Matrix Service Company (Nasdaq: MTRX), through its
subsidiaries, is a leading North American industrial engineering,
construction, and maintenance contractor headquartered in Tulsa,
Oklahoma with offices located throughout the United States and
Canada, as well as Sydney, Australia and Seoul, South Korea.
Key highlights:
- Project
awards in the quarter of $497.4 million, the highest quarterly
award total in five years, resulting in a book-to-bill ratio of
2.5.
- Backlog
increased by 126% to $1.4 billion compared to the same period a
year ago; highest backlog level since June 30, 2015.
- Revenue of
$197.7 million in the first quarter of fiscal 2024 compared to
$205.9 million in the fourth quarter of fiscal 2023. Revenue is
expected to improve in the second half of the fiscal year as a
result of recent awards.
- First
quarter fiscal 2024 loss per share of $0.12; adjusted loss per
share of $0.21(1).
- Adjusted
EBITDA loss of $0.7
million(1) for
the first quarter of fiscal 2024.
“The strong momentum in our markets is reflected
in project awards of $497 million in our first fiscal quarter,
resulting in a book-to-bill ratio of 2.5. We ended the quarter with
a backlog of $1.4 billion, our largest backlog since June 30,
2015,” said John R. Hewitt, President and CEO. “We have good
visibility into revenue and margins for the next several years, and
recent large project awards will begin to show up in our results in
the second half of this fiscal year. As the spending recovery in
our end markets has materialized in a meaningful way, our strategic
approach to the energy and industrial end markets we serve is being
validated. We believe strong tailwinds, particularly in the energy
markets, and our deep expertise and experience executing our
clients’ mission-critical projects will drive our business for
years to come.”
Earnings Summary
Revenue of $197.7 million during the first
quarter of fiscal 2024 was in line with our expectations. The
contribution to revenue of newly awarded projects is currently
limited as they progress through engineering and planning
stages.
Gross margin was 6.0% in the first quarter of
fiscal 2024 compared to a gross margin of 7.1% in the fourth
quarter of fiscal 2023. Despite generally strong project execution,
gross margins in the first quarter of fiscal 2024 were negatively
impacted by the under-recovery of construction overhead costs. On a
consolidated basis, we expect to achieve full recovery of
construction overhead costs on higher revenue volumes in the second
half of fiscal 2024.
____________________
(1) Adjusted net loss and adjusted loss per
share are non-GAAP financial measures which exclude restructuring
costs and gain on sale of non-core assets. Adjusted EBITDA is a
non-GAAP financial measure which excludes restructuring costs, gain
on sale of non-core assets, stock-based compensation, interest
expense, and depreciation and amortization expense. See the
Non-GAAP Financial Measures section included at the end of this
release for a reconciliation to net loss and net loss per
share.
In the Storage and Terminals Solutions segment,
revenue increased to $90.1 million in the first quarter of fiscal
2024 as compared to $64.1 million in the fourth quarter of fiscal
2023 as a result of capital projects awarded in the prior fiscal
year. Gross margin of 5.5% improved over fourth quarter of fiscal
2023 due to strong project execution, but was negatively impacted
by the under-recovery of construction overhead costs. We have
allocated additional resources to this segment to support recent
awards and additional revenue in the second half of fiscal 2024. As
these revenues increase, we expect to reach full recovery of
construction overhead costs in the second half of fiscal 2024.
In the Utility and Power Infrastructure segment,
revenue was $32.4 million in the first quarter of fiscal 2024
compared to $39.1 million in the fourth quarter of fiscal 2023 due
to lower volumes of power delivery work during the summer months.
LNG peak shaving work added to backlog over the past year is
expected to positively impact revenue in this segment beginning in
the second quarter of fiscal 2024. Gross margin was 11.4%, which
was positively impacted by strong project execution which led to
favorable project closeouts, as well as LNG peak shaving projects
which have a better margin profile.
