What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-09-10 compared with 2024-09-10 · 224 added, 214 removed, 954 unchanged (31% of the section changed)

106 unchanged sentences

The Company performed an annual goodwill impairment test as of May 31, 2025, which resulted in no impairment in 2025.

Two reporting units with a combined total of $16.6 million of goodwill as of June 30, 2024 were at higher risk of future impairment and their estimated fair values exceed their carrying values by 13% to 70%, respectively.

Two reporting units with a combined total of $16.6 million of goodwill as of June 30, 2025 were at higher risk of future impairment and their estimated fair values exceed their carrying values by 8% and 37%, respectively.

The Company’s total goodwill was $29.0 million as of June 30, 2025.

23 unchanged sentences

Cost of revenue 729,609 687,740 764,200

Gross profit (loss) 40,473 30,820 ( 1,206 )

Gross profit 39,677 40,473 30,820

Selling, general and administrative expenses 71,173 70,085 68,249

22 unchanged sentences

Net loss $ ( 29,462 ) $ ( 24,976 ) $ ( 52,361 )

Other comprehensive loss, net of tax:

Foreign currency translation loss (net of tax expense of $0, $0 and $71 for the fiscal years ended June 30, 2024, 2023 and 2022, respectively) ( 766 ) ( 594 ) ( 1,426 )

Other comprehensive income (loss), net of tax:

Foreign currency translation gain (loss) 132 ( 766 ) ( 594 )

Comprehensive loss $ ( 29,330 ) $ ( 25,742 ) $ ( 52,955 )

10 unchanged sentences

Income taxes receivable 110 180

Prepaid expenses 4,065 5,741

Other current assets 12 3,118

Prepaid expenses and other current assets 4,347 4,077

Total current assets 419,773 301,591

22 unchanged sentences

Operating lease liabilities 16,986 19,156

Borrowings under asset-backed credit facility — 10,000

Other liabilities, non-current 4,154 2,873

10 unchanged sentences

Treasury stock, at cost — 277,731 and 579,422 shares as of June 30, 2025 and June 30, 2024, respectively

( 2,608 ) ( 6,083 )

Total stockholders' equity 142,716 164,182

13 unchanged sentences

Stock-based compensation expense 8,904 7,745 6,791

Deferred income tax — — 5,358

Gain on sale of property, plant and equipment (Note 3) ( 4,923 ) ( 2,841 ) ( 33,114 )

Accelerated amortization of deferred debt amendment fees — — 1,518

Loss (gain) on disposal of property, plant and equipment (Note 3) 8 ( 4,923 ) ( 2,841 )

Other 234 1,362 147

7 unchanged sentences

Accrued expenses 4,730 5,440 ( 10,610 )

Net cash provided (used) by operating activities 72,571 10,247 ( 54,196 )

Net cash provided by operating activities 117,471 72,571 10,247

Investing activities:

Capital expenditures ( 7,685 ) ( 6,994 ) ( 9,009 )

Proceeds from asset sales (Note 3) 6,049 6,466 39,018

Net cash provided (used) by investing activities ( 945 ) ( 2,543 ) 35,673

Proceeds from sales of property, plant and equipment (Note 3) 240 6,049 6,466

Net cash used by investing activities ( 7,445 ) ( 945 ) ( 2,543 )

Financing activities:

2 unchanged sentences

Payment of debt amendment fees — ( 100 ) —

Issuances of common stock — — 199

Proceeds from issuance of common stock under employee stock purchase plan 195 184 252

Repurchase of common stock for payment of statutory taxes due on equity-based compensation ( 1,235 ) ( 456 ) ( 310 )

Other — — ( 654 )

Net cash provided (used) by financing activities ( 10,372 ) ( 5,058 ) 12,699

Net cash used by financing activities ( 1,040 ) ( 10,372 ) ( 5,058 )

Effect of exchange rate changes on cash 40 ( 451 ) ( 205 )

Net increase (decrease) in cash and cash equivalents 60,803 2,441 ( 6,507 )

Net increase in cash and cash equivalents 109,026 60,803 2,441

Cash, cash equivalents, and restricted cash, beginning of period (Note 1) 140,615 79,812 77,371

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Paid-In Capital Retained

Earnings Treasury Stock Accumulated

Earnings Accumulated

Comprehensive

Loss Treasury Stock

Shares Amount Shares Amount Total

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Treasury shares repurchased to satisfy tax withholding obligations — — — — — 52,864 ( 310 ) ( 310 )

Exercise of stock options — — ( 189 ) — ( 19,550 ) 388 — 199

Stock-based compensation expense — — 6,791 — — — — 6,791

6 unchanged sentences

Stock-based compensation expense — — 7,745 — — — — 7,745

Modification of liability-classified awards (Note 10) — — 967 — — — — 967

June 30, 2024 27,888,217 $ 279 $ 145,580 $ 33,941 $ ( 9,535 ) 579,422 $ ( 6,083 ) $ 164,182

Net loss — — — ( 29,462 ) — — — ( 29,462 )

Other comprehensive loss — — — — — — ( 766 ) ( 766 )

Other comprehensive income — — — — 132 — — 132

Issuance of restricted stock — — ( 4,537 ) — — ( 408,406 ) 4,537 —

2 unchanged sentences

Stock-based compensation expense — — 8,904 — — — — 8,904

Modification of liability-classified awards (Note 10) — — 967 — — — — 967

June 30, 2025 27,888,217 $ 279 $ 149,969 $ 4,479 $ ( 9,403 ) 277,731 $ ( 2,608 ) $ 142,716

10 unchanged sentences

The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

We believe the most significant estimates and judgments are associated with revenue recognition, the recoverability tests that must be periodically performed with respect to our goodwill and other intangible assets, deferred tax assets, and the estimation of loss contingencies, including liabilities associated with litigation and with the self-insured retentions on our insurance programs.

Actual results could materially differ from those estimates.

76 unchanged sentences

Restricted cash 25,000 25,000

Total cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows $ 140,615 $ 79,812

Total cash, cash equivalents and restricted cash $ 249,641 $ 140,615

Accounts Receivable

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Accounts are written off against the allowance for credit losses only after all reasonable collection attempts have been exhausted.

Contract retentions collectable beyond one year are included in Other assets, non-current in the Consolidated Balance Sheets.

Some of our large construction projects may require security in the form of significant retentions.

Contract retention represents an unconditional right to cash that is normally held by the customer until a certain time has passed, which is generally marked by certain contractual milestones, typically at or near the end of a project.

