Matrix Service Q2 2026 Matrix Service Co Earnings Call | AllMind AI Earnings | AllMind AI
Q2 2026 Matrix Service Co Earnings Call
Operator: Currently, all participants are on a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. As a reminder, this conference call is being recorded. I would now like to turn the conference over to today's host, Ms. Kellie Smythe, Senior Director of Investor Relations for Matrix Service Company.
Operator: Currently, all participants are on a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. As a reminder, this conference call is being recorded. I would now like to turn the conference over to today's host, Ms. Kellie Smythe, Senior Director of Investor Relations for Matrix Service Company.
Speaker #1: MATRIX SERVICE CO Kellie
Speaker #1: Smythe. On a listen-only mode.
Speaker #2: Later, we will conduct a question-answer session and instructions will be given at that time. As a reminder, this conference call is being recorded. I would now like to turn the conference over to today's host, Ms. Kellie Smythe.
Speaker #2: Senior Director of Investor Relations for MATRIX SERVICE CO.
Kellie Smythe: Thank you, Victor. Good morning, and welcome to Matrix Service Company's second quarter fiscal 2026 earnings call. Participants on today's call include John Hewitt, President and Chief Executive Officer, and Kevin Cavanah, Vice President and Chief Financial Officer. 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 matrixservicecompany.com. As a reminder, on today's call, we may make various remarks about future expectations, plans, and prospects for Matrix Service Company that constitute forward-looking statements for the purposes of the Private Securities Litigation Reform Act of 1995.
Kellie Smythe: Thank you, Victor. Good morning, and welcome to Matrix Service Company's second quarter fiscal 2026 earnings call. Participants on today's call include John Hewitt, President and Chief Executive Officer, and Kevin Cavanah, Vice President and Chief Financial Officer. 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 matrixservicecompany.com. As a reminder, on today's call, we may make various remarks about future expectations, plans, and prospects for Matrix Service Company that constitute forward-looking statements for the purposes of the Private Securities Litigation Reform Act of 1995.
Speaker #3: morning and welcome to MATRIX Thank you, Victor. Good SERVICE CO's second quarter fiscal 2026 earnings call. Participants on today's call include John Hewitt, President and Chief Executive Officer, and Kevin Cavanah, Vice President and Chief Financial Officer.
Speaker #3: Following our prepared remarks, we will open up the call for questions. The webcast today can be found under events and presentations on the Investor Relations section of MATRIX SERVICE CO.com.
Speaker #3: As a reminder, on today's call, we may make various remarks about presentation materials referred to during the future expectations, plans, and prospects for MATRIX SERVICE CO, the constitute forward-looking statements for the purposes of the private securities litigation reform act of 1995.
Speaker #3: Actual results may differ materially from those indicated by these forward-looking including those discussed in our most 10-K and in subsequent filings made by the company with the SEC.
Kellie Smythe: Actual results may differ materially from those indicated by these forward-looking results because of various factors, including those discussed in our most recent annual report on Form 10-K and in subsequent filings made by the company with the SEC. The forward-looking statements made today are effective only as of today. To the extent we utilize non-GAAP measures, reconciliations will be provided in various press releases, periodic SEC filings, and on our website. Finally, all comparisons today are for the same period as the prior year, unless specifically stated. As we open today's earnings call, let's take a brief moment to focus on what matters most, keeping ourselves and each other safe. With about six weeks to go before the official start of spring, this winter has already brought a range of extreme weather across the country, from blizzards and ice storms to record-breaking cold snaps and heavy rainfall.
Kellie Smythe: Actual results may differ materially from those indicated by these forward-looking results because of various factors, including those discussed in our most recent annual report on Form 10-K and in subsequent filings made by the company with the SEC. The forward-looking statements made today are effective only as of today. To the extent we utilize non-GAAP measures, reconciliations will be provided in various press releases, periodic SEC filings, and on our website. Finally, all comparisons today are for the same period as the prior year, unless specifically stated. As we open today's earnings call, let's take a brief moment to focus on what matters most, keeping ourselves and each other safe. With about six weeks to go before the official start of spring, this winter has already brought a range of extreme weather across the country, from blizzards and ice storms to record-breaking cold snaps and heavy rainfall.
Speaker #3: The forward-looking statements made today are effective only as of recent annual report on Form today. To the extent we reconciliations will be provided in various press releases, periodic SEC filings, and on our year, unless specifically today are for the same period as the prior stated.
Speaker #3: As we open today's earnings call, let's take a brief moment to focus on what matters most: keeping ourselves and each other safe. With about six weeks to go before the official start of spring, this winter has already brought a range of extreme weather across the country, from blizzards and ice storms to record-breaking cold snaps and heavy rainfall.
Speaker #3: These conditions disrupt daily life and create serious safety challenges for everyone. Especially those working outdoors, but the challenges go beyond just physical safety. Shorter days and colder temperatures take the toll, not mentally and emotionally.
Kellie Smythe: These conditions disrupt daily life and create serious safety challenges for everyone, especially those working outdoors. But the challenges go beyond just physical safety. Shorter days and colder temperatures take their toll, not just physically, but mentally and emotionally. Challenges to mental health are as real and as important as physical risks. This is especially true for those in construction and field work, where teams often face harsh outdoor working conditions and are also far from home and their personal support networks, all of which can lead to increased stress, fatigue, and isolation. That said, regardless of where we work, it's important to take time to check in with ourselves and those around us. Watch for signs of stress, start a conversation, listen, and offer support.
Kellie Smythe: These conditions disrupt daily life and create serious safety challenges for everyone, especially those working outdoors. But the challenges go beyond just physical safety. Shorter days and colder temperatures take their toll, not just physically, but mentally and emotionally. Challenges to mental health are as real and as important as physical risks. This is especially true for those in construction and field work, where teams often face harsh outdoor working conditions and are also far from home and their personal support networks, all of which can lead to increased stress, fatigue, and isolation. That said, regardless of where we work, it's important to take time to check in with ourselves and those around us. Watch for signs of stress, start a conversation, listen, and offer support.
Speaker #3: Challenges to mental health are physical risks. This is especially true for those in construction and field work, where teams often face harsh outdoor working conditions and are also far from home and their personal support networks.
Speaker #3: All of which can lead to increased stress, fatigue, and isolation. That said, regardless of where we work, it's important to take time to check in with ourselves and those around us.
Speaker #3: Watch for signs of stress, start a conversation, listen, and offer support. When we look out for one another, and use the resources available, we workplaces safe, healthy, and strong.
Kellie Smythe: When we look out for one another and use the resources available, we help keep our teams and workplaces safe, healthy, and strong. If you or a colleague needs help, reach out to someone you trust or use the support resources available. Let's keep safety, both physical and mental, at the forefront, especially during challenging times. Together, we can make sure everyone goes home safe every day. I will now turn the call over to John.
Kellie Smythe: When we look out for one another and use the resources available, we help keep our teams and workplaces safe, healthy, and strong. If you or a colleague needs help, reach out to someone you trust or use the support resources available. Let's keep safety, both physical and mental, at the forefront, especially during challenging times. Together, we can make sure everyone goes home safe every day. I will now turn the call over to John.
Speaker #3: If you, or a colleague, needs help, reach out to someone you trust, or use the support resources available. Let's keep safety, both physical and mental, at the forefront, especially during challenging times.
Speaker #3: Together, we can make sure everyone goes home safe every day. I will now turn the call over to John.
Speaker #4: Thank you, Kellie. And good morning, everyone. Before we address our second quarter results, I want to highlight important developments announced yesterday regarding our succession planning at MATRIX.
John Hewitt: Thank you, Kelly, and good morning, everyone. Before we address our Q2 results, I want to highlight important developments announced yesterday regarding our succession planning at Matrix. Over the past year, Matrix has focused on actively advancing our strategic objectives and our leadership succession plan, while continuing to evolve our organizational structure to support long-term growth and success. As you might recall, as part of this effort, Sean Payne was promoted to President of E&C in May 2025. Yesterday, in our leadership transition release, we announced that Sean has now been elevated to the Chief Operating Officer of Matrix. And then, per our succession plan, I will step down as President and Chief Executive Officer on 30 June 2026. At that time, Sean will assume the role of Chief Executive Officer, ensuring a seamless leadership transition.
John Hewitt: Thank you, Kelly, and good morning, everyone. Before we address our Q2 results, I want to highlight important developments announced yesterday regarding our succession planning at Matrix. Over the past year, Matrix has focused on actively advancing our strategic objectives and our leadership succession plan, while continuing to evolve our organizational structure to support long-term growth and success. As you might recall, as part of this effort, Sean Payne was promoted to President of E&C in May 2025. Yesterday, in our leadership transition release, we announced that Sean has now been elevated to the Chief Operating Officer of Matrix. And then, per our succession plan, I will step down as President and Chief Executive Officer on 30 June 2026. At that time, Sean will assume the role of Chief Executive Officer, ensuring a seamless leadership transition.
Speaker #4: focused on actively advancing our strategic objectives and our Over the past year, MATRIX has leadership succession plan while continuing to evolve our organizational
Speaker #4: structure to support long-term growth and success. As you might recall, as part of this effort, Sean Payne was promoted to President of E&C in May of 2025.
Speaker #4: Yesterday, in our leadership transition release, we announced that Sean has now been elevated. As part of the succession plan, I will step down as President and Chief Executive Officer on June 30, 2026.
Speaker #4: At that time, Sean will assume the MATRIX. 2012. Sean is a proven leader with later by recruiting him to MATRIX in And then, per our expertise and unwavering commitment to our people and our stakeholders.
John Hewitt: I've worked alongside Shawn for nearly 30 years, first at a previous employer and later by recruiting him to Matrix in 2012. Shawn is a proven leader with exceptional operational expertise and unwavering commitment to our people and our stakeholders. He is instrumental in the growth of our backlog, our business turnaround, organizational streamlining, and strategic planning, and he will actively participate in future calls and investor meetings throughout this transition period. I'm confident in Shawn's leadership, and I'm excited about the future of Matrix, as well as our market strength and the unprecedented generational infrastructure investment underway across the country. Now, moving on to Q2 results, which reflect continued positive execution across our business and culminated in revenue growth of 12% compared to the Q2 of last year.
John Hewitt: I've worked alongside Shawn for nearly 30 years, first at a previous employer and later by recruiting him to Matrix in 2012. Shawn is a proven leader with exceptional operational expertise and unwavering commitment to our people and our stakeholders. He is instrumental in the growth of our backlog, our business turnaround, organizational streamlining, and strategic planning, and he will actively participate in future calls and investor meetings throughout this transition period. I'm confident in Shawn's leadership, and I'm excited about the future of Matrix, as well as our market strength and the unprecedented generational infrastructure investment underway across the country. Now, moving on to Q2 results, which reflect continued positive execution across our business and culminated in revenue growth of 12% compared to the Q2 of last year.
Speaker #4: He has been instrumental in the growth of our help keep our teams and backlog, our business turnaround, organizational streamlining, and strategic planning. And he will actively participate in future calls and investor meetings throughout this transition period.