In the Process and Industrial Facilities
segment, revenue decreased to $75.1 million in the first quarter of
fiscal 2024 compared to $102.7 million in the fourth quarter of
fiscal 2023 primarily due to completion of certain gas processing
work, lower refinery volumes during the summer months, and the sale
of a non-core business during fourth quarter of fiscal 2023.
Despite generally strong project execution, first quarter gross
margin of 6.8% was negatively impacted by low revenue volumes,
which led to the under-recovery of construction overhead costs.
Consolidated SG&A expenses were $17.1
million in the first quarter of fiscal 2024 compared to $17.0
million in the fourth quarter of fiscal 2023. We accrued an
additional $1.6 million of expense associated with the variable
accounting for cash-settled stock based compensation, which
increased due to a higher stock price. This increase was offset by
various other lower costs, which includes delaying certain costs
based on the timing of revenue. We continue to closely manage our
cost structure. We may incur increases in expenses in future
periods associated with performance-based compensation as a result
of our improved operating results and stock price.
Other income during the three months ended
September 30, 2023 included a gain of $2.5 million on the sale of a
previously utilized facility which was no longer strategic to the
future of the business.
Our effective tax rate for the first quarter of
fiscal 2024 was zero, impacted by the valuation allowance placed on
all our deferred tax assets due to the existence of a cumulative
loss over a three-year period. As a result, we expect the effective
tax rate to be around zero throughout fiscal 2024.
For the first quarter of fiscal 2024, we had a
net loss of $3.2 million, or $0.12 per share, compared to a net
loss of $0.3 million, or $0.01 per share, in the fourth quarter of
fiscal 2023. For the first quarter of fiscal 2024, we had an
adjusted net loss of $5.7 million, or $0.21 per share, compared to
an adjusted net loss of $3.1 million, or $0.11 per share, in the
fourth quarter of fiscal 2023(1).
Backlog
Our backlog increased by $299.7 million from the
end of the prior quarter to $1.4 billion as of September 30, 2023.
Project awards totaled $497.4 million in the first quarter of
fiscal 2024, resulting in a book-to-bill ratio of 2.5. On a segment
basis, the first quarter book-to-bill was 4.6 for Storage and
Terminal Solutions, driven by the award of a large LNG storage
facility. Book-to-bill in the Utility and Power Infrastructure
segment was 0.7 and for Process and Industrial Facilities, the
book-to-bill was 0.8. The table below summarizes our awards,
book-to-bill ratios and backlog by segment for our first fiscal
quarter (amounts are in thousands, except for book-to-bill
ratios):
|
|
Three Months Ended September 30,
2023 |
|
Backlog as ofSeptember 30, 2023 |
Segment: |
|
Awards |
|
Book-to-Bill(1) |
|
Storage and Terminal Solutions |
|
$ |
414,645 |
|
4.6 |
|
$ |
595,160 |
Utility and Power Infrastructure |
|
|
23,089 |
|
0.7 |
|
|
450,212 |
Process and Industrial Facilities |
|
|
59,660 |
|
0.8 |
|
|
344,461 |
Total |
|
$ |
497,394 |
|
2.5 |
|
$ |
1,389,833 |
____________________
(1) Calculated by dividing
project awards by revenue recognized during the period.
Financial Position
As of September 30, 2023, we had total liquidity
of $80.3 million and $10.0 million in debt. Liquidity
is comprised of $27.4 million of unrestricted cash and cash
equivalents and $52.9 million of borrowing availability under the
credit facility. The company also has $25.0 million of restricted
cash to support the facility. In October 2023, we had a favorable
resolution of a long-standing legal dispute with an iron and steel
customer that resulted in the receipt of $16.8 million. The amount
collected represented the full amount owed under a reimbursable
contract which the Company had pursued for a number of years. Given
our strong cash position, in November 2023, we repaid all
outstanding borrowings under the credit facility.
