The narrative behind Matrix Service Co. (NASDAQ: MTRX)’s backlog is an interesting one. Backlog at the company typically represents a significant portion of the anticipated revenue, which is why backlog is a key metric to keep an eye on at Matrix.
At the end of its fiscal 2016, whose financial results were released on August 30, Matrix Service Co. (NASDAQ: MTRX) said it had backlog of $869 million. That suggests a dip from backlog of $1.4 billion at the end of fiscal 2015. However, what to keep in mind is that the backlog at the end of F2015 was a record for Matrix and it was consistent with the company’s typical backlog.
What is typical backlog for Matrix?
The company traditionally begins a fresh fiscal year with backlog that represents between 50% and 60% of anticipated revenue. As for F2017, the company’s $869 million backlog represents over 60% of the expected revenue for the year. That not only means that the backlog is consistent with the traditional level, but also that chances of Matrix hitting its revenue target for F2017 look elevated.
How Matrix fared in F4Q2016
Matrix Service Co. (NASDAQ: MTRX) posted EPS of $0.34 in F4Q2016, exceeding the consensus estimate of $0.30. Revenue of $359.6 million also came above the consensus estimate of $338.4 million for the quarter.
Matrix’s CEO John Hewitt said they managed to deliver a strong F4Q and F2016 despite the depressed commodity prices that have continued to rattle the energy sector.
F2017 outlook – Matrix Service Co. (NASDAQ: MTRX)
Matrix Service Co. (NASDAQ: MTRX) is looking for F2017 EPS in the band of $1.10 to $1.40. Revenue for the year is expected in the range of $1.30 to $1.45 billion. Those internal projections compare with consensus estimate of $1.35 billion for revenue and $1.30 for EPS.
To attain its growth targets and set itself on the path for long-term growth, Matrix intends to draw from its strong brand position and safety track record as differentiators.