MATRIX SERVICE CO 10-Q

Item 1. Financial Statements Matrix Service Company Condensed Consolidated Statements of Income (In thousands, except per share data) (unaudited) Three Months Ended September 30, 2025 September 30, 2024 Revenue $ 211,884 $ 165,579 Cost of revenue 197,702 157,766 Gross profit 14,182 7,813 Selling, general and administrative expenses 16,334 18,580 Restructuring costs 3,348 — Operating loss ( 5,500 ) ( 10,767 ) Other income (expense): Interest expense ( 127 ) ( 89 ) Interest income 1,802 1,572 Other 231 61 Loss before income tax expense ( 3,594 ) ( 9,223 ) Provision for federal, state and foreign income taxes 69 — Net loss $ ( 3,663 ) $ ( 9,223 ) Basic loss per common share $ ( 0.13 ) $ ( 0.33 ) Diluted loss per common share $ ( 0.13 ) $ ( 0.33 ) Weighted average common shares outstanding: Basic 28,008 27,559 Diluted 28,008 27,559 See accompanying notes. -1- Table of Contents Matrix Service Company Condensed Consolidated Statements of Comprehensive Income (In thousands) (unaudited) Three Months Ended September 30, 2025 September 30, 2024 Net loss $ ( 3,663 ) $ ( 9,223 ) Other comprehensive income (loss), net of tax: Foreign currency translation gain (loss) ( 528 ) 436 Comprehensive loss $ ( 4,191 ) $ ( 8,787 ) See accompanying notes. -2- Table of Contents Matrix Service Company Condensed Consolidated Balance Sheets (In thousands) (unaudited) September 30, 2025 June 30, 2025 Assets Current assets: Cash and cash equivalents $ 192,307 $ 224,641 Accounts receivable, net of allowance for credit losses 160,344 154,994 Costs and estimated earnings in excess of billings on uncompleted contracts 37,912 29,764 Inventories 5,579 5,917 Income taxes receivable 75 110 Prepaid expenses and other current assets 14,195 4,347 Total current assets 410,412 419,773 Restricted cash 25,000 25,000 Property, plant and equipment, net 41,347 42,097 Operating lease right-of-use assets 15,827 17,827 Goodwill 28,978 29,047 Other intangible assets, net of accumulated amortization 281 555 Other assets, non-current (Note 2) 76,341 65,957 Total assets $ 598,186 $ 600,256 See accompanying notes. -3- Table of Contents Matrix Service Company Condensed Consolidated Balance Sheets (In thousands, except share data) (unaudited) September 30, 2025 June 30, 2025 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 98,199 $ 80,453 Billings on uncompleted contracts in excess of costs and estimated earnings 317,556 323,593 Accrued wages and benefits 15,409 18,961 Accrued insurance 4,711 5,310 Operating lease liabilities 4,458 4,441 Other accrued expenses 3,122 3,617 Total current liabilities 443,455 436,375 Deferred income taxes 24 25 Operating lease liabilities 15,902 16,986 Other liabilities, non-current 2,539 4,154 Total liabilities 461,920 457,540 Commitments and contingencies (Note 5) Stockholders’ equity: Common stock — $ 0.01 par value; 60,000,000 shares authorized; 28,070,427 shares issued and outstanding at September 30, 2025; 27,888,217 shares issued at June 30, 2025 and 27,610,486 shares outstanding as of June 30, 2025; 281 279 Additional paid-in capital 145,100 149,969 Retained earnings 816 4,479 Accumulated other comprehensive loss ( 9,931 ) ( 9,403 ) Treasury stock, at cost — 0 shares as of September 30, 2025 and 277,731 shares as of June 30, 2025; — ( 2,608 ) Total stockholders' equity 136,266 142,716 Total liabilities and stockholders’ equity $ 598,186 $ 600,256 See accompanying notes. -4- Table of Contents Matrix Service Company Condensed Consolidated Statements of Cash Flows (In thousands) (unaudited) Three Months Ended September 30, 2025 September 30, 2024 Operating activities: Net loss $ ( 3,663 ) $ ( 9,223 ) Adjustments to reconcile net loss to net cash provided (used) by operating activities: Depreciation and amortization 2,461 2,515 Stock-based compensation expense 1,921 2,311 Operating lease impairment due to restructuring 1,529 — Loss (gain) on disposal of property, plant and equipment ( 217 ) 68 Other 94 38 Changes in operating assets and liabilities increasing (decreasing) cash: Accounts receivable, net of allowance for credit losses ( 15,083 ) ( 5,110 ) Costs and estimated earnings in excess of billings on uncompleted contracts ( 8,148 ) 2,075 Inventories 338 1,331 Other assets and liabilities ( 10,553 ) ( 8,580 ) Accounts payable 17,720 ( 3,903 ) Billings on uncompleted contracts in excess of costs and estimated earnings ( 6,037 ) 33,304 Accrued expenses ( 6,261 ) ( 2,908 ) Net cash provided (used) by operating activities ( 25,899 ) 11,918 Investing activities: Capital expenditures ( 2,011 ) ( 1,944 ) Proceeds from sale of property, plant and equipment 222 — Net cash used by investing activities ( 