Matrix Service F1Q08 (Qtr End 8/31/07) Earnings Call Transcript

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2007-10-04 13:10:51.0

Tags: Matrix Service Co.

Question-and-Answer Session

Operator

Your first question comes from Daniel Burke - Johnson Rice.

Daniel Burke - Johnson Rice

You mentioned you continue to see an exceptional market out there. With regards to the work you are currently booking into backlog, do you feel like the margin opportunity is better than the margin opportunity you have seen over the last one or two years?

Michael Bradley

We have seen margins improve in our overall outlook for our business and we expect to see strong margins given the demand for our services overall. So a strong market, strong demand, and we are seeing improved margins as compared to the past couple of years.

Daniel Burke - Johnson Rice

Let me try a more specific question. You mentioned the call-out work in repair and maintenance services. Could you address in a little bit more detail what caused that call-out work and why we wouldn't continue to see a bit more of that?

Michael Bradley

I think we had what I would call an atypical amount of emergency call-out work in the quarter. That is not work that we anticipate on an ongoing basis, but it was very opportunistic work for us and we were available and we always focus on trying to service our clients. We will continue to look at those opportunities, but we did have what I would call somewhat of an unusual activity in the emergency call-out work during the quarter.

Daniel Burke - Johnson Rice

You mentioned potential acquisition opportunities. It seems like it has been a while since you addressed the Canadian market. I know that is one you have thought about getting more involved in. Are you more or less interested in that market, Mike, as you have now been at the company for nearly a year?

Michael Bradley

The answer to that question is yes, we are interested. Matrix Service has conducted business in Canada in the past but we are in the process of increasing our focus in Canada, primarily toward above ground storage tanks and repair and maintenance. We have seen a lot of interest from our current clients in the U.S., with the additional crude oil coming out of Canada, demand for storage is continuing to be very, very strong. We have a team up in Canada right now focusing and developing our business. So the answer to that question is yes, we have an interest and we are putting more resources in that particular area.

 

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