x | Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
o | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Delaware | 73-1352174 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
5100 E. Skelly Drive, Suite 700 Tulsa, Oklahoma | 74135 | |
(Address of Principal Executive Offices) | (Zip Code) |
Page | ||
Part I | ||
Item 1. | ||
Item 1A. | ||
Item 1B. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Part II | ||
Item 5. | ||
Item 6. | ||
Item 7. | ||
Item 7A. | ||
Item 8. | ||
Item 9. | ||
Item 9A. | ||
Item 9B. | ||
Part III | ||
Item 10. | ||
Item 11. | ||
Item 12. | ||
Item 13. | ||
Item 14. | ||
Part IV | ||
Item 15. |
• | amounts and nature of future revenues and margins from each of our segments; |
• | the likely impact of new or existing regulations or market forces on the demand for our services; |
• | expansion and other trends in the industries we serve; |
• | our ability to generate sufficient cash from operations or to raise cash in order to meet our short and long-term capital requirements; and |
• | our ability to comply with the covenants in our credit agreement. |
• | the risk factors discussed in Item 1A of this Annual Report and listed from time to time in our filings with the Securities and Exchange Commission; |
• | the inherently uncertain outcome of current and future litigation; |
• | the adequacy of our reserves for contingencies; |
• | economic, market or business conditions in general and in the oil, gas and power industries in particular; |
• | changes in laws or regulations; and |
• | other factors, many of which are beyond our control. |
• | fixed-price awards; |
• | 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 amount. |
Electrical Infrastructure | Oil Gas & Chemical | Storage Solutions | Industrial | Total | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Backlog as of June 30, 2012 | $ | 127,699 | $ | 117,862 | $ | 236,571 | $ | 15,320 | $ | 497,452 | ||||||||||
Net awards | 147,025 | 276,124 | 476,348 | 122,362 | 1,021,859 | |||||||||||||||
Revenue recognized | (171,204 | ) | (273,848 | ) | (393,201 | ) | (54,321 | ) | (892,574 | ) | ||||||||||
Backlog as of June 30, 2013 | $ | 103,520 | $ | 120,138 | $ | 319,718 | $ | 83,361 | $ | 626,737 |
• | current or projected commodity prices, including oil, gas, power and mineral prices; |
• | refining margins; |
• | the demand for oil, gas and electricity; |
• | the ability of oil, gas and power companies to generate, access and deploy capital; |
• | exploration, production and transportation costs; |
• | tax incentives, including those for alternative energy projects; |
• | regulatory restraints on the rates that power companies may charge their customers; and |
• | local, national and international political and economic conditions. |
• | our estimate of the headcount requirements for various operating units based upon our forecast of the demand for our products and services; |
• | our ability to maintain our talent base and manage attrition; |
• | productivity; |
• | our ability to schedule our portfolio of projects to efficiently utilize our employees and minimize downtime between project assignments; and |
• | our need to invest time and resources into functions such as training, business development, employee recruiting, and sales that are not chargeable to customer projects. |
• | contract costs and application of percentage-of-completion accounting; |
• | provisions for uncollectible receivables from customers for invoiced amounts; |
• | the amount and collectability of unapproved change orders and claims against customers; |
• | provisions for income taxes and related valuation allowances; |
• | recoverability of goodwill and intangible assets; |
• | valuation of assets acquired and liabilities assumed in connection with business combinations; and |
• | accruals for estimated liabilities, including litigation and insurance reserves. |
• | supervising the bidding process, including providing estimates of significant cost components, such as material and equipment needs, and the size, productivity and composition of the workforce; |
• | negotiating contracts; |
• | supervising project performance, including performance by our employees, subcontractors and other third-party suppliers and vendors; |
• | estimating costs for completion of contracts that is used to estimate amounts that can be reported as revenues and earnings on the contract under the percentage-of-completion method of accounting; |
• | negotiating requests for change orders and the final terms of approved change orders; and |
• | determining and documenting claims by us for increased costs incurred due to the failure of customers, subcontractors and other third-party suppliers of equipment and materials to perform on a timely basis and in accordance with contract terms. |
Trade | Local # | Location | Expires | |||
Boilermaker | 28 | Bayonne, N.J. | 12/31/2013 | |||
Boilermaker | 13 | Philadelphia, PA. | 12/31/2015 | |||
Electrician | 351 | Winslow, N.J. | 09/30/2013 | |||
Boilermaker—NTD | All | National | 10/31/2013 | |||
Electrician | 102 | Parsippany, N.J. | 06/01/2014 | |||
Electrician | 164 | Paramus, N.J. | 05/31/2014 |
• | curtailment of services; |
• | suspension of operations; |
• | inability to meet performance schedules in accordance with contracts; |
• | weather related damage to our facilities; |
• | disruption of information systems; |
• | inability to receive machinery, equipment and materials at jobsites; and |
• | loss of productivity. |
• | the risk factors described in this Item 1A; |
• | general conditions in our customers’ industries; |
• | general conditions in the security markets. |
• | the significant concentration of ownership of our common stock in the hands of a small number of institutional investors; |
• | a shortfall in operating revenue or net income from that expected by securities analysts and investors; and |
• | changes in securities analysts’ estimates of our financial performance or the financial performance of our competitors or companies in our industry. |
Location | Description of Facility | Segment | Interest | |||
Tulsa, Oklahoma | Corporate headquarters and regional office | Corporate, Storage Solutions | Leased | |||
Alton, Illinois | Regional office and warehouse | Oil Gas & Chemical | Leased | |||
Bellingham, Washington | Regional office and warehouse | Oil Gas & Chemical, Storage Solutions, Industrial | Owned | |||
Benicia, California | Regional office and warehouse | Storage Solutions | Leased | |||
Catoosa, Oklahoma | Fabrication facility, regional offices and warehouse | Oil Gas & Chemical, Storage Solutions, Industrial | Owned (1) | |||
Eddystone, Pennsylvania | Regional office, fabrication facility and warehouse | Electrical Infrastructure, Oil Gas & Chemical, Storage Solutions, Industrial | Leased | |||
Gonzales, Louisiana | Regional office | Oil Gas & Chemical | Leased | |||
Houston, Texas | Regional offices and warehouse | Oil Gas & Chemical, Storage Solutions | Leased & Owned | |||
Jamestown, Wyoming | Regional office | Industrial | Leased | |||
Las Vegas, Nevada | Regional office and warehouse | Electrical Infrastructure | Leased | |||
Norwich, Connecticut | Regional office and warehouse | Electrical Infrastructure | Leased | |||
Parsippany, New Jersey | Regional office | Industrial | Leased | |||
Orange, California | Fabrication facility, regional office and warehouse | Oil Gas & Chemical, Storage Solutions, Industrial | Owned | |||
Rahway, New Jersey | Regional office and warehouse | Electrical Infrastructure, Oil Gas & Chemical, Storage Solutions, Industrial | Leased | |||
Reserve, Louisiana | Regional office and warehouse | Oil Gas & Chemical | Leased | |||
Sandy, Utah | Regional office and warehouse | Industrial | Leased | |||
Sewickley, Pennsylvania | Regional office | Oil Gas & Chemical, Storage Solutions, Industrial | Leased | |||
Temperance, Michigan | Regional office and warehouse | Storage Solutions | Owned | |||
Tucson, Arizona | Regional office and warehouse | Industrial | Leased | |||
Calgary, Alberta, Canada | Sales office | Storage Solutions | Leased | |||
Leduc, Alberta, Canada | Regional office and warehouse | Storage Solutions | Leased | |||
Saint John, New Brunswick, Canada | Regional office | Storage Solutions | Leased | |||
Sarnia, Ontario, Canada | Regional office and warehouse | Storage Solutions | Owned |
(1) | Facilities were constructed by the Company on land acquired through a ground lease with renewal options extending until 2042. |
Fiscal 2013 | Fiscal 2012 | |||||||||||||||
High | Low | High | Low | |||||||||||||
First quarter | $ | 11.88 | $ | 10.10 | $ | 14.52 | $ | 8.05 | ||||||||
Second quarter | 11.74 | 10.09 | 11.40 | 7.66 | ||||||||||||
Third quarter | 17.00 | 11.64 | 14.91 | 9.57 | ||||||||||||
Fourth quarter | 17.62 | 14.01 | 14.00 | 9.77 |
Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs | ||||||||||
April 1 to April 30, 2013 | |||||||||||||
Share Repurchase Program (A) | — | — | — | 2,113,497 | |||||||||
Employee Transactions (B) | — | — | — | ||||||||||
May 1 to May 31, 2013 | |||||||||||||
Share Repurchase Program (A) | — | — | — | 2,113,497 | |||||||||
Employee Transactions (B) | 4,968 | $16.16 | — | ||||||||||
June 1 to June 30, 2013 | |||||||||||||
Share Repurchase Program (A) | — | — | — | 2,113,497 | |||||||||
Employee Transactions (B) | — | — | — |
(A) | Represents shares purchased under our stock buyback program approved by the Company's Board of Directors on November 6, 2012. The plan expires on December 31, 2014. |
(B) | Represents shares withheld to satisfy the employee’s tax withholding obligation that is incurred upon the vesting of deferred shares granted under the Company’s stock incentive plans. |
Twelve Months Ended | One Month Ended | |||||||||||||||||||||||
June 30, 2013 | June 30, 2012 | June 30, 2011 | June 30, 2010 | May 31, 2009 | June 30, 2009(1) | |||||||||||||||||||
Revenues | $ | 892,574 | $ | 739,046 | $ | 627,052 | $ | 550,814 | $ | 689,720 | $ | 45,825 | ||||||||||||
Gross profit | 94,702 | 79,618 | 74,914 | 52,922 | 94,323 | 5,149 | ||||||||||||||||||
Gross margin | 10.6 | % | 10.8 | % | 11.9 | % | 9.6 | % | 13.7 | % | 11.2 | % | ||||||||||||
Selling, general and administrative expenses | 57,988 | 47,983 | 44,014 | 45,169 | 47,006 | 3,570 | ||||||||||||||||||
Operating income | 36,714 | 31,635 | 30,900 | 7,753 | 47,317 | 1,579 | ||||||||||||||||||
Net income | 24,008 | 17,188 | 18,982 | 4,876 | 30,589 | 994 | ||||||||||||||||||
Earnings per share - basic | 0.92 | 0.66 | 0.72 | 0.19 | 1.17 | 0.04 | ||||||||||||||||||
Earnings per share-diluted | 0.91 | 0.65 | 0.71 | 0.18 | 1.16 | 0.04 | ||||||||||||||||||
Working capital | 131,908 | 124,553 | 115,374 | 95,740 | 82,460 | 82,948 | ||||||||||||||||||
Total assets | 409,978 | 323,135 | 306,436 | 284,808 | 303,451 | 299,961 | ||||||||||||||||||
Long-term debt | — | — | — | 259 | 850 | 777 | ||||||||||||||||||
Capital expenditures | 23,231 | 13,534 | 10,416 | 5,302 | 9,983 | 348 | ||||||||||||||||||
Cash flows provided by operations | 57,084 | 2,941 | 22,749 | 4,399 | 38,624 | 18,906 | ||||||||||||||||||
Backlog | 626,737 | 497,452 | 405,118 | 353,216 | 401,073 | 392,097 |
(1) | On July 30, 2009, the Company’s Board of Directors approved a change in the Company’s fiscal year end from May 31 to June 30, beginning July 1, 2009. As a result of the change, the Company had a transition period for the one month ended June 30, 2009. |
• | there is a legal basis for the claim; |
• | the additional costs were caused by circumstances that were unforeseen by the Company and are not the result of deficiencies in our performance; |
• | the costs are identifiable or determinable and are reasonable in view of the work performed; and |
• | the evidence supporting the claim is objective and verifiable. |
• | if the growth rate of estimated revenue decreases by one percentage point, the headroom of the reporting units referenced above would be reduced from 64%, 224%, 144%, 149% and 123% to 59%, 213%, 138%, 139% and 119%, respectively; |
• | if our estimate of gross margins decreases one percentage point, the headroom of the reporting units referenced above would be reduced from 64%, 224%, 144%, 149% and 123% to 30%, 160%, 96%, 100% and 88%, respectively; and |
• | if the applicable discount rate increases one percentage point, the headroom of the reporting units referenced above would be reduced from 64%, 224%, 144%, 149% and 123% to 45%, 186%, 118%, 120% and 97%, respectively. |
Electrical Infrastructure | Oil Gas & Chemical | Storage Solutions | Industrial | Total | ||||||||||||||||
Fiscal Year 2013 | ||||||||||||||||||||
Consolidated revenues | $ | 171,204 | $ | 273,848 | $ | 393,201 | $ | 54,321 | $ | 892,574 | ||||||||||
Gross profit | 21,754 | 32,879 | 37,455 | 2,614 | 94,702 | |||||||||||||||
Selling, general and administrative expenses | 10,569 | 17,464 | 25,551 | 4,404 | 57,988 | |||||||||||||||
Operating income (loss) | 11,185 | 15,415 | 11,904 | (1,790 | ) | 36,714 | ||||||||||||||
Fiscal Year 2012 | ||||||||||||||||||||
Consolidated revenues | $ | 135,086 | $ | 205,823 | $ | 378,154 | $ | 19,983 | $ | 739,046 | ||||||||||
Gross profit | 16,676 | 20,070 | 42,393 | 479 | 79,618 | |||||||||||||||
Selling, general and administrative expenses | 9,067 | 11,936 | 24,900 | 2,080 | 47,983 | |||||||||||||||
Operating income (loss) | 7,609 | 8,134 | 17,493 | (1,601 | ) | 31,635 | ||||||||||||||
Fiscal Year 2011 | ||||||||||||||||||||
Consolidated revenues | $ | 151,058 | $ | 143,354 | $ | 298,706 | $ | 33,934 | $ | 627,052 | ||||||||||
Gross profit | 18,337 | 13,647 | 38,779 | 4,151 | 74,914 | |||||||||||||||
Selling, general and administrative expenses | 9,226 | 10,542 | 22,167 | 2,079 | 44,014 | |||||||||||||||
Operating income | 9,111 | 3,105 | 16,612 | 2,072 | 30,900 | |||||||||||||||
Variances Fiscal Year 2013 to Fiscal Year 2012 Increase/(Decrease) | ||||||||||||||||||||
Consolidated revenues | $ | 36,118 | $ | 68,025 | $ | 15,047 | $ | 34,338 | $ | 153,528 | ||||||||||
Gross profit | 5,078 | 12,809 | (4,938 | ) | 2,135 | 15,084 | ||||||||||||||
Selling, general and administrative expenses | 1,502 | 5,528 | 651 | 2,324 | 10,005 | |||||||||||||||
Operating income | 3,576 | 7,281 | (5,589 | ) | (189 | ) | 5,079 | |||||||||||||
Variances Fiscal Year 2012 to Fiscal Year 2011 Increase/(Decrease) | ||||||||||||||||||||
Consolidated revenues | $ | (15,972 | ) | $ | 62,469 | $ | 79,448 | $ | (13,951 | ) | $ | 111,994 | ||||||||
Gross profit | (1,661 | ) | 6,423 | 3,614 | (3,672 | ) | 4,704 | |||||||||||||
Selling, general and administrative expenses | (159 | ) | 1,394 | 2,733 | 1 | 3,969 | ||||||||||||||
Operating income | (1,502 | ) | 5,029 | 881 | (3,673 | ) | 735 |
• | It does not include interest expense. Because we have borrowed money to finance our operations, 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 income taxes. Because the payment of income taxes is a necessary and ongoing part of our operations, any measure that excludes income taxes 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. |
Twelve Months Ended | |||||||||||
June 30, 2013 | June 30, 2012 | June 30, 2011 | |||||||||
(in thousands) | |||||||||||
Net income | $ | 24,008 | $ | 17,188 | $ | 18,982 | |||||
Interest expense | 800 | 814 | 795 | ||||||||
Provision for income taxes | 11,908 | 13,302 | 11,634 | ||||||||
Depreciation and amortization | 12,782 | 11,485 | 11,067 | ||||||||
EBITDA | $ | 49,498 | $ | 42,789 | $ | 42,478 |
• | Changes in costs and estimated earnings in excess of billings on uncompleted contracts and billings on uncompleted contracts in excess of costs due to contract terms that determine the timing of billings to customers and the collection of those billings |
• | Some cost plus and fixed price customer contracts are billed based on milestones which may require us to incur significant expenditures prior to collections from our customers. |
• | Time and material contracts are normally billed in arrears. Therefore, we are routinely required to carry these costs until they can be billed and collected. |
• | Some of our large construction projects may require significant retentions or security in the form of letters of credit. |
• | Other changes in working capital |
• | Capital expenditures |
• | Acquisitions of new businesses |
