Matrix Service Company (MTRX) Q3 2022 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen. Thank you for standing by and welcome to the Matrix Service Company Conference Call to discuss Results for the Third Quarter Fiscal 2022. [Operator Instructions] I would now like to hand the conference over to your speaker host, Kellie Smythe.

Good morning and welcome to Matrix Service Company’s third quarter of fiscal 2022 earnings call. Participants on today’s call will include John Hewitt, President and Chief Executive Officer; and Kevin Cavanah, Vice President and Chief Financial Officer. The presentation materials we will be referring to during the webcast today can be found under Events and Presentations on the Investor Relations section of matrixservicecompany.com. Before we begin, please let me remind you that 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 as a result of various factors, including those discussed in our annual report on Form 10-K for our fiscal year ended June 30, 2021 and in subsequent filings made by the company with the SEC. To the extent, we utilized non-GAAP measures, reconciliations will be provided in various press releases, periodic SEC filings and on our website. I will now turn the call over to John Hewitt, President and CEO of Matrix Service Company.

Thank you, Kellie and good morning everyone and thank you for joining us. I have been reflecting on the business challenges our customers and Matrix have experienced over the last couple of years and how important it is in times like these, not to lose focus on the safety of our workforce, with our end markets improving, comes increasing workloads and project activity. Our focus, leadership and expectations in driving a zero incident safety outcome must be even greater as activity increases. I want to remind all of us at Matrix that zero incident performance is possible and it is a level of performance that we have demonstrated can be delivered on for our employees and ourselves. If we act or better set or accountable for our outcomes, communicate the expectations and train with passion, I am confident we can achieve our safety vision. Now, before I turn the call to Kevin to discuss results, I want to briefly comment on our performance during the quarter, which is not yet reflective of the strong momentum growing in our end markets or the organizational changes that are underway at Matrix. Our revenues grew by nearly 20% in the quarter compared to the same quarter last year. Revenues are clearly trending up but at a slower pace than we anticipated, impacted in part by delayed starts on previously awarded work. Our revenue in the quarter was driven by smaller project activity, a higher percentage of lower margin reimbursable work and the execution of low-margin projects won during the competitive market environment, which we have experienced over the last few years. This growth in revenue is an encouraging indicator of returning market strength, but it currently does not fulfill our historical gross margin expectations. It limits complete recovery of overheads and leave little room for error. While this growing revenue environment has not yet created the bottom line improvement we expect, we are optimistic that given the significant tailwinds across all our markets, the award strength we are experiencing and the near-term booking opportunities bottom line improvement is on the horizon. I do want to highlight that this was our third consecutive quarter with a book-to-bill greater than 1. And through the first 9 months of the year, we have achieved a book-to-bill of 1.3 on awards of nearly $640 million. To put this in context, year-to-date awards are 81% higher than awards in the first 9 months of fiscal 2021. Our backlog now stands at $594 million, 20% higher than our backlog at the start of the fiscal year. This acceleration in awards has primarily come from projects with individual values of less than $25 million. So while we expect the volume of smaller awards to continue, there is a clear path to larger project awards beginning in the next two quarters. We therefore anticipate a material increase in the size of our backlog as we move through the remainder of the calendar year. During the quarter, we also continued to work on organizational improvements that will result in a company that is more competitive, efficient and produces better bottom line results. Let me hand the call over to Kevin to discuss our segment and consolidated results. And I’ll be back to share our outlook and give you some of the organizational improvements taking place within Matrix.

