Greetings and welcome to the Matrix Service Company second quarter and fiscal year 2010 ended December 31, 2009, results conference call. (Operator Instructions). It is now my pleasure to introduce your host, Trúc Nguyen, Investor Relations for Matrix Service Company. Thank you. Ms. Nguyen, you may now begin. Trúc Nguyen: I would now like to take a moment to read the following. Various remarks that the company may make about future expectations, plans, prospects for Matrix Service Company constitute forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various factors, including those discussed in our Annual Report on Form 10-K for our last fiscal year and in subsequent filings made by the company with the SEC. I would now turn the call over to Michael Bradley, President and CEO of Matrix Service Company. Mike?

Tom Long, our Chief Financial Officer is with me on the call this morning. We appreciate you joining us to discuss our recently completed second quarter of fiscal 2010. Before I turn the call over to Tom to discuss the financial results, I would like to comment on our operating performance and highlight our progress in reducing our cost structure and further diversifying our business. I will conclude my remarks with a brief discussion of our outlook for the remainder of fiscal 2010. This morning we announced our fiscal 2010 earnings for the quarter and year-to-date, which were in line with our projections at the beginning of the fiscal year and reflect the challenging environment that we anticipated and discussed during previous calls. I am pleased with the execution of our employees in this tough market and competitive environment. Our project teams continue to deliver solid gross profits and excellent safety performance. Our backlog was essentially flat quarter-over-quarter, as we added $100 million in new construction projects during the quarter, which is the highest quarter in almost two years. This was driven primarily from new awards in the Power, and Electrical and Instrumentation, or E&I market, which has been a focus of our growth and diversification strategy. The Repair and Maintenance backlog was down quarter-over-quarter due to continued soft, aboveground storage tank and downstream petroleum markets, partially offset by increase in the E&I services market, which again highlights our diversification. Bid activity for our fiscal year 2011, turnaround business has picked up significantly, which is a positive indicator of the longer-term outlook for our downstream petroleum business, however, near-term, the environment challenging. We continue to improve on our financial position, which remains very strong with over $60 million in cash and no debt. We have ample bonding capacity and are…

In the second quarter, we earned $0.17 per fully diluted share on $150 million of revenue. The second quarter results included charges of $900,000 or $0.02 per fully diluted share related to costs associated with our collection efforts and claims required in an acquisition. While we do not discuss the specifics of any litigation, the significance of the charge is important to understanding our results for the quarter. Revenues for both segments continued to be negatively impacted by the economic downturn, which is slow capital spending and impact of the timing and scope of maintenance and construction work in the markets we serve. Our Construction Services segment revenues were $80 million in the quarter as compared to $100 million in the same quarter last year, while our Repair and Maintenance Services segment revenues were $70 million in the quarter compared to $77 million in the prior year. Consolidated gross profit was $18 million in the quarter versus 26 million in the second quarter last year. While we have maintained effective project execution, the lower volume of business is not sufficient to fully recover construction overhead costs, leading to reductions in gross margins. Our gross margins were 12.3% in the quarter as compared to 14.9% in the prior year period. For the six months net income was $9 million or $0.34 per fully diluted share on total revenues of $288 million. The six-month results included charges of $2.1 million or $0.05 per fully diluted share related to legal cost and cost associated with our collection efforts on the claims acquired in an acquisition. The comparable prior year results were revenues up $364 million and net income of $20 million or $0.74 per fully diluted share. Since the end of fiscal 2009, we have increased our cash position by $26 million to $61 million. We did not borrow against our $75 million revolving credit facility during the fiscal year. Our financial position remains strong and total liquidity exceeds $125 million as of December 31, 2009. Our bonding capacity is adequate to support our current volume of business, as well as the domestic and international opportunities that we are pursuing. Capital expenditures for the six months were $2.8 million and we project capital spending to be less than $10 million for the fiscal year. With that, we'll open the call up for questions.

(Operator Instructions) Our first question comes from Matt Duncan from Stephens, Inc.

The first question I've got for you guys is kind of about this increase in backlog awards this quarter. I guess in bookings on the construction side. If you look at sort of how that's been trending, did that sort of gain a little bit of steam into the holidays and I guess probably slowdown around the holidays and maybe importantly, how did that looked through January, is that still sort of the trend line you guys are on or things are still looking better in terms of contract awards through today?