Contract retentions expected to be collected within

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

one year are included within Accounts Receivable in the Consolidated Balance Sheets.

Contract retentions collectible beyond one year are included in Other assets, non-current.

Loss Contingencies

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We use a case-by-case evaluation of the underlying data and update our evaluation as further information becomes known.

Costs incurred for litigation are expensed as incurred.

Inventories consist primarily of steel plate and pipe and aluminum coil and extrusions.

Cost is determined primarily using the average cost method and inventories are stated at the lower of cost or net realizable value.

Depreciation is computed using the straight-line method over the estimated useful lives of the depreciable assets.

Depreciable lives are as follows:

buildings— 40 years, construction equipment— 3 to 15 years, transportation equipment— 3 to 5 years, and office equipment and software— 3 to 10 years.

Leasehold improvements are amortized over the shorter of the useful life of the asset or the lease term.

Property, Plant and Equipment

Property, plant and equipment consists primarily of construction equipment and are recorded at cost.

See Note 3 - Property, Plant and Equipment for more information.

Capitalization Policy

Expenditures that materially extend the useful life, increase capacity, or improve the efficiency of an asset are capitalized, and routine maintenance and repairs are expensed as incurred.

Assets not yet placed into service are included in construction in progress and are not depreciated until placed into service.

Depreciation is calculated using the straight-line method over the following ranges of estimated useful service lives, in years:

Estimated Useful Service Lives

Construction equipment 3 - 15

Transportation equipment 3 - 5

Office equipment and software 3 - 10

Leasehold Improvements Shorter of lease term or useful life

We enter into lease arrangements for real estate, construction equipment and information technology equipment in the normal course of business.

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We consider various factors, including economic incentives, intent, past history and business need, to determine the likelihood that a renewal option will be exercised.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Right-of-use assets are evaluated for impairment in accordance with our policy for impairment of long-lived assets.

7 unchanged sentences

In accordance with current accounting guidance, goodwill is not amortized and is tested at least annually for impairment at the reporting unit level, which is a level below our reportable segments.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

We perform our annual impairment test in the fourth quarter of each fiscal year, or in between annual tests whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable, to determine whether an impairment exists and to determine the amount of headroom.

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Judgments and assumptions are inherent in our reserve accruals;

as a result, changes in assumptions or claims experience could result in changes to these estimates in the future.

as a result, changes in

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

assumptions or claims experience could result in changes to these estimates in the future.

If actual results of claim settlements are different than the amounts estimated, we may be exposed to future gains and losses that could be material.

22 unchanged sentences

Transaction gains and losses are reported as a component of Other income (expense) in the Consolidated Statements of Income.

Accounting Standards Adopted in 2025

The Company adopted FASB ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”) retrospectively as of and for the year ended June 30, 2025.

ASU 2023-07, which was issued to enhance segment reporting disclosures, requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, as well as disclosure of the total amount and description of other segment items by reportable segment.

This ASU also requires disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing segment performance and deciding how to allocate resources.

Under ASU 2023-07, the disclosures that are currently required on an annual basis under Topic 280, Segment Reporting, pertaining to reportable segment profit or loss and assets will also be required for interim periods.

The Company has determined that the effects of adopting this ASU only impacted its disclosures and the adoption of ASU 2023-07 did not have a material effect on its consolidated financial statements, results of its operations or cash flows.

See Note 13 - Segments and Related Information for additional information.

Accounting Standards Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which expands disclosures about a public entity's reportable segments and requires enhanced information about a reportable segment's expenses, interim segment profit or loss, and how a public entity's chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources.

The update will be effective for annual periods beginning after December 15, 2023 (fiscal 2025).

Adoption of this ASU will result in additional disclosure, but will not impact the Company's consolidated financial position, results of operations or cash flows.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

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Adoption of this ASU will result in additional disclosure, but will not impact the Company's consolidated financial position, results of operations or cash flows.

In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses, requiring companies to provide more detailed and organized disclosures of their expenses.

Disclosures will include disaggregation of expense captions presented on the face of the income statement into specific categories, such as purchases of inventory, employee compensation, and costs related to depreciation and amortization.

The new requirements will take effect for annual reporting periods beginning after December 15, 2026 (fiscal 2028) and for interim periods within fiscal years beginning after December 15, 2027 (fiscal 2029), with early adoption permitted.

Adoption of this ASU will result in additional disclosure, but will not impact the Company's consolidated financial position, results of operations or cash flows.

Other accounting pronouncements issued but not effective until after June 30, 2025 are not expected to have a material impact on the Company's consolidated financial position, results of operations, or cash flows.

Note 2 – Revenue

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Remaining Performance Obligations

10 unchanged sentences

The following table provides information about CIE and BIE:

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

2025 June 30,

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Total Revenue $ 769,286 $ 728,213 $ 795,020

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Contract Type Disaggregation:

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Revisions in Estimates

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

We recognize changes in contract estimates on a cumulative catch-up basis in the period in which the changes are identified.

Such changes in contract estimates can result in the recognition of revenue in a current period for performance obligations which were satisfied or partially satisfied in prior period.

Changes in contract estimates may also result in the reversal of previously recognized revenue if the current estimate differs from the previous estimate.

If at any time the estimate of contract profitability indicates an anticipated loss on the contract, we recognize the total loss in the period it is identified.

During fiscal 2025, lower than anticipated labor productivity on a crude terminal project in the Storage and Terminal Solutions segment resulted in a $5.1 million reduction of gross profit during the fiscal year.

This project was completed in early fiscal 2026.

Additionally, we lowered our recovery expectations on a legacy project completed in fiscal 2021 that is currently in arbitration which resulted in $6.4 million reduction in revenue.

During fiscal 2023, unfavorable changes in the estimated recovery of change orders and increased forecasted costs to complete and closeout certain midstream gas processing capital work in the Process and Industrial Facilities segment resulted in a $ 12.6 million reduction of gross profit during the fiscal year.

1 unchanged sentence

We achieved substantial completion on this work in early fiscal 2024.

Our results of operations were materially impacted by an increase in the forecasted costs to complete a midstream gas processing project in the Process and Industrial Facilities segment.

The project reduced gross profit by $ 8.7 million during fiscal 2022.

The increase in forecasted costs was primarily due to poor performance of a now terminated subcontractor, which required rework, as well as supply chain and cost escalation issues.

This project has since reached mechanical completion.

In fiscal 2022, our results of operations were materially impacted by an increase in the costs required to complete a thermal energy storage tank repair and maintenance project in the Storage and Terminal Solutions segment, which resulted in a decrease in gross profit of $ 6.3 million during the fiscal year.

