Matrix Service Co 2026 Q4 Earnings Call

Please go ahead. Welcome to Matrix Service Company's fourth quarter fiscal 2026 earnings call.

Participants on today's call include Chief Executive Officer, Shawn P. Payne, and Chief Financial Officer, Kevin S. Cavanah. Following our prepared remarks, we will open the call up for questions. The presentation materials referred to during the webcast today can be found under Events and Presentations on the Investor Relations section of matrixservicecompany.com. As a reminder, on today's call, we may make various remarks about future expectations, plans, and prospects for Matrix Service Company that constitute forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements because of various factors, including those discussed in our most recent annual report on Form 10-K and in subsequent filings made by the company with the SEC. The forward-looking statements made today are effective only as of today.

To the extent we utilize non-GAAP measures, reconciliations will be provided in various press releases, periodic SEC filings, and on our website. Before we get started, I want to share a project highlight that also illustrates our commitment to safety and quality. This is one of four air raises that Matrix has safely completed in the last four months, each supporting infrastructure for different fuels and feedstocks, including LNG, ethane, liquefied petroleum gas, ammonia, and butane. An air raise is a complex process that uses air pressure to safely lift and position a large steel dome roof, the weight of which can be well over 1 million pounds. This is a pivotal step in the construction of the storage tank. The project being highlighted here is for Dominion Energy's Brunswick-Greensville Storage Facility, which is a greenfield project for Matrix and supports the Brunswick County and Greensville County power stations.

The project features a 25-million-gallon full containment LNG storage tank, providing backup fuel supply for 700,000 businesses and homes. Projects like these are core to our mission of supporting major energy companies, advancing American infrastructure, and connecting U.S. energy to the world. The successful execution of these consecutive air lifts on complex, high-profile projects highlights Matrix's technical expertise, commitment to safety, and dedication to delivering exceptional outcomes for our clients and the communities that rely on these critical assets. I will now turn the call over to Shawn.

Thank you, Patrick. It is a privilege to address you as President and Chief Executive Officer of Matrix Service Company. I am grateful for the confidence of our board of directors and excited to lead the company into its next chapter. As I begin this role, I also want to recognize and thank our dedicated employees in the field and across our offices. Your commitment to safety, quality, and execution is the foundation of everything we do and the driving force behind our success. Throughout my 30-year career in the industrial engineering and construction industry, I've had the privilege of leading high-performing operations, project controls, and finance teams, helping deliver complex projects, improving organizational performance, and creating lasting value for customers and stakeholders. Those experiences have given me a genuine understanding of what good looks like and a deep appreciation for the characteristics required to achieve it.

They have reinforced my belief that sustainable success is built on exceptional people, a strong culture, operational excellence, customer focus, and an unwavering commitment to the safety and wellbeing of everyone involved. These are the very same characteristics that have defined Matrix for decades and helped establish our reputation as a leading heavy industrial contractor that engineers, constructs, and maintains the critical infrastructure that supports industries and communities across North America. While those characteristics have shaped our history, they are equally important to our future and provide the foundation from which we will continue to grow and evolve. As the needs of our clients continue to develop, we are evolving alongside them, expanding our capabilities, strengthening our expertise, and reinforcing our position as a trusted partner in the markets we serve.

Today, our expertise, brand, and reputation provide a distinct advantage as many of our core and emerging markets are experiencing generational levels of investment. But I want to recognize that while Matrix has long been well-positioned to benefit from these opportunities, our past performance has not always reflected the strength of our capabilities or the opportunities before us. The company has yet to unlock its full potential, and we have more work to do. In 2025, the board and executive leadership tasked me with bringing a fresh perspective to the organization, first as President of Engineering and Construction and then as Chief Operating Officer. Together with an enterprise-wide team, we established a strategic framework: Win, Execute, Deliver. This comprehensive business strategy addresses growth, revenue diversification, operational excellence, accountability, and organizational effectiveness, ultimately delivering sustainable profitability and value to our shareholders.

