What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-09-03 compared with 2025-09-10 · 339 added, 279 removed, 899 unchanged (41% of the section changed)

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MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of Matrix Service Company and its wholly-owned subsidiaries (the “Company”) are responsible for establishing and maintaining adequate internal control over financial reporting.

The management of Matrix Service Company and its wholly-owned subsidiaries (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting.

The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S.

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Deloitte & Touche LLP’s report on the Company’s internal control over financial reporting is included herein.

Hewitt /s/ Kevin S.

Hewitt Kevin S.

Payne /s/ Kevin S.

Payne Kevin S.

President and Chief Executive Officer Vice President and Chief Financial Officer

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/s/ DELOITTE & TOUCHE LLP

Tulsa, Oklahoma

Houston, Texas

September 3, 2026

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Our independent estimates were based on information such as management’s work plans, customer purchase orders, third-party invoices from suppliers, subcontractor agreements, and similar historical project experience.

Goodwill – Certain Reporting Units– Refer to Notes 1 and 4 to the financial statements

Goodwill – Certain Reporting Unit– Refer to Notes 1 and 4 to the financial statements

Critical Audit Matter Description

The Company’s evaluation of goodwill for impairment involves the comparison of management’s estimate of the fair value of each reporting unit to its carrying value.

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The use of alternate judgments and/or assumptions could result in a fair value that differs from management’s estimate and could result in the recognition of impairment charges in the financial statements.

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, 2025 were at higher risk of future impairment and their estimated fair values exceed their carrying values by 8% and 37%, respectively.

The Company performed an annual goodwill impairment test as of May 31, 2026, which resulted in no impairment.

One reporting unit, with a total of $11.2 million of goodwill as of June 30, 2026 was at higher risk of future impairment.

The Company’s total goodwill was $28.9 million as of June 30, 2026.

We identified goodwill for two reporting units with a combined total of $16.6 million of goodwill as a critical audit matter because of the significant judgments made by management to estimate the fair values of these reporting units.

We identified goodwill for one reporting unit with $11.2 million of goodwill as a critical audit matter because of the significant judgments made by management to estimate the fair value of this reporting unit.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to the revenue growth rate, forecasted gross margins, and discount rate.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the revenue growth rate, forecasted gross margins, and the discount rate used by management to estimate the fair value of the two identified reporting units included the following, among others:

• We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of the two identified reporting units, as well as controls related to management’s selection of the revenue growth rate, forecasted gross margins, and discount rate.

Our audit procedures related to the revenue growth rate, forecasted gross margins, and the discount rate used by management to estimate the fair value of the identified reporting unit included the following, among others:

◦ We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of the identified reporting unit, as well as controls related to management’s forecasted revenue growth rate and gross margins, and selected discount rate.

◦ We evaluated management’s ability to accurately forecast the revenue growth rate and future gross margins by comparing actual results to management’s historical forecasts.

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/s/ DELOITTE & TOUCHE LLP

Tulsa, Oklahoma

Houston, Texas

September 3, 2026

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Selling, general and administrative expenses 63,607 71,173 70,085

Goodwill impairment — — 12,316

Restructuring costs 3,572 501 3,142

Restructuring costs and other 9,963 3,572 501

Operating loss ( 9,618 ) ( 35,068 ) ( 30,113 )

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Prepaid expenses and other current assets 4,278 4,347

Assets held for sale (Note 3) 948 —

Total current assets 435,650 419,773

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60,000,000 shares authorized;

27,888,217 shares issued as of June 30, 2025 and June 30, 2024;

27,610,486 and 27,308,795 shares outstanding as of June 30, 2025 and June 30, 2024, respectively

28,133,850 shares issued and outstanding as of June 30, 2026;

27,888,217 shares issued and 27,610,486 shares outstanding as of June 30, 2025, respectively

Additional paid-in capital 150,483 149,969

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Accumulated other comprehensive loss ( 10,808 ) ( 9,403 )

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

( 2,608 ) ( 6,083 )

Treasury stock, at cost;

0 and 277,731 shares as of June 30, 2026 and June 30, 2025;

Total stockholders' equity 141,855 142,716

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Net loss $ ( 2,580 ) $ ( 29,462 ) $ ( 24,976 )

Adjustments to reconcile net loss to net cash provided (used) by operating activities

Adjustments to reconcile net loss to net cash provided by operating activities

Depreciation and amortization 8,640 10,012 11,023

Goodwill impairment — — 12,316

Stock-based compensation expense 7,145 8,904 7,745

Operating lease impairment due to restructuring 2,935 — —

Loss (gain) on disposal of property, plant and equipment (Note 3) ( 606 ) 8 ( 4,923 )

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Proceeds from issuance of common stock under employee stock purchase plan 202 195 184

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

Payments related to tax withholding for stock-based compensation ( 4,223 ) ( 1,235 ) ( 456 )

Net cash used by financing activities ( 4,170 ) ( 1,040 ) ( 10,372 )

Effect of exchange rate changes on cash ( 871 ) 40 ( 451 )

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

Net increase (decrease) in cash and cash equivalents ( 1,675 ) 109,026 60,803

Cash, cash equivalents, and restricted cash, beginning of period (Note 1) 249,641 140,615 79,812