Speaker #4: Excited about the future of MATRIX, as well as unprecedented generational infrastructure investment underway across the country. Now, moving on to second quarter results, which reflect continued positive execution across our market strength and the business, and culminated in revenue growth of 12% compared to the second quarter of last year.
Speaker #4: And while our underlying results for the quarter reflect strong growth and solid execution, we did record an unfavorable adjustment related to warranty responsibilities and miscellaneous subcontractor and vendor commercial items we are working to resolve on a substantially complete storage project. I'm confident in Sean's leadership, and I'm...
John Hewitt: And while our underlying results for the quarter reflect strong growth and solid execution, we did record an unfavorable adjustment related to warranty responsibilities, and miscellaneous subcontractor and vendor commercial items we are working to resolve on a substantially complete storage project. EPS was a $0.03 loss for the quarter, which included the negative $0.13 impact from this issue. Kevin will discuss this in more detail during his comments. That said, given our overall positive execution, current backlog of $1.1 billion, and projects already in flight, we are reiterating our full-year revenue guidance of $875 million to $925 million, and we'll achieve profitability in the second half of the year. Turning to awards. Project awards during the second quarter were approximately $177 million, resulting in a book-to-bill of 0.8.
John Hewitt: And while our underlying results for the quarter reflect strong growth and solid execution, we did record an unfavorable adjustment related to warranty responsibilities, and miscellaneous subcontractor and vendor commercial items we are working to resolve on a substantially complete storage project. EPS was a $0.03 loss for the quarter, which included the negative $0.13 impact from this issue. Kevin will discuss this in more detail during his comments. That said, given our overall positive execution, current backlog of $1.1 billion, and projects already in flight, we are reiterating our full-year revenue guidance of $875 million to $925 million, and we'll achieve profitability in the second half of the year. Turning to awards. Project awards during the second quarter were approximately $177 million, resulting in a book-to-bill of 0.8.
Speaker #4: EPS was a 3-cent loss for the quarter, which impact from this issue. Kevin will included the negative 13-cent discuss this in more detail during his comments.
Speaker #4: billion, and projects already in flight, we are reiterating our That said, $875 million to full-year revenue guidance of $925 million. And we'll achieve profitability in the second half of the year.
Speaker #4: Turning to awards, project awards during the second quarter were approximately $177 million, resulting in a overall volume of project awards has been execution, current backlog of 1.1 book-to-bill of 0.8.
John Hewitt: The overall volume of project awards has been tempered due to uncertainty around trade policy, permitting, and the government shutdown that occurred in late 2025. This uncertainty has delayed FIDs and award progression on many projects in our specific market pipeline. While this will likely persist through the end of this fiscal year, it does not represent a fundamental slowdown in our end market demand. In fact, our overall opportunity pipeline continues to expand, increasing to $7.3 billion at the end of fiscal Q2. As we gain more brand recognition and momentum in the power and data center infrastructure market, this will add to the pipeline in future quarters. Now, I wanna step back and provide a clear overview of the macro environment we are operating in, our strategic response, and our outlook for the future.
John Hewitt: The overall volume of project awards has been tempered due to uncertainty around trade policy, permitting, and the government shutdown that occurred in late 2025. This uncertainty has delayed FIDs and award progression on many projects in our specific market pipeline. While this will likely persist through the end of this fiscal year, it does not represent a fundamental slowdown in our end market demand. In fact, our overall opportunity pipeline continues to expand, increasing to $7.3 billion at the end of fiscal Q2. As we gain more brand recognition and momentum in the power and data center infrastructure market, this will add to the pipeline in future quarters. Now, I wanna step back and provide a clear overview of the macro environment we are operating in, our strategic response, and our outlook for the future.
Speaker #4: government shutdown that occurred in late 2025. This uncertainty has delayed FIDs and award progression on many projects in our specific market pipeline. While this will likely persist through the end of this fiscal The year, it does not represent a fundamental slowdown in our end market demand.
Speaker #4: In fact, our overall opportunity pipeline continues to expand, increasing to $7.3 billion at the end of the fiscal second quarter. As we gain more brand recognition and momentum in the power and data center infrastructure market, this will add to the pipeline in future quarters.
Speaker #4: Now, I want to step back and provide a clear overview of the macro environment we are operating in, our strategic response, and our outlook for the future.
Speaker #4: MATRIX and our entire sector are experiencing a once-in-a-generation surge in demand for critical energy, power, rare earth, and industrial infrastructure. Companies like MATRIX, with proven expertise in safely delivering complex projects on time and on budget, that are essential to addressing the early stages of this transformative buildout.
John Hewitt: Matrix and our entire sector has experienced a once-in-a-generation surge in demand for critical energy, power, rare earth, and industrial infrastructure. Companies like Matrix, with proven expertise in safely delivering complex projects on time and on budget, that are essential to addressing the nation's vast infrastructure needs. We firmly believe we are still in the early stages of this transformative build-out. The shortage of reliable, cost-effective power generation has steadily intensified nationwide, and the surge in demand from AI data centers, which require continuous and substantial power, has only compounded this issue. Demand for natural gas, widely recognized as the essential bridge fuel for a cleaner energy future, has soared by over 100%, while pipeline capacity has grown by only 50%. At the same time, the onshoring of manufacturing, electrification of devices, transportation, and equipment are increasing electricity needs.
John Hewitt: Matrix and our entire sector has experienced a once-in-a-generation surge in demand for critical energy, power, rare earth, and industrial infrastructure. Companies like Matrix, with proven expertise in safely delivering complex projects on time and on budget, that are essential to addressing the nation's vast infrastructure needs. We firmly believe we are still in the early stages of this transformative build-out. The shortage of reliable, cost-effective power generation has steadily intensified nationwide, and the surge in demand from AI data centers, which require continuous and substantial power, has only compounded this issue. Demand for natural gas, widely recognized as the essential bridge fuel for a cleaner energy future, has soared by over 100%, while pipeline capacity has grown by only 50%. At the same time, the onshoring of manufacturing, electrification of devices, transportation, and equipment are increasing electricity needs.
Speaker #4: The shortage of reliable, cost-effective power generation has steadily intensified nationwide. And the surge in demand from AI data centers, which require continuous and substantial power, has only compounded this. Natural gas, widely recognized as the issue,
Speaker #4: Demand for future, has soared by over 100%, while pipeline capacity has grown by only 50%. At the same time, the ongoing manufacturing, electrification of devices, transportation, and equipment are generation, most of which depends on natural affordable, reliable electric gas.
John Hewitt: The United States is now critically short of affordable, reliable electric generation, most of which depends on natural gas, an abundant energy source in North America. Crucially, the global race for AI dominance hinges on electricity availability. Governments increasingly recognize that this is not merely a matter of business efficiency or quality of life, but at its core, a national security imperative. Today, the urgent need for affordable, reliable power and connectivity, and the fuels that enable them, has ignited an unprecedented investment cycle backed by strong political resolve. In addition to power generation and electrical infrastructure, we're seeing a compelling multiyear opportunity in mining minerals. The push to onshore and secure critical and rare earth material supply chains in the US is accelerating investment in mining, processing, and associated infrastructure, signaling the early stages of a new multiyear upcycle in project demand.
John Hewitt: The United States is now critically short of affordable, reliable electric generation, most of which depends on natural gas, an abundant energy source in North America. Crucially, the global race for AI dominance hinges on electricity availability. Governments increasingly recognize that this is not merely a matter of business efficiency or quality of life, but at its core, a national security imperative. Today, the urgent need for affordable, reliable power and connectivity, and the fuels that enable them, has ignited an unprecedented investment cycle backed by strong political resolve. In addition to power generation and electrical infrastructure, we're seeing a compelling multiyear opportunity in mining minerals. The push to onshore and secure critical and rare earth material supply chains in the US is accelerating investment in mining, processing, and associated infrastructure, signaling the early stages of a new multiyear upcycle in project demand.
Speaker #4: North America. Crucially, the global race for AI An abundant energy source in dominance hinges on electricity availability. Governments increasingly recognize that this is not merely a matter of business efficiency or quality of life, but at its core, a national security imperative.
Speaker #4: Today, the urgent need for affordable, reliable power and has ignited an unprecedented investment cycle backed by strong political resolve. In addition, to power generation and electrical infrastructure, we're seeing a compelling multi-year opportunity in mining minerals.
John Hewitt: This generational investment cycle has not only had a direct impact on wages, productivity, and a growing domestic manufacturing base. That combined with federal, fiscal, and tax policy changes, as well as private and public investment, will continue to drive a positive economic environment and GDP growth, all of which will create positive tailwinds for our industry. Against that backdrop, Matrix is especially well-positioned as a leading end-to-end EPC general industrial contractor that designs, builds, and maintains critical energy, mining, and industrial infrastructure. We possess market expertise, specialized capabilities, resources, relationships, and a proven track record to deliver comprehensive, high-quality services safely. Matrix meets these standards and is exceptionally well positioned to benefit from this opportunity. Over the past five years, Matrix has proactively transformed our organization to meet these challenges and capitalize on the opportunities ahead.
John Hewitt: This generational investment cycle has not only had a direct impact on wages, productivity, and a growing domestic manufacturing base. That combined with federal, fiscal, and tax policy changes, as well as private and public investment, will continue to drive a positive economic environment and GDP growth, all of which will create positive tailwinds for our industry. Against that backdrop, Matrix is especially well-positioned as a leading end-to-end EPC general industrial contractor that designs, builds, and maintains critical energy, mining, and industrial infrastructure. We possess market expertise, specialized capabilities, resources, relationships, and a proven track record to deliver comprehensive, high-quality services safely. Matrix meets these standards and is exceptionally well positioned to benefit from this opportunity. Over the past five years, Matrix has proactively transformed our organization to meet these challenges and capitalize on the opportunities ahead.
Speaker #4: growth. All of which will create positive tailwinds connectivity and the fuels that enable them backdrop, MATRIX is especially well-positioned as a leading end-to-end EPC general industrial for our industry.
Speaker #4: maintains critical energy, mining, and industrial infrastructure. Against that We possess market expertise, specialized capabilities, resources, relationships, and a proven track record to deliver comprehensive, high-quality services safely.
Speaker #4: MATRIX is well-positioned to benefit from this, meets these standards, and is exceptionally suited for the opportunity. Over the past five years, our organization has proactively transformed to meet these challenges and capitalize on the opportunities ahead.
Speaker #4: We have strategically exited non-core businesses, invested in our people, systems, and processes, to strengthen our core expertise in energy, power, and industrial projects. We have streamlined our operations to deliver on our purpose and value proposition to all stakeholders.
John Hewitt: We have strategically exited non-core businesses, invested in our people, systems, and processes to strengthen our core expertise in energy, power, and industrial projects. We have streamlined our operations to deliver on our purpose and value proposition to all stakeholders, and as a result, we have built a business positioned at the intersection of powerful macro growth drivers, one that will deliver sustainable and profitable growth for years to come. Our recent project awards, including those secured this quarter, and our robust pipeline in LNG facilities, power generation, electrical connectivity, substation, mining, and minerals, underscore the strategic evolution of our business. While we continue to serve traditional energy and industrial clients, our future growth and sustainable performance are firmly anchored in this generational investment cycle. This quarter, for example, we secured the LNG storage component for the first phase of a peak shaving facility in the Virginia AI corridor.
