Good morning, and welcome to the Matrix Service Company conference call to discuss results for the first quarter of fiscal 2026. As a reminder, this conference call is being recorded. I would like to turn the conference over to today's host, Ms. Kellie Smythe, Senior Director of Investor Relations for Matrix Service Company.

Thank you, Marvin. Good morning, and welcome to Matrix Service Company's First Quarter Fiscal 2026 Earnings Call. Participants on today's call include John Hewitt, President and Chief Executive Officer; and Kevin Cavanah, Vice President and Chief Financial Officer. Following our prepared remarks, we will open the call up for questions. The presentation materials referred to during the webcast today can be found under Events and Presentations on the Investor Relations section of matrixservicecompany.com. As a reminder, on today's call, we may make various remarks about future expectations, plans and prospects for Matrix Service Company that constitute forward-looking statements for the purposes of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements because of various factors, including those discussed in our most recent annual report on Form 10-K and in subsequent filings made by the company with the SEC. The forward-looking statements made today are effective only as of today. To the extent we utilize non-GAAP measures, reconciliations will be provided in various press releases, periodic SEC filings and on our website. Finally, all comparisons today are for the same period of the prior year, unless specifically stated. Related to investor conferences and corporate access opportunities, we will be participating in the Sidoti & Company Year-end Virtual Investor Conference on December 10 and 11, 2025. We will also be participating in the Northland Capital Markets Growth Conference on December 16th. This conference is also virtual. If you would like additional information on this event or would like to have a conversation with management, I invite you to contact me through Matrix Service Company Investor Relations website. As we shift our focus to safety, I want to underscore its vital importance to our business. At Matrix, safety stands as our foremost core value. And as Mr. Hewitt frequently emphasizes, nothing outweighs the physical and mental well-being of our employees, subcontractors, clients and others who may be present at our job sites or in our offices. This is simply not about compliance. It's about continuously cultivating an environment where safety is ingrained in our culture. Every one of us deserves to feel safe at work and return home to our families and loved ones at the end of the day. And while safety is always the right thing to do, it's also a business imperative. It strengthens our competitive edge, enabling us to bid on and secure vital projects, foster lasting client relationships and attract and retain top talent. Our clients trust us to execute their projects safely and with unrivaled quality. This trust is something we value, and we hold ourselves accountable to the highest standards. By maintaining our unwavering commitment to safety, we position Matrix not just as a leader in engineering and construction, but as a dependable partner dedicated to excellence and care. I will now turn the call over to John.