• | Strategic investments in new operations |
• | Purchases of shares under our stock buyback program |
• | Contract disputes or collection issues |
• | Capacity constraints under our credit facility and remaining in compliance with all covenants contained in the credit agreement |
Net Cash Provided by Operating Activities | |||
(In thousands) | |||
Net income | $ | 24,008 | |
Non-cash expenses | 17,379 | ||
Deferred income tax | 1,932 | ||
Cash effect of changes in operating assets and liabilities | 13,800 | ||
Other | (35 | ) | |
Net cash provided by operating activities | $ | 57,084 |
• | Accounts receivable increased by $32.4 million. The accounts receivable increase is due to higher business volume and the timing of billings particularly in the Electrical Infrastructure, Storage Solutions and Industrial segments. The receivable aging categories have not deteriorated and we do not anticipate any unusual collection difficulties. |
• | The net change in the combined balances of costs and estimated earnings in excess of billings on uncompleted contracts and billings on uncompleted contracts in excess of costs and estimated earnings caused an increase to cash of $27.3 million in the twelve months ended June 30, 2013. This change was primarily attributable to improved working capital management and our project portfolio permitting a higher degree of advanced billings. |
• | Accounts payable increased by $19.3 million. The increase was primarily due to an increase in business activity. |
• | Our Senior Leverage Ratio, as defined in the agreement, may not exceed 2.50 to 1.00 as of the end of each fiscal quarter. |
• | We are required to maintain a Fixed Charge Coverage Ratio, as defined in the agreement, greater than or equal to 1.25 to 1.00 as of the end of each fiscal quarter. |
• | Asset dispositions (other than inventory and obsolete or unneeded equipment disposed of in the ordinary course of business) are limited to $15.0 million per 12-month period. |
June 30, 2013 | June 30, 2012 | |||||||
(In thousands) | ||||||||
Credit facility | $ | 125,000 | $ | 125,000 | ||||
Capacity constraint due to the Senior Leverage Ratio | — | 9,662 | ||||||
Capacity under the credit facility | 125,000 | 115,338 | ||||||
Letters of credit | 13,372 | 8,499 | ||||||
Availability under the credit facility | $ | 111,628 | $ | 106,839 |
Commitments by Expiration Period | ||||||||||||||||||||
Less than 1 Year | 1–3 Years | 3–5 Years | More than 5 Years | Total | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Letters of credit (1) | $ | 6,569 | $ | — | $ | 6,803 | $ | — | $ | 13,372 | ||||||||||
Surety bonds | 34,913 | 1,818 | 30 | — | 36,761 | |||||||||||||||
Total | $ | 41,482 | $ | 1,818 | $ | 6,833 | $ | — | $ | 50,133 |
(1) | All letters of credit issued under our credit facility are in support of our workers’ compensation insurance programs or certain construction contracts. The letters of credit that support our workers’ compensation programs are expected to renew annually through the term of the credit facility; therefore, they are reported in the same period that the credit facility expires. The letters of credit that support construction contracts will expire when the related work is completed and the warranty period has passed; therefore, these letters of credit are reported in the period that we expect the warranty period to end. |
Contractual Obligations by Expiration Period | ||||||||||||||||||||
Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | Total | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Operating leases | $ | 3,613 | $ | 4,783 | $ | 753 | $ | 124 | $ | 9,273 | ||||||||||
Purchase obligations | 1,105 | 1,612 | 663 | — | 3,380 | |||||||||||||||
Total contractual obligations | $ | 4,718 | $ | 6,395 | $ | 1,416 | $ | 124 | $ | 12,653 |
Maturity by Fiscal Year | Fair Value as of June 30, 2013 | |||||||||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | Total | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Long-term debt: | ||||||||||||||||||||||||||||
Variable rate debt (1) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — |
(1) | There were no outstanding borrowings under our credit facility at June 30, 2013. At the Company’s option, amounts borrowed under the revolving credit facility in U.S. dollars will bear interest at LIBOR or an Alternate Base Rate, plus in each case, an additional margin based on the Senior Leverage Ratio. We may also borrow up to $15.0 million in Canadian dollars at the CDOR rate or the Canadian Prime Rate plus an additional margin based on the Senior Leverage Ratio. The Alternate Base Rate is the greater of the Prime Rate, the Federal Funds Effective Rate plus 0.5% or LIBOR plus 1.00%. The additional margin ranges from 0.75% to 1.5% on Alternate Base Rate borrowings, from 1.75% to 2.5% on LIBOR and CDOR-based borrowings and from 2.25% to 3.0% on Canadian Prime Rate borrowings. The Senior Leverage Ratio at June 30, 2013 placed the Company in the lowest interest rate tier, resulting in LIBOR, CDOR, Canadian Prime Rate and Alternate Base Rate margins of 1.75%, 1.75%, 2.25% and 0.75%, respectively. |
Maturity by Fiscal Year | Fair Value as of June 30, 2012 | |||||||||||||||||||||||||||
2013 | 2014 | 2015 | 2016 | 2017 | Total | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Long-term debt: | ||||||||||||||||||||||||||||
Variable rate debt (1) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — |
(1) | There were no outstanding borrowings under our credit facility at June 30, 2012. |
Financial Statements of the Company | |
/S/ John R. Hewitt | /S/ Kevin S. Cavanah | |||
John R. Hewitt | Kevin S. Cavanah | |||
President and Chief Executive Officer | Vice President and Chief Financial Officer |
Twelve Months Ended | ||||||||||||
June 30, 2013 | June 30, 2012 | June 30, 2011 | ||||||||||
Revenues | $ | 892,574 | $ | 739,046 | $ | 627,052 | ||||||
Cost of revenues | 797,872 | 659,428 | 552,138 | |||||||||
Gross profit | 94,702 | 79,618 | 74,914 | |||||||||
Selling, general and administrative expenses | 57,988 | 47,983 | 44,014 | |||||||||
Operating income | 36,714 | 31,635 | 30,900 | |||||||||
Other income (expense): | ||||||||||||
Interest expense | (800 | ) | (814 | ) | (795 | ) | ||||||
Interest income | 32 | 26 | 71 | |||||||||
Other | (30 | ) | (357 | ) | 440 | |||||||
Income before income tax expense | 35,916 | 30,490 | 30,616 | |||||||||
Provision for federal, state and foreign income taxes | 11,908 | 13,302 | 11,634 | |||||||||
Net income | $ | 24,008 | $ | 17,188 | $ | 18,982 | ||||||
Basic earnings per common share | $ | 0.92 | $ | 0.66 | $ | 0.72 | ||||||
Diluted earnings per common share | $ | 0.91 | $ | 0.65 | $ | 0.71 | ||||||
Weighted average common shares outstanding: | ||||||||||||
Basic | 25,962 | 25,921 | 26,406 | |||||||||
Diluted | 26,358 | 26,298 | 26,686 |
Twelve Months Ended | ||||||||||||
June 30, 2013 | June 30, 2012 | June 30, 2011 | ||||||||||
Net income | $ | 24,008 | $ | 17,188 | $ | 18,982 | ||||||
Other comprehensive income (loss), net of tax: | ||||||||||||
Foreign currency translation adjustments (net of tax of $190, $214 and ($333)) | (544 | ) | (665 | ) | 941 | |||||||
Comprehensive income | $ | 23,464 | $ | 16,523 | $ | 19,923 |
June 30, 2013 | June 30, 2012 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 63,750 | $ | 39,726 | ||||
Accounts receivable, less allowances (2013—$795; 2012—$1,201) | 140,840 | 108,034 | ||||||
Costs and estimated earnings in excess of billings on uncompleted contracts | 73,773 | 68,562 | ||||||
Inventories | 2,988 | 2,482 | ||||||
Income taxes receivable | 3,032 | — | ||||||
Deferred income taxes | 5,657 | 6,024 | ||||||
Other current assets | 6,234 | 5,688 | ||||||
Total current assets | 296,274 | 230,516 | ||||||
Property, plant and equipment, at cost: | ||||||||
Land and buildings | 29,649 | 28,846 | ||||||
Construction equipment | 69,998 | 59,176 | ||||||
Transportation equipment | 34,366 | 25,865 | ||||||
Office equipment and software | 18,426 | 16,892 | ||||||
Construction in progress | 9,080 | 2,910 | ||||||
161,519 | 133,689 | |||||||
Accumulated depreciation | (90,218 | ) | (78,814 | ) | ||||
71,301 | 54,875 | |||||||
Goodwill | 30,836 | 28,675 | ||||||
Other intangible assets | 7,551 | 6,504 | ||||||
Other assets | 4,016 | 2,565 | ||||||
Total assets | $ | 409,978 | $ | 323,135 | ||||
June 30, 2013 | June 30, 2012 | |||||||
Liabilities and stockholders’ equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 68,961 | $ | 48,931 | ||||
Billings on uncompleted contracts in excess of costs and estimated earnings | 62,848 | 30,293 | ||||||
Accrued wages and benefits | 21,919 | 15,298 | ||||||
Accrued insurance | 7,599 | 6,912 | ||||||
Income taxes payable | — | 1,115 | ||||||
Other accrued expenses | 3,039 | 3,414 | ||||||
Total current liabilities | 164,366 | 105,963 | ||||||
Deferred income taxes | 7,450 | 6,075 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Common stock—$.01 par value; 60,000,000 shares authorized; 27,888,217 shares issued as of June 30, 2013 and June 30, 2012 | 279 | 279 | ||||||
Additional paid-in capital | 118,190 | 116,693 | ||||||
Retained earnings | 141,427 | 117,419 | ||||||
Accumulated other comprehensive income | 227 | 771 | ||||||
260,123 | 235,162 | |||||||
Less treasury stock, at cost—1,779,593 and 2,141,990 shares as of June 30, 2013 and June 30, 2012 | (21,961 | ) | (24,065 | ) | ||||
Total stockholders’ equity | 238,162 | 211,097 | ||||||
Total liabilities and stockholders’ equity | $ | 409,978 | $ | 323,135 |
Twelve Months Ended | ||||||||||||
June 30, 2013 | June 30, 2012 | June 30, 2011 | ||||||||||
Operating activities: | ||||||||||||
Net income | $ | 24,008 | $ | 17,188 | $ | 18,982 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities, net of effects of acquisitions: | ||||||||||||
Depreciation and amortization | 12,782 | 11,485 | 11,067 | |||||||||
Stock-based compensation expense | 3,831 | 3,504 | 2,395 | |||||||||
Deferred income taxes | 1,932 | 83 | 3,743 | |||||||||
Allowance for uncollectible accounts | 714 | 24 | 447 | |||||||||
Impairment of intangible asset | 255 | — | — | |||||||||
(Gain) loss on sale of property, plant and equipment | (1 | ) | (158 | ) | 113 | |||||||
Other | 163 | 65 | 72 | |||||||||
Changes in operating assets and liabilities increasing (decreasing) cash, net of effects from acquisitions: | ||||||||||||
Accounts receivable | (32,408 | ) | (4,575 | ) | (16,499 | ) | ||||||
Costs and estimated earnings in excess of billings on uncompleted contracts | (5,211 | ) | (28,506 | ) | 890 | |||||||
Inventories | (1,394 | ) | (233 | ) | 1,202 | |||||||
Other assets | (2,194 | ) | (1,888 | ) | 2,028 | |||||||
Accounts payable | 19,256 | 12,862 | (9,326 | ) | ||||||||
Billings on uncompleted contracts in excess of costs and estimated earnings | 32,555 | (5,192 | ) | 6,608 | ||||||||
Accrued expenses | 2,796 | (1,718 | ) | 1,027 | ||||||||
Net cash provided by operating activities | 57,084 | 2,941 | 22,749 | |||||||||
Investing activities: | ||||||||||||
Acquisition of property, plant and equipment | (23,231 | ) | (13,534 | ) | (10,416 | ) | ||||||
Acquisition | (9,394 | ) | — | (3,800 | ) | |||||||
Acquisition related adjustment | — | 241 | — | |||||||||
Proceeds from asset sales | 186 | 598 | 150 | |||||||||
Net cash used for investing activities | $ | (32,439 | ) | $ | (12,695 | ) | $ | (14,066 | ) |
Twelve Months Ended | ||||||||||||
June 30, 2013 | June 30, 2012 | June 30, 2011 | ||||||||||
Financing activities: | ||||||||||||
Exercise of stock options | $ | 875 | $ | 167 | $ | 166 | ||||||
Capital lease payments | (42 | ) | (258 | ) | (731 | ) | ||||||
Excess tax benefit of exercised stock options and vesting of deferred shares | 37 | — | 50 | |||||||||
Advances under credit agreement | 25,565 | 9,105 | — | |||||||||
Repayments of advances under credit agreement | (25,565 | ) | (9,105 | ) | — | |||||||
Payment of debt amendment fees | — | (643 | ) | (216 | ) | |||||||
Treasury shares sold to Employee Stock Purchase Plan | 54 | 47 | 10 | |||||||||
Open market purchase of treasury shares | — | (8,126 | ) | — | ||||||||
Other treasury share purchases | (1,162 | ) | (537 | ) | (299 | ) | ||||||
Net cash used for financing activities | (238 | ) | (9,350 | ) | (1,020 | ) | ||||||
Effect of exchange rate changes on cash | (383 | ) | (527 | ) | 795 | |||||||
Net increase (decrease) in cash and cash equivalents | 24,024 | (19,631 | ) | 8,458 | ||||||||
Cash and cash equivalents, beginning of period | 39,726 | 59,357 | 50,899 | |||||||||
Cash and cash equivalents, end of period | $ | 63,750 | $ | 39,726 | $ | 59,357 | ||||||
Other cash flow information: | ||||||||||||
Cash paid during the period for: | ||||||||||||
Income taxes | $ | 12,242 | $ | 12,016 | $ | 6,251 | ||||||
Interest | $ | 610 | $ | 478 | $ | 632 | ||||||
Non-cash investing: | ||||||||||||
Purchases of property, plant and equipment on account | $ | 1,146 | $ | 457 | $ | 765 |
Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income(Loss) | Total | |||||||||||||||||||
Balances, June 30, 2010 | $ | 279 | $ | 111,637 | $ | 81,252 | $ | (16,078 | ) | $ | 495 | $ | 177,585 | |||||||||||
Net income | — | — | 18,982 | — | — | 18,982 | ||||||||||||||||||
Other comprehensive income | — | — | — | — | 941 | 941 | ||||||||||||||||||
Exercise of stock options (32,000 shares) | — | 83 | (3 | ) | 86 | — | 166 | |||||||||||||||||
Tax effect of exercised stock options and vesting of deferred shares | — | (109 | ) | — | — | — | (109 | ) | ||||||||||||||||
Issuance of deferred shares (126,428 shares) | — | (328 | ) | — | 328 | — | — | |||||||||||||||||
Employee Stock Purchase Plan (699 shares) (Note 12) | 8 | 2 | 10 | |||||||||||||||||||||
Other treasury share purchases (30,154 shares) | — | — | — | (299 | ) | — | (299 | ) | ||||||||||||||||
Stock-based compensation expense | — | 2,395 | — | — | — | 2,395 | ||||||||||||||||||
Balances, June 30, 2011 | 279 | 113,686 | 100,231 | (15,961 | ) | 1,436 | 199,671 | |||||||||||||||||
Net income | — | — | 17,188 | — | — | 17,188 | ||||||||||||||||||
Other comprehensive loss | — | — | — | — | (665 | ) | (665 | ) | ||||||||||||||||
Exercise of stock options (26,500 shares) | — | 98 | — | 69 | — | 167 | ||||||||||||||||||
Tax effect of exercised stock options and vesting of deferred shares | — | (152 | ) | — | — | — | (152 | ) | ||||||||||||||||
Issuance of deferred shares (184,149 shares) | — | (479 | ) | — | 479 | — | — | |||||||||||||||||
Employee Stock Purchase Plan (4,395 shares) (Note 12) | 36 | 11 | 47 | |||||||||||||||||||||
Open market purchase of treasury shares (886,503 shares) | — | — | — | (8,126 | ) | — | (8,126 | ) | ||||||||||||||||
Other treasury share purchases (52,992 shares) | — | — | — | (537 | ) | — | (537 | ) | ||||||||||||||||
Stock-based compensation expense | — | 3,504 | — | — | — | 3,504 | ||||||||||||||||||
Balances, June 30, 2012 | 279 | 116,693 | 117,419 | (24,065 | ) | 771 | 211,097 | |||||||||||||||||
Net income | — | — | 24,008 | — | — | 24,008 | ||||||||||||||||||
Other comprehensive loss | — | — | — | — | (544 | ) | (544 | ) | ||||||||||||||||
Exercise of stock options (97,840 shares) | — | (662 | ) | — | 1,537 | — | 875 | |||||||||||||||||
Tax effect of exercised stock options and vesting of deferred shares | — | 3 | — | — | — | 3 | ||||||||||||||||||
Issuance of deferred shares (367,449 shares) | — | (1,667 | ) | — | 1,667 | — | — | |||||||||||||||||
Employee Stock Purchase Plan (4,452 shares) (Note 12) | — | (8 | ) | — | 62 | — | 54 | |||||||||||||||||
Other treasury share purchases (107,344 shares) | — | — | — | (1,162 | ) | — | (1,162 | ) | ||||||||||||||||
Stock-based compensation expense | — | 3,831 | — | — | — | 3,831 | ||||||||||||||||||
Balances, June 30, 2013 | $ | 279 | $ | 118,190 | $ | 141,427 | $ | (21,961 | ) | $ | 227 | $ | 238,162 |
• | there is a legal basis for the claim; |
• | the additional costs were caused by circumstances that were unforeseen by the Company and are not the result of deficiencies in our performance; |
• | the costs are identifiable or determinable and are reasonable in view of the work performed; and |
• | the evidence supporting the claim is objective and verifiable. |
Current assets | $ | 1,112 | |
Property, plant and equipment | 4,299 | ||
Tax deductible goodwill | 2,247 | ||
Other intangible assets | 1,853 | ||