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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 —

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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

Net loss — — — ( 2,580 ) — — — ( 2,580 )

Other comprehensive income — — — — 132 — — 132

Other comprehensive loss — — — — ( 1,405 ) — — ( 1,405 )

Issuance of restricted stock 231,950 2 ( 6,805 ) — — ( 274,578 ) 2,580 ( 4,223 )

Treasury shares sold to employee stock purchase plan — — 22 — — ( 17,148 ) 173 195

Treasury shares repurchased to satisfy tax withholding obligations — — — — — 123,863 ( 1,235 ) ( 1,235 )

Shares issued related to employee stock purchase plan 13,683 — 174 — — ( 3,153 ) 28 202

Stock-based compensation expense — — 7,145 — — — — 7,145

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Notes to Consolidated Financial Statements

Note 1— Basis of Presentation and Significant Accounting Policies

Organization and Basis of Presentation

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and include the accounts of Matrix Service Company and its subsidiaries (“Matrix”, the “Company” or “we”, “our”, and “us” are to Matrix Service Company and its subsidiaries), all of which are wholly owned.

Note 1— Business, Basis of Presentation and Significant Accounting Policies

Matrix Service Company and its subsidiaries (“Matrix”, the “Company”, or “we”) provide engineering, fabrication, construction, and maintenance services to support critical energy infrastructure and industrial markets.

We maintain regional offices throughout the United States, Canada and other international locations, and operate through separate union and non-union subsidiaries in the United States, Canada, South Korea and Australia.

Our reportable segments are Storage and Terminal Solutions, Utility and Power Infrastructure, and Process and Industrial Facilities, see Note 13 - Segment Information.

Basis of Presentation

Intercompany transactions and balances have been eliminated in consolidation.

We operate in the United States, Canada, South Korea and Australia.

Our reportable segments are Storage and Terminal Solutions, Utility and Power Infrastructure, and Process and Industrial Facilities.

Use of Estimates

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.

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, deferred tax assets, and the estimation of loss contingencies, including liabilities associated with litigation.

Actual results could materially differ from those estimates.

Significant Accounting Policies

Revenue Recognition

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engineering, procurement, fabrication, construction, repair and maintenance services.

For these contracts, we do not consider the integrated services to be distinct within the context of the contract when the separate scopes of work combine into a single commercial objective or capability for the customer.

Accordingly, we generally identify one performance obligation in our contracts.

The determination of the number of performance obligations in a contract requires significant judgment and could change the timing of the amount of revenue recorded for a given period.

For these contracts, we do not consider the integrated services to be distinct within the context of the contract when the separate scopes of work combine into a single commercial

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

objective or capability for the customer.

Accordingly, we generally identify one performance obligation in our contracts.

The determination of the number of performance obligations in a contract requires significant judgment and could change the timing of the amount of revenue recorded for a given period.

Determine Contract Price

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These variable consideration amounts are generally earned or incurred based on certain performance metrics, most commonly related to project schedule or cost targets.

Contracts are often modified through change orders, which are changes to the agreed upon scope of work.

Most of our change orders are for goods or services that are not distinct from the existing contract due to the significant integration of services provided in the context of the contract and are accounted for as if they were part of that existing contract.

The effect of a change order on the contract price and our measure of progress for the performance obligation to which it relates is recognized as an adjustment to revenue on a cumulative catch-up basis.

Unpriced change orders represent one of the most common forms of variable consideration included within contract value and typically represent contract modifications for which a change in scope has been authorized or acknowledged by our customer but the final adjustment to contract price is yet to be negotiated.

Sometimes we seek claims for amounts in excess of the contract price for delays, errors in specifications and designs, contract terminations, change orders in dispute or other causes of additional costs incurred by us.

Recognition of amounts as additional contract price related to claims is appropriate only if there is a legal basis for the claim.

The determination of our legal basis for a claim requires significant judgment.

We estimate variable consideration at the most likely amount of additional consideration to be received (or paid in the case of penalties), provided that meeting the variable condition is probable.

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Our estimates of variable consideration and determination of whether to include estimated amounts in the contract price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us.

In estimating the transaction price for unpriced change orders and claims, we consider all relevant facts, including documented correspondence with the customer regarding acknowledgement of and/or agreement with the modification, as well as historical experience with the customer or similar contractual circumstances.

We reassess the amount of variable consideration each accounting period until the uncertainty associated with the variable consideration is resolved.

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We recognize revenue on performance obligations associated with fixed-price contracts for engineering, procurement, fabrication and construction services over time since these services create or enhance assets the customer controls as they are being created or enhanced.

We measure progress of satisfying these performance obligations by using the percentage-of-completion method, which is based on costs incurred to date compared to the total estimated costs at completion, since it best depicts the transfer of control of assets being created or enhanced to the customer.

We measure progress of satisfying these performance obligations by using the cost-to-cost input method, which measures our percentage-of-completion of our performance obligations based on costs incurred to date compared to the total estimated costs at completion.

We believe this method best depicts the transfer of control of assets being created or enhanced to the customer.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

We recognize revenue over time for reimbursable and time and material based repair and maintenance contracts since the customer simultaneously receives and consumes the benefit of those services as we perform work under the contract.

