Matrix Service Company

Good morning, and welcome to the Matrix Service Company conference call to discuss results for the first quarter of fiscal 2024. Currently, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. As a reminder, this conference call is being recorded. I would now like to turn the conference over to today's host, Ms. Kelly Smyth, the Senior Director of Investor Relations for Matrix Service Company. Thank you.

Thank you, Josh. Good morning and welcome to Matrix Service Company's first quarter fiscal 2024 earnings call. Participants on today's call will include John Hewitt, President and Chief Executive Officer, and Kevin Kavanaugh, Vice President and Chief Financial Officer. The presentation materials we will be referring to during the webcast today can be found under Events and Presentations on the Investor Relations section of MatrixServiceCompany.com. Before we begin, please let me remind you that on today's call, we may make various remarks about future expectations, plans, and prospects for Matrix Service Company. They constitute forward-looking statements for the 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 facts, including those discussed in our most recent annual report on Form 10-K, and in subsequent filings made by the company with the SEC. To the extent we utilize non-GAAP measures, reconciliations will be provided in various press releases, periodic SEC filings, and on our website. Before I turn the call over to John Hewitt, I'd like to share information about several upcoming investor conferences and corporate access opportunities. On November 14th, we will hold the Matrix Service Company virtual annual stockholder meeting. You can register to attend as instructed in the proxy or via the events tab on our investor relations website. We will present, add, and hold one-on-one meetings at the Sedoti MicroCab virtual conference planned for November 15th and 16th. And finally, we will hold a virtual non-deal road show hosted by Rosen Company in December. If you'd like additional information on any of these events, I invite you to contact us through the Matrix Service Company investor relations website. I will now turn the call over to John.

Thank you, Kelly, and good morning, everyone. Here at Matrix, we continue to pursue and expect zero injuries across our platform. Broadly, our focus is around accountability, communication, and training to drive better outcomes. Each of us need to be accountable to ourselves and each other as we think about our behaviors, decision-making, and risk awareness in not only our professional lives, but at home as well. We need to communicate our expectations, why safety is important, and support each other. As a learning organization, training is critical to improve awareness, decision-making, and ultimately outcomes. Above all, each employee has the authority and the obligation to stop work when they see or feel uncomfortable with the task they or a coworker are about to perform. Three simple questions. What am I about to do? How can I get hurt? What am I going to do about it? Are key to keeping yourself and your coworkers safe. Turning to the quarter. We're pleased to update you on the continued momentum in our business and our end markets. We generated awards of 497 million in our fiscal first quarter, surpassing our fourth quarter of fiscal 2023 awards of 464 million. This is our highest project award total in five years. Project awards resulted in a book-to-bill ratio of 2.5. Our storage and internal solutions segment was the standout in the quarter, recording a book to build a 4.6 on the back of a large capital project award. This award is a midsize LNG liquefaction and storage facility in the eastern U.S., similar to previous small to midsize LNG projects completed in the past. This is a project for a client we've done a good deal of work for over the years, which is a testament to our ability to deliver complex projects safely, on time, and with high quality. In our last earnings call, we referenced another LNG project we were awarded in the fourth quarter of fiscal 2023, an LNG peak shaver in our utility and power infrastructure segment. Together, these projects align with our strategy of leveraging our strong cryogenic storage brand and our capabilities in engineering, fabrication, procurement, and construction. Our strategy to offer complete solutions to the growing small to midsize LNG facility market is creating awards and growth for the company as we expand our brand and capture market share. This market covers a range of uses, such as peak shaving units, backup power plant fuel supply, ship bunkering, rocket fueling, and export facilities. Our teams have a great reputation executing these types of projects and have built strong client relationships over the years, made clear by continued awards like the most recent one I mentioned above. The pipeline for opportunities in the small to mid-scale LNG market remains strong with both new and repeat clients. Patriot's capability to wrap the complete facility around the storage is unique in our markets and among our competition. Considering our current position in a robust market and with the numerous project proposals and bids in progress, as well as the ongoing feed studies, we expect to keep adding similar projects to our backlog over time. Adjacent to this strong position in the small to midsize LNG market, our strategy extends to other specialty vessels and facilities for ammonia, ethane, and other natural gas liquids. In addition, our brand and skill sets extend to hydrogen storage facilities, as well as development of large-scale storage solutions for various clients. We have several clients that are part of the seven Hydrogen Hub teams, recently selected by the Department of Energy to receive funding under the bipartisan infrastructure law. We are in discussion with these clients on how we can assist them in these programs. We believe there will be significant opportunities for our company in not only these hubs, but also a variety of other projects that are taking advantage of the changing energy mix and federal clean energy funding and tax credits. As we look out into the future, We fully expect our backlog and specialty vessel storage and related facilities to continue to grow with a diversified mix of energy projects. In addition to our storage market strategy, the vision for the rest of the business creates opportunity for growth, expansion, and sustainability in gravity. For example, our position for electrical infrastructure services from substations to transmission and distribution and other industrial electrical work presents a strong growth potential for the company in a market that has significant demand of expansion, upgrades, and repair across the country. We are working with technology providers on an increasing number of project opportunities across the country for carbon capture. We continue to be a leading contractor in traditional energy for refinery maintenance and repair, turnarounds, and projects, many of which are focused on lower carbon process improvements such as renewable fuel refining. We remain active in crude and refined product storage tanks and terminals, both new build and repair and maintenance. And finally, midstream gas compression, mining and minerals, chemical and petrochemical, and aerospace projects on an E-only, C-only, or full EPC basis leverage our engineering capabilities, project skills, and construction experience. These service lines, offerings, and skill sets complement each other and support the growth aspirations of the entire business, market capture, and geographic diversity of our operations. All these end markets continue to be supported by the strong tailwinds and macroeconomic drivers we have discussed before, which include global energy security, domestic energy supply assurance, clean energy transition goals, commodity demand to support renewables and infrastructure upgrades, and industrial reshoring of manufacturing. as well as federal infrastructure investments that will start to meaningfully flow into the project phase during calendar year 2024. I can confidently say that we're executing our strategy from a position of strength. Our backlog has grown by 27% from the end of the fourth quarter of fiscal 2023 and 126% from a year ago. At $1.4 billion, our backlog is at its highest level since June 30, 2015. Even with $1.6 billion of awards these past four quarters, our opportunity pipeline remains steady between $5 to $6 billion, providing a strong indication of the potential in our markets and ability to continue a long-term trend of backlog growth. Organization has been meaningfully transformed over the past few years. We are focused on the end markets that present the best opportunity for us to leverage our decades of experience. We have restructured our organization to be more cost efficient while maintaining our skills expertise, and strong brand. We're positioned to safely execute projects with improved operating processes while continuing to deliver best-in-class quality for our customers, and we continue to invest in digital solutions to improve our administrative and project execution performance. While the company is well-positioned with a high-quality backlog that contains larger, long-term capital projects, it is important to note that our traditional small-cap projects and recurring repair and maintenance work which is strategic to our overall portfolio come in and out of backlog in a shorter timeframe. And this work has historically represented on average over 50% of our annual revenue. So to be clear, our strategic market focus and positioning, the macroeconomic and industrial drivers, and the steady opportunity pipeline combined with our transformed organization will continue to build on our diversified backlog portfolio which will lay the foundation for the business to grow and be sustainable well into the future. With that, I'll hand the call over to Kevin to review the results.