Total assets acquired | 9,511 | ||
Current liabilities | 117 | ||
Net assets acquired | $ | 9,394 |
Current assets | $ | 1,316 | |
Property, plant and equipment | 13 | ||
Tax deductible goodwill | 1,583 | ||
Other intangible assets | 3,075 | ||
Total assets acquired | 5,987 | ||
Current liabilities | 1,379 | ||
Net assets acquired | 4,608 | ||
Cash acquired | 8 | ||
Net purchase price | $ | 4,600 |
June 30, 2013 | June 30, 2012 | |||||||
(In thousands) | ||||||||
Costs and estimated earnings recognized on uncompleted contracts | $ | 802,588 | $ | 774,749 | ||||
Billings on uncompleted contracts | 791,663 | 736,480 | ||||||
$ | 10,925 | $ | 38,269 | |||||
Shown on balance sheet as: | ||||||||
Costs and estimated earnings in excess of billings on uncompleted contracts | $ | 73,773 | $ | 68,562 | ||||
Billings on uncompleted contracts in excess of costs and estimated earnings | 62,848 | 30,293 | ||||||
$ | 10,925 | $ | 38,269 |
Electrical Infrastructure | Oil Gas & Chemical | Storage Solutions | Industrial | Total | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Goodwill | $ | 29,666 | $ | 5,841 | $ | 11,213 | $ | 7,338 | $ | 54,058 | ||||||||||
Cumulative impairment loss | (17,653 | ) | (3,000 | ) | (922 | ) | (3,425 | ) | (25,000 | ) | ||||||||||
Net balance at June 30, 2011 | 12,013 | 2,841 | 10,291 | 3,913 | 29,058 | |||||||||||||||
Acquisition related adjustment | — | — | — | (241 | ) | (241 | ) | |||||||||||||
Translation adjustment | — | — | (142 | ) | — | (142 | ) | |||||||||||||
Net balance at June 30, 2012 | 12,013 | 2,841 | 10,149 | 3,672 | 28,675 | |||||||||||||||
Purchase of Pelichem (Note 2) | — | 2,247 | — | — | 2,247 | |||||||||||||||
Translation adjustment | — | — | (86 | ) | — | (86 | ) | |||||||||||||
Net balance at June 30, 2013 | $ | 12,013 | $ | 5,088 | $ | 10,063 | $ | 3,672 | $ | 30,836 |
At June 30, 2013 | ||||||||||||||
Useful Life | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||
(Years) | (In thousands) | |||||||||||||
Intellectual property | 6 to 15 | $ | 2,460 | $ | (753 | ) | $ | 1,707 | ||||||
Customer based | 1 to 15 | 4,250 | (542 | ) | 3,708 | |||||||||
Non-compete Agreements | 3 to 5 | 808 | (287 | ) | 521 | |||||||||
Trade Name | 5 | 165 | — | 165 | ||||||||||
Total amortizing intangibles | 7,683 | (1,582 | ) | 6,101 | ||||||||||
Trade name | Indefinite | 1,450 | — | 1,450 | ||||||||||
Total intangible assets | $ | 9,133 | $ | (1,582 | ) | $ | 7,551 |
At June 30, 2012 | ||||||||||||||
Useful Life | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||
(Years) | (In thousands) | |||||||||||||
Intellectual property | 6 to 15 | $ | 2,460 | $ | (586 | ) | $ | 1,874 | ||||||
Customer based | 1 to 15 | 2,657 | (285 | ) | 2,372 | |||||||||
Non-compete agreements | 3 to 5 | 547 | (159 | ) | 388 | |||||||||
Total amortizing intangibles | 5,664 | (1,030 | ) | 4,634 | ||||||||||
Trade name | Indefinite | 1,870 | — | 1,870 | ||||||||||
Total intangible assets | $ | 7,534 | $ | (1,030 | ) | $ | 6,504 |
• | Our Senior Leverage Ratio, as defined in the agreement, may not exceed 2.50 to 1.00 as of the end of each fiscal quarter. |
• | We are required to maintain a Fixed Charge Coverage Ratio, as defined in the agreement, greater than or equal to 1.25 to 1.00 as of the end of each fiscal quarter. |
• | Asset dispositions (other than inventory and obsolete or unneeded equipment disposed of in the ordinary course of business) are limited to $15.0 million per 12-month period. |
June 30, 2013 | June 30, 2012 | |||||||
(In thousands) | ||||||||
Credit facility | $ | 125,000 | $ | 125,000 | ||||
Capacity constraint due to the Senior Leverage Ratio | — | 9,662 | ||||||
Capacity under the credit facility | 125,000 | 115,338 | ||||||
Letters of credit | 13,372 | 8,499 | ||||||
Availability under the credit facility | $ | 111,628 | $ | 106,839 |
Twelve Months Ended | ||||||||||||
June 30, 2013 | June 30, 2012 | June 30, 2011 | ||||||||||
(In thousands) | ||||||||||||
Domestic | $ | 37,876 | $ | 27,346 | $ | 29,939 | ||||||
Foreign | (1,960 | ) | 3,144 | 677 | ||||||||
Total | $ | 35,916 | $ | 30,490 | $ | 30,616 |
Twelve Months Ended | ||||||||||||
June 30, 2013 | June 30, 2012 | June 30, 2011 | ||||||||||
(In thousands) | ||||||||||||
Current: | ||||||||||||
Federal | $ | 8,260 | $ | 11,320 | $ | 6,104 | ||||||
State | 1,268 | 1,129 | 1,086 | |||||||||
Foreign | 449 | 762 | 604 | |||||||||
9,977 | 13,211 | 7,794 | ||||||||||
Deferred: | ||||||||||||
Federal | 1,801 | (151 | ) | 3,837 | ||||||||
State | 126 | 283 | 389 | |||||||||
Foreign | 4 | (41 | ) | (386 | ) | |||||||
1,931 | 91 | 3,840 | ||||||||||
$ | 11,908 | $ | 13,302 | $ | 11,634 |
Twelve Months Ended | ||||||||||||
June 30, 2013 | June 30, 2012 | June 30, 2011 | ||||||||||
(In thousands) | ||||||||||||
Expected provision for Federal income taxes at the statutory rate | $ | 12,570 | $ | 10,670 | $ | 10,710 | ||||||
State income taxes, net of Federal benefit | 1,252 | 970 | 1,095 | |||||||||
Charges without tax benefit | 1,231 | 1,004 | 16 | |||||||||
Change in valuation allowance | (140 | ) | (544 | ) | — | |||||||
Cumulative non-deductible expenses | — | 2,139 | — | |||||||||
IRC S199 deduction | (844 | ) | (687 | ) | (187 | ) | ||||||
Research & Development Credit | (1,450 | ) | — | — | ||||||||
Foreign tax differential | (160 | ) | — | — | ||||||||
Other | (551 | ) | (250 | ) | — | |||||||
Provision for income taxes | $ | 11,908 | $ | 13,302 | $ | 11,634 |
June 30, 2013 | June 30, 2012 | |||||||
(In thousands) | ||||||||
Deferred tax assets: | ||||||||
Bad debt reserve | $ | 310 | $ | 468 | ||||
Paid-time-off accrual | 602 | 520 | ||||||
Insurance reserve | 2,226 | 2,150 | ||||||
Legal reserve | 462 | 488 | ||||||
Net operating loss benefit and credit carryforwards | 3,884 | 3,788 | ||||||
Valuation allowance | (88 | ) | (230 | ) | ||||
Accrued compensation and pension | 850 | 759 | ||||||
Stock compensation expense on nonvested deferred shares | 943 | 1,189 | ||||||
Accrued losses | 232 | 298 | ||||||
Other—net | 204 | 150 | ||||||
Total deferred tax assets | 9,625 | 9,580 | ||||||
Deferred tax liabilities: | ||||||||
Tax over book depreciation | 9,064 | 8,512 | ||||||
Tax over book amortization | 1,137 | 691 | ||||||
Prepaid insurance | 1,217 | — | ||||||
Other—net | — | 428 | ||||||
Total deferred tax liabilities | 11,418 | 9,631 | ||||||
Net deferred tax liability | $ | (1,793 | ) | $ | (51 | ) |
June 30, 2013 | June 30, 2012 | |||||||
(In thousands) | ||||||||
Current deferred tax assets | $ | 5,657 | $ | 6,024 | ||||
Non-current deferred tax liabilities | (7,450 | ) | (6,075 | ) | ||||
Net deferred tax liability | $ | (1,793 | ) | $ | (51 | ) |
Number of Options | Weighted-Average Remaining Contractual Life | Weighted-Average Exercise Price | Aggregate Intrinsic Value | ||||||||||
(Years) | (In thousands) | ||||||||||||
Outstanding at June 30, 2012 | 491,040 | 5.5 | $ | 9.29 | |||||||||
Granted | — | $ | — | ||||||||||
Exercised | (97,840 | ) | $ | 8.94 | $ | 616 | |||||||
Cancelled | (1,200 | ) | $ | 10.19 | |||||||||
Outstanding at June 30, 2013 | 392,000 | 5.5 | $ | 9.38 | $ | 2,430 | |||||||
Vested or expected to vest at June 30, 2013 | 387,703 | 5.4 | $ | 9.37 | $ | 2,409 | |||||||
Exercisable at June 30, 2013 | 167,800 | 1.5 | $ | 8.29 | $ | 1,223 |
2012 | |
Grant date fair value | $5.61 |
Risk-free interest rate | 0.88% |
Expected volatility | 66.19% |
Expected life in years | 5.00 |
Expected dividend yield | — |
Stock Options Outstanding | Stock Options Exercisable | |||||||||||||||||
Range of Exercise Price | Options Outstanding | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Life | Options Exercisable | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Life | ||||||||||||
(Years) | (Years) | |||||||||||||||||
$4.60 – $ 5.49 | 65,700 | $ | 4.83 | 1.5 | 65,700 | $ | 4.83 | 1.5 | ||||||||||
8.93 – 12.20 | 326,300 | 10.29 | 6.2 | 102,100 | 10.52 | 1.5 | ||||||||||||
$4.60 – $12.20 | 392,000 | $ | 9.38 | 5.5 | 167,800 | $ | 8.29 | 1.5 |
• | Time based awards—Employee awards generally vest in four or five year equal annual installments beginning one year after the grant date. Director awards cliff vest on the earlier of three years or upon retirement from the Board. |
• | Market based awards—These awards are in the form of perfomance units which vest 3 years after the grant date only if the Company’s common stock achieves certain levels when compared to the total shareholder return of a peer group of companies as selected by the Compensation Committee of the Board of Directors. The payout is pro-rated and can range from zero to 200% of the original award. These awards are settled entirely in stock. As of June 30, 2013, there are approximately 228,000 performance units that are scheduled to vest in fiscal 2016. |
Shares | Weighted Average Grant Date Fair Value per Share | ||||||
Nonvested shares at June 30, 2012 | 970,994 | $ | 10.75 | ||||
Shares granted | 503,268 | $ | 10.96 | ||||
Shares vested and released | (367,449 | ) | $ | 11.15 | |||
Shares cancelled | (76,153 | ) | $ | 9.24 | |||
Nonvested shares at June 30, 2013 | 1,030,660 | $ | 10.71 |
Twelve Months Ended | ||||||||||||
June 30, 2013 | June 30, 2012 | June 30, 2011 | ||||||||||
(In thousands, except per share data) | ||||||||||||
Basic EPS: | ||||||||||||
Net income | $ | 24,008 | $ | 17,188 | $ | 18,982 | ||||||
Weighted average shares outstanding | 25,962 | 25,921 | 26,406 | |||||||||
Basic EPS | $ | 0.92 | $ | 0.66 | $ | 0.72 | ||||||
Diluted EPS: | ||||||||||||
Weighted average shares outstanding—basic | 25,962 | 25,921 | 26,406 | |||||||||
Dilutive stock options | 81 | 79 | 93 | |||||||||
Dilutive nonvested deferred shares | 315 | 298 | 187 | |||||||||
Diluted weighted average shares | 26,358 | 26,298 | 26,686 | |||||||||
Diluted EPS | $ | 0.91 | $ | 0.65 | $ | 0.71 |
Twelve Months Ended | |||||||||
June 30, 2013 | June 30, 2012 | June 30, 2011 | |||||||
(In thousands) | |||||||||
Stock options | 193 | 267 | 105 | ||||||
Nonvested deferred shares | 2 | 3 | 13 | ||||||
Total antidilutive securities | 195 | 270 | 118 |
• | Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers. |
• | If a participating employer discontinues contributions to a plan, the unfunded obligations of the plan may be borne by the remaining participating employers. |
• | If a participating employer chooses to stop participating in a plan, a withdrawal liability may be created based on the unfunded vested benefits for all employees in the plan. |
Pension Fund | EIN/Pension Plan Number | Pension Protection Act Zone Status | FIP/RP Status Pending or Implemented | Company Contributions Fiscal Year | Surcharge Imposed | Expiration Date of Collective- Bargaining Agreement | ||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2011 | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Joint Pension Fund Local Union 164 IBEW (1) | 22-6031199/001 | Yellow | Yellow | Yes | $ | 3,943 | $ | 1,538 | $ | 3,054 | No | 5/31/2014 | ||||||||||||
Boilermaker-Blacksmith National Pension Trust | 48-6168020/001 | Yellow | Yellow | Yes | 2,882 | 2,845 | 3,783 | No | Described below (2) | |||||||||||||||
Joint Pension Fund of Local Union No 102 | 22-1615726/001 | Green | Green | Yes | 2,387 | 1,608 | 951 | No | 5/31/2014 | |||||||||||||||
IBEW Local 456 Pension Plan | 22-6238995/001 | Yellow | Yellow | Yes | 2,384 | 977 | 440 | No | 11/30/2013 | |||||||||||||||
Local 351 IBEW Pension Plan | 22-3417366/001 | Yellow | Yellow | Yes | 2,281 | 1,140 | 2,932 | No | 9/30/2013 | |||||||||||||||
Steamfitters Local Union No 420 Pension Plan | 23-2004424/001 | Red | Red | Yes | 1,622 | 813 | 878 | No | 4/30/2014 | |||||||||||||||
Contributions to other multiemployer plans | 8,966 | 7,616 | 8,765 | |||||||||||||||||||||
Total contributions made | $ | 24,465 | $ | 16,537 | $ | 20,803 |
(1) | Our contributions for the Joint Pension Fund Local Union 164 IBEW exceeded 5% of total contributions for the 2011 plan year. This information was not available for 2012. |
(2) | Our collective bargaining agreements with the Boilermaker-Blacksmith National Pension Trust are under a National Maintenance Agreement platform which is evergreen in terms of expiration. However, the agreements allow for termination of the collective bargaining agreement by either party with a predetermined written notice. |
Electrical Infrastructure | Oil Gas & Chemical | Storage Solutions | Industrial | Unallocated Corporate | Total | |||||||||||||||||||
Twelve months ended June 30, 2013 | ||||||||||||||||||||||||
Gross revenues | $ | 171,204 | $ | 273,979 | $ | 395,794 | $ | 54,321 | $ | — | $ | 895,298 | ||||||||||||
Less: inter-segment revenues | — | 131 | 2,593 | — | — | 2,724 | ||||||||||||||||||
Consolidated revenues | 171,204 | 273,848 | 393,201 | 54,321 | — | 892,574 | ||||||||||||||||||
Gross profit | 21,754 | 32,879 | 37,455 | 2,614 | — | 94,702 | ||||||||||||||||||
Operating income (loss) | 11,185 | 15,415 | 11,904 | (1,790 | ) | — | 36,714 | |||||||||||||||||
Segment assets | 64,771 | 75,591 | 159,149 | 27,347 | 83,120 | 409,978 | ||||||||||||||||||
Capital expenditures | 2,129 | 2,942 | 9,929 | 1,645 | 6,586 | 23,231 | ||||||||||||||||||
Depreciation and amortization expense | 2,167 | 2,943 | 6,740 | 932 | — | 12,782 | ||||||||||||||||||
Twelve months ended June 30, 2012 | ||||||||||||||||||||||||
Gross revenues | $ | 135,086 | $ | 206,031 | $ | 380,488 | $ | 19,983 | $ | — | $ | 741,588 | ||||||||||||
Less: inter-segment revenues | — | 208 | 2,334 | — | — | 2,542 | ||||||||||||||||||
Consolidated revenues | 135,086 | 205,823 | 378,154 | 19,983 | — | 739,046 | ||||||||||||||||||
Gross profit | 16,676 | 20,070 | 42,393 | 479 | — | 79,618 | ||||||||||||||||||
Operating income (loss) | 7,609 | 8,134 | 17,493 | (1,601 | ) | — | 31,635 | |||||||||||||||||
Segment assets | 51,998 | 53,567 | 150,543 | 14,018 | 53,009 | 323,135 | ||||||||||||||||||
Capital expenditures | 2,581 | 2,346 | 3,929 | 741 | 3,937 | 13,534 | ||||||||||||||||||
Depreciation and amortization expense | 1,823 | 2,838 | 6,309 | 515 | — | 11,485 | ||||||||||||||||||
Twelve months ended June 30, 2011 | ||||||||||||||||||||||||
Gross revenues | $ | 151,065 | $ | 143,753 | $ | 299,762 | $ | 33,934 | $ | — | $ | 628,514 | ||||||||||||
Less: inter-segment revenues | 7 | 399 | 1,056 | — | — | 1,462 | ||||||||||||||||||
Consolidated revenues | 151,058 | 143,354 | 298,706 | 33,934 | — | 627,052 | ||||||||||||||||||
Gross profit | 18,337 | 13,647 | 38,779 | 4,151 | — | 74,914 | ||||||||||||||||||
Operating income | 9,111 | 3,105 | 16,612 | 2,072 | — | 30,900 | ||||||||||||||||||
Segment assets | 46,411 | 42,801 | 131,050 | 19,542 | 66,632 | 306,436 | ||||||||||||||||||
Capital expenditures | 2,511 | 908 | 4,098 | 9 | 2,890 | 10,416 | ||||||||||||||||||
Depreciation and amortization expense | 1,613 | 2,490 | 6,533 | 431 | — | 11,067 |
Revenues | ||||||||||||
Twelve Months Ended | ||||||||||||
June 30, 2013 | June 30, 2012 | June 30, 2011 | ||||||||||
(In thousands) | ||||||||||||
Domestic | $ | 814,879 | $ | 674,496 | $ | 596,756 | ||||||
International | 77,695 | 64,550 | 30,296 | |||||||||
$ | 892,574 | $ | 739,046 | $ | 627,052 |
Long-Lived Assets | ||||||||||||
June 30, 2013 | June 30, 2012 | June 30, 2011 | ||||||||||
(In thousands) | ||||||||||||
Domestic | $ | 101,581 | $ | 85,290 | $ | 83,312 | ||||||
International | 12,378 | 6,132 | 6,693 | |||||||||
$ | 113,959 | $ | 91,422 | $ | 90,005 |
First Quarter | Second Quarter(a) | Third Quarter | Fourth Quarter(b) | |||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
Fiscal Year 2013 | ||||||||||||||||
Revenues | $ | 209,608 | $ | 221,436 | $ | 225,970 | $ | 235,560 | ||||||||
Gross profit | 22,244 | 22,333 | 23,126 | 26,999 | ||||||||||||
Operating income | 7,924 | 8,772 | 8,431 | 11,587 | ||||||||||||
Net income | 4,684 | 5,436 | 6,521 | 7,367 | ||||||||||||
Earnings per common share: | ||||||||||||||||
Basic | 0.18 | 0.21 | 0.25 | 0.28 | ||||||||||||
Diluted | 0.18 | 0.21 | 0.25 | 0.28 | ||||||||||||
Fiscal Year 2012 | ||||||||||||||||
Revenues | $ | 169,321 | $ | 200,964 | $ | 183,899 | $ | 184,862 | ||||||||
Gross profit | 18,093 | 23,098 | 19,771 | 18,656 | ||||||||||||
Operating income | 6,610 | 11,200 | 7,415 | 6,410 | ||||||||||||
Net income | 3,509 | 7,031 | 4,862 | 1,786 | ||||||||||||
Earnings per common share: | ||||||||||||||||
Basic | 0.13 | 0.27 | 0.19 | 0.07 | ||||||||||||