Thanks, John. I will start with consolidated results. Revenue was $177 million for the third quarter which is a sequential increase of 10% over the second quarter and a 19% increase over the third quarter of the prior fiscal year. While we are expecting larger capital project awards to accelerate in the next couple of quarters, revenue volumes have increased along with backlog on smaller project activity. The company was just below breakeven from a gross margin perspective as performance was impacted by three issues. First, the competitive environment, the last couple of years has resulted in a temporary reduction in the margin opportunity of awarded work. Second, our revenue volume has not been sufficient to fully recover construction overhead, which negatively impacted gross margins by 400 basis points in the quarter. Third, we incurred increases in forecasted costs on two projects, one in the very competitive environment during the height of the pandemic, one in the Process and Industrial Facilities segment and the other in the Utility and Power Infrastructure segment. These two projects impacted gross margins by over 400 basis points in the third quarter. Consolidated SG&A expenses were in line with expectations at $17 million for the quarter. We also incurred non-cash items that impacted earnings in the quarter. The first item was an impairment charge to goodwill. While we normally perform our annual impairment test during the fourth quarter of each year, during the third quarter, we concluded that goodwill impairment indicators existed. The decline in the price of our stock was a significant indicator as were operating results that have underperformed our forecast during the year. Accordingly, we performed an interim impairment test as of March 31, 2022 and concluded that an impairment of $18.3 million should be recorded. The economic environment the past couple of years has impacted our entire business. And as a result, the charge impacted all three segments. We should be clear here that the impairment charge is not indicative of our view of the future. As John discussed, project awards and our backlog have increased significantly this fiscal year, and we expect that trend to continue as larger capital projects are awarded. We also believe the lower gross margins we have experienced this year will return to our historical range of 10% to 12%, as higher quality work is booked and recovery of critically important construction overheads improving. The second item was a reversal of $1.6 million of restructuring costs due to a favorable settlement on a previously recorded restructuring obligation. The third item relates to income taxes. Our effective tax rate was 0.4% for the quarter as the tax benefit generated in the quarter was largely offset by additional valuation allowances of $7.7 million. Although most of these assets do not expire and the company expects to utilize these federal and state NOLs when we return to profitability, the valuation allowance was required. Utilizing these NOLs as well as previously reserved NOLs will have a positive impact on future earnings by significantly lowering our effective tax rate. As a result, we now expect our effective tax rate to be in the single digits until we utilize the deferred tax assets. For the 3 months ended March 31, 2022, we had an adjusted net loss of $13.4 million and an adjusted loss per share of $0.50. Including the impact of the impairment, tax asset valuation allowance and restructuring costs, the quarterly net loss was $34.9 million, and the loss per share was $1.30. Moving to segment results, revenue from Utility and Power Infrastructure segment was $59 million in the third quarter, which is an increase of 8% over the second quarter. The segment gross margin of negative 0.8% was impacted by the following: first, low volumes led to under recovery of construction overhead costs and impacted gross margins by 380 basis points. Second, we recorded a $2.5 million adjustment to the forecasted outcome of a capital project, which is nearing completion. And third, we are also working through competitively bid projects and projects that were marked down in previous periods and therefore, present lower margin opportunities. Moving to the Process and Industrial Facilities segment, third quarter revenue of $69 million represents a 37% increase over the second quarter and the highest quarterly revenue since the third quarter of fiscal 2020. While the revenue increase primarily relates to improved refinery maintenance activity, year-to-date, we have also booked over $315 million of awards, including a number of capital projects, resulting in a book-to-bill of 1.9x. We expect to see continued revenue growth in the fourth quarter due to these strong project awards. The quarterly segment gross margin was just below breakeven as the segment was negatively impacted by a $4.8 million increase in forecasted costs to complete a midstream gas processing project. The mix of work which was impacted by increased reimbursable maintenance activity also contributed to lower margins. The higher revenue led to improvement in recovery of overhead, but the segment still had some under recovery that impacted margins in excess of 100 basis points. The Storage and Terminal Solutions segment produced $49 million of revenue in the third quarter. Storage revenue volume has been impacted by both delays in construction starts of awarded projects as well as delays in the award of larger projects. We expect the quarterly revenue to improve based on recent awards and our pipeline of opportunities. Awards have produced a quarterly book-to-bill of 1.1 and a year-to-date book-to-bill of 1.2. The segment gross margin was a negative 0.9% in the third quarter due to under recovery of construction overhead costs, which impacted margins almost 740 basis points. In addition, segment gross margin was impacted by competitively bid smaller projects, which represent a lower margin opportunity. Moving on to the balance sheet and cash flow, at the start of the quarter, the company had $93 million of cash, which decreased to $59 million during the quarter. The $34 million decrease was primarily the result of cash invested in working capital to support the mix of work in the quarter, which saw an increase in reimbursable work. The net loss in the quarter adjusted for non-cash items also contributed to cash usage. Regarding liquidity, as of the end of the quarter, the company has not drawn on its revolving credit facility which has a borrowing base of $77 million. We have utilized $24 million for letters of credit, so we have availability of $53 million. Excluding restricted cash of $25 million, our liquidity is $87 million, which is adequate to support our needs. I will now turn the call back to John.

