probably the bigger projects.
John Hewitt: Those that are tied into LNG to some extent.
John Hewitt: Got it got it and one last question because you mentioned this.
John Hewitt: Often enough on the conference calls I'm always curious to hear your updated thoughts.
John Hewitt: You always talk about inorganic growth opportunity sometime in the future.
John Hewitt: I'm wondering if you could.
John Hewitt: Maybe a timeline to that and what kind of targets you think about.
John Hewitt: Just maybe a little bit more color on inorganic growth opportunities.
John Hewitt: Yes.
John Hewitt: We've also said that.
John Hewitt: Right.
John Hewitt: And as I'm sure you'll also see us size.
John Hewitt: Yeah. So so we've also said that we've been.
John Hewitt: Principally focused.
John Hewitt: Our return to profitability return to continue to book work.
John Hewitt: To drive a strong backlog to get to the run rate support for our business on the top line is going to drive everything below it and so thats been our principle focus I think as we move at what we see going on in our markets.
John Hewitt: Our ability to add bench strength into our business both from a projecting at engineering capabilities is important.
John Hewitt: While we work all over the country.
John Hewitt: And we work across both Union and Nonunion markets.
John Hewitt: The ability for us to strength in regions of the country, where we see a lot of investments could be also an important part of that so.
John Hewitt: So.
John Hewitt: Today.
John Hewitt: Not really in a position I gave you specifics on what we're exactly looking for but.
John Hewitt: At a high level, I think where we see the market's going.
John Hewitt: And what's what's good to continue to strengthen our business.
John Hewitt: And to strengthen our.
John Hewitt: Physician has specialized E&C provider of services and to take advantage of infrastructure spending.
John Hewitt: Both from an energy.
John Hewitt: Power and industrial infrastructure basis, I think there is a lot of opportunity there for us to play a key role so thats.
John Hewitt: Maybe didn't totally answered your question, but thats.
John Hewitt: That's where our heads are.
John Hewitt: I realize it's hard to do because it's in the <unk>.
Speaker Change: But I just wanted to hear some updated thoughts thank you Sir.
John Hewitt: Sure.
John Hewitt: Thank you.
Speaker Change: And as a reminder to ask a question. Please press star one on your telephone.
Speaker Change: Im not showing any further questions in the queue. At this time I will now turn the call back over to Kelly for any closing remarks.
Kelly: Thank you as a reminder, if you'd like to have a conversation with management. Please contact me through matrix Service Company Investor Relations website. He may also sign up to receive.
Kelly: <unk> news by scanning the QR code on your screen. Thank you for your time.
Kelly: Okay.
Kelly: This concludes today's conference call. Thank you for your participation and you may now disconnect.
Kelly: Yes.
Kelly: [music].
Kelly: Okay.
Kelly: Yeah.