Thank you, Kellie, and good morning, everyone. We began fiscal 2026 with strong execution, resulting in double-digit revenue growth and our highest quarterly gross margin in over two years. This performance reflects the continued maturation of our backlog and the disciplined approach we've taken to project bidding and delivery. Bidding activity remains healthy across our segments, and we saw a solid level of new awards. Our opportunity pipeline also remains robust for not only near-term projects, but several large multiyear projects with anticipated award dates beginning in late fiscal 2026 and into fiscal 2027. Based on our first quarter performance, our strong backlog and the visibility we have today, we are reiterating our full year revenue guidance of $875 million to $925 million. Typically, the first quarter reflects a seasonal slowdown in demand for maintenance and repair services. This year, that was largely offset by increased activity on larger projects. Our mix of project work drove gross margin improvement, representing our best quarterly gross margin in more than two years. We expect continued margin improvement as we move through fiscal 2026, supported by conversion of backlog to revenue. Award activity in the quarter was stable, resulting in a book-to-bill of 0.9, and we ended the quarter with a total backlog of $1.2 billion. During the first quarter, we removed approximately $197 million from backlog related to two projects. While Kevin will provide more detail in his remarks, these removals do not reflect the reduction in demand, changes in the market, or business performance issues. In both cases, the clients changed their commercial strategy, and neither project had mobilized. Importantly, the removal of these projects from our backlog does not impact our Q1 results or full year guidance. We continue to be disciplined in our bidding and contracting efforts to ensure our project risk and financial return profile meets our standards. Now let's talk about our markets and what we see in the organic opportunities that will drive the business. First, our total opportunity pipeline currently sits at $6.7 billion, with the majority of those opportunities in storage and related facilities for LNG, NGLs, and ammonia, which feed our Storage Solutions and Utility and Power Infrastructure segments. We continue to see a steady level of incremental bidding opportunities supported by strong investment in domestic infrastructure and a favorable regulatory environment. Growing demand for sustainable and reliable power is creating significant project opportunities upstream from the massive investment in data centers and advanced manufacturing, among other expanding electrical consumers. So whether it's LNG for backup fuel or peak shaving, upgrades to existing LNG facilities, new baseload or backup power generation, or substation upgrades and new construction, our business will benefit from these investments in this critical infrastructure. And while the timing of awards can be fluid over the coming quarters, we expect that the level of awards will be similar to what we saw during the fourth quarter. This award portfolio will be made up of midsized projects on top of our normal cadence of small projects and maintenance. These projects will reinforce our strong backlog, continue to provide more predictable revenue flow, and build our resource base as the business grows. One recent example is the award of a balance of plant construction at the Delaware River Partners multiuse port facility in Gibbstown, New Jersey that will support growing export demand for NGLs, including propane and butane. This award, which was taken into backlog in the first quarter of fiscal 2026, follows a fiscal 2025 award associated with the construction of our large full containment dual service storage tank at the same facility. These two projects represent our ability to provide integrated delivery for complex storage facilities, which is a key differentiator for the business. As we move into late fiscal 2026 and into fiscal 2027, we anticipate a reacceleration in award activity for larger multiyear projects, which we are currently in the process of pursuing. In our Process and Industrial Facilities segment, our strategic focus is to expand our markets, client base, and footprint to build backlog and revenue while executing safely with high quality and financial outcomes. Actions include strengthening our position in core geographic markets, realigning our business development resources with our growth priorities, and leveraging our strong customer relationships to expand organically. Focus areas include repair, maintenance, turnarounds, and small cap projects in various process industries, including refining, chemicals, and renewable fuels. Mining and minerals in support of the demand for nonferrous metals and rare earth minerals, thermal vacuum chambers where we hold a dominant position, as well as various natural gas value chain opportunities. We are positioned to capture opportunities in this segment and deliver improved results over the long term. With project activity continuing to build due to the steady conversion and replacement of our backlog, we are highly focused on ensuring that we deliver consistent performance for our customers and the highest level of quality and safety. The recent changes to our organizational structure, which we have talked about in our previous calls, have enhanced our agility, competitiveness, and performance. These changes, along with strategic actions we have taken over the last few years, our already strong service offering position us to deliver on current commitments and compete effectively for the substantial opportunities within our robust pipeline. We remain committed to disciplined capital allocation. Our strong balance sheet supports the working capital needs of active projects as these jobs progress through key execution phases. As we return to sustained profitability in the coming quarters, we'll deploy capital thoughtfully, targeting growth opportunities that expand our market share and drive long-term shareholder value. In summary, I'm proud of the team's continued execution as we proceed through this critical chapter of growth for Matrix. We have plenty of opportunities ahead of us, which will not only support this fiscal year, but will continue to create growth in fiscal 2027 and beyond. I am confident that our focus on our core pillars of win, execute, and deliver will serve to drive compounding profitable growth and long-term value for our shareholders and customers alike. So with that, I'll turn the call over to Kevin.