Thank you, Kevin. In prior quarters, we spoke about delays in capital project spending and reduced maintenance activity. In this fiscal year, we are seeing maintenance volume begin to expand and the award of smaller projects gain momentum. As energy markets have stabilized and with the onset of current global events, the sentiment has absolutely turned for energy infrastructure investment. As such, we expect larger capital project award activity to accelerate over the next couple of quarters. Concerns about energy security globally and reliability domestically has created a transformation in the opportunity set and its timing. In addition, the call to action for cleaner forms of energy and renewables is creating significant business opportunities for Matrix. Finally, the supply chain disruption and demand for commodity assurance is building what many in our industry believe will be an industrial investment renaissance here at home. It is indisputable that natural gas has an extremely important role to play in the clean energy transition. Until other solutions are commercially viable and broadly available, natural gas will be needed as a bridging fuel. At the same time, the need for energy security has put natural gas and more specifically, LNG under the global spotlight. This will likely lead to an increasing number of long-term supply agreements backed by a regulatory environment that will almost certainly support decisions to move forward with new LNG projects and support the continued growth of the LNG market. It is important to note that LNG has relevance in both domestic and international markets. Extreme temperature conditions in some parts of North America, limited pipeline capacity and volatile natural gas prices over the last 12 months has driven further interest in LNG peak shaving facilities by most utilities. These facilities offer our utility clients significant flexibility to meet peak demand for electricity and consumer gas supply while managing our exposure to fluctuations in natural gas spot prices. We are actively performing, supporting and pricing multiple feed studies for the maintenance, repair and upgrade to existing facilities as well as the construction of new infrastructure. As I mentioned last quarter, there has also been a significant uptick in bidding in midstream gas processing, and we expect to see capital investment in natural gas infrastructure to continue based on the growth in global demand and recent increases in gas prices. In addition, many of our clients are planning capital expenditures to upgrade their compression and processing stations to minimize the carbon footprints of those facilities while increasing capacity. The midstream natural gas and LNG markets have certainly been catalyzed in the last several months, but these are not the only areas we are seeing strong momentum. The bidding environment is extremely active across all of our segments, and we have added resources to handle the increase in activity. We’ve been tactically building our operational tactical teams to support the pursuit and execution of these opportunities and recently awarded projects. Among these awards are thermal vacuum chambers used for satellite testing, electrical infrastructure projects, the construction of a bore a mining facility as well as early engineering for a new mid-scale LNG export terminal. The distribution of projects in our opportunity pipeline highlights not just the growing demand for traditional and renewable energy-related projects, but also a sharp increase in planned capital spending across our diverse end markets. Our market position supports both our short and long-term opportunity pipeline. We have a very strong brand in storage and terminals for all things energy. LNG, including peak shaving facilities, bunkering and export terminals as well as NGLs and renewable fuels are just starting a strong growth cycle driven by a favorable energy macro. The door is also open for international opportunities across the Americas. Investment in hydrogen infrastructure will increase over time, our global reputation and cryogenic storage capabilities as well as our relationship with Chart Industries will lead to opportunities for us to play a major role in hydrogen infrastructure expansion. For example, the FEED study currently underway on a small-scale hydrogen liquefaction and storage supply facility, when sanctioned will lead to multiple project installations. Our brand-leading cryogenic storage capabilities are attracting several global energy and utility companies interested in the creation of large-scale hydrogen storage solutions. We are continuing to build our brand in midstream gas by strengthening our existing client relationships and capabilities as well as expanding our technical knowledge platform in this critical low-carbon gas supply market. We continue to support our refining clients as a ramp up maintenance and capital spending to support traditional operations and continue to retrofit their facilities to process lower carbon fuels. Awards and bidding opportunities continue to be strong in aerospace, where Matrix has a niche position in the design and construction of thermal vacuum chambers used for satellite and other equipment testing destined for space. In the mining and minerals sector, copper, precious metals and rare earth mineral prices are sustaining at higher levels, and our customers are moving forward with capital spending and delayed maintenance programs to meet the long-term demand for these commodities and more. Finally, the interconnector world of electrical and renewable generation, along with an aging infrastructure system creates significant growth potential for our electrical business, currently operate in the Northeast, Ohio Valley and Mid-Atlantic. Long-term, we remain strategically focused on growing a coast-to-coast delivery offering. Activity that is happening today has a potential to dramatically increase backlog in the near-term. Larger energy infrastructure projects progressing through our pipeline, combined with a normalized cadence of smaller capital projects and maintenance activity could conceivably put us in a position to exit Q1 of fiscal 2023 with the highest level of backlog in several years. These expected awards will provide a strong foundation for the future as we expect the next heavy award cycle in LNG peak shaving terminals and other large projects to continue into calendar 2023 and beyond. With this improving backlog position will come better margins, full recovery of overhead, SG&A leverage, scale and positive bottom line results. It is critically important that Matrix is appropriately positioned to capitalize on the opportunity ahead of us by ensuring that we have the correct resources in place and organizational structure that supports business efficiency and then is centered around delivering high-quality solutions and services to our clients. We continue to strengthen the company through the consolidation of all finance, accounting and human resource functions into our shared services model. We have also created a center of operational excellence is to initially optimize procurement, quality, health and safety with the ultimate goal of providing various internal project management and proposal services across the organization. Long-range planning of our fabrication facilities and resources has been completed, which will lead to investments to improve efficiency, quality and markets served. Also, given changes in the current commercial office market, we are reviewing our fixed office environment for size, location and capital efficiency in context to our strategic growth plans. We have been on a multiyear mission to not just enhance our cost structure but also to create an optimized and efficient organization prepared to support the company’s growth plan aligned with the market opportunity and ultimately delivering better and consistent bottom line results. In short, we are highly confident in the market backdrop and continue to take proactive steps to ensure Matrix is optimally positioned to deliver against it. With that, I’ll open the call for questions.