More than just a list of goals or business as usual, this framework represents a deliberate shift towards a culture of consistent performance, excellence, and value creation. While we still have work to do, we've accomplished a lot in a relatively short period of time. Once our strategy was defined, we ensured the organization was properly sized and structured to support its successful execution. Recognizing our overhead had been built to support a larger anticipated revenue base, we took decisive action to streamline and flatten the organization, establishing a more sustainable cost structure that increased our speed to market while preserving our ability to capitalize on future growth opportunities. In parallel, we transformed our commercial organization by strengthening strategic account management, improving opportunity qualifications, aligning our business development operational resources around targeted markets, and focusing on opportunities that provide the best risk and reward profile for our business.

With a clear strategy guiding our decisions, a transformed commercial focus, and an optimized cost structure, we've built a stronger, more agile organization positioned to deliver consistent execution, profitable growth, and long-term value creation. Today, every role and resource is aligned around our Win, Execute, Deliver strategic framework. Our progress is tangible, evidenced by our return to profitability in the third and fourth quarters of fiscal 2026. Looking forward, our strategy is straightforward: win the right work, execute with excellence, and deliver the results expected by our customers, employees, and shareholders. Each pillar plays a critical role in strengthening our business and creating long-term value. To provide greater context around our progress, I would like to highlight several key initiatives within each pillar.

First, our win strategy is centered on pursuing opportunities that align with our capabilities, meet our risk parameters, and create the greatest potential for profitable growth. This includes expanding our presence in both legacy and selected new and reemerging markets, growing our geographic reach, expanding our construction-only services, and strengthening our relationships with existing customers, as well as increasing new customer acquisitions. Market intelligence and client insight continue to support strong demand across our traditional LNG and NGL infrastructure markets, particularly for peak shaving facilities, backup fuel terminals, and related infrastructure. In fact, over 40% of our current opportunity pipeline is comprised of LNG and NGL projects. Another example of our win strategy at work in our legacy markets is a project for which we have been selected subsequent to the quarter, which we announced by press release after market close yesterday.

This project is for the front-end engineering and design of the storage tank farm for the America First Refining facility in Brownsville, Texas, the first new major refinery to be constructed in the U.S. in more than 50 years. We are extremely proud to have been selected to complete this major step for AFR in reaching a financial investment decision. At the same time, we are actively pursuing opportunities being driven by new and reemerging markets, such as power generation and related infrastructure investments that is driven by the rapid growth of data centers, aging power infrastructure, and the increasing domestic electricity demand. Specific to data centers, our ability to deliver power infrastructure and substation solutions that support our customers' expanding energy requirements is critical.

Evidence of our win strategy at work in this end market includes two recently completed substation projects to bring more power to the Northern Virginia Data Center Alley. We are currently on-site constructing additional substations in the same geographical area, as well as the Eastern Pennsylvania region. Another example of us leveraging our experience to participate in a reemerging market is our focus on the mining and minerals sector, where increased commodity pricing and the demand for critical minerals essential to energy, technology, defense, and AI infrastructure continues to grow. To support our position in this market, we have invested additional capital and resources into our existing Southwest operation. As a result, we have received and have mobilized on a significant award, which was taken into backlog in the fourth quarter.

Beyond our market focus, we are also heavily focused on expanding our geographic reach across key strategic regions and pursuing more construction-only opportunities. As a result of our construction-only initiative, we have received several balance of plant awards across the organization in the fourth quarter. At the same time, our improved strategic account management approach enables us to strengthen relationships with key customers while expanding our presence among new clients. This reinforces our position as a trusted long-term partner across multiple service offerings and project life cycles. Collectively, these initiatives, with our improved speed to market and lower cost structure, will strengthen our backlog, expand our market share, diversify our revenue stream, and drive sustainable, profitable organic growth. The execution pillar is where our reputation is earned and trust is built. That trust depends on our ability to deliver high-quality project safely, on time, and on budget.