Well, in terms of the bookings in the second quarter, obviously, things picked up in terms of awards during that quarter. Some of that were awards, I think, we really had expected earlier on, and I think it's just a reflection of the lag in timing some of the awards that we are anticipating. It was a good quarter for construction pick up and we are very pleased about that. As I stated, we're optimistic that we'll continue to see good awards for the remainder of 2010, based on the activity that we see occurring today. I can't comment on awards since January 1, but as I stated in my opening remarks, we are encouraged that we could see some continued improvement.

Then question about downstream repair and maintenance, I guess what we've heard from competitors in the industry is that the spring of 2010 in terms of downstream repair and maintenance looks better than the spring of 2009 due to the deferrals from the spring '09 that kind of need to be done for safety reasons at this point. It sounds like may be you guys are seeing something little bit different in your business. I am wondering if you can kind of help put that in context for us of what appears to be going on in the broader industry or is downstream repair and maintenance activity is sort of better than last year, but still weak or is it weaker than last year for you guys?

I think, first of all, last spring was one of the strongest turnaround seasons that we had ever experienced. It has to do with the clients we serve and the cycle of activity. You made the comment that turnarounds have been pushed out from what were planned a year ago into later this year or into later last year and then obviously in to the spring. Typically, on turnarounds they are a bid well in advance, and so, a lot of projects that were awarded last year and got pushed back or occurring this spring. So, what we are seeing, we anticipated a lower spring this year than last year due to the cycle of our turnaround activity, but what we are seeing, what we are excited about is, we did pick up a (inaudible) award and executed it very successful in Q2. We are seeing our bid activity for fiscal year 2011 really pickup, which is encouraging. So, it's a little bit out of cycle for us, but again, what we are seeing right now for fiscal year 2011 is pretty good.

As I look at you guys' margins the construction segment gross margin has been doing very well, you had it in the 14 to 15% range the last two quarters. I am wondering is there a little bit of solid project execution or projects that closed out has helped in place that little bit or is that 14% gross margin level something you guys think you can maintain given that it appears as though your execution discipline has been very good and it's driving better margin. I'm just trying to get a sense of how sustainable this gross margin level in construction maybe?

Number one, our execution has been very good. On lump sum projects and even on some of our cost-plus projects where we began to earn incentives. I think, generally speaking, Matt, the execution has just gone very well. So we're very pleased that how the project execution has gone throughout the company, margin waves are down. So I think it's a focus that we've had in terms of improving our overall execution. So, I mean, obviously, it's hard to predict quarter-over-quarter, but I think you're seeing some better execution by the Matrix team in general and I think that's reflective at the margins.

You guys, on the last couple of conference call, have given us some rough framework for revenue guidance. I don't know if you're prepared to do that today, just to kind of help us think about how the topline is trending versus where you guys have expected it to be?

That's a good question, Matt. How I would describe that is currently the topline for the remainder of fiscal 2010 is trending lower than what we expected. However, it's based on some activity we're working on now and timing a project awards that could have a positive impact. So I'd say for right now in terms of our guidance and what we're looking at the revenues are trending lower than what we expected.

Our next question is coming from Mike Harrison from First Analysis Corporation.

We've heard from some people that the only companies out there that are benefiting from stimulus spending are concrete producers. Are you seeing any impact from stimulus spending and do you expect to, in this fiscal year, or calendar year?

I would say for us it's minimal if any. So I don't think we're really seeing the impact of any stimulus money on our business.

What about expectations, are you seeing any pick up in bidding activity related to stimulus-related projects?

I don't know if they are related to stimulus or not, but our bid activity in alternative energy is up, whether it's biomass, landfill, energy, those sort of things. That bid activity is definitely up. We've got some wind activities that has picked up, so if that's related to stimulus then that activity I think has picked up, so.

I had a question on the international side. This is, I believe, the first time you've talked about the actual amount of contracts internationally that you're chasing. You put a $600 million number on that if I...

Yes, that's correct.

Can you talk about specially what type of projects you are looking at and the location of any of those projects and maybe give us an idea of the timing, when we can start to see that come through?

The primary focus of our international push right now is in steel plate structures, whether its aboveground storage, LNG, those sorts of projects. This is an effort we've been talking about. We've picked up some pretty good talent with experience in Caribbean, Central American and South America. I would say that's the primary focus of our efforts right now.

Last question I had is on plans for cash on the balance sheet. I understand the desire to remain flexible and opportunistic. Particularly, given where your stock is trading, I'd have to think that a buyback is looking increasingly attractive. Can you just comment on that?

Well, obviously, from a valuation standpoint, we're definitely undervalued from what we see. On the other hand, I would say that acquisition opportunities had picked up a little bit and we're looking hard to add some possibilities there. So we preferred to use our cash to grow our business and that's what we are focused on right now.

Our next question comes from Rich Wesolowski from Sidoti & Company. Richard Wesolowski - Sidoti & Company: Where would be the $0.02 charge for the acquisition receivable, where was that in the segment data?

It was in the SG&A, Rich. Richard Wesolowski - Sidoti & Company: Okay.

900,000. Richard Wesolowski - Sidoti & Company: It was in the corporate SG&A not the either segment of SG&A?

No, it's little bit in both. Richard Wesolowski - Sidoti & Company: Was there any difference in your project bidding criteria in this (Inaudible) quarter versus September, did you turn more aggressive with the bid margins or maybe the level of risk you were willing to accept?

No. Really what started to drive it is, awards that we were really expecting earlier just started to occur. So, some of these projects that we're awarded in second quarter we've been bidding on for several months. Richard Wesolowski - Sidoti & Company: You had some encouraging comments regarding new tank storage. I mean you had talked about internationally, I just want to confirm that you were citing an improvement in your typical North American tank market and not just a broaden capability to do that work internationally?

That's correct. Richard Wesolowski - Sidoti & Company: Okay. What are some key examples of projects that you have the capacity to bid today that were perhaps out of your scope in '07 or '08?

Obviously, today we can bid turnkey on large-scale terminals. We've got the ability to bid turnkey on LNG, cryogenics that we didn't have them before. We've got process capabilities, and along with that, I think the scale of a project that we can handle today is going up significantly with the talent we have in this organization. So, we've really been able to advance our EPC work in general across steel plate structures and larger-scale projects, thermal vacuum chambers, those sort of things. Richard Wesolowski - Sidoti & Company: Okay. Then lastly, on SME, can you discuss the new awards and the outlook? I mean, is their backlog now considerably above or below where it was when you bought them?

Our backlog is considerably above from a year ago when we purchased it. Richard Wesolowski - Sidoti & Company: Would you expect the power market specifically? I know you do E&I across a lot of different industries, would you expect power to be meaningfully higher share of your revenue, year or two from than it is today?

Yes. We're seeing good activity in our market. We're pretty encouraged.

Our next question is coming from Martin Malloy from Johnson Rice & Company. Martin Malloy - Johnson Rice & Company: If I could ask on aboveground storage tank business, in terms of your customer behavior there, the MLPs, it looks like their cost of capital has become more reasonable recently. Are you seeing a change in terms of projects that perhaps have been on the drawing boards for a while, (Inaudible) might be moving forward?

We're just seeing a lot more activity today than we had compared to a year ago. I think obviously the several other storage companies have healthier balance sheets, but we are also seeing some new players get into storage. There's lot of activity in imports – ethanol, so right now we're just lot more encouraged on the new construction part of aboveground storage than we were a year ago, so... Martin Malloy - Johnson Rice & Company: Then within the power area, could you talk a little bit about what you are seeing on for push control equipment projects?

Well, we are already involved in scrubbers, SCRs, FTDs, and we are continuing to bid on projects of a similar nature. So, I'd say it's a mature market, but we are seeing increased steady opportunities in that area. We are starting to get more excited about gas fired generation opportunities, material handling. So, in general, as I said, that market for us is much more encouraging. We've been part of our growth and diversification focus in this company. Martin Malloy - Johnson Rice & Company: Then in Canada you mentioned that the revenues have doubled here over the last year or so. Is that due to improving spending, customer activity up there or is it your expansion of your capabilities?

Primarily, expansion of our capabilities. The market really fell off in general last year, but we've continue to add projects and revenue in Canada. We continue to see some pretty encouraging opportunities for us going forward. So, I'd expect that to become a more meaningful part of our revenue. So that the Power is really right now offsetting some of the challenges we are seeing in the aboveground storage business, but now we are starting to see some interesting opportunities pop up there so.

Our next question comes from Tahira Azfal from KeyBanc Capital Markets.