Thank you, John. The first quarter of the year went about as we anticipated from an operating results, balance sheet, cash flow, and project award perspective. Revenue of $211.9 million represented a 28% increase compared to $165.6 million in the first quarter of fiscal 2025. This is mainly due to growth driven by larger new construction projects in the Storage and Terminal Solutions and Utility and Power Infrastructure segments. We expect this revenue growth to continue as we move through the rest of the fiscal year. Consolidated gross profit increased 82% to $14.2 million in the first quarter compared to $7.8 million in the prior year. With strong project execution in both periods, the gross profit increase was the result of revenue growth as well as improved construction overhead recovery. Consolidated gross margin improved to 6.7% versus 4.7% in the first quarter of fiscal 2025. SG&A expenses were 7.7% of revenue or $16.3 million compared to 11.3% or $18.6 million in the same quarter last year. The $2.2 million decrease is primarily the result of the efficiency improvement changes implemented by the company over the last two quarters. The company will continue to work to leverage SG&A to its 6.5% target as revenue grows while also investing in resources when needed to support strong market demand and growth in our business. As expected, the company incurred $3.3 million of restructuring costs in the first quarter related to the efficiency efforts mentioned. The company has completed the bulk of restructuring activities and expects minimal restructuring costs during the remainder of fiscal 2026. For the first quarter of fiscal 2026, the company had a net loss of $3.7 million which includes $3.3 million of restructuring costs compared to a $9.2 million net loss in the first quarter last year. GAAP EPS was a loss of $0.13 compared to a $0.33 loss in the prior year. Excluding the restructuring costs, adjusted EPS was nearly breakeven at a loss of $0.01 in the first quarter. This performance reflects the operating leverage inherent in our business model and is consistent with the expectations that we have previously communicated, which is that we expect to achieve breakeven on a GAAP net income basis at a quarterly revenue level of $210 million to $215 million. Adjusted EBITDA in the first quarter was a positive $2.5 million compared to a loss of $5.9 million in the first quarter of last year. Moving to the operating segments. Let's start with Storage and Terminal Solutions, which represented 52% of consolidated revenue. First quarter revenue in this segment was $109.5 million compared to $78.2 million last year. The $31.2 million or 40% increase continues a trend, which began in fiscal 2025 and was driven by LNG storage and specialty vessel projects. We expect this growth trend for the Storage and Terminal Solutions segment to continue as we move through fiscal 2026. Segment gross profit increased by $1.8 million or 38% in the 3 months ended September 30, 2025, compared to the same period last year due to higher revenue volume. The segment gross margin of 5.9% for the quarter was consistent with the segment gross margin of 6% in the same period last year. Gross margins for the segment continued to be primarily impacted by under-recovery of construction overhead costs, which we expect to improve as activity on projects currently in backlog increases through the remainder of fiscal 2026. Moving on to the Utility and Power Infrastructure segment, which accounted for 35% of consolidated revenue. First quarter segment revenue increased 33% to $74.5 million compared to $55.9 million in the first quarter of fiscal 2025, benefiting from a higher volume of work associated with LNG peak shaving and power delivery projects. Segment gross profit increased by $5.5 million or 419% in the first quarter compared to $1.3 million in the same period last year. The growth resulted from the revenue increase and an improved gross margin, which increased to 9.1% compared to 2.3% in the same period last year. The margin improved due to strong project execution and construction overhead cost recovery as a result of higher revenues. Finally, the Process and Industrial Facilities segment accounted for 13% of consolidated revenue or $27.9 million in the first quarter of fiscal 2026 compared to $31.4 million in the first quarter last year. As John discussed, the market presents good opportunities in this segment to improve the revenue level. Segment gross profit decreased to $0.6 million or 28% in the 3 months ended September 30, 2025 compared to the same period last year. The segment gross margin was 5.1% for the quarter compared to 6.4% in the same period last year. The decrease is primarily attributable to an unfavorable change in the mix of work. Segment gross margin in both periods were impacted by under-recovery of construction overhead costs due to low revenue volumes. Moving to the balance sheet and cash flow. As expected, cash decreased in the first quarter, ending at $217 million, down $32 million from the start of the quarter as the company continues to make progress on the large projects in backlog that were in a prepaid position. Exiting the quarter, the balance sheet and liquidity remain in a strong position with liquidity of $249 million and no outstanding debt. We will continue to proactively manage the balance sheet and have the financial strength and liquidity needed to support the positive earnings inflection we anticipate as we progress through fiscal 2026. Now let's discuss project awards and backlog. Project awards in the first quarter were consistent with what we anticipated. They totaled $187.8 million for a 0.9 book-to-bill with the Storage and Terminal Solutions segment accounting for $136.1 million of the awards. As John mentioned, during the first quarter, we made the decision to remove two projects totaling $197 million from backlog, neither of them impacting our fiscal 2026 revenue guidance. Each project reflected a different situation. The first and largest was within our Process and Industrial Facilities segment and was formally awarded to us in late fiscal 2023. Our scope of work on this project was construction only, and the start of field work had already been delayed by over a year due to slow progress on scoping, design development, and engineering, which is outside our responsibility. Just recently, the owner decided to adjust its execution and contracting structure, which resulted in their decision to rebid the construction portion of the project. The project will be rebid in packages later this year, and we intend to submit bids on certain aspects of our original scope. That said, due to this change, we removed the original awarded project from our backlog, consistent with our backlog recognition policy. The second project was in our Utility and Power Infrastructure segment. In this case, the project was formally awarded in the fourth quarter of fiscal 2025. Subsequently, the client sought to modify the terms and conditions of this agreement in a way that significantly increased our risk on the project. This change was inconsistent with both the as-bid basis of our proposal and our commercial policies. As a result, the award was rescinded, and we removed it from backlog. After the removal of these two projects, backlog remains strong at $1.2 billion and is supportive of our revenue guidance of $875 million to $925 million. When we started the year, we mentioned that we were going into the year with 85% of our revenue booked at the midpoint of our guidance range. As a result of awards during the first quarter, this percentage has increased to more than 90%, and we continue to be confident in our ability to achieve our revenue guidance. The improvement in our consolidated revenue, combined with continued focus on execution excellence and leverage of our construction overhead and SG&A cost structures, will allow us to return to profitability as the fiscal year progresses and make significant progress towards the achievement of our long-term financial targets. This concludes our prepared remarks. We'll now open for questions.