Conference Call Details
In conjunction with the earnings release, Matrix
Service Company will host a conference call with John R. Hewitt,
President and CEO, and Kevin S. Cavanah, Vice President and CFO.
The call will take place at 10:30 a.m. (Eastern) / 9:30 a.m.
(Central) on Thursday, November 9, 2023.
A live webcast of the conference call will be
available on the Investor Relations page of the Company's website
at matrixservicecompany.com under Events and Presentations.
Investors and other interested parties can access a live
audio-visual webcast using this webcast link, or through the
Company’s website at www.matrixservicecompany.com on the Investors
Relations page under Events & Presentations.
For those unable to participate in the
conference call, a replay of the webcast will be available on the
Investor Relations page of the Company's website.
The conference call will be recorded and will be
available for replay within one hour of completion of the live call
and can be accessed following the same link as the live call.
About Matrix Service Company
Matrix Service Company (Nasdaq: MTRX), through
its subsidiaries, is a leading North American industrial
engineering and construction contractor headquartered in Tulsa,
Oklahoma with offices located throughout the United States and
Canada, as well as Sydney, Australia and Seoul, South Korea.
The Company reports its financial results in
three key operating segments: Storage and Terminal Solutions,
Utility and Power Infrastructure, and Process and Industrial
Facilities.
With a focus on sustainability, building strong
Environment, Social and Governance (ESG) practices, and living our
core values, Matrix ranks among the Top Contractors by
Engineering-News Record, was recognized for its Board
diversification, is an active signatory to CEO Action for Diversity
and Inclusion, and is consistently recognized as a Great Place to
Work®. To learn more about Matrix Service Company, visit
matrixservicecompany.com and read our inaugural Sustainability
Report.
This release contains forward-looking statements
that are made in reliance upon the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. These statements
are generally accompanied by words such as “anticipate,”
“continues,” “expect,” “forecast,” “outlook,” “believe,”
“estimate,” “should” and “will” and words of similar effect that
convey future meaning, concerning the Company’s operations,
economic performance and management’s best judgment as to what may
occur in the future. Future events involve risks and uncertainties
that may cause actual results to differ materially from those we
currently anticipate. The actual results for the current and future
periods and other corporate developments will depend upon a number
of economic, competitive and other influences, including the
successful implementation of the Company's business improvement
plan and the factors discussed in the “Risk Factors” and “Forward
Looking Statements” sections and elsewhere in the Company’s reports
and filings made from time to time with the Securities and Exchange
Commission. Many of these risks and uncertainties are beyond the
control of the Company, and any one of which, or a combination of
which, could materially and adversely affect the results of the
Company's operations and its financial condition. We undertake no
obligation to update information contained in this release, except