John Hewitt: We have strategically exited non-core businesses, invested in our people, systems, and processes to strengthen our core expertise in energy, power, and industrial projects. We have streamlined our operations to deliver on our purpose and value proposition to all stakeholders, and as a result, we have built a business positioned at the intersection of powerful macro growth drivers, one that will deliver sustainable and profitable growth for years to come. Our recent project awards, including those secured this quarter, and our robust pipeline in LNG facilities, power generation, electrical connectivity, substation, mining, and minerals, underscore the strategic evolution of our business. While we continue to serve traditional energy and industrial clients, our future growth and sustainable performance are firmly anchored in this generational investment cycle. This quarter, for example, we secured the LNG storage component for the first phase of a peak shaving facility in the Virginia AI corridor.
Speaker #4: And as a result, we have built a business positioned at the intersection of powerful macro growth and profitable growth for years to come. Our drivers—ones that will deliver sustainable and secure results this quarter—and a robust pipeline in LNG facilities, power generation, electrical connectivity, substations, and mining minerals, underscore the strategic evolution of our business.
Speaker #4: While we continue to serve traditional growth and sustainable performance energy and industrial clients, our future are firmly anchored in this generational investment cycle. This quarter, for example, we secured the LNG storage component for recent project awards, including those in the Virginia AI corridor.
John Hewitt: Additional storage to support two gas-fired generating facilities in the Southeast, and multiple smaller strategic electrical connectivity projects in the Northeast, which is ground zero for this huge data center investment cycle. Subsequent to the end of the quarter, we were awarded the feed study and are currently developing the full scope of work for a Midwestern utility to provide them the ability to run dual fuel on two of their gas-fired power facilities. We are frequently asked about our role in power generation and delivery, and more specifically, about our role in supporting data centers and advanced manufacturing facilities. So I wanna take a few minutes to share with you, at a high level, overview of the work we do supporting these critical growth markets. Matrix has a strong legacy in power generation and power delivery.
John Hewitt: Additional storage to support two gas-fired generating facilities in the Southeast, and multiple smaller strategic electrical connectivity projects in the Northeast, which is ground zero for this huge data center investment cycle. Subsequent to the end of the quarter, we were awarded the feed study and are currently developing the full scope of work for a Midwestern utility to provide them the ability to run dual fuel on two of their gas-fired power facilities. We are frequently asked about our role in power generation and delivery, and more specifically, about our role in supporting data centers and advanced manufacturing facilities. So I wanna take a few minutes to share with you, at a high level, overview of the work we do supporting these critical growth markets. Matrix has a strong legacy in power generation and power delivery.
Speaker #4: Gas-fired generating facilities in the additional storage to support two electrical connectivity projects in the Southeast and multiple smaller strategic projects in the Northeast, which is ground zero for this huge data center investment cycle.
Speaker #4: Subsequent to the end of the quarter, we were awarded the FEED study and are currently developing the full scope of work for a Midwestern utility to provide them the ability to run dual fuel on two of their gas-fired power facilities.
Speaker #4: We are frequently asked about our role in power generation and delivery and, more specifically, about our role in supporting data centers and advanced manufacturing facilities.
Speaker #4: So I want to take a few minutes to share with you at a high level overview of the work we do supporting these critical growth markets.
Speaker #4: MATRIX has a strong legacy in power generation and power delivery. This includes simple and combined cycle plant construction, central line erection, HRSG erection, balance of plant mechanical and electrical, as well as construction of greenfield substations, brownfield substation upgrades, including grid interconnects.
John Hewitt: This includes Simple Cycle and Combined Cycle plant construction, Center Line Erection, HRSG erection, Balance of Plant, mechanical, and electrical, as well as construction of Greenfield substations, Brownfield substation upgrades, including grid interconnects. This, together with our expertise in both LNG Peak Shaving and backup fuel facilities, provides our clients with the integrated solutions needed to meet existing and increasing demand for electricity to power homes and businesses, including data centers, stabilize the grid during peak periods, and ensure reliable operation during emergencies.... This same expertise is needed by data center developers, OEMs, owners, and others who are pursuing their own energy infrastructure to ensure reliability and redundancy in their operations. In short, Matrix does not build the data center or advanced manufacturing facility. However, we do build the required critical energy infrastructure needed to power them.
John Hewitt: This includes Simple Cycle and Combined Cycle plant construction, Center Line Erection, HRSG erection, Balance of Plant, mechanical, and electrical, as well as construction of Greenfield substations, Brownfield substation upgrades, including grid interconnects. This, together with our expertise in both LNG Peak Shaving and backup fuel facilities, provides our clients with the integrated solutions needed to meet existing and increasing demand for electricity to power homes and businesses, including data centers, stabilize the grid during peak periods, and ensure reliable operation during emergencies.... This same expertise is needed by data center developers, OEMs, owners, and others who are pursuing their own energy infrastructure to ensure reliability and redundancy in their operations. In short, Matrix does not build the data center or advanced manufacturing facility. However, we do build the required critical energy infrastructure needed to power them.
Speaker #4: This, together with our expertise in both LNG peak shaving and backup fuel facilities, provides our clients with the integrated solutions needed to meet existing and increasing demand for electricity and power homes and businesses, including data centers.
Speaker #4: Stabilized grid during peak periods and ensure reliable operation. This same expertise is needed by data center developers, OEMs, owners, and others who are pursuing their own energy infrastructure to ensure reliability and redundancy in their operations.
Speaker #4: In short, MATRIX does not build the data facility, however, we do build the to power them. both organic and inorganic growth, To MATRIX is positioned to accelerate its momentum required critical energy infrastructure needed as a critical provider of the services demanded by this massive infrastructure build-out.
John Hewitt: Through both organic and inorganic growth, Matrix is positioned to accelerate its momentum as a critical provider of the services demanded by this massive infrastructure build-out. Our momentum was fueled by the steady conversion of opportunities into awards, and those awards into revenue, all executed by the business we have purposely built for this moment. In summary, I'm proud of the team's continued execution as we proceed through this critical chapter of growth for Matrix. We have plenty of opportunities ahead, and I'm confident that our focus on our core pillars of win, execute, and deliver will drive compounding profitable growth and long-term value for our shareholders and customers alike. I'll now turn the call over to Kevin.
John Hewitt: Through both organic and inorganic growth, Matrix is positioned to accelerate its momentum as a critical provider of the services demanded by this massive infrastructure build-out. Our momentum was fueled by the steady conversion of opportunities into awards, and those awards into revenue, all executed by the business we have purposely built for this moment. In summary, I'm proud of the team's continued execution as we proceed through this critical chapter of growth for Matrix. We have plenty of opportunities ahead, and I'm confident that our focus on our core pillars of win, execute, and deliver will drive compounding profitable growth and long-term value for our shareholders and customers alike. I'll now turn the call over to Kevin.
Speaker #4: Our momentum was centered on advanced manufacturing, fueled by the steady conversion of opportunities into awards and those awards into revenue, all executed by the business we have purposely built for this moment.
Speaker #4: In summary, I'm proud of the team's continued execution as we proceed through this critical chapter of growth for MATRIX. We have plenty of opportunities ahead, and I'm confident that our focus on our core pillars of win, execute, and deliver will drive compounding, profitable growth and long-term value for our shareholders and customers alike.
Speaker #4: I'll now turn the call over to Kevin.
Speaker #2: Thank
Speaker #2: you, John. Let's start with the 2026. Revenue was $210.5 million, an increase of 23.3 million, or 12% over the second quarter of last year, driven by growth in all three segments with utility and power infrastructure accounting for over 60% of the increase.
Kevin Cavanah: Thank you, John. Let's start with the results for the second quarter of fiscal 2026. Revenue was $210.5 million, an increase of $23.3 million, or 12%, over the second quarter of last year, driven by growth in all three segments, with Utility and Power Infrastructure accounting for over 60% of the increase. We expect to achieve our full-year revenue guidance of $875 to 925 million on strong growth in the second half of the fiscal year, particularly in the fourth quarter. This growth will be driven by large LNG and NGL projects already underway in the Storage and Thermal Solutions segment. Consolidated gross profit increased 21% to $13.1 million in the second quarter, compared to $10.9 million in the prior year.
Kevin Cavanah: Thank you, John. Let's start with the results for the second quarter of fiscal 2026. Revenue was $210.5 million, an increase of $23.3 million, or 12%, over the second quarter of last year, driven by growth in all three segments, with Utility and Power Infrastructure accounting for over 60% of the increase. We expect to achieve our full-year revenue guidance of $875 to 925 million on strong growth in the second half of the fiscal year, particularly in the fourth quarter. This growth will be driven by large LNG and NGL projects already underway in the Storage and Thermal Solutions segment. Consolidated gross profit increased 21% to $13.1 million in the second quarter, compared to $10.9 million in the prior year.
Speaker #2: We expect to achieve our full-year revenue guidance of $875 to $925 million, on strong growth in the second half of the fiscal year, particularly in the fourth quarter.
Speaker #2: This growth will be driven by large LNG and NGL projects already underway in the storage and thermal solution segment. Consolidated gross profit increased 21% to $13.1 million in the second quarter, compared to $10.9 million in the prior year.
Speaker #2: Second quarter gross margin was 6.2% as compared to 5.8% for the second quarter of fiscal 2025. Higher revenues resulted in improved recovery of overhead costs and project execution was generally strong throughout the That said, costs associated with items business.
Kevin Cavanah: Q2 gross margin was 6.2%, as compared to 5.8% for Q2 of fiscal 2025. Higher revenues resulted in improved recovery of overhead costs, and project execution was generally strong throughout the business. That said, costs associated with items arising during commissioning of a specialty tank project in the storage and thermal solutions segment resulted in a $3.6 million reduction of gross profit during the quarter, or about $0.13 per share. Adjustments to project cost estimates, and therefore direct margin, both positive and negative, are a normal aspect of our business, especially as we work to close out a project. During the course of a year, these variations generally net to a positive and improve direct margin across the portfolio, which we expect to occur this year as well.
Kevin Cavanah: Q2 gross margin was 6.2%, as compared to 5.8% for Q2 of fiscal 2025. Higher revenues resulted in improved recovery of overhead costs, and project execution was generally strong throughout the business. That said, costs associated with items arising during commissioning of a specialty tank project in the storage and thermal solutions segment resulted in a $3.6 million reduction of gross profit during the quarter, or about $0.13 per share. Adjustments to project cost estimates, and therefore direct margin, both positive and negative, are a normal aspect of our business, especially as we work to close out a project. During the course of a year, these variations generally net to a positive and improve direct margin across the portfolio, which we expect to occur this year as well.
Speaker #2: The storage and thermal solution segment resulted in a $3.6 million reduction of gross profit during the quarter, or about $0.13 per share. Estimates, and therefore direct margin—both positive and negative—are a normal aspect of our business, especially as we work to close out a project.
Speaker #2: During the course of a year, these variations generally net to a positive and improve direct margin across the portfolio. Which we Adjustments to project cost expect to occur this year as well.