Our first question comes from John Franzreb of Sidoti & Co.

I just want to start with where you finished about those two projects. It doesn't seem like there's much in common with them, and it seems like the start dates are probably due in 2027, if not later. But I'm curious if that suggests that the competitive landscape as one was rebid and when the terms were changed a bit, the competitive landscape we're getting a little bit tougher for larger projects out there?

I don't believe so. I think the issues with both projects weren't really linked to the competitive landscape. As Kevin mentioned, we've had one of those projects in our backlog for nearly two years, and there were numerous scope and design changes occurring between the project owner and our client. Ultimately, the client decided to change their execution strategy and approach it differently. In regards to the other project, I commend our teams for avoiding a job that came with a much higher risk without any additional compensation for taking on that risk. We were able to make that choice because there are numerous opportunities in the market for such work, and we hold a strong brand and position in those markets. So, overall, I see this as a positive outcome, especially since neither project will affect our fiscal 2026.

Got it. And John, I might be reading too much into this. But I think in the prepared remarks, you mentioned that midsized projects are growing. But later in your prepared remarks, you said that you look for a reacceleration of large project work. Did I hear that properly? And if so, what's the timing of when you expect large jobs to be let out again?

We have included some significant projects in our backlog over the past 18 months. The development of larger energy facilities, especially in LNG, NGLs, and ammonia, naturally takes longer to progress through the proposal and development stages. We are tracking several of these projects and may be providing initial feed work, including engineering development, scheduling, and budgeting, to support our core clients who are expanding or planning to expand their infrastructure. It's primarily a timing issue, and we feel confident about our position in this area, as there are numerous opportunities available for us to engage in. Throughout this fiscal year, there continue to be many mid-scale projects that we can pursue. We announced the DRP project this morning, which entered our backlog in the first quarter. These are typical projects in our pipeline that we are currently bidding on or discussing with clients. Each of these projects is not necessarily short-term; they may take 12 to 18 months to complete, which helps us maintain a robust backlog and strengthen our teams as larger projects arise. I feel optimistic about our capacity to maintain a strong backlog and enhance the company's operations through these relatively smaller projects, even though they are not insignificant. They are not the large projects we added to the backlog 18 months ago.