1,789 ) ( 1,944 ) Financing activities: Payment of debt amendment fees ( 149 ) — Proceeds from issuance of common stock under employee stock purchase plan 43 46 Payments related to tax withholding for stock-based compensation ( 4,223 ) ( 1,235 ) Net cash used by financing activities ( 4,329 ) ( 1,189 ) Effect of exchange rate changes on cash ( 317 ) 210 Net increase (decrease) in cash and cash equivalents ( 32,334 ) 8,995 Cash, cash equivalents and restricted cash, beginning of period 249,641 140,615 Cash, cash equivalents and restricted cash, end of period $ 217,307 $ 149,610 Supplemental disclosure of cash flow information: Cash paid during the period for: Income taxes $ 34 $ — Interest $ 131 $ 145 Non-cash investing and financing activities: Purchases of property, plant and equipment on account $ 156 $ 197 See accompanying notes. -5- Table of Contents Matrix Service Company Condensed Consolidated Statements of Changes in Stockholders’ Equity (In thousands, except share data) (unaudited) Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Shares Amount Shares Amount Total June 30, 2025 27,888,217 $ 279 $ 149,969 $ 4,479 $ ( 9,403 ) 277,731 $ ( 2,608 ) $ 142,716 Net loss — — — ( 3,663 ) — — — ( 3,663 ) Other comprehensive loss — — — — ( 528 ) — — ( 528 ) Issuance of restricted stock 182,210 2 ( 6,805 ) — — ( 274,578 ) 2,580 ( 4,223 ) Treasury shares sold to Employee Stock Purchase Plan — — 15 — — ( 3,153 ) 28 43 Stock-based compensation expense — — 1,921 — — — — 1,921 September 30, 2025 28,070,427 $ 281 $ 145,100 $ 816 $ ( 9,931 ) — $ — $ 136,266 June 30, 2024 27,888,217 $ 279 $ 145,580 $ 33,941 $ ( 9,535 ) 579,422 $ ( 6,083 ) $ 164,182 Net loss — — — ( 9,223 ) — — — ( 9,223 ) Other comprehensive income — — — — 436 — — 436 Issuance of restricted stock — — ( 4,109 ) — — ( 360,460 ) 4,109 — Treasury shares sold to Employee Stock Purchase Plan — — ( 17 ) — — ( 4,797 ) 63 46 Treasury shares purchased to satisfy tax withholding obligations — — — — — 123,850 ( 1,235 ) ( 1,235 ) Stock-based compensation expense — — 2,311 — — — — 2,311 September 30, 2024 27,888,217 $ 279 $ 143,765 $ 24,718 $ ( 9,099 ) 338,015 $ ( 3,146 ) $ 156,517 -6- Table of Contents Matrix Service Company Notes to Condensed Consolidated Financial Statements (unaudited) Note 1 – Basis of Presentation and Significant Accounting Policies Basis of Presentation The condensed consolidated financial statements include the accounts of Matrix Service Company and its subsidiaries (“Matrix”, “we”, “our”, “us”, “its” or the “Company”), unless otherwise indicated. Intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with Rule 10-01 of Regulation S-X for interim financial statements required to be filed with the Securities and Exchange Commission and do not include all information and footnotes required by U.S. generally accepted accounting principles ("GAAP") for complete financial statements. The information furnished reflects all adjustments, consisting of normal recurring adjustments, that are, in the opinion of management, necessary for a fair statement of the results of operations, cash flows and financial position for the interim periods presented. The accompanying condensed consolidated financial statements should be read in conjunction with the audited financial statements for the year ended June 30, 2025, included in our Annual Report on Form 10-K. The results of operations for the three month period ended September 30, 2025 may not necessarily be indicative of the results of operations for the full year ending June 30, 2026. Significant Accounting Policies Our significant accounting policies are detailed in “Note 1 - Basis of Presentation and Significant Accounting Policies” of our Annual Report on Form 10-K for the year ended June 30, 2025. Accounting Standards Not Yet Adopted In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S. and foreign jurisdictions. The update will be effective for annual periods beginning after December 15, 2024 (fiscal 2026). 