Kevin Cavanah: Year to date, the direct margin performance, including this issue, is above plan. As backlog converts to revenue and activity levels continue to ramp, if these types of project-level dynamics occur, we expect them to be absorbed more efficiently across the P&L, reducing quarter-to-quarter variability. Moving down the income statement, SG&A expenses decreased to $15.1 million in the second quarter, compared to $17.3 million in the prior year. The 13% decrease is primarily due to cost reductions resulting from our organizational realignment, and lower stock-based compensation expense, which decreased $0.7 million, associated with the variable accounting for cash-settled awards as a result of fluctuations in our stock price. As we previously discussed, our ongoing SG&A quarterly run rate is about $16.5 million. As we return to profitable performance, that will be impacted by variable compensation expense tied to earnings.
Kevin Cavanah: Year to date, the direct margin performance, including this issue, is above plan. As backlog converts to revenue and activity levels continue to ramp, if these types of project-level dynamics occur, we expect them to be absorbed more efficiently across the P&L, reducing quarter-to-quarter variability. Moving down the income statement, SG&A expenses decreased to $15.1 million in the second quarter, compared to $17.3 million in the prior year. The 13% decrease is primarily due to cost reductions resulting from our organizational realignment, and lower stock-based compensation expense, which decreased $0.7 million, associated with the variable accounting for cash-settled awards as a result of fluctuations in our stock price. As we previously discussed, our ongoing SG&A quarterly run rate is about $16.5 million. As we return to profitable performance, that will be impacted by variable compensation expense tied to earnings.
Speaker #2: performance, including this issue, Year to date, the direct margin is above plan. As backlog converts to revenue, and activity levels continue to ramp, if these types of project-level dynamics occur, we expect them to be absorbed more efficiently across the P&L, reducing quarter-to-quarter variability.
Speaker #2: Moving down the income statement, SG&A expenses decreased to $15.1 million in the second quarter, compared to $17.3 million in the prior year. The 13% decrease is primarily due to cost reductions resulting from our organizational realignment and lower stock-based compensation expense, which decreased $0.7 million associated with the variable accounting for cash settled in our stock price.
Speaker #2: discussed, our ongoing SG&A As we previously quarterly run rate is about 16.5 million. As we return to profitable performance, that will be impacted by variable compensation expense tied to earnings.
Speaker #2: We also incurred restructuring costs of $0.2 million in the second quarter, primarily facility-related costs. We will incur additional expenses in the second half of the fiscal year related to the CEO transition; details of that CEO transition are included in item five of the Form 10-Q, which will be filed this afternoon.
Kevin Cavanah: We also incurred restructuring costs of $0.2 million in the second quarter, primarily facility-related costs. We will incur additional expenses in the second half of the fiscal year related to the CEO transition. Details of that CEO transition are included in Item 5 of the Form 10-Q, which will be filed this afternoon. The company generated $1.5 million of interest income in the quarter from its strong balance sheet that has been built up through effective working capital and contract management. For the quarter, the company had a net loss of $0.9 million, compared to a $5.5 million net loss in the second quarter of last year. EPS was a loss of $0.03, compared to a $0.20 loss in the prior year.
Kevin Cavanah: We also incurred restructuring costs of $0.2 million in the second quarter, primarily facility-related costs. We will incur additional expenses in the second half of the fiscal year related to the CEO transition. Details of that CEO transition are included in Item 5 of the Form 10-Q, which will be filed this afternoon. The company generated $1.5 million of interest income in the quarter from its strong balance sheet that has been built up through effective working capital and contract management. For the quarter, the company had a net loss of $0.9 million, compared to a $5.5 million net loss in the second quarter of last year. EPS was a loss of $0.03, compared to a $0.20 loss in the prior year.
Speaker #2: The company generated $1.5 million of interest income in the quarter, from its strong balance sheet that has capital and contract management. For the quarter, the company had a net loss of 0.9 million, compared to a 5.5 million dollar net loss in the second quarter last year.
Speaker #2: EPS was a loss of 3 cents, compared to a 20 cent loss in the prior year. And then adjusted EBITDA in the second quarter improved 4.6 million to a positive 2.4 million, compared to a loss of 2.2 million in the second quarter last year.
Kevin Cavanah: Then adjusted EBITDA in the second quarter improved $4.6 million to a positive $2.4 million, compared to a loss of $2.2 million in the second quarter last year. Now, moving to the operating segment, starting with Storage and Thermal Solutions, which represented 47% of consolidated revenue. Second quarter revenue was $99.9 million, compared to $95.5 million last year. The growth was a result of an increased volume of work for LNG and NGL projects, partially offset by lower volumes for crude oil projects. We expect specialty storage projects, including LNG and NGL, to drive robust growth for the Storage and Thermal Solutions segment as we move through the remainder of fiscal 2026.
Kevin Cavanah: Then adjusted EBITDA in the second quarter improved $4.6 million to a positive $2.4 million, compared to a loss of $2.2 million in the second quarter last year. Now, moving to the operating segment, starting with Storage and Thermal Solutions, which represented 47% of consolidated revenue. Second quarter revenue was $99.9 million, compared to $95.5 million last year. The growth was a result of an increased volume of work for LNG and NGL projects, partially offset by lower volumes for crude oil projects. We expect specialty storage projects, including LNG and NGL, to drive robust growth for the Storage and Thermal Solutions segment as we move through the remainder of fiscal 2026.
Speaker #2: Now, moving to the operating segment, starting with storage and thermal solutions, which represented 47% of consolidated revenue. Second million, compared to 95.5 million last year.
Speaker #2: specially storage projects, including LNG and NGL, to drive quarter revenue was 99.9 through the remainder of fiscal robust growth for the storage and 2026.
Kevin Cavanah: Storage and Thermal Solutions segment gross profit of $4.8 million represented a $2.5 million decrease in the quarter compared to the same period last year. The segment gross margin of 4.8% was lower than segment gross margin of 7.6% last year. The decrease occurred due to the $3.6 million charge we previously discussed. We expect to see significant margin improvement in the remainder of the year based on expected project execution on our high-quality backlog and improved overhead cost recovery resulting from increased revenue levels. Moving on to the Utility and Power Infrastructure segment, which accounted for 36% of consolidated revenues.
Kevin Cavanah: Storage and Thermal Solutions segment gross profit of $4.8 million represented a $2.5 million decrease in the quarter compared to the same period last year. The segment gross margin of 4.8% was lower than segment gross margin of 7.6% last year. The decrease occurred due to the $3.6 million charge we previously discussed. We expect to see significant margin improvement in the remainder of the year based on expected project execution on our high-quality backlog and improved overhead cost recovery resulting from increased revenue levels. Moving on to the Utility and Power Infrastructure segment, which accounted for 36% of consolidated revenues.
Speaker #2: Segment gross profit of $4.8 million represented a $2.5 million decrease in the quarter, compared to Storage and Thermal Solutions last year. The segment gross margin of 4.8% was lower than the segment gross margin of 7.6% last year.
Speaker #2: The decrease occurred due to the $3.6 million charge we previously discussed. We expect to see significant margin improvement in the remainder of the year, based on expected project execution on our high-quality backlog and improved overhead costs in the same period at last year's revenue levels.
Speaker #2: Moving on to the utility and power infrastructure segment, which accounted for 36% of quarter segment revenue increased consolidated revenues. 14.3 million, or 23% to 75.4 million.
Kevin Cavanah: Second quarter segment revenue increased $14.3 million, or 23% to $75.4 million, compared to $61.1 million in the second quarter of fiscal 2025, benefiting from higher volumes of work associated with LNG peak shaving and power delivery projects. Segment gross profit of $7.2 million increased by $3.8 million, or 112% in the second quarter, compared to $3.4 million in the same quarter last year. The increase resulted from higher revenue and an improved gross margin, which increased to 9.6%, compared to 5.6% in the same period last year. The margin increased due to strong project execution and improved construction overhead cost recovery as a result of higher revenues.
Kevin Cavanah: Second quarter segment revenue increased $14.3 million, or 23% to $75.4 million, compared to $61.1 million in the second quarter of fiscal 2025, benefiting from higher volumes of work associated with LNG peak shaving and power delivery projects. Segment gross profit of $7.2 million increased by $3.8 million, or 112% in the second quarter, compared to $3.4 million in the same quarter last year. The increase resulted from higher revenue and an improved gross margin, which increased to 9.6%, compared to 5.6% in the same period last year. The margin increased due to strong project execution and improved construction overhead cost recovery as a result of higher revenues.
Speaker #2: Compared to Second 2025. Benefiting from higher volumes of work associated with LNG peak shaving and power delivery projects. Segment gross profit of 7.2 million increased by 3.8 million, or 112%, in the second quarter, compared to 3.4 million in the same quarter last year.
Speaker #2: from higher revenue and an improved The increase resulted 9.6%, compared to 5.6% in the same period last gross margin, which increased to year. The margin increased due to strong project execution and recovery, as a result of higher revenues.
Speaker #2: Improved construction overhead cost facility segment accounted for 17% of consolidated revenue, or $35.3 million in the second quarter, compared to $30.6 million last year.
Kevin Cavanah: Finally, the process and industrial facility segment accounted for 17% of consolidated revenue, or $35.3 million in Q2, compared to $30.6 million last year. Excuse me. We expect similar revenue levels until we capture additional project opportunities from the strong market and our expansion efforts. Segment gross profit was $1.2 million, or 3.5% in Q2, compared to $0.4 million or 1.2% last year. The current margin level is due to the mix of work, which is primarily lower margin reimbursable activity and the low revenue level, which results in under recovery of construction overhead costs. Both issues should improve as the company captures additional revenue opportunities. Moving to the balance sheet and cash flow.
Kevin Cavanah: Finally, the process and industrial facility segment accounted for 17% of consolidated revenue, or $35.3 million in Q2, compared to $30.6 million last year. Excuse me. We expect similar revenue levels until we capture additional project opportunities from the strong market and our expansion efforts. Segment gross profit was $1.2 million, or 3.5% in Q2, compared to $0.4 million or 1.2% last year. The current margin level is due to the mix of work, which is primarily lower margin reimbursable activity and the low revenue level, which results in under recovery of construction overhead costs. Both issues should improve as the company captures additional revenue opportunities. Moving to the balance sheet and cash flow.
Speaker #2: We—excuse me—we expect similar revenue levels until we capture additional project opportunities from the strong market and our expansion efforts. Segment gross profit was 1.2 million, or 3.5%, in the second quarter, compared to 0.4 million, or 1.2%, last year.
Speaker #2: The current margin on reimbursable activity, and the low revenue level, result in under-recovery of construction overhead costs. Both issues should improve as the company opportunities increase.
Speaker #2: Moving to the balance sheet and cash flow, cash increased $7 million in the quarter, ending at $224 million as of December 31, 2025. The balance sheet and liquidity remain in a strong position, with liquidity of $258 million and no outstanding debt.
Kevin Cavanah: Cash increased $7 million in the quarter, ending at $224 million as of 31 December 2025. The balance sheet and liquidity remain in a strong position, with liquidity of $258 million and no outstanding debt. We also expect to maintain our strong cash balance through the remainder of fiscal 2026 and have the financial strength and liquidity needed to support and grow the business. As we stated previously, the improvement in our consolidated revenue, combined with continued focus on execution excellence, and leverage of our construction overhead and SG&A cost structures, will allow us to return to profitability in the fiscal year and make significant progress toward the achievement of our long-term financial targets. That concludes our prepared remarks, so we'll now open the call up for questions.
Kevin Cavanah: Cash increased $7 million in the quarter, ending at $224 million as of 31 December 2025. The balance sheet and liquidity remain in a strong position, with liquidity of $258 million and no outstanding debt. We also expect to maintain our strong cash balance through the remainder of fiscal 2026 and have the financial strength and liquidity needed to support and grow the business. As we stated previously, the improvement in our consolidated revenue, combined with continued focus on execution excellence, and leverage of our construction overhead and SG&A cost structures, will allow us to return to profitability in the fiscal year and make significant progress toward the achievement of our long-term financial targets. That concludes our prepared remarks, so we'll now open the call up for questions.
Speaker #2: We also expect to maintain our strong cash balance through capturing additional revenue for the remainder of fiscal 2026 and have the financial strength and liquidity needed to support and grow the business.
Speaker #2: As consolidated revenue combined excellence and our—and leverage of our construction overhead and, with continued focus on execution, SG&A cost structures will allow us to return to profitability in the fiscal year and make significant progress toward the achievement of our long-term financial target.
Speaker #2: That—that concludes our prepared remarks, so we'll now open the call up for questions. Thank you. And as a reminder, to ask a we stated previously, the improvement in our question, you need to press star 11 on your telephone and wait for the name to be announced.
Operator: Thank you. As a reminder, to ask a question, you need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question will come from the line of John Franzreb from Sidoti. Your line is open.
Operator: Thank you. As a reminder, to ask a question, you need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question will come from the line of John Franzreb from Sidoti. Your line is open.
Speaker #2: To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question will come from the line of John Franzreb from Sadoty.
Speaker #2: Your line is
Speaker #2: open.
John Franzreb: Good morning, everyone, and thanks for taking the questions. I'd like to start with that one-time issue or the issue you called out, the $3.6 million in storage. I'm curious, is that bleeding into the current quarter? And is there any other large issues similar to that, that we should be cognizant about?
Speaker #3: good
Speaker #3: morning, everyone, and thanks for taking the questions. I—I'd like to start with you—you called out, the, 3.6 million in storage. I'm curious, is that bleeding into the current quarter?
John Franzreb: Good morning, everyone, and thanks for taking the questions. I'd like to start with that one-time issue or the issue you called out, the $3.6 million in storage. I'm curious, is that bleeding into the current quarter? And is there any other large issues similar to that, that we should be cognizant about?
Speaker #3: And is there any other large Cognizant?
Speaker #3: about?
Kevin Cavanah: No, I mean, we think we've captured the issues associated there, and that we would not expect anything bleeding, as you said, bleeding over into the third quarter. We think we've got our hands around what the issues are and a path to get them resolved.
Speaker #4: no, I mean, we—we
Kevin Cavanah: No, I mean, we think we've captured the issues associated there, and that we would not expect anything bleeding, as you said, bleeding over into the third quarter. We think we've got our hands around what the issues are and a path to get them resolved.
Speaker #4: think that we've captured the—we've captured the—the issues associated there, and, that we would not expect any—anything bleeding, as you said, bleeding over into the third quarter.
Speaker #4: We think—We think, issues similar to that, that we should be—we've got our hands around what the issues are and, and, the path to get them.
Speaker #4: resolved. And
Speaker #3: Are there anything similar? Okay, got it. Thank you, John.
John Franzreb: Is there anything similar? Okay, got it. Thank you, John.
John Franzreb: Is there anything similar? Okay, got it.
Kevin Cavanah: Thank you, John.
Speaker #4: There's nothing—nothing similar hanging around someplace
Kevin Cavanah: Nothing similar hanging around someplace else.
Kevin Cavanah: Nothing similar hanging around someplace else.
Speaker #3: Okay, good to know. You also called out in your prepared remarks the opportunity pipeline. Looks like it's up roughly 10%, or $600 million.
John Franzreb: Okay, good to know. You also called out in your prepared remarks, the opportunity pipeline. Looks like it's up roughly 10% or $600 million from last quarter. What's driving that growth?
John Franzreb: Okay, good to know. You also called out in your prepared remarks, the opportunity pipeline. Looks like it's up roughly 10% or $600 million from last quarter. What's driving that growth?
Speaker #3: from last quarter, what's driving that
Speaker #3: growth? I think probably—I don't have the
Kevin Cavanah: I think probably I don't have the statistics in front of me, John. I think, you know, there's a lot of it in the LNG market space and NGL space, but we're also seeing more activity in mining and minerals, and we're seeing more activity in, I think, in electrical. And while those projects aren't necessarily as big, but they're strategically significant for the business.
Kevin Cavanah: I think probably I don't have the statistics in front of me, John. I think, you know, there's a lot of it in the LNG market space and NGL space, but we're also seeing more activity in mining and minerals, and we're seeing more activity in, I think, in electrical. And while those projects aren't necessarily as big, but they're strategically significant for the business.
Speaker #4: statistics in front of me, John. I think, you know, there's a lot of it is in—it's a lot of space and NGL space, but we're also seeing more activity in mining and minerals.
Speaker #4: And we're seeing more activity in, I think in electrical. And, while those projects aren't necessarily as big, but there are strategically significant, for the business.
Speaker #3: Okay, got it. And again, you did reference this in your prepared remarks about the—the backlog. I'm kind of curious, not only in aggregate has the backlog been kind of weak for the last couple quarters, but also notably in—in utility, which I really thought would have been stronger.
John Franzreb: Okay, got it. And again, you did reference this in your prepared remarks about the, the backlog. I'm kind of curious, not only in aggregate, is the backlog kind of been weak for the last couple of quarters, but also notably in, in the utility, which I really thought would have been stronger. Can you kind of talk about what's going on in, in the overall marketplace?
John Franzreb: Okay, got it. And again, you did reference this in your prepared remarks about the, the backlog. I'm kind of curious, not only in aggregate, is the backlog kind of been weak for the last couple of quarters, but also notably in, in the utility, which I really thought would have been stronger. Can you kind of talk about what's going on in, in the overall marketplace?
Speaker #3: Can you kind of talk about what's going on in the overall marketplace?
Speaker #4: Yeah. I think, you know, the wor—the award cycle, obviously, you know, we're—we feel—we feel as though it's been a little muted, and I think some—some of the uncertainty in the energy markets and, you know, permitting, the process of permitting is—is difficult.
Kevin Cavanah: Yeah, I think, you know, the award cycle, obviously, you know, we feel as though it's been a little muted, and I think some of the uncertainty in energy markets and, you know, permitting, the process of permitting is difficult. I think some of those things is just taking a little bit longer for a lot of those projects to get from our opportunity pipeline into a situation of FID and award. We think all the projects in there are good, solid projects, that we're gonna have an opportunity to bid and win our fair share of them. There has not been... So we track what comes in and out of our opportunity pipeline on a monthly basis.
Kevin Cavanah: Yeah, I think, you know, the award cycle, obviously, you know, we feel as though it's been a little muted, and I think some of the uncertainty in energy markets and, you know, permitting, the process of permitting is difficult. I think some of those things is just taking a little bit longer for a lot of those projects to get from our opportunity pipeline into a situation of FID and award. We think all the projects in there are good, solid projects, that we're gonna have an opportunity to bid and win our fair share of them. There has not been... So we track what comes in and out of our opportunity pipeline on a monthly basis.
Speaker #4: I think some of those things is—is just taking a little bit longer for a lot of those projects, to get from our opportunity pipeline into, a situation of FID and—and award.
Speaker #4: We think all the projects in there are good, solid projects that we're going to have an opportunity to—an opportunity to bid and— and— and win our fair share of them.
Speaker #4: there's—there has not been—so we track what comes in and out of our opportunity pipeline on a monthly basis. And so if you go look at that, that isn't a lot of those things are getting won by someone.
Kevin Cavanah: And so if you go look at that, there isn't a lot of those things are getting won by someone.
Kevin Cavanah: And so if you go look at that, there isn't a lot of those things are getting won by someone.
Speaker #4: I—it's not a high percentage of them that are getting won by competitors, right? They're either moving out of our opportunity pipeline back into our prospects because of some permitting delay or a client's investment decision, and then we have projects moving in—moving in out of prospects into opportunities.
John Hewitt: ... It's not a high percentage of them that are getting won by competitors, right? They're either moving out of our opportunity pipeline back into our prospects because of some permitting delay or a client's investment decision, and then we have projects moving in, moving out of prospects into opportunities. But I can't tell you, we're, we're looking at our statistics every month, every quarter, and it's saying, "Oh, wow, we're, you know, we're not winning any of this work." It's, it the stuff is just kind of moving around on us. And you got to remember, too, is that there, you know, a decent chunk, I think we've said in the past, probably $70 to 100 million worth of stuff happens for us every quarter. It's just small projects, maintenance activity, and all that.
John Hewitt: ... It's not a high percentage of them that are getting won by competitors, right? They're either moving out of our opportunity pipeline back into our prospects because of some permitting delay or a client's investment decision, and then we have projects moving in, moving out of prospects into opportunities. But I can't tell you, we're, we're looking at our statistics every month, every quarter, and it's saying, "Oh, wow, we're, you know, we're not winning any of this work." It's, it the stuff is just kind of moving around on us. And you got to remember, too, is that there, you know, a decent chunk, I think we've said in the past, probably $70 to 100 million worth of stuff happens for us every quarter. It's just small projects, maintenance activity, and all that.
Speaker #4: But I can't tell you we're—I'm—we're looking at that statistics every month, every quarter, and it's saying, "Oh, wow, we're—you know, we're not winning any of these—any of this work." It's—it—there—the stuff is just kind of moving around on us.
Speaker #4: And you gotta remember too, though, there are—you know, a—a decent chunk, and I think we've said in the for us every quarter. It's just small projects and maintenance activity and all that.
Speaker #4: It just happened—it's not in that opportunity pipeline, 'cause we don't—we don't think it's relevant to have. We didn't mix it in there with all that other stuff.
John Hewitt: It's not in that opportunity pipeline because we don't, we don't think it's relevant to have mixed in there with all that other stuff. So we have this baseline of awards and work that comes in and out, can come in and out in a quarter, not in that opportunity pipeline. And so it makes it sort of, almost makes it sort of invisible. And, but, but that stuff is continuing to happen for us, and, and we're focused to continue to expand our maintenance operations and, and maintenance, work. And we're, and we're geographically looking into new areas to expand our, our, refinery maintenance and some of the other maintenance activities we have.
John Hewitt: It's not in that opportunity pipeline because we don't, we don't think it's relevant to have mixed in there with all that other stuff. So we have this baseline of awards and work that comes in and out, can come in and out in a quarter, not in that opportunity pipeline. And so it makes it sort of, almost makes it sort of invisible. And, but, but that stuff is continuing to happen for us, and, and we're focused to continue to expand our maintenance operations and, and maintenance, work. And we're, and we're geographically looking into new areas to expand our, our, refinery maintenance and some of the other maintenance activities we have.