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We do not sell separate warranties.

Accordingly, these types of warranties are not considered to be separate performance obligations, but any costs incurred or expected to be incurred in connection with these warranties are included in contract costs.

We have numerous contracts that are in various stages of completion which require estimates to determine the forecasted costs at completion.

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If estimates of costs to complete fixed-price contracts indicate a loss, a provision is made through a contract write-down for the total loss anticipated.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Change Orders

Contracts are often modified through change orders, which are changes to the agreed upon scope of work.

Most of our change orders, which may be priced or unpriced, are for goods or services that are not distinct from the existing contract due to the significant integration of services provided in the context of the contract and are accounted for as if they were part of that existing contract.

For unpriced change orders, we estimate the increase or decrease to the contract price using the variable consideration method described in the Step 3:

Determine Contract Price paragraph above.

Unpriced change orders are more fully discussed in Note 2 - Revenue.

Recognition of amounts as additional contract price related to claims is appropriate only if there is a legal basis for the claim.

The determination of our legal basis for a claim requires significant judgment.

We estimate the change to the contract price using the variable consideration method described in the Step 3:

Determine Contract Price paragraph above.

Claims are more fully discussed in Note 2 - Revenue.

Cash, Cash Equivalents and Restricted Cash

We include as cash equivalents all investments with original maturities of three months or less which are readily convertible into cash.

We include as cash equivalents all highly liquid investments with original maturities of three months or less which are readily convertible into cash.

We have cash on deposit at June 30, 2026 with banks in the United States, Canada, South Korea and Australia in excess of Federal Deposit Insurance Corporation ("FDIC"), Canada Deposit Insurance Corporation ("CDIC"), Korea Deposit Insurance Corporation ("KDIC") and Financial Claims Scheme ("FCS") protection limits, respectively.

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We estimate the allowance for credit losses based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount.

In addition, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default.

Our customers consist primarily of major integrated oil companies, independent refiners and marketers, power companies, petrochemical companies, pipeline companies, mining companies, contractors and engineering firms.

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

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

The provision for credit losses was $ 5 thousand, $ 0.1 million, and $ 3 thousand in fiscal 2026, 2025, and 2024 respectively.

The allowance for credit losses was $ 0.3 million and $ 0.3 million as of June 30, 2026 and 2025, respectively.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

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

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

Contract retentions expected to be collected within 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.

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Operating lease expense is recognized based on the undiscounted future lease payments over the remaining lease term on a straight-line basis.

Lease expense related to short-term leases is recognized on a straight-line basis over the lease term.

Determinations with respect to lease term (including any renewals and terminations), incremental borrowing rate used to discount lease payments, variable lease expense and future lease payments require the use of judgment based on the facts and circumstances related to each lease.

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

Leases with an initial term of twelve months or less are not recorded on the balance sheet;

costs for these leases are recognized on a straight-line basis over the lease term.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Some of our lease agreements contain non-lease components, such as common area maintenance for our real estate leases, which are accounted for separately.

Many of our leases include base rental periods coupled with options to renew or terminate the lease, generally at our discretion.

Certain leases additionally include options to purchase the leased asset.

In evaluating the lease term, we consider whether we are reasonably certain to exercise such options.

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

However, based on the nature of our lease agreements, options generally do not provide us with a significant economic incentive and are therefore excluded from the lease term for the majority of our arrangements.

Our lease agreements do not contain significant residual value guarantees or material restrictive covenants.

As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments.

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

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As a result, actual results may differ from the estimates utilized in our income approach.

For the market approach, significant judgments and assumptions include the selection of guideline companies, forecasted guideline company EBITDA (as defined in Note 4 - Goodwill) and our forecasted EBITDA (as defined in Note 4 - Goodwill).

For the market approach, significant judgments and assumptions include the selection of guideline companies, forecasted guideline company EBITDA (as defined in Note 4 - Goodwill and Other Intangible Assets) and our forecasted EBITDA (as defined in Note 4 - Goodwill and Other Intangible Assets).

The use of alternate judgments and/or assumptions could result in a fair value that differs from our estimate and could result in the recognition of additional impairment charges in the financial statements.

As a test for reasonableness, we also consider the combined fair values of our reporting units to our market capitalization.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Other Intangible Assets

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If quoted market prices are not available, the fair values of the intangible assets are based on present values of expected future cash flows or royalties avoided using discount rates commensurate with the risks involved.

Insurance Reserves

We maintain insurance coverage for various aspects of our operations.

However, we retain exposure to potential losses through the use of deductibles, coverage limits and self-insured retentions.

We establish reserves for claims using a combination of actuarially determined estimates and case-by-case evaluations of the underlying claim data and update our evaluations as further information becomes known.

Judgments and assumptions are inherent in our reserve accruals;

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.

Stock-Based Compensation

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Cash-settled time-based awards must be settled in cash and are accounted for as liability-type awards and are remeasured at the end of each reporting period at fair value until settlement.

For all awards, expense is recognized over the requisite service period with forfeitures recorded as they occur.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

For all awards, expense is recognized using the straight-line method over the requisite service period with forfeitures recorded as they occur.

Stock-based compensation expense related to market-based awards is expensed at their grant date fair value regardless of performance.