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 September 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 Remaining Performance Obligations We had $ 958.3 million of remaining performance obligations yet to be satisfied as of September 30, 2025. We expect to recognize $ 621.3 million of our remaining performance obligations as revenue within the next twelve months. -7- Table of Contents Contract Balances Contract terms with customers include the timing of billing and payments, which usually differs from the timing of revenue recognition. As a result, we carry contract assets and liabilities in our balance sheet. These contract assets and liabilities are calculated on a contract-by-contract basis and are classified as current. We present our contract assets in the balance sheet as Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts ("CIE"). CIE consists of revenue recognized in excess of billings. We present our contract liabilities in the balance sheet as Billings on Uncompleted Contracts in Excess of Costs and Estimated Earnings ("BIE"). BIE consists of billings in excess of revenue recognized. The following table provides information about CIE and BIE: September 30, 2025 June 30, 2025 Change (In thousands) Costs and estimated earnings in excess of billings on uncompleted contracts $ 37,912 $ 29,764 $ 8,148 Billings on uncompleted contracts in excess of costs and estimated earnings ( 317,556 ) ( 323,593 ) 6,037 Net contract liabilities $ ( 279,644 ) $ ( 293,829 ) $ 14,185 The difference between the beginning and ending balances of our CIE and BIE primarily results from the timing of revenue recognized relative to our billings. The amount of revenue recognized during the three months ended September 30, 2025 that was included in the June 30, 2025 BIE balance was $ 126.6 million. Progress billings in accounts receivable at September 30, 2025 and June 30, 2025 included retentions to be collected within one year of $ 29.4 million and $ 29.0 million, respectively. Contract retentions collectible beyond one year are included in Other assets, non-current in the Condensed Consolidated Balance Sheets and totaled $ 71.3 million as of September 30, 2025 and $ 61.5 million as of June 30, 2025, respectively. Unpriced Change Orders and Claims Costs and estimated earnings in excess of billings on uncompleted contracts included revenues for unpriced change orders and claims of $ 12.9 million at September 30, 2025 and $ 11.4 million at June 30, 2025. The amounts ultimately realized may be different than the recorded amounts resulting in adjustments to future earnings. Generally, we expect collection of amounts related to unpriced change orders and claims within twelve months. However, customers may not pay these amounts until final resolution of related claims, which may extend beyond one year. Disaggregated Revenue Revenue disaggregated by reportable segment is presented in Note 7 - Segment Information. The following series of tables presents revenue disaggregated by geographic area where the work was performed and by contract type: Geographic Disaggregation: Three Months Ended September 30, 2025 September 30, 2024 (In thousands) United States $ 198,991 $ 153,222 Canada 11,428 10,768 Other international 1,465 1,589 Total Revenue $ 211,884 $ 165,579 Contract Type Disaggregation: Three Months Ended September 30, 2025 September 30, 2024 (In thousands) Fixed-price contracts $ 164,530 $ 123,769 Time and materials and other cost reimbursable contracts 47,354 41,810 Total Revenue $ 211,884 $ 165,579 -8- Table of Contents Note 3 – Debt 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 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. Our obligations under the ABL Facility are guaranteed by substantially all of our U.S. and Canadian subsidiaries and are secured by a first lien on all our assets under the ABL Facility. The ABL Facility matures, and any outstanding amounts become due and payable, on September 9, 2029. The maximum amount that we may borrow under the ABL Facility is subject to a borrowing base, which is based on restricted cash plus a percentage of the value of certain accounts receivable, inventory and equipment, reduced for certain reserves. We are required to maintain a minimum of $ 25.0 million of restricted cash at all times, but such amounts are also included in the borrowing base. The borrowing base is recalculated on a monthly basis and at September 30, 2025, our borrowing base was $ 61.4 million. The Company had $ 4.8 million in letters of credit outstanding as of September 30, 2025, which resulted in availability of $ 56.6 million under the ABL Facility. 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”), a 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 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: (i) rate of interest announced by Bank of Montreal from time to time as its prime rate; (ii) the U.S. federal funds rate plus 0.50 %; (iii) Term SOFR for one month period plus 1.00 %; or (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 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. The ABL Facility contains customary conditions to borrowings, events of default and covenants, including, but not limited to, covenants that limit our ability to sell assets; engage in mergers and acquisitions; make investments, including investments in certain international subsidiaries; incur, assume or permit to exist additional indebtedness and guarantees; create or permit to exist liens; pay cash dividends or make distributions; issue equity instruments; or redeem or repurchase capital stock. In the event that our availability is less than the greater of (i) $ 13.5 million and (ii) 15.00 % of the commitments under the ABL Facility then in effect, a consolidated Fixed Charge Coverage Ratio of at least 1.00 to 1.00 must be maintained. We were in compliance with all covenants of the ABL Facility as of September 30, 2025. Note 4 – Income Taxes Effective Tax Rate During the three months ended September 30, 2025 and 2024, our effective tax rates were ( 1.9 )% and zero . The effective tax rates during both periods were impacted by valuation allowances of $ 1.4 million and $ 1.3 million, respectively, placed on deferred tax assets generated during the quarters. Valuation Allowance 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. -9- Table of Contents Note 5 – 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 We maintain insurance coverage for various aspects of our operations. However, we retain exposure to potential losses through the use of deductibles, self-insured retentions and coverage limits. 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 maintain a performance and payment bonding line sufficient to support the business. We generally require our subcontractors to indemnify us and our customer and name us as an additional insured for activities arising out of the subcontractors’ work. We also require certain subcontractors to provide additional insurance policies, including surety bonds in favor of us, to secure the subcontractors’ work or as required by the subcontract. There can be no assurance that our insurance and the additional insurance coverage provided by our subcontractors will fully protect us against a valid claim or loss under the contracts with our customers. Litigation In January 2021, we achieved mechanical completion on a crude oil storage project. On April 1, 2022, we filed an arbitration demand against Keyera Energy, Inc. in an effort to collect outstanding balances of $ 32.7 million related to the project. 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 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 at a mining and minerals facility. In late fiscal 2023, after numerous attempts to collect outstanding receivables, we filed a notice of default for lack of payment of outstanding balances, and in early fiscal 2024, we filed a lien on the facility. The customer, 5E Boron Americas, LLC, responded by commencing litigation against us on July 17, 2023 in the United States District Court for the Central District of California, Eastern Division (5E Boron Americas, LLC v. Matrix Service Inc., Case No. 5:23-cv-01396-AB(DTBx)), alleging breach of contract and breach of express warranty. 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 accruals based on our evaluation of the possible outcomes for the matters described above. However, the results of litigation are inherently unpredictable, and the possibility exists that the ultimate resolution of one or more of these matters could result in a material effect on our financial position, results of operations or liquidity. We and our subsidiaries are participants in various other legal actions; 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. -10- Table of Contents Note 6 – Earnings per Common Share Basic earnings per share (“EPS”) is calculated based on the weighted average shares outstanding during the period. Diluted earnings per share includes the dilutive effect of employee and director nonvested restricted stock units. Nonvested restricted stock units are considered dilutive (antidilutive) to our EPS 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 to our EPS in the event we report a net loss. The computation of basic and diluted earnings per share is as follows: Three Months Ended September 30, 2025 September 30, 2024 (In thousands, except per share data) Basic EPS: Net loss $ ( 3,663 ) $ ( 9,223 ) Weighted average shares outstanding 28,008 27,559 Basic loss per share $ ( 0.13 ) $ ( 0.33 ) Diluted EPS: Net loss $ ( 3,663 ) $ ( 9,223 ) Diluted weighted average shares outstanding 28,008 27,559 Diluted loss per share $ ( 0.13 ) $ ( 0.33 ) The following securities are considered antidilutive and have been excluded from the calculation of Diluted EPS: Three Months Ended September 30, 2025 September 30, 2024 (In thousands) Nonvested restricted stock units $ 901 $ 631 -11- Table of Contents Note 7 – Segment Information 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 : primarily consists of engineering, procurement, fabrication, and construction services related to cryogenic and other specialty tanks and terminals for LNG, NGLs such as butane, propane, ethane, ethylene, and other liquid petroleum products, as well as hydrogen and ammonia. 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, 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. • Utility and Power Infrastructure : primarily consists of engineering, procurement, fabrication, and construction services to support growing demand for LNG utility peak shaving facilities. 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 for base load, peaking, and backup power supply. • Process and Industrial Facilities : primarily consists of plant maintenance, repair, and turnarounds in the downstream and midstream markets for energy clients including refining and processing of crude oil, fractionating, and marketing of natural gas and natural gas liquids. 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 engineer and construct thermal vacuum test chambers for aerospace and defense industries and other infrastructure for industries including chemicals, petrochemical, sulfur, mining and minerals, 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 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. 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. -12- Table of Contents Segment Information - The following tables set forth certain selected financial information for our segments for the periods indicated: (In thousands) Storage and Terminal Solutions Utility and Power Infrastructure Process and Industrial Facilities Corporate Total Three Months Ended September 30, 2025 Total revenue (1) $ 109,459 $ 74,501 $ 27,924 $ — $ 211,884 Cost of revenue ( 102,962 ) ( 67,717 ) ( 26,495 ) ( 528 ) ( 197,702 ) Gross profit (loss) 6,497 6,784 1,429 ( 528 ) 14,182 Selling, general and administrative expenses 5,548 2,977 1,307 6,502 16,334 Restructuring costs 1,759 640 729 220 3,348 Operating income (loss) $ ( 810 ) $ 3,167 $ ( 607 ) $ ( 7,250 ) $ ( 5,500 ) (1) Total revenues are net of inter-segment revenues which are primarily Storage and Terminal Solutions and Process and Industrial Facilities and were $0.6 million for the three months ended September 30, 2025. Capital expenditures $ 871 $ 851 $ 81 $ 208 $ 2,011 Depreciation and amortization $ 533 $ 92 $ 217 $ 1,619 $ 2,461 Storage and Terminal Solutions Utility and Power Infrastructure Process and Industrial Facilities Corporate Total Three Months Ended September 30, 2024 Total revenue (1) $ 78,239 $ 55,912 $ 31,428 $ — $ 165,579 Cost of revenue ( 73,542 ) ( 54,605 ) ( 29,431 ) ( 188 ) ( 157,766 ) Gross profit (loss) 4,697 1,307 1,997 ( 188 ) 7,813 Selling, general and administrative expenses 5,569 3,976 1,766 7,269 18,580 Operating income (loss) $ ( 872 ) $ ( 2,669 ) $ 231 $ ( 7,457 ) $ ( 10,767 ) (1) Total revenues are net of inter-segment revenues which are primarily Storage and Terminal Solutions and Process and Industrial Solutions and were $0.9 million for the three months ended September 30, 2024. Capital expenditures $ 1,047 $ 280 $ 139 $ 478 $ 1,944 Depreciation and amortization $ 522 $ 92 $ 168 $ 1,733 $ 2,515 Total assets by segment September 30, 2025 June 30, 2025 Storage and Terminal Solutions $ 209,625 $ 194,354 Utility and Power Infrastructure 114,261 98,582 Process and Industrial Facilities 32,156 39,490 Corporate 242,144 267,830 Total Segment Assets $ 598,186 $ 600,256 -13- Table of Contents Note 8 – Restructuring Costs In the fourth quarter of fiscal 2025, we commenced an organizational restructuring plan to create a flatter, leaner organization by eliminating certain 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 continued the organizational restructuring plan to further integrate our engineering and construction services, consolidate service lines, and close an under-performing office, among other changes. We incurred $ 3.3 million of restructuring costs during the first quarter of fiscal 2026 associated with these actions. These costs included $ 1.5 million of operating lease and fixed asset impairments associated with certain real estate leases that we exited as part of our restructuring plan. The fair values of the assets associated with these leases were determined based on Level 3 fair value measurements, utilizing a discounted cash flow method based in part on projected sublease income. Remaining costs incurred during the first quarter of fiscal 2026 consisted primarily of severance and other personnel-related costs. Our restructuring plan was substantially complete as of September 30, 2025. -14- Table of Contents