Speaker #4: So we got this baseline of awards and work that comes in and out of—can come in and out in a quarter, not in that opportunity pipeline.
Speaker #4: And so it makes us sort of—almost makes us sort of invisible. And, but—but that stuff is continuing to happen for us, and—and we're focused to continue to expand our maintenance operations and—and maintenance, work.
Speaker #4: And we're—and we're geographically looking into new areas to expand our—our, refinery maintenance and some of our other maintenance activities we have. So—uh, so while, you know, we certainly would like to have both, you know, big book the bills every quarter, but I think we've communicated to you guys in the past that, you know, we're—we're gonna—we're gonna have a quarter with a big book the bill, and then we could have two, three, four quarters where it's gonna be below one.
John Hewitt: So, while, you know, we certainly would like to have book, you know, a big book-to-bills every quarter, but I think we've communicated to you guys in the past that, you know, we're gonna have a quarter with a big book-to-bill, and then we could have two, three, four quarters where it's gonna be below one. So, I think it's okay. I think we're in a good spot. I would tell you, if you look, if you look at the details, you know, the book-to-bill for the year, the book-to-bill in storage is above one. So, we're continuing to have a strong bookings in that, and it represents a big chunk of the business.
John Hewitt: So, while, you know, we certainly would like to have book, you know, a big book-to-bills every quarter, but I think we've communicated to you guys in the past that, you know, we're gonna have a quarter with a big book-to-bill, and then we could have two, three, four quarters where it's gonna be below one. So, I think it's okay. I think we're in a good spot. I would tell you, if you look, if you look at the details, you know, the book-to-bill for the year, the book-to-bill in storage is above one. So, we're continuing to have a strong bookings in that, and it represents a big chunk of the business.
Speaker #4: So—um, I think it's okay. I think we're in a good spot. I would tell you, if you look—if you look at the details, you know, the book the bill in for the year, the book the bill in storage is above one.
Speaker #4: So—so we're continuing to—to—to have a strong bookings in that, and it represents a big chunk of the business.
Speaker #3: So—so John, just to follow up, do you expect these awards to be moved to the right such that they're gonna be awarded in the second half of the fiscal year, or are they moved to the right that they're gonna be a fiscal 2027 award?
John Franzreb: So, John, just to follow up, do you expect these awards to be moved to the right such that they're gonna be awarded in the second half of the fiscal year, or they move to the right, that they're gonna be a fiscal 2027 award? I'm just kind of curious about the, maybe the exit velocity of backlog in fiscal 2026, because we kind of talked about it being around 1.0 overall and maybe I wonder if that dynamic's changed at all.
John Franzreb: So, John, just to follow up, do you expect these awards to be moved to the right such that they're gonna be awarded in the second half of the fiscal year, or they move to the right, that they're gonna be a fiscal 2027 award? I'm just kind of curious about the, maybe the exit velocity of backlog in fiscal 2026, because we kind of talked about it being around 1.0 overall and maybe I wonder if that dynamic's changed at all.
Speaker #3: I'm just kind of curious about the—maybe the exit velocity of backlog in fiscal 2026, 'cause we kind of talked about it being around 1.0 overall, and maybe I wonder if that dynamic's changed at—
Speaker #3: all. Right.
John Hewitt: Right. I think what we've said and what we've communicated in the past, and I'll use an NFL term, chunk plays, so like chunk projects, right? So the big chunk projects that drive, really drive that a big book-to-bill in a quarter, you know, they're out there. You know, we're positioned for them. Those are the-- those big chunk projects are the ones that I think are gonna be-- we're gonna see in our award cycle in fiscal 2027, which starts 1 July. But we're gonna see some, probably some strategic awards, some smaller awards that are gonna be in the next two quarters. But, you know, it probably isn't likely that we're gonna exit the quarter over a 1.0 collectively across the business.
John Hewitt: Right. I think what we've said and what we've communicated in the past, and I'll use an NFL term, chunk plays, so like chunk projects, right? So the big chunk projects that drive, really drive that a big book-to-bill in a quarter, you know, they're out there. You know, we're positioned for them. Those are the-- those big chunk projects are the ones that I think are gonna be-- we're gonna see in our award cycle in fiscal 2027, which starts 1 July. But we're gonna see some, probably some strategic awards, some smaller awards that are gonna be in the next two quarters. But, you know, it probably isn't likely that we're gonna exit the quarter over a 1.0 collectively across the business.
Speaker #4: I—I think what we've said and what we've communicated in the past, and I'll use an NFL term, chunk place. So like chunk projects, right?
Speaker #4: So the big chunk projects that drive really drive that a big book the bill in a quarter, you know, they're out there. You know, we're positioned for them.
Speaker #4: Those big chunk projects are the ones that I think are going to be—we're going to see them in our award cycle in fiscal '27, which starts July 1.
Speaker #4: And but we're gonna see some probably some strategic awards, some smaller awards that are gonna—uh, be in the next two quarters, but, you know, it probably isn't likely that we're gonna exit the quarter over a 1.0 collectively across the business.
Speaker #4: But you—you continue to see a strong book the bill in any one of those—any one of the
Speaker #4: But you—you continue to see a strong book-to-bill in any one of those—any one of the segments. Got it.
John Hewitt: But you continue to see a strong book-to-bill in any one of those segments.
John Hewitt: But you continue to see a strong book-to-bill in any one of those segments.
John Franzreb: Got it. Thanks for taking the questions.
John Franzreb: Got it. Thanks for taking the questions.
Speaker #3: Than-thanks for taking the questions.
John Hewitt: Sure.
John Hewitt: Sure.
Speaker #1: Thank you. One moment for our next
Operator: Thank you. One moment for our next question. Our next question will come from the line of Brent Thielman from D.A. Davidson. Your line is open.
Operator: Thank you. One moment for our next question. Our next question will come from the line of Brent Thielman from D.A. Davidson. Your line is open.
Speaker #1: Question. Sure. Our next question will come from the line of Brent Thilman from D.A. Davidson. Your line is open.
Speaker #5: Yeah. Hey. Thanks, guys. hey, John, maybe just, to—to follow up on the conversation about all the things you can do, y-you know, around data centers.
Brent Thielman: Yeah. Hey, thanks, guys. Hey, John, maybe just to follow up on the conversation about all the things you can do, you know, around data centers, that sort of bundle, you know, things you can do directly on those sites with, you know, the power component of that as well, which just seems to be sort of feverish demand here. Why wouldn't that be more influential to your bookings here in the next few quarters, just given the appetite and the fact that you have these, you know, capabilities that seem to be in the sweet spot of that?
Brent Thielman: Yeah. Hey, thanks, guys. Hey, John, maybe just to follow up on the conversation about all the things you can do, you know, around data centers, that sort of bundle, you know, things you can do directly on those sites with, you know, the power component of that as well, which just seems to be sort of feverish demand here. Why wouldn't that be more influential to your bookings here in the next few quarters, just given the appetite and the fact that you have these, you know, capabilities that seem to be in the sweet spot of that?
Speaker #5: I sort of bundle, you know, things you can do directly on those sites with, you know, the power component of that as well, which just seems to be, sort of, feverish demand here.
Speaker #5: Why—why wouldn't that be more influential to your—your bookings here in the next few quarters? Just given the appetite and the fact that you have these—you know, capabilities that seem to be in the sweet spot of
Speaker #5: that.
Speaker #4: Yeah. So I think
John Hewitt: Yeah, so I think that's, it's a good question. You know, and we've been focused on that market here. It didn't just start yesterday, right? So we've been working on it probably over the last 12 months, so, and we recognize, like everybody else, that there's a significant amount of spend there. But you got to remember, a lot of those clients are new clients to us. Yes, we've got a power generation capability in-house. We've built some significant power plants, that's on our resume. And obviously, the electrical connectivity capabilities that's principally in the Northeast, and then all the backup fuel and all that stuff. So but, you know, we're kind of entering that market, and we've got to sell our resume, we've got to build relationships with those clients.
John Hewitt: Yeah, so I think that's, it's a good question. You know, and we've been focused on that market here. It didn't just start yesterday, right? So we've been working on it probably over the last 12 months, so, and we recognize, like everybody else, that there's a significant amount of spend there. But you got to remember, a lot of those clients are new clients to us. Yes, we've got a power generation capability in-house. We've built some significant power plants, that's on our resume. And obviously, the electrical connectivity capabilities that's principally in the Northeast, and then all the backup fuel and all that stuff. So but, you know, we're kind of entering that market, and we've got to sell our resume, we've got to build relationships with those clients.
Speaker #4: It's—uh, it's a good question. You know, we've—and we've been focused on that market here. It didn't just start yesterday, right? So we've been working on it probably over the last 12 months—and a significant amount of spend there.
Speaker #4: But you we recognize, like everybody else, that there's a gotta remember, a lot of those clients are—are new clients to us. yes, we've got a power generation capability in-house.
Speaker #4: We've built some significant power plants. That's on our resume. And obviously, the—the electrical connectivity issues that are—are—our electrical connectivity capabilities, that's principally in the Northeast, and—and then all the backup fuel and all that stuff.
Speaker #4: So, but, you know, we're kind of entering that market, and we've got to sell our resume. We've got to build relationships with those clients. We have got to want to make sure we're positioning ourselves for work that—you know, fits our risk profile and our financial profile.
John Hewitt: We have got to want to make sure we're positioning ourselves for work that, you know, fits our risk profile and our financial profile. We need to appreciate how we compete and how we win in that market. And so all that stuff's going on, and I think we're starting to see some fruits of that work by our business development and operations people. And so as we said in the prepared remarks, my thoughts are that we're gonna start to see some growth in the opportunity pipeline as some of this stuff hits where we can, are gonna be deciding to bid or being invited to bid on certain projects.
John Hewitt: We have got to want to make sure we're positioning ourselves for work that, you know, fits our risk profile and our financial profile. We need to appreciate how we compete and how we win in that market. And so all that stuff's going on, and I think we're starting to see some fruits of that work by our business development and operations people. And so as we said in the prepared remarks, my thoughts are that we're gonna start to see some growth in the opportunity pipeline as some of this stuff hits where we can, are gonna be deciding to bid or being invited to bid on certain projects.
Speaker #4: We need to appreciate—uh, how we compete and how we win in those—in that market. And so all that stuff's going on, and I think we're starting to see some fruits of that work by our business development and operations people.
Speaker #4: And so—uh, as we said in the prepared remarks, my—my thoughts are the opportunity is that we're gonna start to see some growth pipeline as some of this stuff gets to—hits our—hits where we can—are gonna be choosing, deciding the bid, or being—uh, invited to bid on certain projects.
Speaker #4: But we're already—we're already, uh, bidding projects from an electrical infrastructure standpoint on new substations that are directly connected to, uh, to a—uh, data center, power needs.