We use the asset and liability approach for financial accounting and reporting for income taxes.

Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.

Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.

Valuation allowances based on our judgments and estimates are established when necessary to reduce deferred tax assets to the amount expected to be realized in future operating results.

Our estimates are based on facts and circumstances in existence as well as interpretations of existing tax regulations and laws applied to the facts and circumstances, with the help of professional tax advisors.

Our estimates are based on facts and circumstances in existence as well as interpretations of existing tax regulations and laws applied to the facts and circumstances.

Therefore, we estimate and provide for amounts of additional income taxes that may be assessed by the various taxing authorities.

We account for uncertain tax positions using a “more-likely-than-not” threshold for recognizing and resolving uncertain tax positions.

The evaluation of uncertain tax positions is based on factors that include changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position.

We evaluate uncertain tax positions on a quarterly basis and adjust the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions.

Foreign Currency

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Dollar since its sales are primarily denominated in that currency.

For subsidiaries with operations using a foreign functional currency, assets and liabilities are translated at the year-end exchange rates and the income statement accounts are translated at average exchange rates throughout the year.

For subsidiaries with operations using a foreign functional currency, assets and liabilities are translated at the period-end exchange rates and the income statement accounts are translated at average exchange rates throughout the year.

Translation gains and losses are reported in Accumulated Other Comprehensive Loss, net of tax, in the Consolidated Statements of Changes in Stockholders’ Equity and in Other Comprehensive Loss in the Consolidated Statements of Comprehensive Income.

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Accounting Standards Adopted in 2026

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

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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.

The Company adopted this ASU prospectively as of and for the year ended June 30, 2026.

See Note 6 - Income Taxes for additional information.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Accounting Standards Not Yet Adopted

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

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Note 2 – Revenue

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Remaining Performance Obligations

We had $ 1.0 billion of remaining performance obligations yet to be satisfied as of June 30, 2025.

We had $ 863.3 million of remaining performance obligations yet to be satisfied as of June 30, 2026.

We expect to recognize approximately $ 667.0 million of our remaining performance obligations as revenue within the next twelve months.

Contract Balances

Contract terms with customers include the timing of billing and payment, which usually differs from the timing of revenue recognition.

Billing practices are governed by the contract terms of each project based upon costs incurred, achievement of milestones or predetermined schedules.

Billings do not necessarily correlate with revenue recognized over time using the percentage-of-completion method.

As a result, we carry contract assets and liabilities in our balance sheet.

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Net contract liabilities $ ( 270,716 ) $ ( 293,829 ) $ 23,113

The difference between the beginning and ending balances of our CIE and BIE primarily results from the timing of revenue recognized relative to its billings.

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 fiscal year ended June 30, 2026 that was included in the prior period BIE balance was $ 318.9 million.

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However, customers may not pay these amounts until final resolution of related claims, which may extend beyond one year.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Disaggregated Revenue

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The following series of tables presents revenue disaggregated by geographic area where the work was performed and by contract type:

Geographic Disaggregation:

Fiscal Years Ended

Geographic Disaggregation Fiscal Years Ended

2026 June 30,

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Total Revenue $ 873,632 $ 769,286 $ 728,213

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Contract Type Disaggregation:

Fiscal Years Ended

Contract type disaggregation Fiscal Years Ended

2026 June 30,

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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.

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 a 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 2026, based on an evaluation of projects that had revisions to total estimated costs or anticipated contract value that individually resulted in a change to gross profit in excess of $1.0 million, we recognized a reduction of gross profit of $4.8 million.

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.

These charges were primarily the result of the client not approving adequate compensation to us for the impact that excessive scope changes had on our ability to progress the work according to forecast and for the impacts of global supply chain issues and inflation.

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

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

The matter was fully resolved in fiscal 2026.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Note 3 - Property, Plant and Equipment

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2026 June 30,

2025 Estimated Useful Lives (in years)

(In thousands)

Property, plant and equipment

Land and buildings $ 38,158 $ 32,610

Land $ 4,852 $ 5,160

Buildings 15,524 15,477 40

Construction equipment 78,923 78,395 3-15

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Office equipment and software 30,865 30,590 3-10

Leasehold improvements 17,718 17,521 Shorter of lease term or useful life

Finance lease 32 32

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Property, plant and equipment, net $ 36,261 $ 42,097

Depreciation expense totaled $ 8.1 million, $ 8.9 million, and $ 9.6 million in fiscal 2026, 2025 and 2024, respectively.

As of June 30, 2026, we classified $ 0.9 million of property, plant and equipment as held for sale.

The assets include primarily transportation equipment associated with our transmission and distribution service line in the Utility and Power Infrastructure segment.

We began winding down this service line in the fourth quarter of fiscal 2025.

We expect to sell the remaining equipment during fiscal 2027.

During fiscal 2024, we sold a previously utilized facility in Burlington, Ontario for $ 2.7 million in net proceeds, which resulted in a gain of $ 2.5 million.

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.

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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.

The sale resulted in a $ 2.9 million gain, which was included in Other income in the Consolidated Statements of Income.

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.