Diluted | 0.13 | 0.27 | 0.19 | 0.07 |
(a) | The second quarter of fiscal 2013 includes a pretax charge on a Canadian project of $3.3 million. |
(b) | The fourth quarter of fiscal 2013 includes a pretax charge on a Canadian project of $0.6 million. The fourth quarter of fiscal 2012 included an income tax charge of $3.1 million. The income tax charge represents adjustments of $2.1 million for prior fiscal years and $1.0 million in fiscal 2012, of which $0.2 million related to fourth quarter activity. |
COL. A | COL. B | COL. C ADDITIONS | COL. D | COL. E | |||||||||||||||||||
Balance at Beginning of Period | Charged to Costs and Expenses | Charged to Other Accounts—Describe | Deductions—Describe | Balance at End of Period | |||||||||||||||||||
Fiscal Year 2013 | |||||||||||||||||||||||
Deducted from asset accounts: | |||||||||||||||||||||||
Allowance for doubtful accounts | $ | 1,201 | $ | 725 | $ | (666 | ) | (A) | $ | (465 | ) | (B) | $ | 795 | |||||||||
Valuation reserve for deferred tax assets | 230 | (140 | ) | — | — | 90 | |||||||||||||||||
Total | $ | 1,431 | $ | 585 | $ | (666 | ) | $ | (465 | ) | $ | 885 | |||||||||||
Fiscal Year 2012 | |||||||||||||||||||||||
Deducted from asset accounts: | |||||||||||||||||||||||
Allowance for doubtful accounts | $ | 1,428 | $ | 23 | $ | (250 | ) | (A) | $ | — | $ | 1,201 | |||||||||||
Valuation reserve for deferred tax assets | 774 | (544 | ) | (C) | — | — | 230 | ||||||||||||||||
Total | $ | 2,202 | $ | (521 | ) | $ | (250 | ) | $ | — | $ | 1,431 | |||||||||||
Fiscal Year 2011 | |||||||||||||||||||||||
Deducted from asset accounts: | |||||||||||||||||||||||
Allowance for doubtful accounts | $ | 1,404 | $ | 24 | $ | — | $ | — | $ | 1,428 | |||||||||||||
Valuation reserve for deferred tax assets | 774 | — | — | — | 774 | ||||||||||||||||||
Total | $ | 2,178 | $ | 24 | $ | — | $ | — | $ | 2,202 |
(A) | Collection of a fully reserved receivable recognized as revenue. |
(B) | Receivables written off against allowance for doubtful accounts. |
(C) | Release of the valuation allowance on foreign tax credit carryovers which have now been determined to be utilizable. |
Financial Statements of the Company | |
3.1 | Amended and Restated Certificate of Incorporation (Exhibit 4.1 to the Company’s Registration Statement on Form S-3 (File No. 333-156814) filed January 21, 2009, is hereby incorporated by reference). | ||
3.2 | Certification of Designations, Preferences and Rights of Series B Junior Preferred Stock dated November 12, 1999 (Exhibit 3.2 to the Company’s Registration Statement on Form S-3 (File No. 333-117077) filed July 1, 2004, is hereby incorporated by reference). | ||
3.3 | Certificate of Increase of Authorized Number of Shares of Series B Junior Participating Preferred Stock pursuant to Section 151 of the General Corporation Law of the State of Delaware dated July 11, 2005 (Exhibit 3.5 to the Company’s Annual Report on Form 10-K (File No. 1-15461) filed August 17, 2005, is hereby incorporated by reference). | ||
3.4 | Certificate of Increase of Authorized Number of Shares of Series B Junior Participating Preferred Stock pursuant to Section 151 of the General Corporation Law of the State of Delaware dated October 23, 2006 (Exhibit 3.7 to the Company’s Annual Report on Form 10-K (File No. 1-15461) filed August 14, 2007, is hereby incorporated by reference). | ||
3.5 | Amended and Restated Bylaws (Exhibit 3 to the Company’s Current Report on Form 8-K (File No. 1-15461) filed April 9, 2009, is hereby incorporated by reference). | ||
4 | Specimen Common Stock Certificate (Exhibit 4.1 to the Company’s Registration Statement on Form S-1 (File No. 33-36081) filed July 26, 1990, is hereby incorporated by reference). | ||
+10.1 | Matrix Service Company 1990 Incentive Stock Option Plan (Exhibit 10.14 to the Company’s Registration Statement on Form S-1 (File No. 33-36081) filed June 12, 1990, is hereby incorporated by reference). | ||
+10.2 | Matrix Service Company 1991 Incentive Stock Option Plan (Exhibit 10.1 to the Company’s Registration Statement on Form S-8 (File No. 333-56945) filed June 16, 1998, is hereby incorporated by reference). | ||
+10.3 | Matrix Service Company 1995 Nonemployee Directors’ Stock Option Plan (Exhibit 4.3 to the Company’s Registration Statement on Form S-8 (File No. 333-02771) filed April 23, 1996, is hereby incorporated by reference). | ||
+10.4 | Amendment No. 1 to the Matrix Service Company 1995 Nonemployee Directors’ Stock Option Plan (Exhibit B to the Company’s 2005 Proxy Statement filed September 16, 2005 (File No. 1-15461), is hereby incorporated by reference). | ||
+10.5 | Form of Stock Option Award Agreement (1995 Directors' Plan) (Exhibit 10.6 to the Company’s Annual Report on Form 10-K (File No. 1-15461) filed August 4, 2006, is hereby incorporated by reference). | ||
+10.6 | Matrix Service Company 2004 Stock Incentive Plan (Appendix B to the Company’s Proxy Statement filed September 15, 2006 (File No. 1-15461), is hereby incorporated by reference). | ||
+10.7 | Amendment 1 to Matrix Service Company 2004 Stock Incentive Plan (Exhibit 10 to Amended Schedule 14A filed October 4, 2006 (File No. 1-15461), is hereby incorporated by reference). | ||
+10.8 | Amendment 2 to Matrix Service Company 2004 Stock Incentive Plan (Exhibit 10.6 to the Company’s Annual Report on Form 10-K (File No. 1-15461) filed August 5, 2008, is hereby incorporated by reference). | ||
+10.9 | Amendment 3 to Matrix Service Company 2004 Stock Incentive Plan (Exhibit A to the Company’s Proxy Statement filed September 11, 2009 (File No. 1-15461), is hereby incorporated by reference). | ||
+10.10 | Form of Restricted Stock Unit Award Agreement for non-employee directors (2004 Stock Incentive Plan) (Exhibit 10.8 to the Company’s Annual Report on Form 10-K (File No. 1-15461) filed September 28, 2010 (the “2010 10-K”), is hereby incorporated by reference). | ||
+10.11 | Form of Restricted Stock Unit Award Agreement for employees (2004 Stock Incentive Plan - time-based) (Exhibit 10.11 to the Company's Annual Report on Form 10-K (File No. 1-15461) filed September 6, 2012 (the "2012 10-K"), is hereby incorporated by reference). | ||
+10.12 | Form of Restricted Stock Unit Award Agreement for executive management (2004 Stock Incentive Plan – performance based) (Exhibit 10.10 to the 2010 10-K is hereby incorporated by reference). | ||
+10.13 | Form of Stock Option Award Agreement (2004 Stock Incentive Plan – Incentive Stock Options) (Exhibit 10.13 to the 2012 10-K is hereby incorporated by reference). | ||
+10.14 | Form of Stock Option Award Agreement (2004 Stock Incentive Plan – Non-qualified) (Exhibit 10.14 to the 2012 10-K is hereby incorporated by reference). | ||
+10.15 | Matrix Service Company 2012 Stock and Incentive Compensation Plan (Attachment A to the Company's Proxy Statement (File No. 1-15461) filed October 10, 2012, is hereby incorporated by reference). | ||
+10.16 | Long-Term Incentive Award Agreement (2012 Stock and Incentive Compensation Plan) (Exhibit 10 to the Company's Quarterly Report on Form 10-Q (File No. 1-15461) filed February 7, 2013, is hereby incorporated by reference). | |
+10.17 | Form of Severance Agreement (Exhibit 10.6 to the Company’s Current Report on Form 8-K (File No. 1-15461) filed October 27, 2006, is hereby incorporated by reference). | |
+10.18 | Form of Amendment to Severance Agreement, (Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (File No. 1-15461) filed January 8, 2009, is hereby incorporated by reference). | |
+10.19 | Amended and Restated Deferred Compensation Plan for Members of the Board of Directors (Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No. 1-15461) filed January 8, 2009, is hereby incorporated by reference). | |
+10.20 | Amendment 1 to Amended and Restated Deferred Compensation Plan for Members of the Board of Directors (Exhibit 10 to the Company's Quarterly Report on Form 10-Q (File No. 1-15461) filed November 9, 2012, is hereby incorporated by reference). | |
10.21 | Third Amended and Restated Credit Agreement dated as of November 7, 2011, among the Company, as Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, Swingline Lender and Issuing Bank, J.P. Morgan Securities LLC, as Sole Bookrunner and Sole Lead Arranger and the Lenders party thereto (Exhibit 10 to the Company’s Quarterly Report on Form 10-Q (File No. 1-15461) filed November 8, 2011, is hereby incorporated by reference). | |
*21 | Subsidiaries. | |
*23 | Consent of Independent Registered Public Accounting Firm—Deloitte & Touche LLP. | |
*31.1 | Certification Pursuant to Section 302 of Sarbanes-Oxley Act of 2002—CEO. | |
*31.2 | Certification Pursuant to Section 302 of Sarbanes-Oxley Act of 2002—CFO. | |
*32.1 | Certification Pursuant to 18 U.S.C. 1350 (section 906 of Sarbanes-Oxley Act of 2002)—CEO. | |
*32.2 | Certification Pursuant to 18 U.S.C. 1350 (section 906 of Sarbanes-Oxley Act of 2002)—CFO. | |
*101.INS | XBRL Instance Document. | |
*101.SCH | XBRL Taxonomy Schema Document. | |
*101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | |
*101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | |
*101.LAB | XBRL Taxonomy Extension Labels Linkbase Document. | |
*101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. | |
*Filed herewith | ||
+Management Contract or Compensatory Plan. |
Matrix Service Company | ||||||
Date : September 6, 2013 | By: | /S/ John R. Hewitt | ||||
John R. Hewitt, President and Chief Executive Officer |
Signatures | Title | Date | ||
/S/ John R. Hewitt | President, Chief Executive Officer and Director | September 6, 2013 | ||
John R. Hewitt | (Principal Executive Officer) | |||
/S/ Kevin S. Cavanah | Vice President and Chief Financial Officer | September 6, 2013 | ||
Kevin S. Cavanah | (Principal Accounting and Principal Financial Officer) | |||
/S/ Michael J. Hall | Chairman of the Board of Directors | September 6, 2013 | ||
Michael J. Hall | ||||
/S/ I. Edgar Hendrix | Director | September 6, 2013 | ||
I. Edgar Hendrix | ||||
S/ Paul K. Lackey | Director | September 6, 2013 | ||
Paul K. Lackey | ||||
/S/ Tom E. Maxwell | Director | September 6, 2013 | ||
Tom E. Maxwell | ||||
/S/ Jim W. Mogg | Director | September 6, 2013 | ||
Jim W. Mogg |
3.1 | Amended and Restated Certificate of Incorporation (Exhibit 4.1 to the Company’s Registration Statement on Form S-3 (File No. 333-156814) filed January 21, 2009, is hereby incorporated by reference). | |
3.2 | Certification of Designations, Preferences and Rights of Series B Junior Preferred Stock dated November 12, 1999 (Exhibit 3.2 to the Company’s Registration Statement on Form S-3 (File No. 333-117077) filed July 1, 2004, is hereby incorporated by reference). | |
3.3 | Certificate of Increase of Authorized Number of Shares of Series B Junior Participating Preferred Stock pursuant to Section 151 of the General Corporation Law of the State of Delaware dated July 11, 2005 (Exhibit 3.5 to the Company’s Annual Report on Form 10-K (File No. 1-15461) filed August 17, 2005, is hereby incorporated by reference). | |
3.4 | Certificate of Increase of Authorized Number of Shares of Series B Junior Participating Preferred Stock pursuant to Section 151 of the General Corporation Law of the State of Delaware dated October 23, 2006 (Exhibit 3.7 to the Company’s Annual Report on Form 10-K (File No. 1-15461) filed August 14, 2007, is hereby incorporated by reference). | |
3.5 | Amended and Restated Bylaws (Exhibit 3 to the Company’s Current Report on Form 8-K (File No. 1-15461) filed April 9, 2009, is hereby incorporated by reference). | |
4 | Specimen Common Stock Certificate (Exhibit 4.1 to the Company’s Registration Statement on Form S-1 (File No. 33-36081) filed July 26, 1990, is hereby incorporated by reference). | |
+10.1 | Matrix Service Company 1990 Incentive Stock Option Plan (Exhibit 10.14 to the Company’s Registration Statement on Form S-1 (File No. 33-36081) filed June 12, 1990, is hereby incorporated by reference). | |
+10.2 | Matrix Service Company 1991 Incentive Stock Option Plan (Exhibit 10.1 to the Company’s Registration Statement on Form S-8 (File No. 333-56945) filed June 16, 1998, is hereby incorporated by reference). | |
+10.3 | Matrix Service Company 1995 Nonemployee Directors’ Stock Option Plan (Exhibit 4.3 to the Company’s Registration Statement on Form S-8 (File No. 333-02771) filed April 23, 1996, is hereby incorporated by reference). | |
+10.4 | Amendment No. 1 to the Matrix Service Company 1995 Nonemployee Directors’ Stock Option Plan (Exhibit B to the Company’s 2005 Proxy Statement filed September 16, 2005 (File No. 1-15461), is hereby incorporated by reference). | |
+10.5 | Form of Stock Option Award Agreement (1995 Directors' Plan) (Exhibit 10.6 to the Company’s Annual report on Form 10-K (File No, 1-15461) filed August 4, 2006, is hereby incorporated by reference). | |
+10.6 | Matrix Service Company 2004 Stock Incentive Plan (Appendix B to the Company’s Proxy Statement filed September 15, 2006 (File No. 1-15461), is hereby incorporated by reference). | |
+10.7 | Amendment 1 to Matrix Service Company 2004 Stock Incentive Plan (Exhibit 10 to Amended Schedule 14A filed October 4, 2006 (File No. 1-15461), is hereby incorporated by reference). | |
+10.8 | Amendment 2 to Matrix Service Company 2004 Stock Incentive Plan (Exhibit 10.6 to the Company’s Annual Report on Form 10-K (File No. 1-15461) filed August 5, 2008, is hereby incorporated by reference). | |
+10.9 | Amendment 3 to Matrix Service Company 2004 Stock Incentive Plan (Exhibit A to the Company’s Proxy Statement filed September 11, 2009 (File No. 1-15461), is hereby incorporated by reference). | |
+10.10 | Form of Restricted Stock Unit Award Agreement for non-employee directors (2004 Stock Incentive Plan) (Exhibit 10.8 to the Company’s Annual Report on Form 10-K (File No. 1-15461) filed September 28, 2010 (the “2010 10-K”), is hereby incorporated by reference). | |
+10.11 | Form of Restricted Stock Unit Award Agreement for employees (2004 Stock Incentive Plan - time-based) (Exhibit 10.11 to the Company's Annual Report on Form 10-K (File No. 1-15461) filed September 6, 2012 (the "2012 10-K"), is hereby incorporated by reference. | |
+10.12 | Form of Restricted Stock Unit Award Agreement for executive management (2004 Stock Incentive Plan – performance based) (Exhibit 10.10 to the 2010 10-K is hereby incorporated by reference). | |
+10.13 | Form of Stock Option Award Agreement (2004 Stock Incentive Plan – Incentive Stock Options) (Exhibit 10.13 to the 2012 10-K is hereby incorporated by reference). | |
+10.14 | Form of Stock Option Award Agreement (2004 Stock Incentive Plan – Non-qualified) (Exhibit 10.14 to the 2012 10-K is hereby incorporated by reference). | |
+10.15 | Matrix Service Company 2012 Stock and Incentive Compensation Plan (Attachment A to the Company's Proxy Statement (File No. 1-15461) filed October 10, 2012, is hereby incorporated by reference). | |
+10.16 | Long-Term Incentive Award Agreement (2012 Stock and Incentive Compensation Plan) (Exhibit 10 to the Company's Quarterly Report on Form 10-Q (File No. 1-15461) filed February 7, 213, is hereby incorporated by reference). | |
+10.17 | Form of Severance Agreement (Exhibit 10.6 to the Company’s Current Report on Form 8-K (File No. 1-15461) filed October 27, 2006, is hereby incorporated by reference). | |
+10.18 | Form of Amendment to Severance Agreement, (Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (File No. 1-15461) filed January 8, 2009, is hereby incorporated by reference). | |
+10.19 | Amended and Restated Deferred Compensation Plan for Members of the Board of Directors (Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (File No. 1-15461) filed January 8, 2009, is hereby incorporated by reference). | |
+10.20 | Amendment 1 to Amended and Restated Deferred Compensation Plan for Members of the Board of Directors (Exhibit 10 to the Company's Quarterly Report on From 10-Q (File No. 1-15461) filed November 9, 2012, is hereby incorporated by reference). | |
10.21 | Third Amended and Restated Credit Agreement, dated as of November 7, 2011, among the Company, as Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, Swingline Lender and Issuing Bank, J.P. Morgan Securities LLC, as Sole Bookrunner and Sole Lead Arranger and the Lenders party thereto (Exhibit 10 to the Company’s Quarterly Report on Form 10-Q (File No. 1-15461) filed November 8, 2011, is hereby incorporated by reference). | |