We achieved substantial completion on this project in fiscal 2022.

During fiscal 2022, our results of operations were materially impacted by changes in the forecasted costs to complete two large construction projects in the Utility and Power Infrastructure segment and an unfavorable settlement of a claim with a customer in the same segment.

Increases in the forecasted costs to complete the first project resulted in the project reducing gross profit by $ 3.6 million during fiscal 2022.

Increased forecasted costs to complete the second capital project resulted in the project reducing gross profit by $ 2.2 million during the fourth quarter of fiscal 2022 and $ 0.1 million during fiscal 2022.

We recognized $ 78.1 million of revenue on this project during fiscal 2022 at a near break-even margin as a result of the change in estimate.

Both projects reached substantial completion in fiscal 2023.

The unfavorable settlement of a claim with a customer reduced gross profit by $ 2.1 million.

Note 3— Property, Plant and Equipment

14 unchanged sentences

We closed this previously utilized facility because it was no longer strategic to the future of the business.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

During fiscal 2024, we also sold a facility in Catoosa, Oklahoma for $ 2.7 million in net proceeds, which resulted in a gain of $ 2.0 million.

1 unchanged sentence

The gains from these asset sales were included in Other income in the Consolidated Statements of Income.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

During fiscal 2024, we purchased a facility in Bakersfield, California for $ 4.1 million to replace a facility that was being leased.

During fiscal 2023, we sold our industrial cleaning business for net proceeds of $ 6.3 million in cash and a $ 0.4 million receivable for amounts to be paid upon satisfactory transfer of title of certain vehicles and equipment sold.

1 unchanged sentence

The industrial cleaning business was included in our Process and Industrial Facilities segment and was disposed of because its operations were no longer core to our growth strategy.

In fiscal 2022, we took advantage of elevated real estate prices and sold our regional office and fabrication and warehouse facilities located in Orange, California for net proceeds of $ 37.4 million in cash and recorded a gain of $ 32.4 million on the sale.

In connection with the sale, we entered into a leaseback agreement while replacement facilities were obtained.

During fiscal 2024, we purchased a facility in Bakersfield, California for $ 4.1 million and leased new space for the regional office.

The Company will move into these new facilities in early fiscal 2025.

Depreciation expense totaled $ 8.9 million, $ 9.6 million, and $ 12.0 million in fiscal 2025, 2024 and 2023, respectively.

7 unchanged sentences

Goodwill impairment — — ( 12,316 ) ( 12,316 )

Translation adjustment (1)

( 121 ) ( 62 ) ( 6 ) ( 189 )

Net balance at June 30, 2022 19,445 4,263 18,427 42,135

Goodwill impairment — — ( 12,316 ) ( 12,316 )

Disposal of business (2)

6 unchanged sentences

Net balance at June 30, 2024 19,333 4,206 5,484 29,023

Translation adjustment (1)

Net balance at June 30, 2025 $ 19,349 $ 4,214 $ 5,484 $ 29,047

(1) The translation adjustments relate to the periodic translation of Canadian Dollar and South Korean Won denominated goodwill recorded as a part of prior acquisitions in Canada and South Korea, in which the local currency was determined to be the functional currency.

5 unchanged sentences

The estimated fair value of each reporting unit was derived by utilizing a discounted cash flow analysis and market multiples of projected EBITDA.

EBITDA is defined as earnings before interest expense, interest income, taxes, depreciation and amortization, The key assumptions used are described in Note 1 - Summary of Significant Accounting Policies.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

EBITDA is defined as earnings before interest expense, interest income, taxes, depreciation and amortization.

The key assumptions used are described in Note 1 - Summary of Significant Accounting Policies.

In the second quarter of fiscal 2023, we concluded that a goodwill impairment indicator existed for a reporting unit in the Process and Industrial Facilities segment based on a material adverse change in gross profit on a project.

Based on the indicated outcome of this project and our near-term outlook for the reporting unit, we performed an interim impairment test for the unit and concluded that its $ 12.3 million of goodwill was fully impaired.

The impairment was recognized in operating income during the three and six months ended December 31, 2022.

In the third quarter of fiscal 2022, we concluded that goodwill impairment indicators existed based on the decline in the price of our stock and operating results that have underperformed our forecasts during the year.

Accordingly, we performed an interim impairment test as of March 31, 2022 and concluded that there was $ 18.3 million of total impairment to goodwill, which was recognized in operating income during the three and nine months ended March 31, 2022 as follows:

• $8.4 million in the Process and Industrial Facilities segment;

• $7.2 million in the Storage and Terminal Solutions segment;

• $2.7 million in the Utility and Power Infrastructure segment.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Other Intangible Assets

Information on the carrying value of other intangible assets is as follows:

At June 30, 2024

June 30, 2025

Useful Life Gross

3 unchanged sentences

Intellectual property 10 $ 130 $ ( 122 ) $ 8

Customer based (1)

9 to 15 11,144 ( 9,514 ) 1,630

Customer based 9 to 15 11,144 ( 10,597 ) 547

Total other intangible assets $ 11,274 $ ( 10,719 ) $ 555

(1) Intangible assets have been adjusted in fiscal 2024 to remove $4.4 million of intangible assets that have been fully amortized.

At June 30, 2023

June 30, 2024

Useful Life Gross

2 unchanged sentences

(Years) (In thousands)

Intellectual property 10 to 15 $ 2,483 $ ( 2,371 ) $ 112

Intellectual property 10 $ 130 $ ( 109 ) $ 21

Customer based (1)

1 unchanged sentence

Total other intangible assets $ 11,274 $ ( 9,623 ) $ 1,651

(1) Customer-based intangible assets have been adjusted in fiscal 2023 to remove $4.2 million of intangible assets that have been fully amortized.

(1) Intangible assets have been adjusted in fiscal 2024 to remove $4.4 million of intangible assets that have been fully amortized.

Amortization expense totaled $ 1.1 million, $ 1.4 million, and $ 1.7 million in fiscal 2025, 2024, and 2023, respectively.

We estimate that future amortization of other intangible assets will be as follows (in thousands):

For year ending:

June 30, 2025 $ 1,096

June 30, 2026 555

Total estimated amortization expense $ 1,651

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

The remaining net book value of intangible assets of $ 0.6 million will be amortized in fiscal 2026.