as required by law.
For more information, please contact:
Kellie SmytheSenior Director, Investor RelationsT:
918-359-8267Email: ksmythe@matrixservicecompany.com
Matrix Service Company |
Condensed Consolidated Statements of Income |
(unaudited) |
(In thousands, except per share data) |
|
|
Three Months Ended |
|
|
September 30,2023 |
|
September 30,2022 |
Revenue |
|
$ |
197,659 |
|
|
$ |
208,431 |
|
Cost of revenue |
|
|
185,800 |
|
|
|
195,423 |
|
Gross profit |
|
|
11,859 |
|
|
|
13,008 |
|
Selling, general and
administrative expenses |
|
|
17,113 |
|
|
|
16,811 |
|
Restructuring costs |
|
|
— |
|
|
|
1,287 |
|
Operating loss |
|
|
(5,254 |
) |
|
|
(5,090 |
) |
Other income (expense): |
|
|
|
|
Interest expense |
|
|
(325 |
) |
|
|
(372 |
) |
Interest income |
|
|
150 |
|
|
|
24 |
|
Other |
|
|
2,262 |
|
|
|
(1,074 |
) |
Loss before income tax
expense |
|
|
(3,167 |
) |
|
|
(6,512 |
) |
Provision for federal, state
and foreign income taxes |
|
|
— |
|
|
|
— |
|
Net loss |
|
$ |
(3,167 |
) |
|
$ |
(6,512 |
) |
|
|
|
|
|
Basic loss per common
share |
|
$ |
(0.12 |
) |
|
$ |
(0.24 |
) |
Diluted loss per common
share |
|
$ |
(0.12 |
) |
|
$ |
(0.24 |
) |
Weighted average common shares
outstanding: |
|
|
|
|
Basic |
|
|
27,113 |
|
|
|
26,862 |
|
Diluted |
|
|
27,113 |
|
|
|
26,862 |
|
Matrix Service Company |
Condensed Consolidated Balance Sheets |
(unaudited) |
(In thousands) |
|
September 30,2023 |
|
June 30,2023 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
27,359 |
|
$ |
54,812 |
Accounts receivable, less allowances (September 30, 2023—$402 and
June 30, 2023—$1,061) |
|
152,300 |
|
|
145,764 |
Costs and estimated earnings in excess of billings on uncompleted
contracts |
|
42,369 |
|
|
44,888 |
Inventories |
|
9,153 |
|
|
7,437 |
Income taxes receivable |
|
496 |
|
|
496 |
Prepaid expenses |
|
10,136 |
|
|
5,741 |
Other current assets |
|
3,235 |
|
|
3,118 |
Total current assets |
|
245,048 |
|
|
262,256 |
Restricted cash |
|
25,000 |
|
|
25,000 |
Property, plant and equipment
- net |
|
45,027 |
|
|
47,545 |
Operating lease right-of-use
assets |
|
20,641 |
|
|
21,799 |
Goodwill |
|
29,055 |
|
|
29,120 |
Other intangible assets, net
of accumulated amortization |
|
2,635 |
|
|
3,066 |
Other assets, non-current |
|
14,872 |
|
|
11,718 |
Total assets |
$ |
382,278 |
|
$ |
400,504 |
Matrix Service Company |
Condensed Consolidated Balance Sheets
(continued) |
(unaudited) |
(In thousands, except share data) |
|
September 30,2023 |
|
June 30,2023 |
Liabilities and
stockholders’ equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
74,094 |
|
|
$ |
76,365 |
|
Billings on uncompleted contracts in excess of costs and estimated
earnings |
|
73,133 |
|
|
|
85,436 |
|
Accrued wages and benefits |
|
11,511 |
|
|
|
13,679 |
|
Accrued insurance |
|
5,749 |
|
|
|
5,579 |
|
Operating lease liabilities |
|
4,281 |
|
|
|
4,661 |
|
Other accrued expenses |
|
2,641 |
|
|
|
1,815 |
|
Total current liabilities |
|
171,409 |
|
|
|
187,535 |
|
Deferred income taxes |
|
25 |
|
|
|
26 |
|
Operating lease liabilities |
|
19,945 |
|
|
|
20,660 |
|
Borrowings under asset-backed credit facility |
|
10,000 |
|
|
|
10,000 |
|
Other liabilities, non-current |
|
1,776 |
|
|
|
799 |
|
Total liabilities |
|
203,155 |
|
|
|
219,020 |
|
Commitments and
contingencies |
|
|
|
Stockholders’ equity: |
|
|
|
Common stock—$.01 par value; 60,000,000 shares authorized;