John Hewitt: But we're already bidding projects from an electrical infrastructure standpoint on new substations that are directly connected to a data center power needs. And so we have several of those that we're bidding now, and I would hope that we're gonna be able to put some of those into backlog this, in this second half of the year. And so we're also working with EPC power plant constructors, where we can come in and provide our services. And any one of the things that I mentioned there, you know, whether it's, you know, putting the turbines in or doing the mechanical work or electrical work or erecting the boilers or whatever that is, all those things we've got capabilities and skills for.
John Hewitt: But we're already bidding projects from an electrical infrastructure standpoint on new substations that are directly connected to a data center power needs. And so we have several of those that we're bidding now, and I would hope that we're gonna be able to put some of those into backlog this, in this second half of the year. And so we're also working with EPC power plant constructors, where we can come in and provide our services. And any one of the things that I mentioned there, you know, whether it's, you know, putting the turbines in or doing the mechanical work or electrical work or erecting the boilers or whatever that is, all those things we've got capabilities and skills for.
Speaker #4: And, so we have several of those that we're bidding now, and I would hope that we're gonna be able to put some of those into—into backlog this—in this second half of the year.
Speaker #4: And, so we're also working with, EPC power plant con-constructors where we can come in and provide our services and any one of the things that I mentioned there, you know, whether it's a, you know, putting the turbines in or doing the mechanical work or electrical work or erecting the boilers or whatever that is, all those things we've got capabilities and skills for.
Speaker #4: And so we're—and so we're—I think we're doing a good job. We're working into those markets, and I think we're gonna see here over the quar we're gonna start to see some impact to that efforts in our opportunity pipeline and to a small degree into our award cycle this—this fis this fiscal year.
John Hewitt: And so we're-- I think we're doing a good job. We're working into those markets, and I think we're gonna start to see some impact to that efforts in our opportunity pipeline and to a small degree, into our award cycle this fiscal year, but it's gonna really start to grow, I think, as we move into 2027.
John Hewitt: And so we're-- I think we're doing a good job. We're working into those markets, and I think we're gonna start to see some impact to that efforts in our opportunity pipeline and to a small degree, into our award cycle this fiscal year, but it's gonna really start to grow, I think, as we move into 2027.
Speaker #4: But it's gonna really start to grow, I think, as we move into '27.
Speaker #3: All right. Appreciate that, John. any thoughts on the midstream side? I mean, we talk about all the demand around gas power coming. I mean, it's becoming pretty evident with some other companies.
Brent Thielman: All right. Appreciate that, John. Any thoughts on the midstream side? I mean, as we talk about all the demand around gas power coming, and it's becoming pretty evident with some other companies. Are there things that you're starting to see in the midstream arena pop up for you that could also be an opportunity?
Brent Thielman: All right. Appreciate that, John. Any thoughts on the midstream side? I mean, as we talk about all the demand around gas power coming, and it's becoming pretty evident with some other companies. Are there things that you're starting to see in the midstream arena pop up for you that could also be an opportunity?
Speaker #3: Is there—are there things that you're starting to see in the midstream arena pop up for you that could also be an
Speaker #3: opportunity? so when you say
John Hewitt: So when you say midstream, are you talking about crude oil or are you talking about gas?
John Hewitt: So when you say midstream, are you talking about crude oil or are you talking about gas?
Speaker #4: midstream, you're talking about crude oil, or you're talking about gas? Yes to
Speaker #3: Yeah. Yeah.
Brent Thielman: Gas. Gas.
Brent Thielman: Gas. Gas.
John Hewitt: Yes to both?
John Hewitt: Yes to both?
Speaker #3: Gas. both.
Brent Thielman: Yeah, gas, John. Gas. He said gas.
Brent Thielman: Yeah, gas, John. Gas. He said gas.
Speaker #3: John.
Speaker #6: Gas. Yeah.
John Hewitt: Yeah. So I think the crude market is fairly, you know, muted. There's some new tanks getting built. There's certainly tank maintenance, repair works going on all the time. You know, we do that work. You know, but our, I think a lot of our, a lot of our storage resources have been a little more focused on the specialty vessel stuff we're doing, where that's more complex construction, better margins for us, less competition. And so while we're still doing, we're, we continue to offer services in the, on the crude storage and midstream side, the company, you know, it's, it's become a smaller and smaller piece of the revenue of the business. So there's activity out there.
John Hewitt: Yeah. So I think the crude market is fairly, you know, muted. There's some new tanks getting built. There's certainly tank maintenance, repair works going on all the time. You know, we do that work. You know, but our, I think a lot of our, a lot of our storage resources have been a little more focused on the specialty vessel stuff we're doing, where that's more complex construction, better margins for us, less competition. And so while we're still doing, we're, we continue to offer services in the, on the crude storage and midstream side, the company, you know, it's, it's become a smaller and smaller piece of the revenue of the business. So there's activity out there.
Speaker #4: So
Speaker #4: I think the—the, crude—uh, crude market is know, muted. There's some new tanks getting built. There's, certainly tank maintenance repair work's going on all the time.
Speaker #4: We, you know, we do that work. you know, but our I think a lot of our a lot of our storage resources have been a little more focused on especially vessel stuff we're doing.
Speaker #4: Where that's more complex construction, better margins for us, less competition. And so while we're still doing we're—we're contin we continue to offer services in the on the crude storage and midstream side.
Speaker #4: the company—um, you know, it's—it's become a smaller and smaller piece of the revenue of the business. So there's activity out there. On the natural gas side, certainly, you know, we've got a great position in—in, gas storage.
John Hewitt: On the natural gas side, certainly, you know, we've got a great position in gas storage, in LNG and in NGLs, both the storage perspective, but also the Balance of Plant construction for those facilities, and whether they're, you know, a utility connection or they're for fueling or whatever. So, you know, I think the activity level there, I think, related to gas is strong, getting stronger. A lot of permitting issues around that, as we said in the prepared remarks. You know, there's a lot of pipeline issues out there in the marketplace because of permitting challenges.
John Hewitt: On the natural gas side, certainly, you know, we've got a great position in gas storage, in LNG and in NGLs, both the storage perspective, but also the Balance of Plant construction for those facilities, and whether they're, you know, a utility connection or they're for fueling or whatever. So, you know, I think the activity level there, I think, related to gas is strong, getting stronger. A lot of permitting issues around that, as we said in the prepared remarks. You know, there's a lot of pipeline issues out there in the marketplace because of permitting challenges.
Speaker #4: We're in LNG and in, N-NGLs. both in storage for s storage perspective, but also the balance of plant construction, for those facilities. And whether they're, you know, utility connection or they're for, fueling or, or whatever.
Speaker #4: So, you know, I, I think we're—we're, the activity level there, I think, related to gas is, is, is, is, is strong. Getting stronger. A lot of permitting issues around that.
Speaker #4: As we said in the prepared remarks, you know, there’s a lot of pipeline issues out there in the marketplace because of permitting challenges. And so you have companies that are—you know, unsure about tying up dollars when they’re uncertain about the ability to get a permit pushed through.
John Hewitt: And so you have companies that are, you know, unsure about tying up dollars when they're uncertain about the ability to get a permit pushed through. So one of the projects that we announced an award last quarter, we're building the Balance of Plant for a NGL facility, which we're also building the storage tank for. And we had expected more revenues in Q2 on that project, but the permitting delays have kind of pushed our ability to go earn revenue into the back half of this fiscal year. The project's in flight. We're starting to get permits, we're starting to work through it. But that's certainly one of the issues, I think, that's impacted probably a lot of people in the midstream market.
John Hewitt: And so you have companies that are, you know, unsure about tying up dollars when they're uncertain about the ability to get a permit pushed through. So one of the projects that we announced an award last quarter, we're building the Balance of Plant for a NGL facility, which we're also building the storage tank for. And we had expected more revenues in Q2 on that project, but the permitting delays have kind of pushed our ability to go earn revenue into the back half of this fiscal year. The project's in flight. We're starting to get permits, we're starting to work through it. But that's certainly one of the issues, I think, that's impacted probably a lot of people in the midstream market.
Speaker #4: So, one of the projects that we announced in an award last quarter—we're building the balance of plant for an NGL facility, which we're also building the storage tank for.
Speaker #4: And, you know, we had expected more revenues in Q2 on that project, but the, the, the, the permitting delays have kinda pushed the pushed has slid the pro the our ability to go burn revenue into the back half of this fiscal year.
Speaker #4: Now, the project's in flight. We're starting to get permits; we're starting to work through it. But that's certainly one of the issues. I think that's an impact that probably a lot of people in the midstream—
Speaker #4: market. Okay.
Brent Thielman: Okay. And then, you did mention minerals and mining. You know, obviously, critical materials become more topical here.
Brent Thielman: Okay. And then, you did mention minerals and mining. You know, obviously, critical materials become more topical here.
Speaker #3: And then, you did mention minerals and mining. You know, obviously, critical materials become more topical here in the—
John Hewitt: Right
John Hewitt: Right
Speaker #3: lately. You're, you're, you're Right. positioning there and kind of maybe waiting for us to size the opportunity
Brent Thielman: ... lately. Your, you're positioning there and kind of any way that for us to size the opportunity for you?
Brent Thielman: ... lately. Your, you're positioning there and kind of any way that for us to size the opportunity for you?
Speaker #3: for you?
Speaker #4: Yeah.
John Hewitt: Yeah. So we've got, you know, we've got a legacy history in mining and minerals. When that market was stronger, we had an operation in Arizona and did work for some of the big miners down there. And then that market kind of fell apart. And so, you know, we've kind of kept our hand in there from a sales perspective, but really haven't done any work. That market's coming back strongly, copper, rare earth minerals, gold. And so, you know, we're seeing a lot more opportunities finally get off the drawing board. And we've got a couple of really nice projects that we're bidding now in the mining and minerals market.
John Hewitt: Yeah. So we've got, you know, we've got a legacy history in mining and minerals. When that market was stronger, we had an operation in Arizona and did work for some of the big miners down there. And then that market kind of fell apart. And so, you know, we've kind of kept our hand in there from a sales perspective, but really haven't done any work. That market's coming back strongly, copper, rare earth minerals, gold. And so, you know, we're seeing a lot more opportunities finally get off the drawing board. And we've got a couple of really nice projects that we're bidding now in the mining and minerals market.
Speaker #4: So we've got you know, we've got a legacy history in mining and minerals. We used to have we at, at when that market was stronger, we had an operation in, Arizona.
Speaker #4: And did work for some of the big miners down there. And then, and then that market kinda fell apart. And so, you know, we've kinda kept our hand in there from a sales perspective, but really haven't done any work.
Speaker #4: That market's coming back strongly. Copper, rare earth minerals, gold. And so, you know, we're seeing, we're seeing a lot more opportunities finally get off the drawing board and we've got a couple of really nice projects that we're bidding now, in, in the mining and minerals market.
Speaker #4: And again, we're, you know, we think our brand's continues to be strong there and, and so we're, we're kinda rebuilding those relationships and, think there's a real opportunity for us here you know, plus then you got the, you know, the b-besides the demand for those kind of, nonferrous metals, related to what's going on with all this infrastructure built out, you've also got the federal government now that is, you know, a-again, from a national security issue, is investing money in rare earth minerals.