[Operator Instructions] And our first question coming from the line of John Franzreb with Sidoti. Your line is open.

Good morning, John and Kevin. Thanks for taking the questions.

Good morning, John.

So I like to start with the revenue that was deferred. I remember you specifically mentioned in the storage. But how much company-wide was deferred and give me like a magnitude of when it’s been deferred to?

So Kevin, you can count on the numbers. So we had a number of projects that were awarded in Q1, Q2 and early part of Q3 that we had anticipated starting to burn dollars on both engineering and procurement that got delayed in some cases, upwards of 5 months while our clients work through some rescoping. In some cases, they had supply of critical pieces of equipment that they had to make choices on that affected our design and on our ability to move all the design and ordering the materials. And so the amount of that – I’m not sure I can quantify. Kevin might have a number in his head. But in each of those cases, it pushed revenues that we thought we were going to start to burn in 3Q. We didn’t start – in some cases, didn’t start actually burning those revenues until a couple of weeks ago. And so, all of that had an impact against the organization of diminishing the revenues that we had anticipated, specifically in the fourth quarter.

Yes. So John, on the awarded projects, I’d say it primarily impacted the Process and Industrial Facilities segment and the Storage and Terminals Solutions segment. The exact amount is probably about a 10% impact plus 10% to 15% impact on each of those segments in the quarter is my best estimate.

Okay. Okay. Fair enough. And the two problematic projects that you had in the quarter in utility and in process, can you talk a little bit about what the issues were? And are they fully resolved? Is it something that to worry about in coming quarters?

So one project, the issue there – so I would put both projects in prospective. Both those projects were fundamentally won during the height of the pandemic. So we were – we like, our competition was very aggressive on winning that work to maintain our resources. And as we move through the – however long this pandemic inspired downturn was going to last. So that’s kind of an overall statement. Two, the project in the Process and Industrial, we had, in that case, we’re not self-performing to work. We were – had subcontracted the majority of the work to a general contractor. That general contractor did not do their job. And so we had to make a replacement of that contractor in fundamentally in the middle of the job. And as a result of that, there were issues around the quality of work that was in place that we had to fix the supply materials that weren’t paid for. And so a variety of issues there that we had to deal with that caused excess cost on the project. We think we have that captured. We understand what that is. We’ve moved our own construction forces into the job to finish it. And so we’re – and where the job itself is probably 50% complete around numbers. And – but we think we’ve captured what the pain is associated with the direct cost on the job. We still have to have fisticuffs with the general contractor on the job, but that’s come in a later day. The second job in the Utilities and Power Infrastructure, that project, in general, I think, is being challenged a little bit with supply chain issues. We have said on previous calls that we really hadn’t had material impact from an inflationary escalations. We are starting to see that as we’re rounding that job out. And so that job is – it continues to be operating at a profit, although at a lower profit than what we had anticipated. It’s on schedule, on track for mechanical completion this summer. Our client is extremely happy with us. In fact, they are talking to us about some other projects. And so we’re working through that, and we’re fairly comfortable that we think we’ve got most of those – the risks managed there.