*21 | Subsidiaries. | |
*23 | Consent of Independent Registered Public Accounting Firm—Deloitte & Touche LLP. | |
*31.1 | Certification Pursuant to Section 302 of Sarbanes-Oxley Act of 2002—CEO. | |
*31.2 | Certification Pursuant to Section 302 of Sarbanes-Oxley Act of 2002—CFO. | |
*32.1 | Certification Pursuant to 18 U.S.C. 1350 (section 906 of Sarbanes-Oxley Act of 2002)—CEO. | |
*32.2 | Certification Pursuant to 18 U.S.C. 1350 (section 906 of Sarbanes-Oxley Act of 2002)—CFO. | |
*101.INS | XBRL Instance Document. | |
*101.SCH | XBRL Taxonomy Schema Document. | |
*101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | |
*101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | |
*101.LAB | XBRL Taxonomy Extension Labels Linkbase Document. | |
*101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. | |
*Filed herewith. | ||
+Management Contract or Compensatory Plan. |
1. | I have reviewed this annual report on Form 10-K of Matrix Service Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | September 6, 2013 | |
/s/ John R. Hewitt | ||
John R. Hewitt | ||
President and Chief Executive Officer |
1. | I have reviewed this annual report on Form 10-K of Matrix Service Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | September 6, 2013 | |
/s/ Kevin S. Cavanah | ||
Kevin S. Cavanah | ||
Vice President and Chief Financial Officer |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | September 6, 2013 | |
/s/ John R. Hewitt | ||
John R. Hewitt | ||
President and Chief Executive Officer |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | September 6, 2013 | |
/s/ Kevin S. Cavanah | ||
Kevin S. Cavanah | ||
Vice President and Chief Financial Officer |
Leases
|
12 Months Ended |
---|---|
Jun. 30, 2013
|
|
Leases [Abstract] | |
Leases | Operating Leases The Company is the lessee under operating leases covering real estate and office equipment under non-cancelable operating lease agreements that expire at various times. Future minimum lease payments under non-cancelable operating leases that were in effect at June 30, 2013 total $9.3 million and are payable as follows: fiscal 2014—$3.6 million; fiscal 2015—$3.2 million; fiscal 2016—$1.6 million; fiscal 2017—$0.5 million; fiscal 2018—$0.3 million and thereafter—$0.1 million. Operating lease expense was $4.5 million, $4.1 million and $3.6 million for the twelve months ended June 30, 2013, June 30, 2012 and June 30, 2011. |
Leases (Details Textual) (USD $)
In Millions, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2011
|
|
Leases [Abstract] | |||
Future minimum operating lease payable, in total | $ 9.3 | ||
Minimum operating lease payable, Fiscal 2014 | 3.6 | ||
Minimum operating lease payable, Fiscal 2015 | 3.2 | ||
Minimum operating lease payable, Fiscal 2016 | 1.6 | ||
Minimum operating lease payable, Fiscal 2017 | 0.5 | ||
Minimum operating lease payable, Fiscal 2018 | 0.3 | ||
Minimum operating lease payable, Thereafter | 0.1 | ||
Operating lease expense | $ 4.5 | $ 4.1 | $ 3.6 |
Consolidated Statements of Comprehensive Income (Parentheticals) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2011
|
|
Statement of Other Comprehensive Income [Abstract] | |||
Foreign currency translation adjustments, tax effect | $ 190 | $ 214 | $ (333) |
Summary of Significant Accounting Policies
|
12 Months Ended | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Organization and Basis of Presentation The consolidated financial statements include the accounts of Matrix Service Company (“Matrix” or the “Company”) and its subsidiaries, all of which are wholly owned. Intercompany transactions and balances have been eliminated in consolidation. The Company operates in the United States and Canada. The Company’s reportable segments are Electrical Infrastructure, Oil Gas & Chemical, Storage Solutions and Industrial. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. We believe the most significant estimates and judgments are associated with revenue recognition, the recoverability tests that must be periodically performed with respect to our goodwill and other intangible assets, valuation reserves on our accounts receivable and deferred tax assets, and the estimation of loss contingencies, including liabilities associated with litigation and with the self insured retentions on our insurance programs. Actual results could materially differ from those estimates. Revenue Recognition Matrix records profits on fixed-price contracts on a percentage-of-completion basis, primarily based on costs incurred to date compared to the total estimated contract cost. The Company records revenue on reimbursable and time and material contracts on a proportional performance basis as costs are incurred. Contracts in process are valued at cost plus accrued profits less billings on uncompleted contracts. Contracts are generally considered substantially complete when field construction is completed. The elapsed time from award of a contract to completion of performance may be in excess of one year. Matrix includes pass-through revenue and costs on cost-plus contracts, which are customer-reimbursable materials, equipment and subcontractor costs, when Matrix determines that it is responsible for the procurement and management of such cost components. Matrix has numerous contracts that are in various stages of completion which require estimates to determine the appropriate cost and revenue recognition. The Company has a history of making reasonably dependable estimates of the extent of progress towards completion, contract revenues and contract costs, and accordingly, does not believe significant fluctuations are likely to materialize. However, current estimates may be revised as additional information becomes available. If estimates of costs to complete fixed-price contracts indicate a loss, provision is made through a contract write-down for the total loss anticipated. A number of our contracts contain various cost and performance incentives and penalties that impact the earnings we realize from our contracts, and adjustments related to these incentives and penalties are recorded in the period, on a percentage-of-completion basis, when estimable and probable. Indirect costs, such as salaries and benefits, supplies and tools, equipment costs and insurance costs, are charged to projects based upon direct labor hours and overhead allocation rates per direct labor hour. Warranty costs are normally incurred prior to project completion and are charged to project costs as they are incurred. Warranty costs incurred subsequent to project completion were not material for the periods presented. Overhead allocation rates are established annually during the budgeting process. Precontract Costs Precontract costs are expensed as incurred. Change Orders and Claims Recognition Change orders are modifications of an original contract that effectively change the existing provisions of the contract. Change orders may include changes in specifications or designs, manner of performance, facilities, equipment, materials, sites and period of completion of the work. Matrix or our clients may initiate change orders. The client's agreement to the terms of change orders is, in many cases, reached prior to work commencing; however, sometimes circumstances require that work progress prior to obtaining client agreement. Costs related to change orders are recognized as incurred. Revenues attributable to change orders that are unapproved as to price or scope are recognized to the extent that costs have been incurred if the amounts can be reliably estimated and their realization is probable. Revenues in excess of the costs attributable to change orders that are unapproved as to price or scope are recognized only when realization is assured beyond a reasonable doubt. Change orders that are unapproved as to both price and scope are evaluated as claims. Claims are amounts in excess of the agreed contract price that we seek to collect from customers or others for delays, errors in specifications and designs, contract terminations, change orders in dispute or unapproved as to both scope and price or other causes of anticipated additional costs incurred by us. Recognition of amounts as additional contract revenue related to claims is appropriate only if it is probable that the claims will result in additional contract revenue and if the amount can be reliably estimated. We must determine if:
If all of these requirements are met, revenue from a claim is recorded only to the extent that we have incurred costs relating to the claim. Unapproved change orders and claims are more fully discussed in Note 7—Contingencies. Cash Equivalents The Company includes as cash equivalents all investments with original maturities of three months or less which are readily convertible into cash. The Company had approximately $0.3 million of restricted cash related to a customer deposit at June 30, 2013 and $0.4 million of restricted cash at June 30, 2012. Accounts Receivable Accounts receivable are carried on a gross basis, less the allowance for uncollectible accounts. The Company’s customers consist primarily of major integrated oil companies, independent refiners and marketers, power companies, petrochemical companies, pipeline companies, mining companies, contractors and engineering firms. The Company is exposed to the risk of individual customer defaults or depressed cycles in our customers’ industries. To mitigate this risk many of our contracts require payment as projects progress or advance payment in some circumstances. In addition, in most cases the Company can place liens against the property, plant or equipment constructed or terminate the contract if a material contract default occurs. Management estimates the allowance for uncollectible accounts based on existing economic conditions, the financial condition of its customers and the amount and age of past due accounts. Accounts are written off against the allowance for uncollectible accounts only after all collection attempts have been exhausted. Retentions Accounts receivable at June 30, 2013 and June 30, 2012 included retentions to be collected within one year of $19.9 million and $22.3 million, respectively. Contract retentions collectible beyond one year are included in Other Assets on the Consolidated Balance Sheets and totaled $3.1 million at June 30, 2013 and $1.2 million at June 30, 2012. Accounts payable included retentions of $3.1 million at June 30, 2013 and $1.5 million at June 30, 2012. Loss Contingencies Various legal actions, claims and other contingencies arise in the normal course of our business. Contingencies are recorded in the consolidated financial statements, or are otherwise disclosed, in accordance with ASC 450-20, “Loss Contingencies”. Specific reserves are provided for loss contingencies to the extent we conclude that a loss is both probable and estimable. We use a case-by-case evaluation of the underlying data and update our evaluation as further information becomes known. We believe that any amounts exceeding our recorded accruals should not materially affect our financial position, results of operations or liquidity. However, the results of litigation are inherently unpredictable and the possibility exists that the ultimate resolution of one or more of these matters could result in a material effect on our financial position, results of operations or liquidity. Legal costs are expensed as incurred. Inventories Inventories consist primarily of steel plate and pipe and are stated at the lower of cost or net realizable value. Cost is determined primarily using the average cost method. Depreciation Depreciation is computed using the straight-line method over the estimated useful lives of the depreciable assets. Depreciable lives are as follows: buildings—40 years, construction equipment—3 to 15 years, transportation equipment—3 to 5 years, and office equipment and software—3 to 10 years. Leasehold improvements are amortized over the shorter of the useful life of the asset or the lease term. Internal-Use Computer Software We expense or capitalize costs associated with the development of internal-use software as follows: Preliminary Project Stage: Both internal and external costs incurred during this stage are expensed as incurred. Application Development Stage: Both internal and external costs incurred to purchase or develop computer software are capitalized after the preliminary project stage is completed and management authorizes the computer software project. However, training costs and data conversion costs, which includes purging or cleansing of existing data, reconciling or balancing of data, are expensed as incurred. Post-Implementation/Operation Stage: All training costs and maintenance costs incurred during this stage are expensed as incurred. Costs of upgrades and enhancements are capitalized if the expenditures will result in adding functionality to the software. Capitalized software costs are depreciated using the straight-line method over the estimated useful life of the related software, which may be up to ten years. Impairment of Long-Lived Assets The Company evaluates long-lived assets for impairment when events or changes in circumstances indicate, in management’s judgment, that the carrying value of such assets used in operations may not be recoverable. The determination of whether an impairment has occurred is based on management’s estimate of undiscounted future cash flows attributable to the assets as compared to the carrying value of the assets. If an impairment has occurred, the amount of the impairment recognized is determined by estimating the fair value of the assets and, to the extent the carrying value exceeds the fair value of the assets, recording a loss provision. For assets identified to be disposed of in the future, the carrying value of the assets are compared to the estimated fair value less the cost of disposal to determine if an impairment has occurred. Until the assets are disposed of, an estimate of the fair value is redetermined when related events or circumstances change. Goodwill Goodwill represents the excess of the purchase price of acquisitions over the acquisition date fair value of the net identifiable tangible and intangible assets acquired. In accordance with current accounting guidance, goodwill is not amortized and is tested at least annually for impairment at the reporting unit level. We perform our annual analysis during the fourth quarter of each fiscal year and in any other period in which indicators of impairment warrant additional analysis. Goodwill impairment reviews involve a two-step process. Goodwill is first evaluated for impairment by comparing management’s estimate of the fair value of a reporting unit with its carrying value, including goodwill. Management utilizes a discounted cash flow analysis, referred to as an income approach, to determine the estimated fair value of our reporting units. Significant judgments and assumptions including the discount rate, anticipated revenue growth rate and gross margins, estimated operating and interest expense, and capital expenditures are inherent in these fair value estimates, which are based on our operating and capital budgets and on our strategic plan. As a result, actual results may differ from the estimates utilized in our income approach. The use of alternate judgments and/or assumptions could result in a fair value that differs from our estimate and could result in the recognition of an impairment charge in the financial statements. As a result of these uncertainties, we utilize multiple scenarios and assign probabilities to each of the scenarios in the income approach. We also consider indications obtained from market-based approaches. We compare market multiples derived from market prices of stock of companies that are engaged in a similar line of business to the corresponding measures of the Company. We also consider the combined carrying values of our reporting units to our market capitalization. If the carrying value of our reporting unit is higher than its fair value, there is an indication that impairment may exist and the second step must be performed to measure the amount of impairment. The amount of impairment is determined by comparing the implied fair value of the reporting unit's goodwill to the carrying value of the goodwill calculated in the same manner as if the reporting unit were being acquired in a business combination. If the implied fair value of goodwill is less than its carrying value, we would record an impairment charge for the difference. Other Intangible Assets Intangible assets that have finite useful lives are amortized by the straight-line method over their useful lives ranging from 1 to 15 years. Intangible assets that have indefinite useful lives are not amortized but are tested at least annually for impairment. Each reporting period, we evaluate the remaining useful lives of intangible assets not being amortized to determine whether facts and circumstances continue to support an indefinite useful life. Intangible assets are considered impaired if the fair value of the intangible asset is less than its net book value. If quoted market prices are not available, the fair values of the intangible assets are based on present values of expected future cash flows or royalties avoided using discount rates commensurate with the risks involved. Insurance Reserves We maintain insurance coverage for various aspects of our operations. However, we retain exposure to potential losses through the use of deductibles, coverage limits and self-insured retentions. We establish reserves for claims using a combination of actuarially determined estimates and case-by-case evaluations of the underlying claim data and update our evaluations as further information becomes known. Judgments and assumptions are inherent in our reserve accruals; as a result, changes in assumptions or claims experience could result in changes to these estimates in the future. If actual results of claim settlements are different than the amounts estimated we may be exposed to future gains and losses that could be material. Stock-Based Compensation The Company has issued stock options and nonvested deferred share awards under its long-term incentive compensation plans. The fair value of these awards is calculated at grant date. The fair value of time-based, nonvested deferred shares is the value of the Company’s common stock at the grant date. The fair value of market-based nonvested deferred shares is based on several factors, including the probability that the market condition specified in the grant will be achieved. The fair value of stock options is determined based on the Black-Scholes option pricing model. The detailed assumptions used in the model are included in Note 10—Stock Based Compensation. For all stock-based awards, expense is recognized over the requisite service period, net of estimated forfeitures. The expense related to performance based shares is recognized only if management believes it is probable that the performance targets specified in the awards will be achieved. Income Taxes The Company complies with ASC 740, “Income Taxes”. Deferred income taxes are computed using the liability method whereby deferred tax assets and liabilities are recognized based on temporary differences between the financial statement and tax basis of assets and liabilities using presently enacted tax rates. Valuation allowances are established against deferred tax assets to the extent management believes that it is not probable that the assets will be recovered. The Company provides for income taxes regardless of whether it has received a tax assessment. Taxes are provided when we consider it probable that additional taxes will be due in excess of the amounts included in our tax returns. We continually review our exposure to additional income taxes due, and as further information is known or events occur, adjustments may be recorded. Foreign Currency The functional currency of the Company’s operations in Canada is the Canadian dollar. The assets and liabilities are translated at the year end exchange rate and the income statement accounts are translated at average exchange rates throughout the year. Translation gains and losses are reported in Accumulated Other Comprehensive Income (Loss) in the Consolidated Statements of Changes in Stockholders’ Equity and in Other Comprehensive Income (Loss) in the Consolidated Statement sof Comprehensive Income. Transaction gains and losses are reported as a component of Other income (expense) in the Consolidated Statements of Income. Recently Issued Accounting Standards Accounting Standards Update 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income In February 2013, the FASB issued Accounting Standards Update No. 2013-02,“Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income” (ASU 2013-02). ASU 2013-02 requires companies to report the effect of significant reclassifications out of accumulated other comprehensive income, by component, either on the face of the financial statements or in the notes to the financial statements and is intended to help entities improve the transparency of changes in other comprehensive income. ASU 2013-02 does not amend any existing requirements for reporting net income or other comprehensive income in the financial statements. ASU 2013-02 is effective for reporting periods beginning after December 15, 2012. We currently do not expect the adoption of this standard to have a material impact on our consolidated financial statements. Accounting Standards Update 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities In December 2011, the FASB issued Accounting Standards Update No. 2011-11,“Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities” (ASU 2011-11) and in January 2013, the FASB issued Accounting Standards Update No. 2013-01, “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities.” ASU 2011-11, as clarified, enhances disclosures surrounding offsetting (netting) assets and liabilities. The standard applies to derivatives, repurchase agreements and securities lending transactions and requires companies to disclose gross and net information about financial instruments and derivatives eligible for offset and to disclose financial instruments and derivatives subject to master netting arrangements in financial statements. ASU 2011-11 is effective for annual reporting periods beginning on or after January 1, 2013. We will adopt this standard beginning our first interim period of fiscal 2014. We currently do not expect the adoption of this standard to have a material impact on our consolidated financial statements. |
Valuation and Qualifying Accounts
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Valuation and Qualifying Accounts [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Valuation and Qualifying Accounts | Matrix Service Company Schedule II—Valuation and Qualifying Accounts June 30, 2013, June 30, 2012, and June 30, 2011 (In thousands)
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Quarterly Financial Data (Unaudited) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | 12 Months Ended | ||||||||||||||||
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Jun. 30, 2013
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Mar. 31, 2013
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Dec. 31, 2012
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Sep. 30, 2012
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Jun. 30, 2012
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Mar. 31, 2012
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Dec. 31, 2011
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Sep. 30, 2011
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2011
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Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||
Sales Revenue, Services, Net | $ 235,560 | [1] | $ 225,970 | $ 221,436 | [2] | $ 209,608 | $ 184,862 | [1] | $ 183,899 | $ 200,964 | $ 169,321 | $ 892,574 | $ 739,046 | $ 627,052 | ||||
Gross Profit | 26,999 | [1] | 23,126 | 22,333 | [2] | 22,244 | 18,656 | [1] | 19,771 | 23,098 | 18,093 | 94,702 | 79,618 | 74,914 | ||||
Operating Income (Loss) | 11,587 | [1] | 8,431 | 8,772 | [2] | 7,924 | 6,410 | [1] | 7,415 | 11,200 | 6,610 | 36,714 | 31,635 | 30,900 | ||||
Net Income (Loss) Attributable to Parent | $ 7,367 | [1] | $ 6,521 | $ 5,436 | [2] | $ 4,684 | $ 1,786 | [1] | $ 4,862 | $ 7,031 | $ 3,509 | $ 24,008 | $ 17,188 | $ 18,982 | ||||
Basic earnings per common share | $ 0.28 | [1] | $ 0.25 | $ 0.21 | [2] | $ 0.18 | $ 0.07 | [1] | $ 0.19 | $ 0.27 | $ 0.13 | $ 0.92 | $ 0.66 | $ 0.72 | ||||
Diluted earnings per common share | $ 0.28 | [1] | $ 0.25 | $ 0.21 | [2] | $ 0.18 | $ 0.07 | [1] | $ 0.19 | $ 0.27 | $ 0.13 | $ 0.91 | $ 0.65 | $ 0.71 | ||||
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Stock-Based Compensation (Details 1) (USD $)
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12 Months Ended |
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Jun. 30, 2012
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Assumptions used to calculate grant date fair value | |
Grant date fair value | $ 5.61 |
Risk-free interest rate | 0.88% |
Expected volatility | 66.19% |
Expected life in years | 5 years |
Expected dividend yield | 0.00% |
Stockholders' Equity
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12 Months Ended |
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Jun. 30, 2013
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Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Preferred Stock The Company has 5.0 million shares of preferred stock authorized, none of which was issued or outstanding at June 30, 2013 or June 30, 2012. Treasury Shares On November 6, 2012 our Board of Directors approved an extension of a stock buyback program that allows the Company to purchase up to 2,113,497 shares of common stock provided that such purchases do not exceed $25.0 million in any calendar year through calendar year 2014 if sufficient liquidity exists and we believe that it is in the best interest of the stockholders. The Company may elect to purchase shares under this program. In addition to the stock buyback program, the Company may withhold shares of common stock to satisfy the tax withholding obligations upon vesting of an employee’s deferred shares. Matrix withheld 107,344 and 52,992 shares of common stock during fiscal 2013 and fiscal 2012, respectively, to satisfy these obligations. These shares were returned to the Company’s pool of treasury shares. The Company has 1,779,593 treasury shares as of June 30, 2013 and intends to utilize these treasury shares solely in connection with equity awards under the Company’s stock incentive plans. |
Income Taxes (Details 2) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2011
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Difference between expected income tax provision applying domestic federal statutory tax rate and reported income tax provision | |||
Expected provision for Federal income taxes at the statutory rate | $ 12,570 | $ 10,670 | $ 10,710 |
State income taxes, net of Federal benefit | 1,252 | 970 | 1,095 |
Charges without tax benefit | 1,231 | 1,004 | 16 |
Change in valuation allowance | (140) | (544) | 0 |
Cumulative non-deductible expenses | 0 | 2,139 | 0 |
IRS S199 deduction | (844) | (687) | (187) |
Research & Development Credit | (1,450) | 0 | 0 |
Foreign tax differential | (160) | 0 | 0 |
Other | (551) | (250) | 0 |
Provision for income taxes | $ 11,908 | $ 13,302 | $ 11,634 |
Acquisitions (Details Textual) (USD $)
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0 Months Ended | 3 Months Ended | 12 Months Ended | ||
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May 03, 2011
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Acquisitions (Textual) [Abstract] | |||||
Goodwill, Purchase Accounting Adjustments | $ (241,000) | ||||
EDC [Member]
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Acquisitions (Textual) [Abstract] | |||||
Cash payment for asset | 3,800,000 | ||||
Additional incentive payment | 800,000 | ||||
Financial targets achievement period | 2 years | ||||
Asset purchase price | 4,600,000 | ||||
Carrying value of the acquisition payable and selling, general and administrative costs | 400,000 | 400,000 | 800,000 | ||
Goodwill, Purchase Accounting Adjustments | $ 200,000 |
Customer Contracts (Tables)
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Jun. 30, 2013
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Contractors [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross and net amount of uncompleted contracts |
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Acquisitions (Tables)
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Jun. 30, 2013
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase price allocation | The following table summarizes the purchase price allocation:
The following table summarizes the final purchase price allocation:
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Income Taxes (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2011
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Components of pretax income | |||
Domestic | $ 37,876 | $ 27,346 | $ 29,939 |
Foreign | (1,960) | 3,144 | 677 |
Income before income tax expense | $ 35,916 | $ 30,490 | $ 30,616 |
Segment Information (Tables)
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Jun. 30, 2013
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Results of Operations | Results of Operations (In thousands)
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Summary of revenues and long lived assets according to geographic areas | Geographical information is as follows:
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Customer Contracts (Details Textual) (USD $)
In Millions, except Per Share data, unless otherwise specified |
12 Months Ended | 3 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2013
SME [Member]
|
Jun. 30, 2012
SME [Member]
|
Jun. 30, 2013
S.M. Electric Company [Member]
|
Jun. 30, 2012
S.M. Electric Company [Member]
|
Jun. 30, 2013
Western Canada Aboveground Storage Tank Project [Member]
|
Dec. 31, 2012
Western Canada Aboveground Storage Tank Project [Member]
|
Jun. 30, 2013
Western Canada Aboveground Storage Tank Project [Member]
|
|
Business Acquisition [Line Items] | ||||||||
Record amount of claims | $ 0.7 | $ 0.7 | ||||||
Contracts Receivable, Claims and Uncertain Amounts, Expected to be Collected in Next Rolling Twelve Months | 2.9 | 2.9 | ||||||
Pretax charge on a Canadian project | 0.6 | 3.3 | 3.7 | |||||
Change In Accounting Estimate, Financial Effect, Net Income | 2.4 | |||||||
Change In Accounting Estimate, Financial Effect, Diluted Earnings Per Share | $ 0.10 | |||||||
Loss Contingency, Damages Awarded, Value | 1.5 | |||||||
Loss Contingency Accrual, Carrying Value, Period Increase (Decrease) | $ 1.0 |
Income Taxes (Details 3) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Jun. 30, 2012
|
---|---|---|
Deferred tax assets: | ||
Bad debt reserve | $ 310 | $ 468 |
Paid time-off accrual | 602 | 520 |
Insurance reserve | 2,226 | 2,150 |
Legal reserve | 462 | 488 |
Net operating loss benefit and credit carryforwards | 3,884 | 3,788 |
Valuation allowance | (88) | (230) |
Accrued compensation and pension | 850 | 759 |
Stock compensation expense on nonvested deferred shares | 943 | 1,189 |
Accrued losses | 232 | 298 |
Other-net | 204 | 150 |
Total deferred tax assets | 9,625 | 9,580 |
Deferred tax liabilities: | ||
Tax over book depreciation | 9,064 | 8,512 |
Tax over book amortization | 1,137 | 691 |
Prepaid insurance | 1,217 | 0 |
Other-net | 0 | 428 |
Total deferred tax liabilities | 11,418 | 9,631 |
Net deferred tax liability | $ (1,793) | $ (51) |
Stock-Based Compensation (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option activity and related information | Stock option activity and related information for the year ended June 30, 2013 is as follows:
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Assumptions used to calculate grant date fair value | Assumptions used to calculate the fiscal 2012 grant date fair value and the fair value calculated was as follows:
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Stock options information | The following table summarizes information about stock options at June 30, 2013:
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Nonvested deferred share activity | Nonvested deferred share activity for the twelve months ended June 30, 2013 is as follows:
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Segment Information (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 12 Months Ended | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Mar. 31, 2013
|
Dec. 31, 2012
|
Sep. 30, 2012
|
Jun. 30, 2012
|
Mar. 31, 2012
|
Dec. 31, 2011
|
Sep. 30, 2011
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2011
|
||||||||
Results of Operations | ||||||||||||||||||
Gross revenues | $ 895,298 | $ 741,588 | $ 628,514 | |||||||||||||||
Less: Inter-segment revenues | 2,724 | 2,542 | 1,462 | |||||||||||||||
Revenues | 235,560 | [1] | 225,970 | 221,436 | [2] | 209,608 | 184,862 | [1] | 183,899 | 200,964 | 169,321 | 892,574 | 739,046 | 627,052 | ||||
Gross profit | 26,999 | [1] | 23,126 | 22,333 | [2] | 22,244 | 18,656 | [1] | 19,771 | 23,098 | 18,093 | 94,702 | 79,618 | 74,914 | ||||
Operating income (loss) | 11,587 | [1] | 8,431 | 8,772 | [2] | 7,924 | 6,410 | [1] | 7,415 | 11,200 | 6,610 | 36,714 | 31,635 | 30,900 | ||||
Segment assets | 409,978 | 323,135 | 409,978 | 323,135 | 306,436 | |||||||||||||
Capital expenditures | 23,231 | 13,534 | 10,416 | |||||||||||||||
Depreciation and amortization | 12,782 | 11,485 | 11,067 | |||||||||||||||
Electrical Infrastructure [Member]
|
||||||||||||||||||
Results of Operations | ||||||||||||||||||
Gross revenues | 171,204 | 135,086 | 151,065 | |||||||||||||||
Less: Inter-segment revenues | 0 | 0 | 7 | |||||||||||||||
Revenues | 171,204 | 135,086 | 151,058 | |||||||||||||||
Gross profit | 21,754 | 16,676 | 18,337 | |||||||||||||||
Operating income (loss) | 11,185 | 7,609 | 9,111 | |||||||||||||||
Segment assets | 64,771 | 51,998 | 64,771 | 51,998 | 46,411 | |||||||||||||
Capital expenditures | 2,129 | 2,581 | 2,511 | |||||||||||||||
Depreciation and amortization | 2,167 | 1,823 | 1,613 | |||||||||||||||
Oil Gas & Chemical [Member]
|
||||||||||||||||||
Results of Operations | ||||||||||||||||||
Gross revenues | 273,979 | 206,031 | 143,753 | |||||||||||||||
Less: Inter-segment revenues | 131 | 208 | 399 | |||||||||||||||
Revenues | 273,848 | 205,823 | 143,354 | |||||||||||||||
Gross profit | 32,879 | 20,070 | 13,647 | |||||||||||||||
Operating income (loss) | 15,415 | 8,134 | 3,105 | |||||||||||||||
Segment assets | 75,591 | 53,567 | 75,591 | 53,567 | 42,801 | |||||||||||||
Capital expenditures | 2,942 | 2,346 | 908 | |||||||||||||||
Depreciation and amortization | 2,943 | 2,838 | 2,490 | |||||||||||||||
Storage Solutions [Member]
|
||||||||||||||||||
Results of Operations | ||||||||||||||||||
Gross revenues | 395,794 | 380,488 | 299,762 | |||||||||||||||
Less: Inter-segment revenues | 2,593 | 2,334 | 1,056 | |||||||||||||||
Revenues | 393,201 | 378,154 | 298,706 | |||||||||||||||
Gross profit | 37,455 | 42,393 | 38,779 | |||||||||||||||
Operating income (loss) | 11,904 | 17,493 | 16,612 | |||||||||||||||
Segment assets | 159,149 | 150,543 | 159,149 | 150,543 | 131,050 | |||||||||||||
Capital expenditures | 9,929 | 3,929 | 4,098 | |||||||||||||||
Depreciation and amortization | 6,740 | 6,309 | 6,533 | |||||||||||||||
Industrial [Member]
|
||||||||||||||||||
Results of Operations | ||||||||||||||||||
Gross revenues | 54,321 | 19,983 | 33,934 | |||||||||||||||
Less: Inter-segment revenues | 0 | 0 | 0 | |||||||||||||||
Revenues | 54,321 | 19,983 | 33,934 | |||||||||||||||
Gross profit | 2,614 | 479 | 4,151 | |||||||||||||||
Operating income (loss) | (1,790) | (1,601) | 2,072 | |||||||||||||||
Segment assets | 27,347 | 14,018 | 27,347 | 14,018 | 19,542 | |||||||||||||
Capital expenditures | 1,645 | 741 | 9 | |||||||||||||||
Depreciation and amortization | 932 | 515 | 431 | |||||||||||||||
Unallocated Corporate [Member]
|
||||||||||||||||||
Results of Operations | ||||||||||||||||||
Segment assets | 83,120 | 53,009 | 83,120 | 53,009 | 66,632 | |||||||||||||
Capital expenditures | $ 6,586 | $ 3,937 | $ 2,890 | |||||||||||||||
|
Goodwill and Other Intangible Assets (Details Textual) (USD $)
|
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2011
|
|
Goodwill [Line Items] | |||
Impairment of Intangible Assets, Finite-lived | $ 255,000 | $ 0 | $ 0 |
Goodwill and Other Intangible Assets (Textual) [Abstract] | |||
Amortization expense | 400,000 | 500,000 | |
2014 | 700,000 | ||
2015 | 700,000 | ||
2016 | 700,000 | ||
2017 | 600,000 | ||
2018 | 600,000 | ||
Customer Relationships [Member]
|
|||
Goodwill [Line Items] | |||
Finite-lived Intangible Assets, Fair Value Disclosure | 1,600,000 | ||
Noncompete Agreements [Member]
|
|||
Goodwill [Line Items] | |||
Finite-lived Intangible Assets, Fair Value Disclosure | $ 300,000 | ||
Noncompete Agreements [Member] | Pelichem Industrial Cleaning Services, LLC [Member]
|
|||
Goodwill [Line Items] | |||
Finite-Lived Intangible Asset, Useful Life | 5 years | ||
Customer Based [Member] | Pelichem Industrial Cleaning Services, LLC [Member]
|
|||
Goodwill [Line Items] | |||
Finite-Lived Intangible Asset, Useful Life | 10 years |
Valuation and Qualifying Accounts (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2011
|
|||||||||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||||||||||
Balance at Beginning of Period | $ 1,431 | $ 2,202 | $ 2,178 | ||||||||
Charged to Costs and Expenses | 585 | (521) | 24 | ||||||||
Charged to Other Accounts | (666) | (250) | 0 | ||||||||
Deductions | (465) | 0 | 0 | ||||||||
Balance at End of Period | 885 | 1,431 | 2,202 | ||||||||
Allowance for Doubtful Accounts [Member]
|
|||||||||||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||||||||||
Balance at Beginning of Period | 1,201 | 1,428 | 1,404 | ||||||||
Charged to Costs and Expenses | 725 | 23 | 24 | ||||||||
Charged to Other Accounts | (666) | [1] | (250) | [1] | 0 | ||||||
Deductions | (465) | [2] | 0 | 0 | |||||||
Balance at End of Period | 795 | 1,201 | 1,428 | ||||||||
Valuation Allowance of Deferred Tax Assets [Member]
|
|||||||||||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||||||||||
Balance at Beginning of Period | 230 | 774 | 774 | ||||||||
Charged to Costs and Expenses | (140) | (544) | [3] | 0 | |||||||
Charged to Other Accounts | 0 | 0 | 0 | ||||||||
Deductions | 0 | 0 | 0 | ||||||||
Balance at End of Period | $ 90 | $ 230 | $ 774 | ||||||||
|
Summary of Significant Accounting Policies (Policies)
|
12 Months Ended | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
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Accounting Policies [Abstract] | |||||||||||||||||
Organization and Basis of Presentation | Organization and Basis of Presentation The consolidated financial statements include the accounts of Matrix Service Company (“Matrix” or the “Company”) and its subsidiaries, all of which are wholly owned. Intercompany transactions and balances have been eliminated in consolidation. The Company operates in the United States and Canada. The Company’s reportable segments are Electrical Infrastructure, Oil Gas & Chemical, Storage Solutions and Industrial. |
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. We believe the most significant estimates and judgments are associated with revenue recognition, the recoverability tests that must be periodically performed with respect to our goodwill and other intangible assets, valuation reserves on our accounts receivable and deferred tax assets, and the estimation of loss contingencies, including liabilities associated with litigation and with the self insured retentions on our insurance programs. Actual results could materially differ from those estimates. |
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Revenue Recognition | Revenue Recognition Matrix records profits on fixed-price contracts on a percentage-of-completion basis, primarily based on costs incurred to date compared to the total estimated contract cost. The Company records revenue on reimbursable and time and material contracts on a proportional performance basis as costs are incurred. Contracts in process are valued at cost plus accrued profits less billings on uncompleted contracts. Contracts are generally considered substantially complete when field construction is completed. The elapsed time from award of a contract to completion of performance may be in excess of one year. Matrix includes pass-through revenue and costs on cost-plus contracts, which are customer-reimbursable materials, equipment and subcontractor costs, when Matrix determines that it is responsible for the procurement and management of such cost components. Matrix has numerous contracts that are in various stages of completion which require estimates to determine the appropriate cost and revenue recognition. The Company has a history of making reasonably dependable estimates of the extent of progress towards completion, contract revenues and contract costs, and accordingly, does not believe significant fluctuations are likely to materialize. However, current estimates may be revised as additional information becomes available. If estimates of costs to complete fixed-price contracts indicate a loss, provision is made through a contract write-down for the total loss anticipated. A number of our contracts contain various cost and performance incentives and penalties that impact the earnings we realize from our contracts, and adjustments related to these incentives and penalties are recorded in the period, on a percentage-of-completion basis, when estimable and probable. Indirect costs, such as salaries and benefits, supplies and tools, equipment costs and insurance costs, are charged to projects based upon direct labor hours and overhead allocation rates per direct labor hour. Warranty costs are normally incurred prior to project completion and are charged to project costs as they are incurred. Warranty costs incurred subsequent to project completion were not material for the periods presented. Overhead allocation rates are established annually during the budgeting process. |
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Precontract Costs | Precontract Costs Precontract costs are expensed as incurred. |
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Change Orders and Claims Recognition | Change Orders and Claims Recognition Change orders are modifications of an original contract that effectively change the existing provisions of the contract. Change orders may include changes in specifications or designs, manner of performance, facilities, equipment, materials, sites and period of completion of the work. Matrix or our clients may initiate change orders. The client's agreement to the terms of change orders is, in many cases, reached prior to work commencing; however, sometimes circumstances require that work progress prior to obtaining client agreement. Costs related to change orders are recognized as incurred. Revenues attributable to change orders that are unapproved as to price or scope are recognized to the extent that costs have been incurred if the amounts can be reliably estimated and their realization is probable. Revenues in excess of the costs attributable to change orders that are unapproved as to price or scope are recognized only when realization is assured beyond a reasonable doubt. Change orders that are unapproved as to both price and scope are evaluated as claims. Claims are amounts in excess of the agreed contract price that we seek to collect from customers or others for delays, errors in specifications and designs, contract terminations, change orders in dispute or unapproved as to both scope and price or other causes of anticipated additional costs incurred by us. Recognition of amounts as additional contract revenue related to claims is appropriate only if it is probable that the claims will result in additional contract revenue and if the amount can be reliably estimated. We must determine if:
If all of these requirements are met, revenue from a claim is recorded only to the extent that we have incurred costs relating to the claim. Unapproved change orders and claims are more fully discussed in Note 7—Contingencies. |
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Cash Equivalents | Cash Equivalents The Company includes as cash equivalents all investments with original maturities of three months or less which are readily convertible into cash. The Company had approximately $0.3 million of restricted cash related to a customer deposit at June 30, 2013 and $0.4 million of restricted cash at June 30, 2012. |
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Accounts Receivable | Accounts Receivable Accounts receivable are carried on a gross basis, less the allowance for uncollectible accounts. The Company’s customers consist primarily of major integrated oil companies, independent refiners and marketers, power companies, petrochemical companies, pipeline companies, mining companies, contractors and engineering firms. The Company is exposed to the risk of individual customer defaults or depressed cycles in our customers’ industries. To mitigate this risk many of our contracts require payment as projects progress or advance payment in some circumstances. In addition, in most cases the Company can place liens against the property, plant or equipment constructed or terminate the contract if a material contract default occurs. Management estimates the allowance for uncollectible accounts based on existing economic conditions, the financial condition of its customers and the amount and age of past due accounts. Accounts are written off against the allowance for uncollectible accounts only after all collection attempts have been exhausted. |
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Retentions | Retentions Accounts receivable at June 30, 2013 and June 30, 2012 included retentions to be collected within one year of $19.9 million and $22.3 million, respectively. Contract retentions collectible beyond one year are included in Other Assets on the Consolidated Balance Sheets and totaled $3.1 million at June 30, 2013 and $1.2 million at June 30, 2012. Accounts payable included retentions of $3.1 million at June 30, 2013 and $1.5 million at June 30, 2012. |
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Loss Contingencies | Loss Contingencies Various legal actions, claims and other contingencies arise in the normal course of our business. Contingencies are recorded in the consolidated financial statements, or are otherwise disclosed, in accordance with ASC 450-20, “Loss Contingencies”. Specific reserves are provided for loss contingencies to the extent we conclude that a loss is both probable and estimable. We use a case-by-case evaluation of the underlying data and update our evaluation as further information becomes known. We believe that any amounts exceeding our recorded accruals should not materially affect our financial position, results of operations or liquidity. However, the results of litigation are inherently unpredictable and the possibility exists that the ultimate resolution of one or more of these matters could result in a material effect on our financial position, results of operations or liquidity. Legal costs are expensed as incurred. |
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Inventories | Inventories Inventories consist primarily of steel plate and pipe and are stated at the lower of cost or net realizable value. Cost is determined primarily using the average cost method. |
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Depreciation | Depreciation Depreciation is computed using the straight-line method over the estimated useful lives of the depreciable assets. Depreciable lives are as follows: buildings—40 years, construction equipment—3 to 15 years, transportation equipment—3 to 5 years, and office equipment and software—3 to 10 years. Leasehold improvements are amortized over the shorter of the useful life of the asset or the lease term. |
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Internal Use Computer Software | Internal-Use Computer Software We expense or capitalize costs associated with the development of internal-use software as follows: Preliminary Project Stage: Both internal and external costs incurred during this stage are expensed as incurred. Application Development Stage: Both internal and external costs incurred to purchase or develop computer software are capitalized after the preliminary project stage is completed and management authorizes the computer software project. However, training costs and data conversion costs, which includes purging or cleansing of existing data, reconciling or balancing of data, are expensed as incurred. Post-Implementation/Operation Stage: All training costs and maintenance costs incurred during this stage are expensed as incurred. Costs of upgrades and enhancements are capitalized if the expenditures will result in adding functionality to the software. Capitalized software costs are depreciated using the straight-line method over the estimated useful life of the related software, which may be up to ten years. |
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Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company evaluates long-lived assets for impairment when events or changes in circumstances indicate, in management’s judgment, that the carrying value of such assets used in operations may not be recoverable. The determination of whether an impairment has occurred is based on management’s estimate of undiscounted future cash flows attributable to the assets as compared to the carrying value of the assets. If an impairment has occurred, the amount of the impairment recognized is determined by estimating the fair value of the assets and, to the extent the carrying value exceeds the fair value of the assets, recording a loss provision. For assets identified to be disposed of in the future, the carrying value of the assets are compared to the estimated fair value less the cost of disposal to determine if an impairment has occurred. Until the assets are disposed of, an estimate of the fair value is redetermined when related events or circumstances change. |
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Goodwill | Goodwill Goodwill represents the excess of the purchase price of acquisitions over the acquisition date fair value of the net identifiable tangible and intangible assets acquired. In accordance with current accounting guidance, goodwill is not amortized and is tested at least annually for impairment at the reporting unit level. We perform our annual analysis during the fourth quarter of each fiscal year and in any other period in which indicators of impairment warrant additional analysis. Goodwill impairment reviews involve a two-step process. Goodwill is first evaluated for impairment by comparing management’s estimate of the fair value of a reporting unit with its carrying value, including goodwill. Management utilizes a discounted cash flow analysis, referred to as an income approach, to determine the estimated fair value of our reporting units. Significant judgments and assumptions including the discount rate, anticipated revenue growth rate and gross margins, estimated operating and interest expense, and capital expenditures are inherent in these fair value estimates, which are based on our operating and capital budgets and on our strategic plan. As a result, actual results may differ from the estimates utilized in our income approach. The use of alternate judgments and/or assumptions could result in a fair value that differs from our estimate and could result in the recognition of an impairment charge in the financial statements. As a result of these uncertainties, we utilize multiple scenarios and assign probabilities to each of the scenarios in the income approach. We also consider indications obtained from market-based approaches. We compare market multiples derived from market prices of stock of companies that are engaged in a similar line of business to the corresponding measures of the Company. We also consider the combined carrying values of our reporting units to our market capitalization. If the carrying value of our reporting unit is higher than its fair value, there is an indication that impairment may exist and the second step must be performed to measure the amount of impairment. The amount of impairment is determined by comparing the implied fair value of the reporting unit's goodwill to the carrying value of the goodwill calculated in the same manner as if the reporting unit were being acquired in a business combination. If the implied fair value of goodwill is less than its carrying value, we would record an impairment charge for the difference. |
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Other Intangible Assets | Other Intangible Assets Intangible assets that have finite useful lives are amortized by the straight-line method over their useful lives ranging from 1 to 15 years. Intangible assets that have indefinite useful lives are not amortized but are tested at least annually for impairment. Each reporting period, we evaluate the remaining useful lives of intangible assets not being amortized to determine whether facts and circumstances continue to support an indefinite useful life. Intangible assets are considered impaired if the fair value of the intangible asset is less than its net book value. If quoted market prices are not available, the fair values of the intangible assets are based on present values of expected future cash flows or royalties avoided using discount rates commensurate with the risks involved. |
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Insurance Reserves | Insurance Reserves We maintain insurance coverage for various aspects of our operations. However, we retain exposure to potential losses through the use of deductibles, coverage limits and self-insured retentions. We establish reserves for claims using a combination of actuarially determined estimates and case-by-case evaluations of the underlying claim data and update our evaluations as further information becomes known. Judgments and assumptions are inherent in our reserve accruals; as a result, changes in assumptions or claims experience could result in changes to these estimates in the future. If actual results of claim settlements are different than the amounts estimated we may be exposed to future gains and losses that could be material. |
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Stock-Based Compensation | Stock-Based Compensation The Company has issued stock options and nonvested deferred share awards under its long-term incentive compensation plans. The fair value of these awards is calculated at grant date. The fair value of time-based, nonvested deferred shares is the value of the Company’s common stock at the grant date. The fair value of market-based nonvested deferred shares is based on several factors, including the probability that the market condition specified in the grant will be achieved. The fair value of stock options is determined based on the Black-Scholes option pricing model. The detailed assumptions used in the model are included in Note 10—Stock Based Compensation. For all stock-based awards, expense is recognized over the requisite service period, net of estimated forfeitures. The expense related to performance based shares is recognized only if management believes it is probable that the performance targets specified in the awards will be achieved. |
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Income Taxes | Income Taxes The Company complies with ASC 740, “Income Taxes”. Deferred income taxes are computed using the liability method whereby deferred tax assets and liabilities are recognized based on temporary differences between the financial statement and tax basis of assets and liabilities using presently enacted tax rates. Valuation allowances are established against deferred tax assets to the extent management believes that it is not probable that the assets will be recovered. The Company provides for income taxes regardless of whether it has received a tax assessment. Taxes are provided when we consider it probable that additional taxes will be due in excess of the amounts included in our tax returns. We continually review our exposure to additional income taxes due, and as further information is known or events occur, adjustments may be recorded. |
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Foreign Currency | Foreign Currency The functional currency of the Company’s operations in Canada is the Canadian dollar. The assets and liabilities are translated at the year end exchange rate and the income statement accounts are translated at average exchange rates throughout the year. Translation gains and losses are reported in Accumulated Other Comprehensive Income (Loss) in the Consolidated Statements of Changes in Stockholders’ Equity and in Other Comprehensive Income (Loss) in the Consolidated Statement sof Comprehensive Income. Transaction gains and losses are reported as a component of Other income (expense) in the Consolidated Statements of Income. |
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Recently Issued Accounting Standards | Recently Issued Accounting Standards Accounting Standards Update 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income In February 2013, the FASB issued Accounting Standards Update No. 2013-02,“Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income” (ASU 2013-02). ASU 2013-02 requires companies to report the effect of significant reclassifications out of accumulated other comprehensive income, by component, either on the face of the financial statements or in the notes to the financial statements and is intended to help entities improve the transparency of changes in other comprehensive income. ASU 2013-02 does not amend any existing requirements for reporting net income or other comprehensive income in the financial statements. ASU 2013-02 is effective for reporting periods beginning after December 15, 2012. We currently do not expect the adoption of this standard to have a material impact on our consolidated financial statements. Accounting Standards Update 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities In December 2011, the FASB issued Accounting Standards Update No. 2011-11,“Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities” (ASU 2011-11) and in January 2013, the FASB issued Accounting Standards Update No. 2013-01, “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities.” ASU 2011-11, as clarified, enhances disclosures surrounding offsetting (netting) assets and liabilities. The standard applies to derivatives, repurchase agreements and securities lending transactions and requires companies to disclose gross and net information about financial instruments and derivatives eligible for offset and to disclose financial instruments and derivatives subject to master netting arrangements in financial statements. ASU 2011-11 is effective for annual reporting periods beginning on or after January 1, 2013. We will adopt this standard beginning our first interim period of fiscal 2014. We currently do not expect the adoption of this standard to have a material impact on our consolidated financial statements. |
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified |
Jun. 30, 2013
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Jun. 30, 2012
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Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 795 | $ 1,201 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 27,888,217 | 27,888,217 |
Treasury stock, shares | 1,779,593 | 2,141,990 |
Acquisitions
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Jun. 30, 2013
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions Purchase of Pelichem Industrial Cleaning Services, LLC On December 31, 2012, the Company acquired substantially all of the assets of Pelichem Industrial Cleaning Services, LLC (“Pelichem”). Pelichem is an industrial cleaning company based in Reserve, Louisiana that performs hydroblasting, vacuum services, chemical cleaning and industrial services. Pelichem's operating results are included in the Oil Gas & Chemical Segment. The purchase price was allocated to the major categories of assets and liabilities based on their estimated fair value at the acquisition date. The following table summarizes the final purchase price allocation:
The operating data related to this acquisition was not material. The acquisition was funded with cash on hand. Purchase of EDC, Inc. On May 3, 2011, the Company purchased substantially all of the assets of EDC, Inc. (“EDC”). EDC, located in New Jersey, provides consulting, engineering, design and supply services for bulk material handling systems. EDC’s results are included in the Industrial segment. The asset purchase agreement provided for a $3.8 million cash payment at closing, as well as an additional incentive payment of up to $0.8 million if certain financial targets are achieved over a two-year period ending April 30, 2013. Based on initial projections, the Company believed the operating performance of EDC would exceed what is required to earn the maximum payout. Therefore, the Company recorded the EDC asset purchase at $4.6 million, which represented the cash payment plus the estimated fair value of the incentive payment. The purchase price was allocated to the major categories of assets and liabilities based on their estimated fair values at the acquisition date. The following table summarizes the purchase price allocation:
The operating and proforma data related to the EDC acquisition was not material. The acquisition was funded with cash on hand. As a part of its ongoing assessment of the carrying value of the acquisition payable, the Company subsequently determined the financial targets were not being achieved. Accordingly, as required under ASC 805—“Business Combinations”, the Company recognized adjustments totaling $0.8 million, of which $0.4 million was recorded in fiscal 2012 and an additional $0.4 million was recorded in fiscal 2013. These adjustments reduced the carrying value of the acquisition payable and selling, general and administrative costs. We also had a $0.2 million adjustment to goodwill in fiscal 2012 as part of the final working capital settlement. |
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical)
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12 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2011
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Exercise of stock options, shares | 97,840 | 26,500 | 32,000 |
Issuance of deferred shares, shares | 367,449 | 184,149 | 126,428 |
Employee Stock Purchase Plans, shares | 4,452 | 4,395 | 699 |
Open market purchase of treasury shares, shares | 886,503 | ||
Other treasury share purchases | 107,344 | 52,992 | 30,154 |
Goodwill and Other Intangible Assets (Tables)
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Jun. 30, 2013
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying value of goodwill by segment | The changes in the carrying amount of goodwill by segment are as follows:
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Carrying value of other intangible assets | Information on the carrying value of other intangible assets is as follows:
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Earnings per Common Share (Tables)
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Jun. 30, 2013
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Computation of basic and diluted earnings per share | The computation of basic and diluted EPS is as follows:
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Schedule of antidilutive securities excluded from computation of diluted earnings per share | The following securities are considered antidilutive and have been excluded from the calculation of diluted earnings per share:
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Acquisitions (Details) (USD $)
In Thousands, unless otherwise specified |
Dec. 31, 2012
Pelichem Industrial Cleaning Services, LLC [Member]
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May 03, 2011
EDC [Member]
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Purchase price allocation | ||
Current assets | $ 1,112 | $ 1,316 |
Property, plant and equipment | 4,299 | 13 |
Tax deductible goodwill | 2,247 | 1,583 |
Other intangible assets | 1,853 | 3,075 |
Total assets acquired | 9,511 | 5,987 |
Current liabilities | 117 | 1,379 |
Net assets acquired | 9,394 | 4,608 |
Cash acquired | 8 | |
Net purchase price | $ 4,600 |