I had a couple of questions. Number one, if you look at the bookings you just had in the quarter, it was a nice quarter in terms of bookings. Assuming good execution, how would the margins in that compared and how are the mix compared to what you're releasing one through your revenues and P&L right now?

The mix that we picked up in the quarter was quite a bit different than our mix historically because of the added Electrical and Instrumentation, Infrastructure Projects, Power. So I'd would say the mix was changed quite a bit. Which is good, that's been part of our focus. I would say the market is competitive, but we still feel good about the margin opportunities on our projects, particularly if our execution continues to be as good as it has been. So, that's a big factor.

Under absorption from what I can gather can move from your most fixed cost intensive businesses and perhaps of your fabrication intensive businesses, would that be correct and is that really what causing the under absorption?

Yes, part of the under absorption is, we've really reduced cost in our fab operations. I think what we're looking at right now to here is as you sit there and we always take a six-month or 12-month view of our project activity and discussions with clients and what we're bidding on and what we feel good about. So based on those source of outlooks, we'll make a decision on how much construction overhead we'll continue to carry. I think that right now as I stated, we're much more encouraged about construction opportunities and turnaround opportunities over the next six to 12 months. I think on the some of the Repair and Maintenance business, there is definitely a slowdown in activity there, but we got very excellent people on (crews) and if we see some pickup, then we'll go ahead and carry some of that for several months, because we think it's going to turn back up. I think all in all, it's something we watch closely and pay attention to. On the other hand, we really are more encouraged, so we're going to continue to carry some of this because of the opportunities that we see.

As soon as you look at some of the larger opportunities you have on the tank side, you mentioned ethanol and I have seen more ethanol projects pretty come up on those storage side. Generally, you know as you see these pushback kind of on a quarterly basis, when you talk to customers, what sense are you getting from them in terms of what the push outs are due to and what would really trigger than starting construction, going ahead with these projects. Is it more just a general macro environment or are they also looking at the cost structure and (inaudible) more or so as the commodity market is dropping?

I think everybody has just been more cautious in terms of releasing dollars to spend. I think, obviously, calendar 2009 was very difficult. We've seen some capital budgets open up after the first year. A lot more activity, I think, pricing right now is pretty good, steel prices are starting to inch up. We're seeing capacity at the mills tight right now, price increases being enforced. I don't know how long that's going to continue, but that's kind of the environment right now. So I think pricing right now is pretty good. Also, I think would people having better balance sheet is important. A lot of these projects that have been hanging out there for considerable time and some of them we're starting before now.

If you look at the nuclear and the gas price side, could you comment a bit on the progress towards the nuclear stamp? Because, clearly, nuclear back in the picture now. Number two, going back, historically, and I know you guys don't share in a sense when the gas price subcontracting activities really happened for Matrix. To extent, you can comment on the market size and opportunity on the gas side power plant, that would be helpful.

In terms of the nuclear activity, we still are on track to get our N stamp this spring. That was delayed not because of anything with activity we've got going on. It was just a backup in terms of getting the appropriate people out to review, but we're still feel good about getting that N stamp this spring. On the gas-fired generation, we've really seen some indications of increasing opportunities in that market for us. We're primarily focused in the Northeast and Atlantic, but activity has picked up. We're starting to see bid opportunities encouraged by what we see there. So...

Got it.

They are fairly decent scale projects. These are pretty decent sized projects.

I mean the nuclear stamps getting pushed out a bit quarter-on-quarter is that more because of the bottlenecks at the agency or is there anything on the company specific side, information you needed to provide or something the agencies have not been comfortable with?

No, it's really been the bottleneck in getting people available to do the final (Inaudible). So...

Last question in terms of acquisitions, clearly the refinery industry domestically is going to be challenged for a couple of years, and if you look to invest what are the opportunities you are looking at, in which areas would you like to focus on?

Well, I won't talk about specific opportunities, but we continue to look at opportunities to expand certain part of our service business. We like the diversification progress and our E&I and Power, so we'll continue to look along those arenas. Engineering capabilities to expand, we see as pretty interesting opportunity right now. International opportunities, we would look at on a select basis, but I think generally we're just continuing to build out our platform Tahira in terms of the diversification we've already began on. So, some interesting opportunities out there.

Our next question comes from David Yuschak from Madison Williams & Company. David Yuschak - Madison Williams & Company: I just want to drill down a little bit on your power. You mentioned that since the acquisition, you really haven't earned at all that long given success that you had. If you look at the maintenance side versus new construction side, is there anything that kind of stands out as far as what key things have helped you drive the kind of success you've had there to-date?

Well, I think, as we stated when we first acquired S.M. Electric is a very well respected company. They do an excellent job and combined with the Matrix E&I business, and we've got a stronger platform, but we're recognized as a high quality provider of services and that's what we targeted in the beginning, and it's playing out well. I think the other piece of it is, we did anticipate increased spend in these markets. We've already expanded our markets a bit beyond what we had planned, which is good. So, everything that we expected is coming together here. It probably got delayed three or four months from what we originally planned. We had a very cool summer in the northeast, but it's all fallen in place and we feel very good about what the SME team combined with the Matrix team and the opportunities we see continuing to develop there. David Yuschak - Madison Williams & Company: As far as you resources continue to develop those opportunities, as you look at your landscape have enough internally to take care of what you needed to do here right now, or even maybe because of the success you've had and are you going to need to look for other resources to help compliment that success?

I think right now, as we build it, we'll continue to have to look at adding resources, which is a good thing. So I mean we can handle what we have, but we're still looking at expanding some resources and growing that business. David Yuschak - Madison Williams & Company: Then just another quick questions on resources. So, as you look at the landscape that where opportunities over the domestic Canada, international, how do you see about your resource allocation each of these kind of markets to where you may think some of the best market maybe, but you maybe underutilized in this markets for the opportunity. Is there anything like that out at all?

Well, I think our progress in Canada is across multiple provinces, it's not just in a single province. We continue to be encouraged by the opportunities we see developing. The oilfield sands activity is picking up a little bit, which is good. So I think we're in a mode there where we'll look at adding resources as the business continues to pick up. I think the Gulf Coast is an area that, which has really been the focal point of growing our turnaround business as well as our international business, and that's where I think we've got resources to do a lot more. That's again, the focus in part of our growth efforts in the Gulf Coast right now. David Yuschak - Madison Williams & Company: So, you think in the Gulf Coast international, because the way you structure the business, you get plant capacity there right now?

Yes.

(Operator Instructions). Our next question is a follow-up from Rich Wesolowski from Sidoti & Company. Richard Wesolowski - Sidoti & Company: I was just hoping you would describe what role Matrix could play in the eventual build-out of the nation's natural gas delivery network and maybe give us sense of how important that market is relative to the other opportunities? Thanks.

Sure, in terms of natural gas infrastructure Rich, we've got capabilities in terms of constructing aboveground facilities, we're not on underground high clients, but we do have full capabilities on aboveground infrastructure. I think also what's encouraging again is, what we're looking at is the end-use opportunities that are associated with some of the increases in excess to gas in this country, particularly in the Northeast. So we're very focused on the end-use markets and how we're positioned for that, but we also have capabilities for aboveground infrastructure.

(Operator Instructions). If you'd have no further questions, I'd like to turn the call back over to speakers for any closing comments.

Well, again, thanks everyone for joining us this morning. In closing, I want to continue to emphasis that we have advanced and continue to advance on our long-term strategy and growth objectives. As we look forward, we remain committed to the growth of our core AST and refinery and maintenance business in North America. While it's down, I think it still creates some opportunities for Matrix over the long-term. Additionally, our strength and capabilities in engineering, procurement fabrication and construction for aboveground storage tanks and large scale terminals have positioned us well to move into select international markets. We are leveraging our capabilities to diversify further as I mentioned at the Power, Electrical and Instrumentation, Specialty Structures, Renewable Energy and Industrial Construction, including our focus on broadening our overall Repair and Maintenance Service offerings. Our expanded engineering capabilities really enable us to pursue, as I mentioned, much larger scale turnkey terminal projects and more complex steel plate structure projects, such as thermal vacuum chambers, nuclear and cryogenic. Finally, as I mentioned, we will continue to pursue acquisitions to facilitate and support these long-term strategic objectives. We have the financial strength, capabilities and talent to facilitate and support growth in our business. We remain committed to our strong safety culture and high-quality project execution for our clients. These sound fundamentals enable us to be disciplined, selective and strategic in our pursuits. This market has its challenges as we all know, but we also believe it presents some interesting opportunities. We are confident that with the steps we have taken and remain strategically focused on a long-term growth and diversification of our business. Again, thank you for joining us today. We look forward to talking with you in the future.

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.