Okay. And just thinking about how you referenced that you’re still working through older, lower-priced bookings. When does the scale tip that you’re going to have more repriced jobs that are more favorable margin and less of the low price unfavorable margin that causes you to have under absorption? Just a general time line. Do you think that, that’s going to materialize?

Yes. So John, that’s not a bright line, right? So I could tell you that we’ve put projects into backlog over the last quarter that have margins that are in our normal expected range. And – but we’ve got some projects in some segments that are still at these sort of depressed margins. So it’s going to be a transition. I think that transition will occur as we move through the balance of this calendar year. And so I would think by the time we get to the probably get into the second quarter of next fiscal year, we will see a higher percentage of the projects that we’ve got in backlog, new projects that we’ve got in backlog and getting back to more of our traditional gross margin rates.

Okay, thanks, guys. I will get back into queue.

[Operator Instructions] And our next question is coming from the line of Jean Ramirez with D.A. Davidson. Your line is open.

Good morning. This is Jean Ramirez for Brent Thielman.

Good morning.

My first question is, given the inflationary environment, is $200 million to $220 million revenue is still the right ballpark to get to breakeven, or is it higher today?

So, our cost structure is still basically where we had planned it to be. So – but the margin opportunity as we talked is a bit lower. So, for every percent of direct margin opportunity that decreases, that means we have got to do an additional $10 million of revenue to kind of cover that issue to get to breakeven. So, it has increased a bit in this environment. As John said, as we move back towards more normal margins, that will come back down to closer towards that $200 million breakeven level.

And just a follow-up to that. What is the timeline for that breakeven or the – as you mentioned, to the normal margins? When do you expect to hit that point?

So, throughout this fiscal year, it’s been – it’s hard to predict the timing of awards and the delays we have had on capital projects. And so it’s been hard for us to predict exactly what the revenue level is going to be in the future quarters. But we did have a good growth in 3Q. I think that will continue in 4Q. So, there is still the potential that we could reach breakeven in 4Q. But if we don’t in 4Q, then I would expect it at some point in the first half of the fiscal ‘23 year.

Great. And if you don’t mind, one more question. Regarding your beta opportunities, could you just give us some more color on the LNG and in the hydrogen market as well?

So, we have got a fair amount of projects in the LNG sector that we are either proposing on. In some cases, like I said, we have started engineering on a mid-scale LNG export terminal, where we see our greatest role. And the future here will be really associated with LNG peak shaving terminals that we see. There is a significant amount of interest across the U.S. utility market. And so we have several of new clients there that were in the early stages of discussing some pre-FEED with. You have also got a significant amount of the utilities across the U.S. already have some form of LNG storage or peak shaving facility in place that was built probably in the ‘70s and ‘80s that needs upgraded, reviewed and studies done. And so we have spent some time and are doing some work for utilities on that. And in fact, we have had a couple of projects that have run through the system with some small repairs and some upgrades on them. So, on a large-scale LNG export facilities, which we think there will be several more come to market. Our role on those will be principally around the storage and the construction – engineering design and fabrication of the storage facilities if they get added to those facilities. And then there is opportunities for us on the import side, in the Caribbean and other Americas markets that we are tracking. On the hydrogen side, we see that, again, as a long-term growth opportunity that hydrogen will be play a major part in the energy environment across the globe, but specifically in the U.S. And so as we have said in our prepared remarks, we have a FEED study that we are executing on right now. We will come to a close here this summer that we expect will – could get sanctioned into a project. And they are a smaller level capital project, but there could be a few of them built by this one client. And so that creates an opportunity plus we have been approached by a number of global energy companies to find a solution for large-scale hydrogen storage larger than what we have – the markets have traditionally designed and installed. And then kind of on top of that, since you are onto cryogenic topics, there is also a lot of work around ethane and ethylenes and propanes, both for export and for domestic use. So overall, we see a lot of growth in the sort of the cryogenic-related energy storage and terminal markets, and I feel we are very well positioned to take advantage of that growth.

