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TWST: What is Matrix Service?
Mr. Hall: Matrix Service is a general industrial construction, repair
and maintenance company that services the petroleum, petrochemical,
power, LNG, pipeline and other related industries. The company was
founded in Tulsa as a tank repair and maintenance company. It grew and
did an initial public offering in September 1990 and for the next 13
years, made a number of acquisitions. The largest was in March 2003 when
we acquired The Hake Group of Companies headquartered in Eddystone,
Pennsylvania. The acquisition doubled the size of the company. The
company experienced financial difficulties toward the end of fiscal
2005. Our fiscal year runs from June 1 through May 31. I had retired in
May 2004 as Chief Financial Officer and the Board asked if I would come
back as President and Chief Executive Officer to restructure the
business, and with the Chief Financial Officer, refinance the debt. Over
the last year we have been able to accomplish a major restructuring of
the balance sheet by issuing $30 million of convertible security notes
and issuing $15 million of equity. We were able to refinance all of our
senior bank debt, turn the company around and return it to
profitability. In fact, by the end of February 2006, we were able to pay
off all of our senior bank debt. TWST: What's the agenda today? What are your priorities for the next
12-24 months? What would make that time frame a success?
Mr. Hall: I think that over the next 12-24 months, the real focus will
be on continuing to grow the business, both in revenues margins. We're
in a very attractive market right now, and there are a lot of
opportunities in front of us in the downstream petroleum industry
primarily, but also in LNG, where we were awarded a major project to
build the three LNG tanks for Cheniere at Sabine Pass. We believe that
LNG will be a major opportunity for us in the next three to five years.
There are also many clean air mandates, which we call the Back-End
Technology projects. We're also looking at some of the California Air
Quality Management District initiatives for above-ground storage tanks.
There is significant opportunity in new tank and terminal construction
as our customer base is spending significant capital for pipeline
construction and for additional storage capacity. So among the Back-End
Technology projects, the clean air mandates, the repair and maintenance
for above-ground storage tanks, LNG, ethanol storage and blending
facilities to convert to ethanol from MTBEs, there are some significant
opportunities to continue to grow the revenues for the company and also
its profitability. We will continue to focus on increasing the margins.
This year we have been successful in turning the company around, but it
is still a transition year and we will continue to maintain the emphasis
on margins. We will also focus on training and recruiting personnel to
be able to facilitate our internal growth, as personnel availability is
currently our biggest limitation to achieve our longer-term objectives.
We need to find the craft, the project managers, the superintendents and
the construction engineers to be able to take us to the next level, so
recruiting will be a major initiative for Matrix.
Tickers included in this excerpt: MTRX
For more information call (212) 952 7433. The
Wall Street Transcript does not endorse any of the comments made by interviewees, and does
not make stock recommendations.
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