Understood. Just a question on the restructuring. I'm wondering how that changes the breakeven dynamics? And if there's any other things that you're thinking about as far as the year ahead or any of the other kind of actions?

Yes. It positively impacts our cost structure, reducing it, which lowers our breakeven point. Last year, we needed $225 million in quarterly revenue to break even. Now, that has decreased to between $210 million and $215 million. These changes have also lowered the revenue required for full construction overhead cost recovery to about $250 million. Additionally, the revenue needed to reduce our SG&A to our 6.5% target is also now down to $250 million. This definitely enhances the earnings potential of the company. We are nearly finished with the restructuring efforts that will affect costs, and while there may be some minor expenses for the rest of the year, we do not expect much. That said, we are focused on enhancing the business and have plans to address all issues to ensure we return to profitability and achieve a strong bottom line each quarter.

Our next question comes from the line of Augie Smith of D.A. Davidson.

To begin, can you guys touch a bit more on kind of what projects you're targeting within the gas power project space? In previous conversations, you had mentioned you're looking at some gas power plant work, but kind of more specifically, what are your capabilities there? And how do you see that playing out moving forward? And then is this something we should be considering for fiscal '26?

Yes. If you've been with us for some time, you'll remember that during the late '90s and early 2000s, we were actively involved in many large combined cycle gas-fired power plant projects across various regions, including California, Ohio, and Pennsylvania. We served as general contractors on these projects and also handled aspects like centerline erection, boiler erection, and mechanical piping systems. Our organization possesses these skill sets and capabilities. However, in recent years, as the market stabilized before COVID, our resources were directed toward other industries that were experiencing growth. Currently, with the rise in demand for power generation coupled with a push for greater sustainability and cleaner energy sources—transitioning from coal to natural gas—this aligns well with our expertise. We possess all the necessary construction skills to engage in new power generation projects, including backup fueling and peak shaving terminals for natural gas and LNG. We have a robust brand presence in this sector. Looking upstream to the increasing demand for generation, existing power suppliers need to expand their resources and ensure reliable backup fuel. These dynamics are creating numerous project opportunities for us. I anticipate that our opportunity pipeline will expand over the coming year as more power generation projects transition from prospects to active opportunities.

Okay. Awesome. And then kind of shifting gears again back to the backlog. So obviously, backlog was impacted this quarter by the removal of those two awards. But kind of moving forward, should we continue to view backlog in the $1 billion-plus range? And then kind of more specifically, you guys mentioned that the Process and Industrial Facilities project that was removed was because the client wanted to split it up into multiple bids. Do you guys envision this kind of becoming a pattern with other clients as well? Or do you guys think of this as more of a one-off?

Yes. I believe that this is a unique situation for the projects we are involved in. What we are observing more frequently is that clients are attempting to secure resources and construction capabilities. In some instances, they are exploring alliances, partnership agreements, and improved risk-sharing through reimbursable contracts. Currently, we are in a market phase that feels like a seller's market. I think we are seeing a shift in certain areas and regions where more contractors will be engaged with owners to establish their infrastructure. Therefore, it is a favorable time for us to leverage our brand strength and capabilities in the markets where we operate, and this applies not only to us but also to some of our peers.

I'm showing no further questions at this time. I'd now like to turn it back to Kellie Smythe for closing remarks.

Thank you. As a reminder, the Sidoti & Company Year-end Virtual Investor Conference is scheduled for December 10 and 11. We will also be participating for the first time in the Northland Capital Markets Virtual Growth Conference on December 16, 2025. If you're participating, we look forward to speaking with you. Additionally, if you'd like to have a conversation with management, please contact me through the Matrix Service Company Investor Relations website. You may also sign up to receive MTRX news by scanning the QR code on your screen. Thank you for your time.

Thank you for your participation in today's conference. This concludes the program. You may now disconnect.