Great. Thank you so much. I appreciate your time. I will jump back in the queue.

And we have a follow-up question from John Franzreb with Sidoti. Your line is open.

Yes. John, you seem fairly confident about having a high booking profile in the next couple of quarters. I mean you clearly outlined some of the programs that you are bidding on. But if I look at it on the segment basis, given the different margin profiles, I am curious which segments are going to have the best order intake over the next two quarters and what’s going to drive those orders?

I would say the storage and PIF. And longer term, then it will be increased in the UPI. The big backlog driver in UPI is LNG peak shaving terminals, because it’s a utility – it’s generally a utility-based project.

Right. And I guess I want to go back closer to the hydrogen question a little bit. I would have thought we would have been farther along by now as far as the magnitude of project work. Could you talk a little bit about if you have the same anticipation and perception that you have more project work right now, or has something changed in the marketplace that it is just not coming as quickly as you had hoped?

Well, I think when you talk about these sort of new energy transitional LMS, they take a little bit longer to get – put in place to get from a technical standpoint and from a financing perspective. We bid and are bidding a few hydrogen storage projects and some developer-led projects that were unable to get to a financial close. Some of the storage projects, we were not successful in winning, again, super competitive market. And the people that won those storage projects took them for a price that we weren’t willing to go to. So, there has been activity there. And so we have been – in some cases, have been caution about our aggressiveness there. And in other cases, it’s just timing. There is plenty of activity out there. It’s just timing.

Okay. And maybe this one is for you, Kevin, maybe next two. Cash took a hit in the quarter. Working capital, I imagine was the key indicator. I haven’t seen the cash flow statement yet. I am just curious, how does the cash position change in the fourth quarter? A little bit of thoughts about what’s going on in the puts and takes in cash.

Yes. So, I will address fourth quarter, but let’s talk about third quarter first. If you look back at the start of the quarter, we ended with – we started the quarter with what, $92 million of cash. That was really high because we had got some upfront payments from some customers. And so during this quarter, when we think about the mix of work we have got going on, we are working off capital projects that have been prepaid effectively, and we have increased revenue volume and reimbursable work, and so the – which we have got to fund. So, that’s the combination that causes us to increase our investment in working capital in the quarter. Now a lot of that reimbursable work that increase continues on in the first, let’s say, the first two months of the fourth quarter because it’s – a lot of its refinery-related and that’s the traditional turnaround season. So, when we think about 4Q cash flows, I think we will see some additional investment in working capital. Then that thing gets – then that comes back towards the last month, 1.5 months of the quarter. And then we have also – we have talked about before, we have got $13 million of tax refunds due sometime in May or June. So, that’s still supposed to happen. And then I think John mentioned in this call, we are trying to make sure that we have – we are doing the right thing with our facilities, and so there could be some cash flow that comes out of that activity. So, I feel good about where we stand overall. I think you are going to see cash potentially increase significantly in the fourth quarter if everything goes as planned.

Okay. Good. And you just touched on this a little bit. On the tax line, I think I heard in the prepared remarks that we should be thinking about a high-single digit. Now, I am not sure if you said for the balance of the year or did you say until you return to profitability? Just walk me through you were trying to get out to that message.

Yes. So, right now, what you should expect on tax is as any additional tax assets that are generated right now are going to – we are going to immediately put a valuation allowance on those. So effectively, our tax rate is going to be near zero. And then as we start – as we return to profitability, we will get to utilize those NOLs at a high rate. And so as a result, we are probably going to have a tax rate in the mid-single digits until those NOLs are utilized. And we have got over $20 million of NOLs in right now. So, that’s a lot of income that will basically have zero tax on it or minimal tax on it until those NOLs are utilized.

Alright. Thanks for the color. I appreciate it guys.

And I am showing no further questions at this time. I would now like to turn the conference call back over to Mr. John Hewitt for any closing remarks.

Thank you, everybody, for attending today’s call. Appreciate your confidence and investment in Matrix, and I wish everybody a great summer. Thank you.

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect.