Q3 2025 Matrix Service Co Earnings Call
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Speaker Change: Good morning, and welcome to the Matrix Service Company conference call to discuss results for the third quarter of fiscal 2025.
Speaker Change: Currently all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will be given at that time.
Speaker Change: A reminder, this conference call is being recorded I would now like to turn the conference over to todays host Ms. Kellie Smythe Senior director of Investor Relations for Matrix Service Company. Please go ahead.
Speaker Change: Thank you Dan Good morning, and welcome to Matrix service company's third quarter fiscal 2025 earnings call.
John Hewitt: On today's call include included John Hewitt, President and Chief Executive Officer, and Kevin Cavanah, Vice President and Chief Financial Officer.
Speaker Change: Following our prepared remarks, we will open up the call for questions.
The presentation materials referred 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 of the private Securities Litigation Reform Act at 1919 five.
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 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 of today.
Speaker Change: To the extent, we use non-GAAP measures reconciliations will be provided in various press releases periodic SEC filings and on our website. Finally, all comparisons today are for the same period of the prior year unless specifically stated.
Speaker Change: Okay.
Speaker Change: Related to investor conferences, and corporate access opportunity matrix will be participating in the Sidoti Microcap Virtual conference on May 20, <unk> and 20 seconds and will also be participating in the Stifel Cross sector insights conference on June 3rd and fourth in Boston, if you'd like additional information on these events are we'd like to have a conversation.
Speaker Change: With management I invite you to contact me through that makes it service company Investor Relations website.
Speaker Change: Turning now to safety.
Speaker Change: At matrix, our people take pride in the fact that our workshops, a brighter future enhances quality of life and generate lasting value for our employees partners shareholders and the communities we serve.
Speaker Change: We do so by engineering, constructing and maintaining energy and industrial infrastructure that elevate the standard of living not just here, but around the globe.
Speaker Change: This infrastructure is essential for powering our homes.
Speaker Change: Fueling transportation supporting businesses and providing the foundational elements for producing clothing medicine technology recreational activities among many other things.
Speaker Change: To fulfill our objective on our work on our work sites and in our offices.
Speaker Change: We must maintain a steadfast commitment to safety as our leading core value and prioritize quality execution and our work.
Speaker Change: This week, we join our clients and others in the construction industry for the construction safety wait 2025, marking the 20th annual industry wide initiative dedicated to highlighting the importance of safety in the workplace.
Speaker Change: At matrix, our safety culture is rooted in a genuine concern for the mental and physical wellbeing of our people. It shapes, our expectations informs our leadership and is a vital ability and is vital to our ability to realize our mission.
Speaker Change: On behalf of the company's leadership team I would like to express my gratitude to the employees for a commitment and responsibility and safely pursuing our mission.
John Hewitt: I turn the call over to John.
John Hewitt: Thank you Kelly and good morning, everyone.
John Hewitt: I wanted to begin by reviewing many organizational improvements we were making that represent a shift in the company's operational structure that will address several key business imperatives among them create a more efficient organization to ensure we deliver on the significant projects and opportunities in front of us.
John Hewitt: The competitiveness of our offerings and strategic focus and benefiting from greater speed and agility through a leaner flatter organization.
John Hewitt: First we eliminated senior level positions to ensure we are a more efficient and effective organization.
John Hewitt: From an operating perspective, we have streamlined our engineering and construction of change to create a more seamless offering specifically, we recently promoted Shawn paying to the newly created position of president of engineering and construction the new position will have oversight responsibility of the Companys operating subsidiaries.
John Hewitt: Services.
Speaker Change: John joined matrix of 2012, most recently served as president of the Companys non Union construction subsidiary, John who will report directly to me.
Speaker Change: Third there are decentralized elements of our business development organization to create a more integrated sales and operations functions.
Speaker Change: Large EPC projects get a significant amount of attention across the enterprise. During the proposal process. These projects are critical to our growth strategy with the foundational services of our business and small capital construction construction only turnarounds maintenance and repair.
Speaker Change: Important to the Baseload revenue for this property.
Speaker Change: Directly reconnecting the business development teams to the P&L leaders will create more momentum opportunities and awards for this part of our revenue platform <unk>.
Speaker Change: These foundational services deepen customer relationships build bench strength and keep us competitive overall this reorientate the business development function will improve capture rates growth strategies. They are ultimately revenue across the company.
Speaker Change: Finally, the company has begun the process of winding down our northeast transmission and distribution service, Florida. This piece of our ongoing electrical business, while it's competitively disadvantaged due to a mismatch in scale and constrained geography growth and scale was highly dependent on capital and strategic investments.
Speaker Change: Currently the Companys direction.
Speaker Change: While this may seem sudden.
Speaker Change: The lack of sufficient awards throughout the year confirmed our decision to exit the service line.
Speaker Change: That said matrix has been in the electrical services business in the northeast mid Atlantic and Ohio Valley for over 20 years, and we will continue to provide services to our utility energy and industrial customers as they face rising demand for electrical infrastructure.
Speaker Change: This infrastructure includes power generation backup fuel supply midstream energy infrastructure manufacturing expansion Substations and Datacenters to name a few.
Speaker Change: The electrical infrastructure market presents strong growth potential and as capital investment demand large better today with our long term business performance targets as.
Speaker Change: As majors continues its progress toward a return to profitability with marked improvement in this financial performance, we must continue to for the future.
Speaker Change: With this new structure will enhance communication accountability and collaboration throughout all levels of the organization.
Speaker Change: In line with our strategic priorities, we remain committed to delivering sustainable long term shareholder value by building a resilient growth oriented platform that meets the evolving needs of our customers.
Speaker Change: From a market outlook perspective, we are also closely monitoring the impacts of the evolving U S trade and environmental policies that are introduced a heightened level of macroeconomic uncertainty and while the underlying demand environment remains strong some clients may elect to delay a final investment decisions and in turn project.
Speaker Change: Starts as they assess the potential impact of these policies on project economics, including offtake agreements with global partners as well as supply chain and operational costs.
Speaker Change: However, we believe the.
Speaker Change: This uncertainty to be temporary.
Speaker Change: Specific to existing projects and New awards are contract formats, a proposal disciplined generally protect us from pricing risks created by the tariff activity. In addition, we are actively collaborating with our customers to find cost optimization opportunities. We're also optimize our own supply chain by making advanced purchases, where we can.
Speaker Change: Working closely with our current suppliers and exploring additional supplier options. This proactive strategy enables us to remain agile and responsive to market changes and ensures we continue to provide outstanding value to our customers.
Speaker Change: At the same time several of our energy clients have stated that their intentions are to fund start and complete as many infrastructure projects as possible over the next four years to take advantage of the more relaxed regulatory environment and higher demand for energy products, both domestically and abroad.
Speaker Change: Considering the current macroeconomic environment and our decision to exit the transmission and distribution business. We believe it is prudent to revise our fiscal 2025 revenue guidance by 10% to $7 $70 million to $800 million, which Kevin will discuss in more detail during his remarks. Please.
Speaker Change: Please note our revised guidance continues to reflect quarter over quarter growth as we finish the year as demonstrated by the 20% to 25% growth in the second half of fiscal 2025% compared to the first half.
Speaker Change: Across the energy and industrial markets, we serve energy related infrastructure spending remains elevated.
Speaker Change: Elevated level of spending is supported by an estimated 45% increase in U S. LNG export demand as highlighted by the EIA in this recent annual energy outlook. Furthermore, the EIA outlook also projects at 8% increase in demand or the 38 trillion cubic feet of natural gas over the next six years in <unk>.
Speaker Change: Sponsored rapidly growing domestic and international demand for LNG and other natural gas related products.
Speaker Change: This outlook underpins, our $7 billion pipeline of project opportunities, which gives us confidence in achieving a sustainable and profitable growth trajectory as we move into fiscal 2026 and beyond.
Speaker Change: As a reminder, many of the projects. We are currently pursuing are expected to be bid and awarded within the next 12 to 18 months and once awarded they will unfold over multi year construction time lines, providing us with long term revenue visibility and improve earnings consistency.
Speaker Change: Now turning to the quarter revenue volume continued to accelerate culminating in our highest quarterly revenues at two years as project activity ramped up throughout the period.
Speaker Change: As typical for our fiscal third quarter. We also benefited from elevated activity in our refinery services business.
Speaker Change: The company grew backlog by nearly 8% sequentially to over $1 4 billion or $301 million of project awards, resulting in a book to Bill of one five. This also increased our year to date book to Bill to a one O.
Speaker Change: Storage and terminal solutions accounted for $205 million of the quarterly awards, which increases backlog to 848 million the highest level in the company's history. The quarter activity included a project for the engineering and construction of the multiple storage vessels for propane butane and related NGL products. We're also seeing strength in.
Speaker Change: The process and industrial facilities segment, which had a $59 million awards, primarily in our refinery services business.
Speaker Change: Overall, our strategy remains anchored around three pillars for win execute and deliver.
Speaker Change: Through this framework, we will continue to focus on project discipline with the right clients commercial structure and timing of delivery.
Speaker Change: Prior resume and brand leadership to not only our core markets of energy industrial and power infrastructure, but also expanding into new high value verticals delivering projects safely on time on budget and with high quality and enhancing operating leverage to drive strong profitability cash generation and disciplined capital.
Speaker Change: Deployment.
Speaker Change: As you look ahead to the fourth quarter, we believe the momentum exiting the third quarter combined with the strategic actions I spoke of earlier will support improved fixed cost absorption better operating leverage and resulted in positive adjusted EBITDA. Furthermore, we are confident that potential near term project awards, some of which are insulated.
Speaker Change: Recent macroeconomic developments will help us end the year with a full year book to bill ratio around want.
Kevin: With that I'll now turn the call over to Kevin. Thank.
Kevin: Thank you John.
Kevin: Revenue growth continued in the third quarter, increasing 21% to $200.
Kevin: 2 million compared to $166 million in the third quarter last year.
Kevin: The growth was driven by the storage and terminal solutions and utility and power infrastructure segments, partially offset by reduced revenue volumes in process and industrial facilities.
Kevin: Gross margin was $12 9 million or six 4% in the quarter compared to $5 6 million.
Kevin: Or three 4% for the third quarter of fiscal 2024.
Kevin: We'll discuss drivers for that improvement when I get into the segment results I want to provide an update here on the impact of under recovery of construction overhead cost.
Kevin: As a result of the revenue growth in the quarter.
Kevin: The impact of under recovered overhead decreased to 280 basis points. This compares to 370 basis points last year and this is the lowest level in two years.
Kevin: As the revenue ramp continues disruption overhead we feel fully recovered from the negative impact on margins will be eliminated.
Kevin: SG&A expenses were $17 7 million in the third quarter compared to $19 9 million for the prior year. The decrease was primarily due to lower cash settled stock based compensation expense.
Kevin: For the third quarter of fiscal 2025, the company had a net loss of $3 4 million or.
Kevin: Or <unk> 12 per share compared to a net loss of $14 6 million or <unk> 53 per share in the third quarter of fiscal 2024 adjusted.
Kevin: Adjusted EBITDA improved to breakeven in the quarter compared to a loss of $10 million in the third quarter last year.
Kevin: Moving to the segments.
Kevin: Storage and terminal solutions segment revenue increased 77% to $96 1 million in the third quarter compared to $54 3 million in the third quarter of fiscal 2024.
Kevin: Our revenue is being driven by increased volume quarter for specialty vessel projects.
Kevin: Gross margin was three 9% in the third quarter of fiscal 2025 compared to four 3% in the third quarter of fiscal 2024.
Kevin: Although higher revenue has resulted in improved leverage of our cost structure segment gross margin continues to be impacted by under recovery as we allocate more resources to this segment in anticipation of continuing revenue growth.
Kevin: Additionally, the third quarter of fiscal 2025 was negatively impacted by lower than anticipated labor productivity on our crude terminal project that is nearing completion.
Kevin: Excluding the margin adjustment on this project that year to date project execution for the storage and terminal solutions segment would have been within our 10% to 12% target as quarterly revenue continues to increase the company expects to achieve full recovery of construction overheads and the targeted gross margin range.
Kevin: Utility and power infrastructure segment revenue increased 27%.
Kevin: $58 7 million in the third quarter compared to $46 1 million in the prior year period.
Kevin: Benefiting from higher volume of work associated with natural gas peak shaving projects.
Kevin: Gross margin was nine 4% in the third quarter compared to three 1% for the third quarter of fiscal 2024.
Kevin: Due to strong project execution and improved construction overhead cost absorption.
Kevin: Process and industrial facilities segment revenue decreased to $45 4 million in the third quarter of fiscal 2025 compared to <unk> 65.
Kevin: $6 million last year, primarily due to lower revenue volumes, resulting from the completion of a large renewable diesel project.
Kevin: Anthony believes this reduction is temporary given our strong backlog and opportunity funnel gross margin was eight 3% in the third quarter compared to two 7% for the third quarter of fiscal 'twenty two.
Kevin: Last year's gross margin was impacted by an accounting adjustment on a refinery maintenance contract.
Kevin: Last quarter I discussed some keys to our financial performance before we move away from operating results I want to review those keys in our long term financial targets first revenue levels critical to earnings revenue growth started in the second quarter and continued in the third.
Kevin: Anticipate revenue growth to continue reaching $250 million and above.
Kevin: Second project execution has been strong producing overall direct project margins that are approaching our target range.
Kevin: On project execution continues and the margin opportunity within our $1 4 billion backlog and our $7 billion opportunity funnel continues to support our long term consolidated gross margin target of 10% to 12%.
Kevin: Third the company continues to proactively manage its cost structure and has taken the additional steps to improve our operating effectiveness as John discussed.
Kevin: This will enhance our competitiveness and allow for continued improvement in the leverage of our cost structure.
Kevin: Construction overhead recovery has been a significant issue, but it is improving and will be illuminated based on anticipated revenue growth.
Kevin: Leverage of SG&A will also grew due to flattening of the organization as well as revenue growth driving toward our target of six 5% of revenue.
Kevin: Finally, the combination of these Arnold's will drive the improved performance towards our long term targets.
Kevin: Moving to the balance sheet, our disciplined approach to capital allocation remains a cornerstone of our strategy.
Kevin: Working capital management has been strong throughout fiscal 2025 net cash provided by operating activities was $31 2 million during the third fiscal quarter to $76 8 million year to date.
Kevin: Cash flow activity. During the year has also further strengthened our balance sheet available liquidity has increased to $247 1 million as of the end of the quarter.
Kevin: Liquidity is liquidity is comprised of $185 $5 million of uninsured to cash to $61 5 million of borrowing availability under the credit facility.
Kevin: Company also has $25 million of restricted cash to support the credit facility and our debt position remains at zero.
Kevin: We will continue to proactively manage the balance sheet and have the financial strength and liquidity needed to support the execution of our backlog and to deploy capital toward opportunistic panic growth.
Kevin: Before we open the call for questions I want to touch on the outlook.
Kevin: As we noted in our press release second half revenue levels have been impacted by the timing of awards in the third quarter as well as the uncertainty around macroeconomic and environmental policy and.
Kevin: In addition, full year revenue has been impacted by our transmission distribution business, which we are now exiting.
Kevin: Full year revenue impact of exiting this business is approximately $50 million.
Kevin: As a result, we reduced revenue guidance for fiscal 2025 by 10% to $770 million to $800 million.
Kevin: Even with this reduction this implies continued strong year over year growth of over 20% in the fourth quarter.
Kevin: And a return to profitable performance, our backlog and revenue growth is coming from larger multiyear projects. As a result, we expect to operate at or above these levels.
Kevin: Revenue levels for the foreseeable future.
Kevin: This combined with the changes, we're making to improve operating effectiveness should lead to strong bottom line results and achieve our long term funds.
Kevin: This concludes our prepared remarks, we will open it up for questions.
Kevin: Thank you to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby, while we compile the Q&A roster.
Speaker Change: And our first question comes from John <unk> of Sidoti <unk> Company. Your line is now open.
John Hewitt: Good morning, everyone and thanks for taking my questions.
Speaker Change: I guess on sort of revenue guidance.
Speaker Change: Kevin You said $50 million was baked into that business I guess for this fiscal year can you just walk us through the <unk>.
Speaker Change: Decision, making process to exit the business.
Speaker Change: Is there a potential buyer out there we just wind it down.
Speaker Change: And what's the relative cost savings.
Speaker Change: Exiting that business.
John Hewitt: I'll give you some of the strategic stuff there John so.
Speaker Change: So the going into the year that the.
John Hewitt: The.
John Hewitt: Target for that business was higher than <unk> 50 million.
John Hewitt: But because we're probably simply put we are too big to be small too small to be big.
John Hewitt: So there are competitive dynamics in that business made it difficult for us to win work at acceptable margins.
John Hewitt: Plus the capital investment in that business.
John Hewitt: Would be dramatically higher than the rest of the company.
John Hewitt: So there was sort of on our watch list. This year that we were able to pick up some some good projects with.
John Hewitt: Acceptable.
John Hewitt: Commercial terms than.
John Hewitt: Then we would it would modify or at least with guide our decision on whether we thought there was an opportunity to continue to grow it or that we needed to sell it or that we needed to shut it just shut it down.
John Hewitt: So as we moved into the and what we saw was the opportunity for us to win some some nice projects in the back half of the fiscal year.
John Hewitt: And we didn't win any of them.
John Hewitt: And so we're trying to win those projects around the commercial framework that we think is acceptable to the business. So when we started to see that those projects were not going to come into our backlog. We made the decision that we're going to wind the business down without any kind of a.
John Hewitt: Positive looking backlog it would be difficult to find a buyer for the business.
John Hewitt: They are picking up equipment in and people. So so we made the decision that.
John Hewitt: So we're just wind the business down and we will eventually sell off some of the construction assets that are associated with that business. We still have some small contracts that we're going to be working out into fiscal 'twenty six but doesn't represent a lot of revenue and we're doing that with clients that we do other business with so we just don't want to.
John Hewitt: Just.
John Hewitt: You'll walk away from those jobs through which can't be contractually anyway, but so we want to continue to support those clients because again because they have other work that our electrical business does that's kind of how we got to where we where we are.
John Hewitt: Understood and the potential cost savings.
John Hewitt: Okay.
John Hewitt: It's more about.
John Hewitt: There are cost savings.
And.
John Hewitt: Yes.
John Hewitt: But theres also a reallocation of some resources to that.
John Hewitt: Electrical and instrumentation business that we're keeping.
John Hewitt: And then I think that business has been operating at a loss. So that's probably the bigger savings in the cost structure. It was a relatively low overhead business than the equipment.
John Hewitt: Yes.
John Hewitt: The reason for that is that this was a business that we grew organic but this was from an acquisition.
Speaker Change: Okay fair enough the other part of the.
Speaker Change: Adjustments to the revenue guidance was what you said was deferrals I'm curious.
Speaker Change: The entire balance deferrals or cancellations.
Speaker Change: The deferrals.
Speaker Change: Timing are we talking about now versus three months ago.
Speaker Change: So some of it is a combination of a couple of things one is as one of the.
Speaker Change: Our major projects that was in the awards further in Q3.
Speaker Change: In storage, we had anticipated actually winning in Q2 and have started negotiating a contract for that project in Q2.
Speaker Change: And then.
Speaker Change: As we moved into Q3.
Speaker Change: We thought that that project will get awarded in January and that we'd be able to get engineering started would be able to get our procurement for all of the plate steel associated started.
Speaker Change: And probably get on site and start doing some of the civil work. So we had expected.
Speaker Change: Hey.
Speaker Change: Earlier award and no revenue flowing from that project impacting this fiscal year's revenues, but we actually don't sign the contract to the very last day of March and so basically what that did was pushed all of a majority of what we thought was going to be some revenue off that project into June and probably.
Speaker Change: And to the end of fiscal 'twenty six so so that's one thing.
Speaker Change: And that's just that's just that's just about the how long it took to put the contract together.
Speaker Change: Which is not ours.
Speaker Change: Necessarily unusual and then we had.
Speaker Change: Got it.
Speaker Change: Another project that we've been kind of verbally selected on that one of his off takers for that client.
Speaker Change: As in the.
Speaker Change: As on the other side of the Ocean.
Speaker Change: And with some of the trade stuff is going on.
Speaker Change: There has been a dose that had been a delay in getting that offtake sold we think that delays over with.
Speaker Change: And are expecting that project to move forward here.
Speaker Change: Then the next within this quarter or the first quarter of 2006 so.
Speaker Change: Other than that I mean, I think it would be unreasonable for us to assume that these uncertainties around the tariff issues and.
Speaker Change: Finalization of environmental policy and the regulatory environment is on keeping clients a little bit.
Speaker Change: Hasnt yet in some cases on how they're going to spend our capital dollars.
Speaker Change: I can tell you we've had we've had several of our core clients tell us.
Speaker Change: Okay.
Speaker Change: Very strongly that their attentions are over the next four years to spend as much money as possible on their energy infrastructure and what they perceive to be a much.
Speaker Change: Easier regulatory environment and so we're excited about that excited about us being able to take a take advantage of that opportunity because.
Speaker Change: Because of our strong relationships with these clients and two because of the kind of services and strong brand position, we have in that in those markets.
Speaker Change: Yes, John and then one last question.
John Hewitt: Mentioned that youre targeting smaller jobs.
John Hewitt: Talk a little bit about where you think the opportunity profile is as you reengage in those some of those smaller.
John Hewitt: Projects.
John Hewitt: Maybe size that for us and timeline when you expect to start getting on them.
John Hewitt: Yeah, So I mean.
John Hewitt: We as an organization in our history and our organization has always been a mix in the portfolio of maintenance or turnaround work small capital projects construction only projects mixed in with one or two large capital EPC jobs, So and we continue to see the opportunity for these large.
John Hewitt: Our EPC projects to continue to enter the backlog.
John Hewitt: And probably for us on a more thoughtful way that they fit into our execution plans and our resource availability.
John Hewitt: That doesn't minimize the need in our business for these smaller.
John Hewitt: <unk> activity that I that I have laid out and I think.
John Hewitt: Part of our change in the developed business development structure, as we sort of lost touch with that a little bit I think these larger projects get a lot of attention from the organization and and but we need those smaller projects they build relationships with clients.
John Hewitt: They help us to build and strengthen our execution teams.
John Hewitt: They are great for brand recognition, they eat overhead and so we just need to do a better job.
John Hewitt: <unk>.
John Hewitt: We are pursuing and winning.
John Hewitt: Those smaller what I'm, calling foundational elements of our business.
John Hewitt: Forward and so some of the actions strategic actions, we've taken are directly related to our desire to be better at that that we have been over the past 18 months.
John Hewitt: Okay, well good luck with that.
John Hewitt: Back into the queue. Thank you gentlemen.
John Hewitt: Thank you. Thank you.
Speaker Change: And our next question comes from Brent Thielman of D. A Davidson your line is open.
Brent Thielman: Hey, Thanks, good morning.
John Hewitt: John.
Speaker Change: The real Big picture question here, I mean, you've been through your share of cycles.
John Hewitt: In the past we value your perspective here.
John Hewitt: The geopolitical and macroeconomic environment today, you take what Youre seeing now.
John Hewitt: You look at prevailing commodity prices to some degree influence heightened customer spend.
Speaker Change: My question is John I mean, how is all of this stuff that we're seeing in the market. How do you think it might influence what your customers may end up doing here not necessarily in the short term but.
John Hewitt: In medium term as all of this ultimately.
John Hewitt: Positive driver for your business.
Speaker Change: Let me perspective there.
John Hewitt: Well I think you know.
John Hewitt: Whether it's tariffs or no matter what it is we see in the media, there's a lot of rhetoric, rather around both out of the Washington D C and out of the media houses and across the globe. So I think it's difficult for all of US whether you are a business leader.
John Hewitt: Citizen to figure out what the future looks like.
John Hewitt: Hi.
John Hewitt: For me I think and what we hear from our clients. So I think they're being.
John Hewitt: Adding some more thoughtfulness to what their what their capital plans are.
John Hewitt: I think overriding all of that is the not only domestically, but globally. The demand for energy is continuing to rise.
John Hewitt: That demand has got to be met.
John Hewitt: It is it is not necessarily going to be 100% backed by.
John Hewitt: By renewable energy sources, you've got huge electrical infrastructure needs.
In the U S alone to fuel the growth in power demand.
John Hewitt: So.
Speaker Change: Thank irrespective recall terracing settle out which I personally think we'll we'll get.
John Hewitt: Get settled out here over the next three or four months.
John Hewitt: I think we're still going to see a lot of infrastructure put in place we're going to see this huge demand globally for Ngls coming out of the U S and for LNG.
John Hewitt: Because the face of the demand for energy is growing like I said and it.
John Hewitt: It supports a higher quality of life around the around the globe and Theres a lot of instability.
John Hewitt: And the energy sources.
John Hewitt: And people are going to be a look into the U S to provide that stability.
John Hewitt: I am pretty bullish and confident in the markets that we're in with our brand position.
John Hewitt: Particular around specialty vessels.
John Hewitt: Specialty vessel storage and infrastructure that we're going to play out we're going to play a strong role in that as we look out to the future.
John Hewitt: Yes.
John Hewitt: Appreciate that.
Speaker Change: And then I guess another one Kevin this might be more for you but.
Speaker Change: And then there's been an expectation for sort of a progressive ramp in volume and revenue as that as the fiscal year has played out.
Speaker Change: I think maybe more specific to storage I mean, you had terrific growth compared to last year, but the growth was somewhat muted relative to the previous quarter. So as you kind of look at the fourth fiscal quarter is there is there a net confidence here that we should see that.
Speaker Change: Segment step up I think that sort of critical to support the outlook.
Speaker Change: And I guess, maybe the question that you're seeing the critical jobs moving forward now.
Speaker Change: That segment that really should contribute here.
Speaker Change: Yes, so youre right.
Speaker Change: The revenue was.
Speaker Change: And the third in Q3 was pretty consistent with Q2.
Speaker Change: Part of that was just timing of procurement.
Speaker Change: Now when we're looking at <unk> I'm expecting to see.
Speaker Change: A really strong growth cycle.
Speaker Change: In the storage and terminal solutions segments. So I think that is supportive of the outlook I think youll also see some growth in utility and power infrastructure.
Speaker Change: Hum.
Speaker Change: Process and industrial facilities took a step up this third quarter I would expect it to be.
Speaker Change: Somewhere close to that same level here in the fourth quarter. So the combined.
Speaker Change: I should have a strong.
Speaker Change: Our port move in revenue level for <unk>.
Speaker Change: Got it.
Speaker Change: That will benefit that will benefit overhead recovery.
Speaker Change: And that the gross margin percentage.
Speaker Change: A significant way.
Speaker Change: Perfect. Okay. That's all I had thank you.
Speaker Change: Okay.
Speaker Change: Thank you. This concludes our question and answer session I would now like to turn it back to Kellie Smythe Senior director of Investor Relations for closing remarks.
Kellie Smythe: Thank you as a reminder, we will be.
Speaker Change: Participating in the Sidoti Microcap Virtual conference on May 20, <unk> 22nd.
Speaker Change: We'll be attending the Stifel Cross sector insight conference on June 3rd and fourth in Boston. Additionally, Additionally, Anthony I'd like to have a conversation with management. Please contact me to the matrix Service Company Investor Relations website. You May also sign up to receive matrix news by scanning a QR code on your screen. Thank you for your time.
Speaker Change: This concludes today's conference call. Thank you for participating and you may now disconnect.
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