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

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Note 4 - Goodwill and Other Intangible Assets

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Net balance at June 30, 2023 $ 19,397 $ 4,239 $ 5,484 $ 29,120

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

Disposal of business (2)

— — ( 627 ) ( 627 )

Translation adjustment (1)

2 unchanged sentences

Translation adjustment (1)

( 64 ) ( 33 ) — ( 97 )

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

Translation adjustment (1)

( 112 ) ( 57 ) — ( 169 )

Net balance at June 30, 2026 $ 19,237 $ 4,157 $ 5,484 $ 28,878

(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.

(2) We sold our industrial cleaning business during the fourth quarter of fiscal 2023, which resulted in the allocation $0.6 million of goodwill to net assets sold in the transaction.

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

We performed our annual goodwill impairment test as of May 31, 2026, which resulted in no impairment.

The fiscal 2025 test indicated that 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.

If our view of project opportunities or gross margins deteriorates, particularly for the higher risk reporting units, then we may be required to record an impairment of goodwill.

The fiscal 2026 test indicated that one reporting unit with $ 11.2 million of goodwill as of June 30, 2026 was at higher risk of future impairment.

If our view of project opportunities or gross margins deteriorates, particularly for the higher risk reporting unit, then we may be required to record an impairment of goodwill.

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.

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.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

The key assumptions used are described in Note 1 - Business, Basis of Presentation and Significant Accounting Policies.

Other Intangible Assets

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

Our other intangible assets were fully amortized as of June 30, 2026.

Information on the carrying value of other intangible assets as of June 30, 2025 is as follows:

June 30, 2025

6 unchanged sentences

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

June 30, 2024

Useful Life Gross

Amount Accumulated

Amortization Net Carrying

(Years) (In thousands)

Intellectual property 10 $ 130 $ ( 109 ) $ 21

Customer based (1)

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

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

(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 $ 0.6 million, $ 1.1 million, and $ 1.4 million in fiscal 2026, 2025, and 2024, respectively.

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

Note 5 - Debt

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

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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.

and Canadian subsidiaries and are secured by a first lien on all our assets

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

under the ABL Facility.

The ABL Facility matures, and any outstanding amounts become due and payable, on September 9, 2029 .

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The Company had $ 4.5 million in letters of credit outstanding as of June 30, 2026, which resulted in availability of $ 60.9 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 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").

Our borrowing base availability has ranged from $ 55.6 million to $ 65.0 million during fiscal 2026.

Subsequent to June 30, 2026, we issued an additional $20.0 million project-related letter of credit.

The letter of credit resulted in a release of $20.0 million of contract retention, which we collected in August 2026.

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 as 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.

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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.

Depending on the amount of average availability, the applicable margin is between 1.00 % and 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.

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Total $ ( 2,224 ) $ ( 28,998 ) $ ( 25,012 )

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Components of the Provision for Income Tax Expense (Benefit) Fiscal Years Ended

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Total $ 356 $ 464 $ ( 36 )

Our effective tax rate on pre-tax income (loss) for the year ended June 30, 2026 differed from the statutory U.S.

federal income tax rate of 21% as a result of the following, presented after prospectively adopting ASU 2023-09:

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

2025 June 30,

Reconciliation Between the Expected Income Tax Provision Applying the Domestic Federal Statutory Tax Rate and the Reported Income Tax Provision Fiscal Year Ended June 30, 2026

Amount Percent

(In thousands)

Tax provision at statutory U.S.

federal income tax rate $ ( 467 ) 21.0 %

State income taxes, net of federal benefit (1)

Foreign tax effects

Foreign income tax 154 ( 6.9 ) %

Return to provision 91 ( 4.1 ) %

Valuation allowance 120 ( 5.4 ) %

Statutory rate difference ( 20 ) 0.9 %

Statutory rate difference ( 47 ) 2.1 %

Valuation allowance 231 ( 10.4 ) %

Other 145 ( 6.5 ) %

Effect of cross-border tax laws ( 28 ) 1.3 %

Research & development credit ( 820 ) 36.9 %

Foreign tax credit ( 238 ) 10.7 %

Changes in valuation allowances ( 1,296 ) 58.3 %

Nontaxable or nondeductible items

Officer compensation 1,605 (72.2) %

Meals and entertainment 953 (42.9) %

Excess tax expense (benefit) on stock-based compensation 118 (5.3) %

Other adjustments, net (195) 8.7 %

Income tax provision $ 356 ( 16.0 ) %

(1) State taxes in New Jersey, Pennsylvania, and Virginia made up the majority of state income tax.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

The following table presents the Reconciliation Between the Expected Income Tax Provision Applying the Domestic Federal Statutory Tax Rate and the Reported Income Tax Provision for the years ended June 30, 2025 and 2024, prior to the adoption of ASU 2023-09:

Fiscal Years Ended

2025 June 30,

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Change in valuation allowance 6,472 8,542

6,472 8,542 12,595

Excess tax expense (benefit) on stock-based compensation 1,063 ( 61 )

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

(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.

These assets are primarily comprised of federal net operating losses, which have an indefinite carryforward, federal tax credits and state net operating losses.

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.

