Matrix Service Company EBITDA dropped on 109% and EBITDA Margin decreased on 4.4 pp from 4.0% to -0.47%
09/02/2020 • About Matrix Service Company (
$MTRX) • By InTwits
Matrix Service Company reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- Matrix Service Company is a company in decline: FY2020 revenue growth was -22.3%, 5 years revenue CAGR was -3.9%
- EBITDA Margin is quite volatile: -0.5% in FY2020, 4.0% in FY2019, 0.9% in FY2018, 2.2% in FY2017, 4.8% in FY2016
- Matrix Service Company has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.2%. At the same time it's in pair with industry average of 1.7%
- CAPEX is quite volatile: $2m in FY2020, $2m in FY2019, $1m in FY2018, $0m in FY2017, $0m in FY2016
- The company has unprofitable business model: ROIC is -10.1%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.8x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue dropped on 22.3%. Revenue decline showed acceleration in FY20Q4 - it was 50.9% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.0 pp from 5.4% to 9.4% in FY2020.
Gross Margin showed almost no change in FY2020. SG&A as a % of Revenue increased slightly on 1.2 pp from 6.6% to 7.8% in FY2020.
Net Income margin decreased on 5.0 pp from 2.0% to -3.0% in FY2020.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 1.7% in FY2020. Matrix Service Company showed small growth in CAPEX/Revenue of 0.69 pp from 0.99% in FY2017 to 1.7% in FY2020. For the last three years the average CAPEX/Revenue was 1.3%. During the last 5 years CAPEX as a % of Revenue bottomed in FY2018 at 0.80% and was growing since that time.
Return on investment
The company operates at negative ROIC (-10.1%) and ROE (-10.0%). ROIC dropped on 21.2 pp from 11.2% to -10.1% in FY2020. ROE dropped on 18.4 pp from 8.3% to -10.0% in FY2020.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.8x and Debt / EBITDA is . Debt surged on 588% while cash surged on 11.5%.
Matrix Service Company has no short term refinancing risk: cash is higher than short term debt (1,321.8%).
Management team
John R Hewitt is a the company's CEO. John R Hewitt has spent 9 years with the company. Matrix Service Company's CFO is Kevin S Cavanah. Kevin S Cavanah has 10 years tenure at the company.
Financial and operational results
FY ended 06/30/2020
Matrix Service Company ($MTRX) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 1,312 | 1,198 | 1,092 | 1,417 | 1,101 | -22.3% |
| Gross Profit | 126 | 81 | 92 | 132 | 102 | -22.6% |
| SG&A | 85 | 76 | 84 | 94 | 86 | -8.2% |
| EBITDA | 62 | 26 | 10 | 56 | -5 | -109.3% |
| Net Income | 29 | -0 | -11 | 28 | -33 | -218.2% |
Balance Sheet
|
|---|
| Cash | 72 | 44 | 64 | 90 | 100 | 11.5% |
| Short Term Debt | 0 | 0 | 0 | 0 | 8 | |
| Long Term Debt | 0 | 45 | 0 | 5 | 29 | 446.2% |
Cash flow
|
|---|
| Capex | 14 | 12 | 9 | 20 | 19 | -5.2% |
Ratios
|
|---|
| Revenue growth | -2.3% | -8.7% | -8.8% | 29.8% | -22.3% | |
| EBITDA growth | 93.1% | -57.5% | -62.7% | 469.1% | -109.3% | |
|
|---|
| Gross Margin | 9.6% | 6.8% | 8.4% | 9.3% | 9.3% | -0.0% |
| EBITDA Margin | 4.8% | 2.2% | 0.9% | 4.0% | -0.5% | -4.4% |
| SG&A, % of revenue | 6.5% | 6.4% | 7.7% | 6.6% | 7.8% | 1.2% |
| Net Income Margin | 2.2% | -0.0% | -1.1% | 2.0% | -3.0% | -5.0% |
| CAPEX, % of revenue | 1.1% | 1.0% | 0.8% | 1.4% | 1.7% | 0.3% |
|
|---|
| ROIC | 13.2% | 1.4% | -3.0% | 11.2% | -10.1% | -21.2% |
| ROE | 9.5% | -0.1% | -3.6% | 8.3% | -10.0% | -18.4% |
| Net Debt/EBITDA | -1.1x | 0.0x | -6.5x | -1.5x | |
Matrix Service Company ($MTRX) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 338 | 319 | 248 | 196 | | 6.1% | -6.4% | -30.8% | -50.9% |
| EBITDA | 17 | -24 | 2 | 6 | | 146.5% | -332.4% | -87.8% | -73.3% |
| Net Income | 6 | -28 | -5 | -6 | | 166.9% | -812.3% | -161.5% | -144.7% |
Balance Sheet
|
|---|
| Cash | 140 | 110 | 88 | 100 | | 87.2% | 54.6% | 76.1% | 11.5% |
| Short Term Debt | 9 | 9 | 9 | 8 | | - | - | - | - |
| Long Term Debt | 27 | 39 | 32 | 29 | | 1,666.6% | - | 1,352.5% | 446.2% |
Ratios
|
|---|
| Gross Margin | 9.6% | 9.4% | 8.2% | 9.8% | | 2.2% | 1.2% | -2.0% | -1.1% |
| EBITDA Margin | 4.9% | -7.4% | 0.9% | 3.0% | | 2.8% | -10.3% | -4.0% | -2.5% |
| Net Income Margin | 1.8% | -8.8% | -2.2% | -2.9% | | 1.1% | -9.9% | -4.7% | -6.1% |
Peers in Oil & Gas Equipment & Services
Below you can find Matrix Service Company benchmarking vs. other companies in Oil & Gas Equipment & Services industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