On September 9, 2021 , the Company and our primary U.S.

and Canada operating subsidiaries entered into an asset-based credit agreement, which was most recently amended on May 3, 2024 (as amended, the "ABL Facility"), with Bank of Montreal, as Administrative Agent, Swing Line Lender and a Letter of Credit Issuer, and the lenders named therein.

and Canada operating subsidiaries entered into an asset-based credit agreement, which was most recently amended on August 22, 2025 (as amended, the " ABL Facility"), with Bank of Montreal, as Administrative Agent, Swing Line Lender and a Letter of Credit Issuer.

The maximum amount of loans under the ABL Facility is limited to $ 90.0 million.

The ABL Facility's available borrowings may be increased by an amount not to exceed $15.0 million, subject to certain conditions, including obtaining additional commitments.

The ABL Facility is intended to be used for working capital, capital expenditures, issuances of letters of credit and other lawful purposes.

5 unchanged sentences

The borrowing base is recalculated on a monthly basis and at June 30, 2025, our borrowing base was $ 64.6 million.

During fiscal 2024, the Company repaid all outstanding borrowings under the ABL Facility.

The Company had $ 6.9 million in letters of credit outstanding, nearly all of which expire within the next 12 months, which resulted in availability of $ 54.0 million under the ABL Facility.

During 2025, the Company had no outstanding borrowings under the ABL Facility.

The Company had $ 4.8 million in letters of credit outstanding as of June 30, 2025, which resulted in availability of $ 59.8 million under the ABL Facility.

Our borrowing base has ranged from $ 57.8 million to $ 73.8 million during fiscal 2025.

Borrowings under the ABL Facility bear interest through maturity at a variable rate based upon, at our option, an annual rate of either a base rate (“Base Rate”), an Adjusted Term Secured Overnight Financing Rate ("Adjusted Term SOFR"), or at the Canadian Prime Rate, plus an applicable margin.

The Adjusted Term SOFR is defined as (i) the SOFR plus (ii) 11.448 basis points for a one-month tenor and 26.161 basis points for a three-month tenor;

provided that the Adjusted Term SOFR cannot be below zero.

Borrowings under the ABL Facility bear interest through maturity at a variable rate based upon, at our option, an annual rate of either a base rate (“Base Rate”), an Term Secured Overnight Financing Rate ("Term SOFR"), or at the Canadian Prime Rate, plus an applicable margin.

The Term SOFR rate, whether for one-month or three-month tenor, is provided by a third party

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

defined in the ABL Facility ("Term SOFR Administrator").

The Term SOFR Administrator publishes a daily set of forward-looking interest rates for various tenors, provided that the Term SOFR cannot be below zero.

The Base Rate is defined as a fluctuating interest rate equal to the greater of:

2 unchanged sentences

federal funds rate plus 0.50 %;

(iii) Adjusted Term SOFR for one month period plus 1.00 %;

or (iv) 1.00 %.

(iii) Term SOFR for one month period plus 1.00 %;

and (iv) 1.00 %.

Depending on the amount of average availability, the applicable margin is between 1.00 % to 1.50 % for Base Rate and Canadian Prime Rate borrowings, which includes either U.S.

or Canadian prime rate, and between 2.00 % and 2.50 % for Adjusted Term SOFR borrowings.

Interest is payable either (i) monthly for Base Rate or Canadian Prime Rate borrowings or (ii) the last day of the interest period for Adjusted Term SOFR borrowings, as set forth in the ABL Facility.

or Canadian prime rate, and between 2.00 % and 2.50 % for Term SOFR borrowings.

Interest is payable either (i) monthly for Base Rate or Canadian Prime Rate borrowings or (ii) the last day of the interest period for Term SOFR borrowings, as set forth in the ABL Facility.

The fee for undrawn amounts is 0.25 % per annum and is due quarterly.

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We were in compliance with all covenants of the ABL Facility as of June 30, 2025.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Note 6— Income Taxes

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Current Total 464 ( 36 ) ( 400 )

Federal — — 2,504

State — — 2,858

Foreign — — ( 4 )

Deferred Total — — —

Total $ 464 $ ( 36 ) $ ( 400 )

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Reconciliation Between the Expected Income Tax Provision Applying the Domestic Federal Statutory Tax Rate and the Reported Income Tax Provision Fiscal Years Ended

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State income taxes, net of federal benefit ( 716 ) ( 2,065 ) ( 2,320 )

Impairment of non-deductible goodwill (1)

Charges without tax benefit, net of non-taxable income 1,042 384 358

4 unchanged sentences

Foreign tax differential 88 388 50

Federal rate differential net operating loss carryback — — 141

Change in uncertain tax positions — ( 81 ) ( 90 )

1 unchanged sentence

Provision (benefit) for federal, state and foreign income taxes $ 464 $ ( 36 ) $ ( 400 )

(1) In fiscal 2022, we impaired $18.3 million of goodwill, which included $ 5.4 million of non-deductible goodwill.

See Note 4 - Goodwill and Other Intangible Assets for more information about the impairments.

(1) Due to the existence of a cumulative loss over a three-year period, we recorded a full valuation allowance against our deferred tax assets in fiscal 2022 and recorded additional valuation allowances against newly generated deferred tax assets in fiscal 2023, 2024, and 2025.

1 unchanged sentence

To the extent we generate taxable income in the future, or cumulative losses are no longer present and our future projections for growth or tax planning strategies are demonstrated, we will realize the benefit associated with the net operating losses for which the valuation allowance has been provided.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Significant Components of our Deferred Tax Assets and Liabilities

11 unchanged sentences

Foreign currency translation and other 1,271 1,324

Valuation allowance ( 49,434 ) ( 41,060 )

Total deferred tax assets 60,372 54,969

Valuation allowance ( 55,973 ) ( 49,434 )

Deferred tax assets, net 4,399 5,535

Deferred tax liabilities:

3 unchanged sentences

Net deferred tax liability $ ( 25 ) $ ( 25 )

As reported in the Consolidated Balance Sheets:

2024 June 30,

(In thousands)

Deferred income tax assets $ — $ —

Deferred income tax liabilities ( 25 ) ( 26 )

Net deferred tax liability $ ( 25 ) $ ( 26 )

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Valuation Allowance

We placed a valuation allowance on our deferred tax assets in the second quarter of fiscal 2022 due to the existence of a cumulative loss over a three-year period.

We will continue to place valuation allowances on newly generated deferred tax assets and will realize the benefit associated with the deferred tax assets for which the valuation allowance has been provided to the extent we generate taxable income in the future.

We recorded a valuation allowance on our deferred tax assets due to the existence of a cumulative loss over a three-year period.

We will continue to place valuation allowances on newly generated deferred tax assets.

We will realize the benefit associated with the deferred tax assets for which the valuation allowance has been provided as we generate taxable income.