27,888,217 shares issued as of September 30, 2023 and June 30,
2023; 27,209,838 and 27,047,318 shares outstanding as of September
30, 2023 and June 30, 2023, respectively |
|
279 |
|
|
|
279 |
|
Additional paid-in capital |
|
139,773 |
|
|
|
140,810 |
|
Retained earnings |
|
55,750 |
|
|
|
58,917 |
|
Accumulated other comprehensive loss |
|
(9,307 |
) |
|
|
(8,769 |
) |
|
|
186,495 |
|
|
|
191,237 |
|
Treasury stock, at cost — 678,379 shares as of September 30, 2023,
and 840,899 shares as of June 30, 2023 |
|
(7,372 |
) |
|
|
(9,753 |
) |
Total stockholders'
equity |
|
179,123 |
|
|
|
181,484 |
|
Total liabilities and
stockholders’ equity |
$ |
382,278 |
|
|
$ |
400,504 |
|
Matrix Service Company |
Results of Operations |
(unaudited) |
(In thousands) |
|
Three Months Ended |
|
September 30,2023 |
|
September 30,2022 |
Gross
revenue |
|
|
|
Storage and Terminal Solutions |
$ |
90,979 |
|
|
$ |
77,290 |
|
Utility and Power
Infrastructure |
|
32,395 |
|
|
|
44,870 |
|
Process and Industrial
Facilities |
|
75,138 |
|
|
|
86,745 |
|
Total gross revenue |
$ |
198,512 |
|
|
$ |
208,905 |
|
Less: Inter-segment
revenue |
|
|
|
Storage and Terminal
Solutions |
$ |
835 |
|
|
$ |
357 |
|
Process and Industrial
Facilities |
|
18 |
|
|
|
117 |
|
Total inter-segment revenue |
$ |
853 |
|
|
$ |
474 |
|
Consolidated
revenue |
|
|
|
Storage and Terminal
Solutions |
$ |
90,144 |
|
|
$ |
76,933 |
|
Utility and Power
Infrastructure |
|
32,395 |
|
|
|
44,870 |
|
Process and Industrial
Facilities |
|
75,120 |
|
|
|
86,628 |
|
Total consolidated revenue |
$ |
197,659 |
|
|
$ |
208,431 |
|
Gross profit
(loss) |
|
|
|
Storage and Terminal
Solutions |
$ |
4,953 |
|
|
$ |
7,564 |
|
Utility and Power
Infrastructure |
|
3,697 |
|
|
|
1,714 |
|
Process and Industrial
Facilities |
|
5,078 |
|
|
|
4,330 |
|
Corporate |
|
(1,869 |
) |
|
|
(600 |
) |
Total gross profit |
$ |
11,859 |
|
|
$ |
13,008 |
|
Selling, general and
administrative expenses |
|
|
|
Storage and Terminal
Solutions |
$ |
4,629 |
|
|
$ |
4,158 |
|
Utility and Power
Infrastructure |
|
1,548 |
|
|
|
1,738 |
|
Process and Industrial
Facilities |
|
3,087 |
|
|
|
4,070 |
|
Corporate |
|
7,849 |
|
|
|
6,845 |
|
Total selling, general and administrative expenses |
$ |
17,113 |
|
|
$ |
16,811 |
|
Restructuring
costs |
|
|
|
Storage and Terminal
Solutions |
$ |
— |
|
|
$ |
522 |
|
Utility and Power
Infrastructure |
|
— |
|
|
|
37 |
|
Process and Industrial
Facilities |
|
— |
|
|
|
315 |
|
Corporate |
|
— |
|
|
|
413 |
|
Total restructuring costs |
$ |
— |
|
|
$ |
1,287 |
|
Operating income
(loss) |
|
|
|
Storage and Terminal
Solutions |
$ |
324 |
|
|
$ |
2,884 |
|
Utility and Power
Infrastructure |
|
2,149 |
|
|
|
(61 |
) |
Process and Industrial
Facilities |
|
1,991 |
|
|
|
(55 |
) |
Corporate |
|
(9,718 |
) |
|
|
(7,858 |
) |
Total operating loss |
$ |
(5,254 |
) |
|
$ |
(5,090 |
) |
|
Backlog
We define backlog as the total dollar amount of
revenue that we expect to recognize as a result of performing work
that has been awarded to us through a signed contract, limited
notice to proceed ("LNTP") or other type of assurance that we
consider firm. The following arrangements are considered firm:
- minimum customer commitments on cost plus arrangements;
and
- certain time and material arrangements in which the estimated
value is firm or can be estimated with a reasonable amount of
certainty in both timing and amounts.
For long-term maintenance contracts with no
minimum commitments and other established customer agreements, we
include only the amounts that we expect to recognize as revenue
over the next 12 months. For arrangements in which we have received
a LNTP, we include the entire scope of work in our backlog if we
conclude that the likelihood of the full project proceeding as
high. For all other arrangements, we calculate backlog as the
estimated contract amount less revenue recognized as of the
reporting date.
The following table provides a summary of changes in our backlog
for the three months ended September 30, 2023:
|
Storage and Terminal Solutions |
|
Utility and Power Infrastructure |
|
Process and Industrial Facilities |
|
Total |
|
(In thousands) |
Backlog as of June 30, 2023 |
$ |
270,659 |
|
|
$ |
459,518 |
|
|
$ |
359,921 |
|
|
$ |
1,090,098 |
|
Project awards |
|
414,645 |
|
|
|
23,089 |
|
|
|
59,660 |
|
|
|
497,394 |
|
Revenue recognized |
|
(90,144 |
) |
|
|
(32,395 |
) |
|
|
(75,120 |
) |
|
|
(197,659 |
) |
Backlog as of September 30,
2023 |
$ |
595,160 |
|
|
$ |
450,212 |
|
|
$ |
344,461 |
|
|
$ |
1,389,833 |
|
Book-to-bill ratio(1) |
|
4.6 |
|
|
|
0.7 |
|
|
|
0.8 |
|
|
|
2.5 |
|
____________________
(1) Calculated by dividing project
awards by revenue recognized during the period.
Non-GAAP Financial Measures
Adjusted Net Loss
We have presented Adjusted net loss, which we
define as Net loss before restructuring costs, gain on sale of
assets, and the tax impact of these adjustments because we believe
it better depicts our core operating results. We believe that the
line item on our Condensed Consolidated Statements of Income
entitled “Net loss” is the most directly comparable GAAP measure to
Adjusted net loss. Since Adjusted net loss is not a measure of
performance calculated in accordance with GAAP, it should not be
considered in isolation of, or as a substitute for, Net loss as an
indicator of operating performance. Adjusted net loss, as we
calculate it, may not be comparable to similarly titled measures
employed by other companies. In addition, this measure is not a
measure of our ability to fund our cash needs. As Adjusted net loss
excludes certain financial information compared with Net loss, the
most directly comparable GAAP financial measure, users of this
financial information should consider the type of events and
transactions that are excluded. Our non-GAAP performance measure,
Adjusted net loss, has certain material limitations as follows:
- It does not include
restructuring costs. Restructuring costs represent material costs
that were incurred and are oftentimes cash expenses. Therefore, any
measure that excludes restructuring costs has material
limitations.
- It does not include
gain on the sale of assets. While this sale occurred outside the
normal course of business, any measure that excludes this gain has
inherent limitations since the sale resulted in a material inflow
of cash.
A reconciliation of Net loss to Adjusted net loss follows:
Reconciliation of Net Loss to Adjusted Net
Loss(1) |
(In thousands, except per share data) |
|
|
|
Three Months Ended |
|
|
September 30, 2023 |
|
September 30, 2022 |
Net loss, as reported |
|
$ |
(3,167 |
) |
|
$ |
(6,512 |
) |
Restructuring costs |
|
|
— |
|
|
|
1,287 |
|
Gain on sale of assets(2) |
|
|
(2,536 |
) |
|
|
— |
|
Tax impact of adjustments(3) |
|
|
— |
|
|
|
— |
|
Adjusted net loss |
|
$ |
(5,703 |
) |
|
$ |
(5,225 |
) |
|
|
|
|
|
Loss per share, as
reported |
|
$ |
(0.12 |
) |
|
$ |
(0.24 |
) |
Adjusted loss per share |
|
$ |
(0.21 |
) |
|
$ |
(0.19 |
) |
____________________
(1) Beginning with the first quarter
of fiscal 2024, the definition of Adjusted net loss and Adjusted
loss per share was updated to no longer include changes in the
valuation allowance of deferred tax assets. Prior period
information has been adjusted to conform to the updated definition
of Adjusted net loss and Adjusted loss per share.(2) Represents
gain on the sale of our Burlington, ON office.(3) Represents the
tax impact of the adjustments to Net loss, calculated using the
applicable effective tax rate of the adjustment.
Adjusted EBITDA
We have presented Adjusted EBITDA, which we
define as Net loss before restructuring costs, gain on sale of
assets, stock-based compensation, interest expense, and
depreciation and amortization, because it is used by the financial
community as a method of measuring our performance and of
evaluating the market value of companies considered to be in
similar businesses. We believe that the line item on our Condensed
Consolidated Statements of Income entitled “Net loss” is the most
directly comparable GAAP measure to Adjusted EBITDA. Since Adjusted
EBITDA is not a measure of performance calculated in accordance
with GAAP, it should not be considered in isolation of, or as a
substitute for, Net loss as an indicator of operating performance.
Adjusted EBITDA, as we calculate it, may not be comparable to
similarly titled measures employed by other companies. In addition,
this measure is not a measure of our ability to fund our cash
needs. As Adjusted EBITDA excludes certain financial information
compared with Net loss, the most directly comparable GAAP financial
measure, users of this financial information should consider the
type of events and transactions that are excluded. Our non-GAAP
performance measure, Adjusted EBITDA, has certain material
limitations as follows:
- It does not include
restructuring costs. Restructuring costs represent material costs
that were incurred and are oftentimes cash expenses. Therefore, any
measure that excludes restructuring costs has material
limitations.
- It does not include
gain on the sale of assets. While this sale occurred outside the
normal course of business, any measure that excludes this gain has
inherent limitations since the sale resulted in a material inflow
of cash.
- It does not include
stock-based compensation. Stock-based compensation represents
material amounts of equity that are awarded to our employees and
directors for services rendered. While the expense is non-cash, we
release vested shares out of our treasury stock, which has
historically been replenished by using cash to periodically
repurchase our stock. Therefore, any measure that excludes
stock-based compensation has material limitations.
- It does not include
interest expense. Because we have borrowed money to finance our
operations and acquisitions, pay commitment fees to maintain our
credit facility, and incur fees to issue letters of credit under
the credit facility, interest expense is a necessary and ongoing
part of our costs and has assisted us in generating revenue.
Therefore, any measure that excludes interest expense has material
limitations.
- It does not include
depreciation or amortization expense. Because we use capital and
intangible assets to generate revenue, depreciation and
amortization expense is a necessary element of our cost structure.
Therefore, any measure that excludes depreciation or amortization
expense has material limitations.
A reconciliation of Net loss to Adjusted EBITDA follows:
|
|
Three Months Ended |
|
|
September 30,2023 |
|
September 30,2022 |
|
(In thousands) |
Net loss |
|
$ |
(3,167 |
) |
|
$ |
(6,512 |
) |
Restructuring costs |
|
|
— |
|
|
|
1,287 |
|
Gain on sale of assets(1) |
|
|
(2,536 |
) |
|
|
— |
|
Stock-based
compensation(2) |
|
|
1,755 |
|
|
|
2,055 |
|
Interest expense |
|
|
325 |
|
|
|
372 |
|
Depreciation and
amortization |
|
|
2,911 |
|
|
|
3,642 |
|
Adjusted EBITDA |
|
$ |
(712 |
) |
|
$ |
844 |
|
____________________
(1) Represents gain
on the sale of our Burlington, ON
office.(2) Represents only the equity-settled
portion of our stock-based compensation expense.
Grafico Azioni Matrix Service (NASDAQ:MTRX)
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Grafico Azioni Matrix Service (NASDAQ:MTRX)
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