The following table presents income taxes paid, net of refunds, for the year ended June 30, 2026, presented prospectively after the adoption of ASU 2023-09:

Fiscal Year Ended

June 30, 2026

(In thousands)

The following table presents income taxes paid, net of refunds, for the years ended June 30, 2025 and 2024, prior to the adoption of ASU 2023-09:

Fiscal Years Ended

June 30, 2025 June 30, 2024

(In thousands)

Income taxes paid (received), net of refunds $ 328 $ ( 165 )

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Significant Components of our Deferred Tax Assets and Liabilities

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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.

Due to the existence of a cumulative loss over a three-year period, we recorded a full valuation allowance against our deferred tax assets beginning in fiscal 2022 and have recorded additional valuation allowances against newly generated deferred tax assets in subsequent years through fiscal 2026.

These assets are primarily comprised of federal net operating losses, which have an indefinite carryforward, federal tax credits and state net operating losses.

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 recognize the benefit associated with the net operating losses for which the valuation allowance has been provided.

Operating Loss and Tax Credit Carryforwards

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State tax credits June 2032 to indefinite $ 774

Foreign net operating losses June 2029 to June 2045 $ 34,117

Foreign net operating losses June 2029 to indefinite $ 35,109

Foreign tax credits June 2035 to June 2046 $ 652

4 unchanged sentences

At June 30, 2026, we updated our evaluation of our open tax years in all known jurisdictions.

As of June 30, 2025, we have a $ 0.1 million liability for unrecognized tax positions and the payment of related interest and penalties.

We treat the related interest and penalties as income tax expense.

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.

As of June 30, 2026, we have no liability for unrecognized tax positions.

Note 7 - Commitments and Contingencies

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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

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.

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.

In 2020, we commenced litigation in the United States District Court for the Northern District of Ohio, Western Division (Matrix North American Construction, Inc.

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We received full payment of the remaining amount owed of $16.8 million in the second quarter of fiscal 2024.

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 for a customer 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.

In April 2022, we filed an arbitration demand against Keyera Energy, Inc.

in an effort to collect outstanding balances related to a crude oil storage project.

In response, the customer filed certain counterclaims against us.

We received an interim award in

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

January 2026 and a final award in April 2026 resolving all claims and awarding attorneys' fees to us as the prevailing party.

After application of insurance coverages, we collected $15.1 million for amounts owed on the project and reimbursement of attorneys' fees incurred.

We received payment in the fourth quarter of fiscal 2026.

In late fiscal 2023, after numerous attempts to collect outstanding receivables for construction services on a mining and minerals facility, 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 reserves 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.

5:23-cv-01396-CV(DTBx)).

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

In the third quarter of fiscal 2026, to avoid future legal costs associated with this matter, we entered into a settlement and received payment of $4.3 million.

On July 10, 2026, we were served with two complaints filed in the Superior Court of the State of Washington alleging certain employment claims for unpaid wages and violations of Washington statutes addressing moonlighting restrictions for low-wage employees, and nondisclosure and non-disparagement provisions in employment agreements (Malachi Ridley v.

Matrix Service Inc., No.

26-2-01375-37 and Malachi Ridley v.

Matrix Service Inc., No.

26-2-01384-1).

The complaints were filed by an individual that was employed by Matrix Service Inc.

between March 2024 and April 2024, but each complaint seeks class certification.

We believe we have substantial legal defenses to class certifications and the claims presented.

Additionally, certain claims asserted in the complaints may be subject to insurance coverage.

Damages for the claims, if any, have not yet been quantified.

Any potential losses associated with this matter cannot be estimated at this time.

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.

Note 8— Leases

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.

The results of litigation are inherently unpredictable;

however, 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.

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.

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.

We establish reserve accruals for claims using a combination of actuarially determined estimates and case-by-case evaluations of the underlying claim data and update our evaluations as further information becomes known.

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.

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.

Many customers, particularly in connection with new construction, require the Company to post performance and payment bonds.

These bonds provide a guarantee that the Company will perform under the terms of a contract and pay its subcontractors and vendors.

In certain circumstances, the customer may demand that the surety make payments or provide services under the bond, and the Company must reimburse the surety for any expenses or outlays it incurs.

As of June 30, 2026, the Company is not aware of any outstanding material obligations for payments related to bond obligations.

However, to the extent future reimbursements are required, the amounts could be material and could adversely affect the Company’s consolidated business, financial condition, results of operations and cash flows.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Letters of credit

We issue letters of credit under our ABL Facility to support workers' compensation programs.

In addition, from time to time, certain customers require the Company to post letters of credit to ensure payment of subcontractors and vendors and guarantee performance under contracts.

Such letters of credit are issued under our ABL Facility.

Each letter of credit commits the issuer to pay specified amounts to the holder of the letter of credit if the holder claims that the Company has failed to perform specified actions.

If this were to occur, the Company would be required to reimburse the lender under the ABL Facility.

Depending on the circumstances of such a reimbursement, the Company may also be required to record a charge to earnings for the reimbursement.

The Company is not aware of any claims currently asserted or threatened under any of these letters of credit that are material, individually or in the aggregate.

However, to the extent payment is required for any such claims, the amount paid could be material and could adversely affect the Company’s consolidated business, financial condition, results of operations and cash flows.

Note 8 - Leases

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

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Non-current operating lease liabilities $ 15,094

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

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

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

Fiscal Years Ended

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Cash flow information related to leases is as follows:

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Fiscal Years Ended

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We made no repurchases under the program in fiscal 2026.