Operating Loss and Tax Credit Carryforwards

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The gross carryforwards will generally expire as shown below for each jurisdiction:

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Operating Loss and Tax Credit Carryforwards Expiration Period Amount (in thousands)

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Due to the uncertainties related to these tax matters, we are unable to make a reasonably reliable estimate as to when cash settlement with a taxing authority will occur.

On July 4, 2025, a budget and reconciliation package commonly known as the One Big Beautiful Bill Act (“OBBBA”) was signed into law.

Under United States GAAP, changes in tax law are accounted for in the period of enactment, our fiscal 2026.

OBBBA is not expected to have a material impact on our fiscal 2026 financial statements due to our valuation allowance.

We expect to benefit primarily from changes which include the immediate expensing of United States research and development expenditures and 100 percent bonus depreciation for certain capital expenditures.

Note 7— Commitments and Contingencies

We are party to various legal actions, claims and other contingencies that arise in the ordinary course of business.

These actions typically seek, among other things, compensation for alleged workers’ compensation claims, personal injury claims, and contract disputes, some of which may be subject to certain insurance coverage.

With respect to all such matters, we record a loss when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated.

In addition, we disclose matters for which management believes a material loss is at least reasonably possible.

Insurance Reserves

2 unchanged sentences

Typically our contracts require us to indemnify our customers for injury, damage or loss arising from the performance of our services and provide warranties for materials and workmanship.

We may also be required to name the customer as an additional insured up to the limits of insurance available, or we may be required to purchase special insurance policies or surety bonds for specific customers or provide letters of credit in lieu of bonds to satisfy performance and financial guarantees on some projects.

We may also be required to name the customer as an additional

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

insured up to the limits of insurance available, or we may be required to purchase special insurance policies or surety bonds for specific customers or provide letters of credit in lieu of bonds to satisfy performance and financial guarantees on some projects.

We maintain a performance and payment bonding line sufficient to support the business.

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In response, on June 2, 2022, the customer filed counterclaims seeking $ 20.0 million , which included liquidated damages and damages with respect to miscellaneous warranty items.

On October 31, 2022, the customer amended its counterclaim claiming

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

damages in a range of $ 18.8 million to $ 36.0 million, which included estimated amounts for “potential future costs.” In July 2024, the customer filed a second amended counterclaim which significantly increased the amount of alleged damages to a range of $ 69.6 million to $ 97.9 million, including a new claim for unspecified “other damages” of $ 46.9 million .

A portion of the total alleged damages, if we are held liable, may be subject to certain insurance coverages.

We believe we have substantial legal and contractual defenses to the claims presented, and are vigorously contesting the claims.

On October 31, 2022, the customer amended its counterclaim claiming damages in a range of $ 18.8 million to $ 36.0 million, which included estimated amounts for “potential future costs.” In July 2024, the customer filed a second amended counterclaim which significantly increased the amount of alleged damages up to $ 97.9 million.

As part of the arbitration process, our claim amount was specified at $24.5 million and Keyera's counterclaim was reduced to $72.9 million.

We believe we have substantial legal and contractual defenses to the claims presented, many of which are expressly disallowed per the contract.

Additionally, in the event we are found liable for a portion of the alleged damages, they may be subject to certain insurance coverages.

Arbitration proceedings were held in August 2025.

Following submission of post-hearing briefs, the arbitration hearing will be closed and awaiting a decision by the arbitrator, which is expected in fiscal 2026.

During fiscal 2023, we completed construction services on a time and materials basis for a customer at a mining and minerals facility.

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We denied all claims and filed a countersuit against the customer for failure to pay amounts due of $ 5.6 million.

Based on the current trial schedule, we anticipate this matter will be resolved in calendar year 2026.

We believe we have set appropriate reserves based on our evaluation of the possible outcomes for the matters described above.

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We and our subsidiaries are participants in various other legal actions;

It is the opinion of management that none of the other known legal actions will have a material impact on our financial position, results of operations or liquidity.

however, assessing the eventual outcome of litigation involves forward-looking speculation as to judgment being made by arbitrators, judges, juries and appellate courts in the future.

Based upon information presently available, and in light of legal and other factual defenses available to the Company, management does not believe that such other known legal actions will have a material adverse effect on our financial position, results of operations or liquidity.

Note 8— Leases

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

We enter into lease arrangements for real estate, construction equipment and information technology equipment in the normal course of business.

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The future undiscounted lease payments, as reconciled to the discounted operating lease liabilities presented in our Consolidated Balance Sheets, were as follows:

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

June 30, 2025

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Non-current operating lease liabilities $ 16,986

The following is a summary of the weighted average remaining operating lease and term and weighted average discount rate as of June 30, 2024:

Weighted-average remaining lease term (in years) 6.1 years

The following is a summary of the weighted average remaining operating lease and term and weighted average discount rate:

Fiscal Years Ended

June 30, 2025 June 30, 2024

(in thousands)

Weighted-average remaining lease term (in years) 5.2 years 6.1 years

Weighted-average discount rate 6.7 % 6.3 %

Cash flow information related to leases is as follows:

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Supplemental cash flow information related to leases is as follows:

Fiscal Year Ended

June 30, 2024

Fiscal Years Ended

June 30, 2025 June 30, 2024 June 30, 2023

(in thousands)

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The program will continue unless and until it is modified or revoked by the Board of Directors.

We made no repurchases under the program in fiscal 2024 and have no current plans to repurchase stock.

We made no repurchases under the program in fiscal 2025.

The terms of our ABL Facility limit share repurchases to $ 2.5 million per fiscal year provided that we meet certain availability thresholds and do not violate our Fixed Charge Coverage Ratio financial covenant.

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We have 277,731 treasury shares as of June 30, 2025 and intend to utilize these treasury shares in connection with equity awards under our incentive plans and for sales to the Employee Stock Purchase Plan.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Note 10— Stock-Based Compensation

Total stock-based compensation expense for the fiscal years ended June 30, 2025, June 30, 2024, and June 30, 2023 was $ 8.9 million, $ 7.7 million and $ 6.8 million, respectively.

Measured but unrecognized stock-based compensation expense at June 30, 2024 was $ 9.8 million, all of which related to nonvested restricted stock units which are expected to be recognized as expense over a weighted average period of 1.8 years.

Measured but unrecognized stock-based compensation expense at 2025 was $ 7.8 million, all of which related to nonvested restricted stock units which are expected to be recognized as expense over a weighted average period of 1.6 years.