John Hewitt: And again, we're, you know, we think our brands continues to be strong there, and, and so we're, we're kind of rebuilding those relationships. I think there's a real opportunity for us here. You know, plus, then you got the, you know, the, besides the demand for those kind of non-ferrous metals related to what's going on with all this infrastructure build-out, you've also got the federal government now that is, you know, again, from a national security issue, is investing money in rare earth minerals, to make sure that the, the, you know, from a national security issue, that we've got those minerals here in, in this country.
John Hewitt: And again, we're, you know, we think our brands continues to be strong there, and, and so we're, we're kind of rebuilding those relationships. I think there's a real opportunity for us here. You know, plus, then you got the, you know, the, besides the demand for those kind of non-ferrous metals related to what's going on with all this infrastructure build-out, you've also got the federal government now that is, you know, again, from a national security issue, is investing money in rare earth minerals, to make sure that the, the, you know, from a national security issue, that we've got those minerals here in, in this country.
Speaker #4: to make sure that the, the, you know, from a national security issue that we've got those minerals here in, in this country. So I think there's a lot of good there's a lot of good, tailwinds associated with that market.
John Hewitt: So I think there's a lot of good tailwinds associated with that market, and I think we've got a resume and the relationships to be able to take advantage of it.
John Hewitt: So I think there's a lot of good tailwinds associated with that market, and I think we've got a resume and the relationships to be able to take advantage of it.
Speaker #4: And I think we've got a resume and a and the relationships to be able to take advantage of it.
Speaker #3: Okay. Maybe just last one, guys. Appreciate you taking all these. you know, I think about y-y-your outlook for the rest of the year, the, the return to profitability, your anticipating and what seems to me like a lot of green shoots here in the business, notwithstanding some of the, the uncertainty in some of your markets here in the short term.
Brent Thielman: Okay. Maybe just last one, guys. I appreciate you taking all these. You know, I think about, you know, the outlook for the rest of the year, the return to profitability you're anticipating, and what seems to me like a lot of green shoots here in the business, notwithstanding some of the uncertainty in some of your markets here in the short term. And you got a lot of cash on the balance sheet. I mean, John, just to refresh on, you know, buybacks, why wouldn't they make sense here? Just seems like business is heading in the right direction. You got some good things coming for you. Any just update on your thoughts there?
Brent Thielman: Okay. Maybe just last one, guys. I appreciate you taking all these. You know, I think about, you know, the outlook for the rest of the year, the return to profitability you're anticipating, and what seems to me like a lot of green shoots here in the business, notwithstanding some of the uncertainty in some of your markets here in the short term. And you got a lot of cash on the balance sheet. I mean, John, just to refresh on, you know, buybacks, why wouldn't they make sense here? Just seems like business is heading in the right direction. You got some good things coming for you. Any just update on your thoughts there?
Speaker #3: And you got a lot of cash on the balance sheet. I mean, John, just to refresh on, y-you know, buybacks, why wouldn't they make sense here?
Speaker #3: Just seems like businesses heading in the right direction. You got some good things coming for you. Are you just updating your thoughts
Speaker #4: I think, you know, as we've always said, I think our, you know, as we want to—we're—as we return balance sheet. You know, we're going to be focused on, you know, we've been pretty lean as an organization on how we spent our capital, internally, for our operations.
John Hewitt: ... I think, you know, as we've always said, I think our, you know, as we wanna, we're as we return to profitability, yes, we have cash on the balance sheet, you know, we're gonna be focused on, you know, we've been pretty lean as an organization on how we spent our capital internally for our operations, and so there's some catch-up for us to do there. We are gonna be looking for inorganic opportunities that round out our business, or our business offering. And certainly, the inability to find inorganic opportunities to add to the business could result in, you know, us making the decision that maybe we buy back shares. So I would say all that stuff's on the table. And, you know, so we're...
John Hewitt: ... I think, you know, as we've always said, I think our, you know, as we wanna, we're as we return to profitability, yes, we have cash on the balance sheet, you know, we're gonna be focused on, you know, we've been pretty lean as an organization on how we spent our capital internally for our operations, and so there's some catch-up for us to do there. We are gonna be looking for inorganic opportunities that round out our business, or our business offering. And certainly, the inability to find inorganic opportunities to add to the business could result in, you know, us making the decision that maybe we buy back shares. So I would say all that stuff's on the table. And, you know, so we're...
Speaker #4: And so there's some catch-up for us to do there. We, we are gonna be looking for inorganic opportunities that round out our business or our business offering.
Speaker #4: And certainly, the un-un-inability to find, find, inorganic opportunities to add to the business could, could result in, you know, us making the decision that maybe we buyback shares.
Speaker #4: So I would say all that stuff's on the table. And, you know, so we're—as we've said in previous calls—we're waiting to, we're driving the business to return to profitability, to win, execute, and deliver.
John Hewitt: As we've said in previous calls, we're driving the business to return to profitability, to win, execute, and deliver. And as that happens, then we're gonna be looking for the more expanded things to do with the cash on the balance sheet.
John Hewitt: As we've said in previous calls, we're driving the business to return to profitability, to win, execute, and deliver. And as that happens, then we're gonna be looking for the more expanded things to do with the cash on the balance sheet.
Speaker #4: And as that happens, then we're gonna be looking for, more expanded, things to do with the cash on the balance
Speaker #4: sheet. Okay.
John Franzreb: Okay, thanks for taking all the questions, guys. Appreciate it.
John Franzreb: Okay, thanks for taking all the questions, guys. Appreciate it.
Speaker #3: Thanks for taking all the questions, guys. Appreciate it.
Speaker #4: Sure. it.
John Hewitt: Sure.
John Hewitt: Sure.
Speaker #1: Thank
Operator: Thank you. One moment for a follow-up question. We have a follow-up question from John Franzreb from Sidoti. Your line is open.
Operator: Thank you. One moment for a follow-up question. We have a follow-up question from John Franzreb from Sidoti. Your line is open.
Speaker #1: you. One moment for a follow-up question. We have a follow-up question from John Franzrep from Cedotti. Your line is open.
Speaker #5: Yeah. I-I'm just actually curious about the competitive landscape. our new jobs being written at, at target mo margins, or is that pressure uncertain and, and markets versus others?
John Franzreb: Yeah, I'm just actually curious about the competitive landscape. Are new jobs being written at target margins, or is there pressure in certain markets versus others? And I guess on the flip side of that, are some being written at above target? You know, can you just kind of talk a little bit about that?
John Franzreb: Yeah, I'm just actually curious about the competitive landscape. Are new jobs being written at target margins, or is there pressure in certain markets versus others? And I guess on the flip side of that, are some being written at above target? You know, can you just kind of talk a little bit about that?
Speaker #5: And I guess on the flip side of that, are some being written at above target? You know, can you just kinda talk a little bit about—
Speaker #5: that? Yeah.
John Hewitt: Yeah, I mean, the work that we're booking on a collective basis is falling within our targeted margin ranges. So, I would say we're not—it's not the same as it was three years ago, where contractors are out chasing projects and driving margins to the bottom. That's... We're not experiencing that.
John Hewitt: Yeah, I mean, the work that we're booking on a collective basis is falling within our targeted margin ranges. So, I would say we're not—it's not the same as it was three years ago, where contractors are out chasing projects and driving margins to the bottom. That's... We're not experiencing that.
Speaker #4: I mean, our, our, our the, the work that we're booking, on a collective basis, is falling within our targeted margin ranges. So, I, I would say we're not it's not the same as it was three, three years ago.
Speaker #4: Where contractors are out chasing projects and driving the margins to the bottom. We're not experiencing that.
Speaker #1: And, a-any of them you know, any of the markets above target margins at
John Franzreb: Any of them, you know, any of the markets above target margins at all?
John Franzreb: Any of them, you know, any of the markets above target margins at all?
Speaker #1: all? Yeah.
John Hewitt: Yeah, I mean, it depends on which, on which piece of our business. Some pieces will get a higher margin, some the bigger the job, sometimes we're able, we're able to get a, a higher margin. So I think, you know, we've talked about a margin range of 10% to 12%.
John Hewitt: Yeah, I mean, it depends on which, on which piece of our business. Some pieces will get a higher margin, some the bigger the job, sometimes we're able, we're able to get a, a higher margin. So I think, you know, we've talked about a margin range of 10% to 12%.
Speaker #4: I mean, it depends on which on which piece of our business. Some pieces, we'll get a higher margin. Some of the bigger the job, sometimes we're ab we're able to get a, a higher margin.
Speaker #4: So I think, you know, we've talked about a margin range of 10 to 12 percent. Some pieces of our business are in the high end of that range.
John Franzreb: Right.
John Franzreb: Right.
John Hewitt: Some pieces of our business are in the high end of that range, some are a little bit above. And but some, you know, some more of the maintenance activities and those things are certainly at the lower end of those margin ranges or even below. So but the portfolio overall, I think the margin ranges there in the backlog is well within our expected range.
John Hewitt: Some pieces of our business are in the high end of that range, some are a little bit above. And but some, you know, some more of the maintenance activities and those things are certainly at the lower end of those margin ranges or even below. So but the portfolio overall, I think the margin ranges there in the backlog is well within our expected range.
Speaker #4: Some are a little bit above, and—but some, you know, some more of the maintenance activities and those things are certainly at the lower end of those margin ranges, or even below.
Speaker #4: So but the portfolio overall, I think the margin range is there in the in the in the backlog is well within our expected
Speaker #4: range. Okay.
John Franzreb: Okay, got it. Thanks for taking the follow-up, John. Appreciate it.
John Franzreb: Okay, got it. Thanks for taking the follow-up, John. Appreciate it.
Speaker #3: Got it. Thanks for taking the follow-up, John. Appreciate
Speaker #3: it.
Speaker #1: Thank
Operator: Thank you. I'm not showing any further questions in the queue. I'd like to turn it back over to Kellie for any closing remarks.
Operator: Thank you. I'm not showing any further questions in the queue. I'd like to turn it back over to Kellie for any closing remarks.
Speaker #1: you. I'm not showing any further questions in the queue. I'd like to turn it back over to Kelly for any closing
Speaker #1: remarks. Thank
Speaker #6: you. As always, our approach is our approach is to be open and transparent with our investors and, as such, I would like to invite you if you'd like to have a conversation with management, to contact me through MATRIX SERVICE COMPANY INVESTOR RELATIONS website.
Kellie Smythe: Thank you. As always, our approach is to be open and transparent with our investors, and as such, I would like to invite you, if you'd like to have a conversation with management, to contact me through Matrix Service Company Investor Relations website. You can also sign up for MTRX news by scanning the QR code on your screen. Thank you so much for your time.
Kellie Smythe: Thank you. As always, our approach is to be open and transparent with our investors, and as such, I would like to invite you, if you'd like to have a conversation with management, to contact me through Matrix Service Company Investor Relations website. You can also sign up for MTRX news by scanning the QR code on your screen. Thank you so much for your time.
Speaker #6: You can also sign up for MTRX News by scanning the QR code on your screen. Thank you so much for your
Speaker #6: time. Thank you for your
Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.
Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.