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.

The terms of our ABL Facility limit share repurchases to $ 2.5 million per fiscal year provided that we meet certain availability thresholds.

There were 1,349,037 shares available for repurchase under the November 2018 Program as of June 30, 2026.

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These shares were returned to our pool of treasury shares.

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.

During fiscal 2026, we utilized remaining treasury shares in connection with equity awards under our incentive plans and for sales to the Employee Stock Purchase Plan.

We had no treasury shares as of June 30, 2026.

Matrix Service Company

1 unchanged sentence

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 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.

Plan Information

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Stock options, restricted stock, restricted stock units, stock appreciation rights, performance shares and cash-based awards can be issued under this plan.

Upon approval of the 2020 Plan, the 2018 Stock and Incentive Compensation Plan ("2018 Plan") was frozen with the exception of normal vesting and other activity associated with awards previously granted under the 2018 Plan.

Shares awarded under the 2018 Plan that are subsequently forfeited or net settled for tax withholding purposes are returned to the treasury share pool and become available for grant under the 2020 Plan.

Upon approval of the 2020 Plan, the 2018 Stock and Incentive Compensation Plan ("2018 Plan") was frozen.

The 2020 Plan was amended in November 2025 to increase the maximum authorized shares under the plan by 1,025,000 shares, increasing the total authorized shares under the 2020 Plan from 3,975,000 to 5,000,000 shares.

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• Time-based awards—Employee awards generally vest in four equal annual installments beginning one year after the grant date.

The award agreements contain a provision that accelerates the vesting for retirement eligible participants and participants that become retirement eligible during the vesting period and who elect to retire more than one year after the date of the award.

The award agreements contain a provision that accelerates the service period for retirement eligible participants and participants that become retirement eligible during the vesting period and who elect to retire more than one year after the date of the award.

The award is forfeited if retirement occurs before the first anniversary of the award.

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If the successor company does assume the awards, then vesting of the awards will be accelerated in the event of an involuntary termination or other material adverse event that occurs in connection with or following the change of control.

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.

Equity-settled time-based restricted stock unit activity for the fiscal year ended June 30, 2026 is as follows:

Shares Weighted Average Grant

Units Weighted Average Grant

Date Fair Value per

Nonvested shares at June 30, 2024 753,366 $ 8.31

Shares granted 357,496 10.20

Shares vested and released ( 305,556 ) 8.85

Shares canceled ( 45,325 ) 9.74

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

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Balance at June 30, 2025 759,981 $ 8.89

Units granted 294,271 15.14

Units vested and released ( 321,978 ) 9.07

Units canceled ( 119,486 ) 11.54

Balance at June 30, 2026 612,788 $ 11.24

The balance of equity-settled time-based restricted stock units included 288,901 and 301,901 units as of June 30, 2026 and 2025, respectively, that were fully expensed but not yet settled, primarily associated with retirement eligible participants.

There were 357,496 and 412,976 equity-settled time-based restricted stock units granted in fiscal 2025 and 2024 with weighted average grant date fair values of $10.20 and $8.51 per share, respectively.

There were 305,556 and 297,026 equity-settled time-based restricted stock units that vested and were released in fiscal 2025 and 2024 with weighted average grant date fair values of $8.85 and $9.40 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.

Measured but unrecognized stock-based compensation expense at June 30, 2026 was $ 2.4 million, which is expected to be recognized as expense over a weighted average period of 1.6 years.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Equity-settled market-based restricted stock unit activity for the fiscal year ended June 30, 2026 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

Units Weighted Average Grant Date Fair Value per Unit

Balance at June 30, 2025 1,525,332 $ 11.06

Units granted 359,709 19.08

Units vested and released (1)

( 420,631 ) 8.01

Units canceled ( 299,019 ) 15.43

Balance at June 30, 2026 (2)

1,165,391 $ 13.51

(1) The performance stock units vested at 109% of target on August 30, 2025.

This payout was based on our relative Total Shareholder Return ("TSR") for the performance period from July 1, 2023 through June 30, 2025, as measured against a designated peer group.

(2) Balance includes approximately 578,000 awards due to vest in August 2026.

Based on our relative total shareholder return, our performance was below the amount required for threshold payout;

therefore, no market-based awards vested in August 2026.

There were 468,351 and 626,150 equity-settled market-based restricted stock units granted in fiscal 2025 and 2024 with weighted average grant date fair values of $ 11.49 and $ 12.83 per share, respectively.

There were 274,363 and 329,489 equity-settled market-based restricted stock units cancelled in 2025 and 2024 with weighted average grant date fair values of $16.19 and $ 11.61 per share, respectively.

Measured but unrecognized stock-based compensation expense at June 30, 2026 for market-based awards was $3.6 million, which is expected to be recognized as expense over a weighted average period of 1.8 years.

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.

For the fiscal 2026 grant, the model estimated the fair value of the award based on 50,000 simulations of the future prices of our common stock compared to the future prices of the common stock of peer companies based on historical volatilities.

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

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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.

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 Consolidated Statement of Changes in Stockholders' Equity for the twelve months ended June 30, 2024.