We recognized excess tax expense (benefit) of $ 1.1 million, $( 0.1 ) million, and $ 1.2 million related to stock-based compensation vesting for the fiscal years ended June 30, 2025, 2024, and 2023, respectively.

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The 2020 Plan was amended in November 2023 to increase the maximum authorized shares under the plan by 1,625,000 shares, increasing the total authorized shares under the 2020 Plan from 2,350,000 to 3,975,000 shares.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Awards totaling 3,975,000 shares have been authorized under the 2020 Plan, as amended.

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The payout can range from zero to 200 % of the original award depending on the Company's relative total shareholder return during the performance period.

As of June 30, 2024, there were approximately 377,000 , 431,000 , and 626,000 performance units that are scheduled to vest in fiscal 2025, fiscal 2026, and fiscal 2027, respectively, assuming target performance.

All awards under the 2020 Plan vest upon the death or disability of the participant or upon a change of control of the Company, provided that the successor company fails to assume or replace the awards in connection with that change of control event.

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All awards prior to the 2020 Plan vest upon the death or disability of the participant or upon a change of control of the Company.

The grant date fair value of the time-based awards is determined by the market value of our common stock on the grant date.

The grant date fair value of the market-based awards is calculated using a Monte Carlo model.

For the fiscal 2024 grant, the model estimated the fair value of the award based on approximately 100,000 simulations of the future prices of our common stock compared to the future prices of the common stock of its peer companies based on historical volatilities.

The model also took into account the expected dividends over the performance period of those peer companies which pay cash dividends.

Equity-settled restricted stock unit activity for the fiscal year ended June 30, 2024 is as follows:

Equity-settled time-based restricted stock unit activity for the fiscal year ended June 30, 2025 is as follows:

Shares Weighted Average Grant

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Nonvested shares at June 30, 2025 759,981 $ 8.89

There were 782,707 and 696,227 restricted stock units granted in fiscal 2023 and 2022 with average grant date fair values of $ 7.04 and $ 14.13 per share, respectively.

There were 259,529 and 268,403 restricted stock units that vested and were released in fiscal 2023 and 2022 with weighted average fair values of $ 14.19 and $ 13.92 per share, respectively.

There were 214,017 and 242,743 restricted stock units cancelled in fiscal 2023 and 2022 with an average grant date fair value of $ 21.89 and $ 25.50 per share, respectively.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

There were 412,976 and 338,358 equity-settled time-based restricted stock units granted in fiscal 2024 and 2023 with weighted average grant date fair values of $ 8.51 and $ 5.77 per share, respectively.

There were 297,026 and 259,529 equity-settled time-based restricted stock units that vested and were released in fiscal 2024 and 2023 with weighted average grant date fair values of $ 9.40 and $ 14.19 per share, respectively.

There were 15,357 equity-settled time-based restricted stock units cancelled in 2023 with a weighted average grant date fair value of $ 9.55 per share.

Equity-settled market-based restricted stock unit activity for the fiscal year ended June 30, 2025 is as follows:

Shares Weighted Average Grant Date Fair Value per Share

Nonvested shares at June 30, 2024 1,434,194 $ 12.27

Shares granted 468,351 11.49

Shares vested and released ( 102,850 ) 16.19

Shares canceled ( 274,363 ) 16.19

Nonvested shares at June 30, 2025 1,525,332 $ 11.06

There were 626,150 and 444,349 equity-settled market-based restricted stock units granted in fiscal 2024 and 2023 with weighted average grant date fair values of $ 12.83 and $ 8.01 per share, respectively.

There were 329,489 and 198,660 equity-settled market-based restricted stock units cancelled in 2024 and 2023 with weighted average grant date fair values of $ 11.61 and $ 22.84 per share, respectively.

The grant date fair value of the time-based awards is determined by the market value of our common stock on the grant date.

The grant date fair value of the market-based awards is calculated using a Monte Carlo model.

For the fiscal 2025 grant, the model estimated the fair value of the award based on 100,000 simulations of the future prices of our common stock compared to the future prices of the common stock of its peer companies based on historical volatilities.

The Monte Carlo simulation valuation methodology applied the following key inputs:

2025 2024 2023

Valuation date price based on August 27, 2024, August 29, 2023, and August 30, 2022 closing stock prices of Matrix common stock $ 9.74 $ 8.22 $ 5.78

Expected volatility (1)

57 % 58 % 71 %

Risk-free interest rate 3.74 % 4.61 % 3.47 %

Term in years 2.84 2.84 2.84

(1) The expected volatility inputs are based on historical volatility, which is based on the Company's closing prices over a period equivalent to the performance period

In the first quarter of fiscal 2024, due to an insufficient number of remaining shares available for issuance under the 2020 Plan, market-based awards granted in that period were subject to cash settlement upon vesting at the election of the board of directors, and the above-target payout portion of the awards were accounted for as liability awards.

In the second quarter of fiscal 2024, stockholders approved an increase in the number of shares available for issuance under the 2020 Plan.

In the fourth quarter of fiscal 2024, the compensation committee of the board of directors concluded the Company has the intent and ability to settle the entire market-based awards in equity, and therefore the grants became share-settled, equity-classified awards.

The modification resulted in the elimination of the $ 1.0 million liability related to these awards, with a corresponding increase to additional paid-in capital, as presented on the Statements of Stockholders' Equity for the twelve months ended June 30, 2024.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Cash-Settled Restricted Stock Units

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with weighted average fair values of $ 2.2 million and $ 1.4 million, respectively.

There were no shares cancelled in fiscal 2024.

In fiscal 2023, 13,621 shares were cancelled with a weighted average fair value of $ 0.1 million.

There were 45,325 shares cancelled in fiscal 2025 with a weighted average fair value of $ 0.4 million.

There were no shares cancelled in fiscal 2024 and in fiscal 2023, 13,621 shares were cancelled with a weighted average fair value of $ 0.1 million.

The grant date fair value of these awards is based on the price of our common stock and the number of shares awarded on the date of grant.

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These awards contain the same retirement provisions described for time-based awards in the equity-settled restricted stock units section above.

In the second quarter of fiscal 2024, stockholders approved an increase in the number of shares available for issuance under the 2020 Plan.

We recognized $ 4.7 million, $ 5.0 million, and $ 1.3 million of expense in fiscal years 2025, 2024, and 2023, respectively, for cash-settled restricted stock units, which was included in selling, general and administrative expenses and cost of revenue in the Consolidated Statements of Income.

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The non-current portion of the liability was $ 3.2 million and is included in other non-current liabilities in the Consolidated Balance Sheets.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Note 11—Earnings per Common Share

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Diluted earnings per share includes the dilutive effect of employee and director nonvested restricted stock units.

Nonvested restricted stock units are considered dilutive (antidilutive) whenever the average market value of the shares during the period exceeds (is less than) the sum of the related average unamortized compensation expense during the period plus the related hypothetical estimated excess tax benefit that will be realized when the shares vest.

Nonvested restricted stock units are considered antidilutive in the event we report a net loss.

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Our matching contributions vest immediately.

Our matching contributions were $ 5.1 million in fiscal year ended June 30, 2024 and $ 5.3 million in each of the fiscal years ended June 30, 2023 and 2022.

Our matching contributions were $ 5.0 million, $ 5.1 million and $ 5.3 million in fiscal years ended June 30, 2025, 2024, and 2023, respectively.

Multiemployer Pension Plans

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(In thousands)

Boilermaker-Blacksmith National Pension Trust 48-6168020/001 Red

Red Implemented $ 4,494 $ 5,284 $ 5,208 Yes

National Electrical Benefit Fund, IBEW locals 71, 126, 488, and 1319 53-0181657/001 Green

Green NA 2,666 3,437 2,973 No

Pipefitters Local 460 Pension Plan 51-6108443/001 Green

Green NA 4,217 2,479 111 No

Joint Pension Fund Local Union 164 IBEW 22-6031199/001 Green

Green NA 1,257 1,724 1,514 No

IBEW Local 654 Pension Plan 23-6538183/001 Green

Green NA 867 1,242 857 No

Joint Pension Fund of Local Union No 102 IBEW 22-1615726/001 Green

Green NA 403 1,143 906 No

IBEW Local 456 Pension Plan 22-6238995/001 Green

Green NA 801 1,180 734 No

Local 351 IBEW Pension Plan

22-3417366/001 Green Green NA 841 1,033 395 No

Steamfitters Local Union No 420 Pension Plan 23-2004424/001 Red

Red Implemented 615 656 498 Yes

Pipefitters Local 342 Pension Plan 94-3190386/001 Green

Green NA 9 498 345 No

IBEW Local 98 Pension Plan 23-6583334/001 Yellow

Yellow Implemented 634 484 143 No

Laborers Local 220 Pension Plan 43-6159056/001 Green

Green NA 747 427 24 No

Boilermaker-Blacksmith National Pension Trust 48-6168020/001 Green Red Implemented $ 6,267 $ 4,494 $ 5,284 Yes

National Electrical Benefit Fund, IBEW locals 71, 126, 488, and 1319 53-0181657/001 Green Green NA 2,199 2,666 3,437 No

Contributions to other multiemployer plans 8,718 13,673 14,835

Total contributions made $ 17,184 $ 20,833 $ 23,556

(1) For the National Electrical Benefit Fund for Locals 71/126/488/1319, Pipefitters Local 460 Pension Plan, Local 351 IBEW Pension Plan, and Laborers Local 220 Pension Plan, we did not receive a funding notification that covered fiscal year 2023 during the preparation of the Form 10-K filed September 12, 2023.

Under Federal pension law, if a multiemployer pension plan is determined to be in critical or endangered status, the plan must provide notice of this status to participants, beneficiaries, the bargaining parties, the Pension Benefit Guaranty Corporation, and the Department of Labor.

We also observed that these plans have not submitted any Critical or Endangered Status Notices to the Department of Labor for calendar years that we have not received notification.

The Critical or Endangered Status Notices can be accessed at https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/public-disclosure/2024-funding-status-notices#2024-c-and-d.

Employee Stock Purchase Plan

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The ESPP can be terminated at any time at the discretion of the Board of Directors and will automatically terminate once the plan shares are exhausted.

Shares are issued from Treasury Stock under the ESPP.

There were 17,148 shares issued in fiscal 2025, 19,775 shares in fiscal 2024, and 50,139 shares in fiscal 2023.

Note 13— Segment Information

We operated our business through three reportable segments:

We operate our business through a number of different operating subsidiaries, which are organized into three reportable segments based on the type of work performed and the markets serviced:

• Storage and Terminal Solutions :

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We also perform work related to traditional aboveground crude oil and refined product storage tanks and terminals.

This segment also includes terminal balance of plant work,

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

truck and rail loading/offloading facilities, and marine structures as well as storage tank and terminal maintenance and repair.

This segment also includes terminal balance of plant work, truck and rail loading/offloading facilities, and marine structures as well as storage tank and terminal maintenance and repair.

Finally, we manufacture and sell precision engineered specialty tank products, including geodesic domes, aluminum internal floating roofs, floating suction and skimmer systems, roof drain systems and floating roof seals.

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primarily consists of engineering, procurement, fabrication, and construction services to support growing demand for LNG utility peak shaving facilities.

We also perform traditional electrical work for public and private utilities, including construction of new substations, upgrades of existing substations, transmission and distribution line installations, and upgrades and maintenance including live wire work.

Work may also include emergency and storm restoration services.

We also perform power delivery work for public and private utilities, including construction of new substations, upgrades of existing substations, and maintenance.

We also provide construction services to a variety of power generation facilities, including natural gas fired facilities in simple or combined cycle configurations.

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We also perform engineering, procurement, fabrication, and construction for refinery upgrades and retrofits for renewable fuels, including hydrogen processing, production, loading and distribution facilities.

We also construct thermal vacuum test chambers for aerospace and defense industries and other infrastructure for industries including petrochemical, sulfur, mining and minerals primarily in the extraction of non-ferrous metals, cement, agriculture, wastewater treatment facilities and other industrial customers.

We evaluate performance and allocate resources based on operating income.

We also engineer and construct thermal vacuum test chambers for aerospace and defense industries and other infrastructure for industries including chemicals, petrochemical, sulfur, mining and minerals primarily in the extraction of non-ferrous metals, cement, agriculture, wastewater treatment facilities and other industrial customers.

Our Chief Operating Decision Maker ("CODM") is our President and Chief Executive Officer, who regularly reviews operating and financial performance based on our segments.

The Company's CODM uses segment operating income as the key metric in evaluating segment performance.

The CODM uses this metric in the budget and forecasting processes.

The CODM considers

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

budget-to-actual and forecast-to-actual variances when making decisions about allocating resources, including capital and personnel, to the segments.

We incur certain expenses at the corporate level that relate to our business as a whole.

A portion of these expenses are allocated to our business segments.

The balance of the corporate level expenses are reported in the "Corporate Selling, general and administrative expenses" line, which is primarily comprised of corporate facility expense, the cost of the executive management team, and other expenses pertaining to certain centralized functions that benefit the entire Company but are not directly attributable to any specific business segment, such as corporate human resources, legal, governance, compliance and finance functions.

The accounting policies of the segments are the same as those described in the Summary of Significant Accounting Policies (see Note 1).

We eliminate intersegment sales;

therefore, no intercompany profit or loss is recognized.

Corporate selling, general and administrative expenses, including corporate salaries and facilities costs, are excluded from our three reportable segments in order to align controllable costs with the responsibility of segment management, and to be consistent with how our chief operating decision-maker assesses segment performance and allocates resources.

Segment assets consist primarily of accounts receivable, costs and estimated earnings in excess of billings on uncompleted contracts, property, plant and equipment, right-of-use lease assets, goodwill and other intangible assets.

Corporate assets consist primarily of cash,

restricted cash, prepaid expenses, corporate fixed assets, and corporate operating lease right-of-use assets.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Operating Segment Information - The following tables set forth certain selected financial information for our operating segments for the periods indicated:

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Operating income (loss) $ ( 9,206 ) $ 3,834 $ 479 $ ( 30,175 ) $ ( 35,068 )

(1) Total revenues are net of inter-segment revenues which are primarily Storage and Terminal Solutions and were $2.4 million for the year ended June 30, 2024.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

(1) Total revenues are net of inter-segment revenues which are primarily Process and Industrial Facilities and were $2.1 million for the year ended June 30, 2025.

Capital expenditures $ 3,516 $ 1,123 $ 1,454 $ 1,592 $ 7,685

Depreciation and amortization $ 5,042 $ 3,119 $ 1,636 $ 215 $ 10,012

Storage and Terminal Solutions Utility and Power Infrastructure Process and Industrial Facilities Corporate Total

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Selling, general and administrative expenses 19,823 8,844 10,354 31,064 70,085

Goodwill impairment — — 12,316 — 12,316

Restructuring costs — 52 215 234 501

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(1) Total revenues are net of inter-segment revenues which are primarily Storage and Terminal Solutions and were $2.4 million for the year ended June 30, 2024.

Capital expenditures $ 4,641 $ 581 $ 476 $ 1,296 $ 6,994

Depreciation and amortization $ 4,958 $ 3,000 $ 2,840 $ 225 $ 11,023

Storage and Terminal Solutions Utility and Power Infrastructure Process and Industrial Facilities Corporate Total

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Restructuring costs 969 37 972 1,164 3,142

Operating loss $ ( 24,352 ) $ ( 23,103 ) $ ( 10,103 ) $ ( 30,296 ) $ ( 87,854 )

(1) Total revenues are net of inter-segment revenues which are primarily Storage and Terminal Solutions, $3.4 million, and Process and Industrial Solutions, $3.6 million, for the year ended June 30, 2022.

Operating income (loss) $ ( 10,553 ) $ 3,617 $ ( 17,441 ) $ ( 28,510 ) $ ( 52,887 )

(1) Total revenues are net of inter-segment revenues which are primarily Storage and Terminal Solutions and were $5.6 million for the year ended June 30, 2023.

Capital expenditures $ 1,406 $ 4,501 $ 2,775 $ 327 $ 9,009

Depreciation and amortization $ 3,281 $ 3,465 $ 4,783 $ 2,165 $ 13,694

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Total Assets by Segment

June 30, 2024 June 30, 2023 June 30, 2022

June 30, 2025 June 30, 2024

(In thousands)

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The following table presents our long-lived tangible assets including property, plant and equipment, net, and operating right-of-use lease assets at June 30, 2025 and 2024:

June 30, 2024 June 30, 2023 June 30, 2022

June 30, 2025 June 30, 2024

(In thousands)

3 unchanged sentences

Total Long-Lived Assets $ 59,924 $ 62,648

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Information about Significant Customers:

Information about Significant Customers by Segment:

Significant Customers as a Percentage of Segment Revenue

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Fiscal Year ended June 30, 2024

Customer one 10.7 % — % — % 22.9 %

Customer three 10.5 % 27.7 % — % — %

Customer four 10.3 % — % — % 28.2 %

Fiscal Year ended June 30, 2023

Customer one 12.3 % 0.8 % — % 33.5 %

Customer two 11.0 % — % 35.5 % — %

Customer five 10.7 % — % — % 22.9 %

Note 14— Restructuring Costs

In fiscal 2020, we initiated a business improvement plan to increase profitability and reduce our cost structure in order to help us become more competitive and deliver higher quality service.

As a result of specific events, including the effects of the COVID-19 pandemic and related market disruptions, the Company expanded its business improvement plan.

The business improvement plan consists of an initial phase of discretionary cost reductions, workforce reductions, reduction of capital expenditures and the reduction in size or closure of certain offices in order to increase the utilization of our staff and bring the cost structure of the business in line with revenue volumes.

In fiscal 2022, we commenced a second phase of our plan to focus on centralization of support functions, including business development, accounting, human resources, procurement and project services into shared service centers.

The restructuring costs consist primarily of severance costs, facility closure costs, consulting fees and other liabilities.

In the fourth quarter of fiscal 2025, we implemented an organizational restructuring plan to create a flatter, leaner organization by eliminating senior-level positions, streamlining our engineering and construction services, and decentralizing elements of our business development organization.

As a result of this restructuring we incurred certain costs, consisting primarily of severance and other personnel-related costs, which totaled 3.6 million for fiscal year 2025.

In the first quarter of fiscal 2026, we expanded this plan to further integrate our engineering and construction services, consolidate service lines, and close an under-performing office, among other changes.

We incurred approximately $3.5 million of restructuring costs during the first quarter of fiscal 2026 associated with these actions.

In fiscal 2020, we initiated a business improvement plan to increase profitability and reduce our cost structure as a result of the effects of the COVID-19 pandemic and related market disruptions.

Our restructuring efforts were substantially complete as of June 30, 2023.

Restructuring costs incurred are classified as follows:

Fiscal Year Ended Since Inception of Business Improvement Plan

June 30, 2024 June 30, 2023 June 30, 2022

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Restructuring costs incurred for the fiscal 2020 plan are classified as follows:

Since Inception of Business Improvement Plan

June 30, 2023

(in thousands)

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Deducted from asset accounts:

Allowance for credit losses $ 1,061 $ 3 $ — $ ( 863 ) (A) $ 201

Allowance for credit losses $ 201 $ 51 $ — $ — $ 252

Valuation allowance for deferred tax assets 49,434 6,472 67 — (B) 55,973

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data