Total stock-based compensation expense for the fiscal years ended June 30, 2026, 2025, and 2024 was $ 7.1 million, $ 8.9 million and $ 7.7 million, respectively.

The total fair value of awards that vested and were released during fiscal years ended June 30, 2026, 2025, and 2024 was $11.8 million, $4.2 million and $2.6 million, respectively.

We withheld 274,578, 123,850, and 55,324 shares for taxes on stock-based compensation vestings for $4.2 million, $1.2 million, and $0.5 million during fiscal 2026, 2025 and 2024, respectively, which are reported as financing cash outflows in our Consolidated Statements of Cash

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

We recognized excess tax expense (benefit) of $ 0.1 million, $1.1 million, and ($0.1) million related to stock-based compensation vesting for the fiscal years ended June 30, 2026, 2025, and 2024, respectively.

Cash-Settled Restricted Stock Units

Our cash-settled restricted stock units are time-based awards with terms consistent with equity-settled time based awards described above, except that the awards are ultimately paid in cash at the vesting dates.

We granted 175,689, 307,756 , and 360,030 , cash-settled restricted stock units during fiscal years 2026, 2025 and 2024, respectively;

with weighted average fair values of $ 3.1 million, $ 3.0 million, and $ 1.5 million, respectively.

with fair values of $2.9 million, $ 3.1 million, and $ 3.0 million, respectively.

There were 269,738, 255,110 , and 165,109 shares vested and released in fiscal 2026, 2025, and 2024, respectively;

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

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.

with total fair values of $4.1 million, $ 2.5 million, and $1.4 million, respectively.

There were 119,486 shares cancelled in fiscal 2026 with a fair value of $1.4 million.

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

There were no shares cancelled in fiscal 2024.

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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The non-current portion of the liability was $ 2.3 million and is included in other non-current liabilities in the Consolidated Balance Sheets.

Modifications and Cancellations

Restricted stock units were impacted during fiscal 2026 by modifications and cancellations of awards as a result of our organizational restructuring.

See Note 14 for additional information regarding our organizational restructuring.

Equity-settled time-based award activity for fiscal 2026 includes grants of 36,958 units and cancellations of 80,366 units associated with the restructuring.

Equity-settled market-based award activity for fiscal 2026 includes grants of 85,658 units and cancellations of 187,940 units associated with the restructuring.

Cash-settled award activity for fiscal 2026 includes grants of 36,958 units and cancellations of 80,366 units associated with the restructuring.

Matrix Service Company

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• If a participating employer chooses to stop participating in a plan, a withdrawal liability may be created based on the unfunded vested benefits for all employees in the plan.

Under federal legislation regarding multiemployer pension plans, in the event of a withdrawal from a plan or plan termination, companies are required to continue funding their proportionate share of such plan’s unfunded vested benefits.

Under federal legislation regarding multiemployer pension plans, in the event of a withdrawal from a plan or plan termination, companies may be required to make payments to the plan for their proportionate share of such plan’s unfunded vested benefits.

We are a participant in multiple union sponsored multiemployer plans, and, as a plan participant, our potential obligation could be significant.

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(In thousands)

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

Boilermaker-Blacksmith National Pension Trust 48-6168020/001 Red Green Implemented $ 5,744 $ 6,267 $ 4,494 Yes

National Electrical Benefit Fund, IBEW locals 71, 126, 488, and 1319 53-0181657/001 Green Green NA 2,723 2,199 2,666 No

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Total contributions made $ 17,849 $ 17,184 $ 20,833

Based upon the most recently available annual reports, our contribution to each of the individually significant plans listed in the table above was less than 5% of each plan’s total contributions.

The amount of additional funds, if any, that the Company may be obligated to contribute to these plans in the future cannot be estimated due to uncertainty of the future levels of work that require the specific use of union employees covered by these plans, as well as the future contribution levels and possible surcharges on contributions applicable to these plans.

Employee Stock Purchase Plan

The Matrix Service Company 2011 Employee Stock Purchase Plan (“ESPP”) was effective January 1, 2011.

The ESPP allows employees to purchase shares through payroll deductions and members of the Board of Directors to purchase shares from amounts withheld from their cash retainers.

Share purchases are limited to an aggregate market value of no greater than $ 60,000 per calendar year per participant and are purchased from us at the current market value with no discount to the participant.

Contributions are with after tax earnings and are accumulated in non-interest bearing accounts for quarterly purchases of company stock.

Upon the purchase of shares, the participants receive all stockholder rights including dividend and voting rights and are permitted to sell their shares at any time.

We have made 1,000,000 shares available under the ESPP and as of June 30, 2025 there were 733,334 shares available for purchase.

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.

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

The Matrix Service Company 2011 Employee Stock Purchase Plan (“2011 ESPP”) was effective January 1, 2011 through December 31, 2025.

The 2011 ESPP allowed employees to purchase shares through payroll deductions and members of the Board of Directors to purchase shares from amounts withheld from their cash retainers.

Share purchases were limited to an aggregate market value of no greater than $ 60,000 per calendar year per participant and were purchased from us at the current market value with no discount to the participant.

Contributions were with after tax earnings and were accumulated in non-interest bearing accounts for quarterly purchases of company stock.

Upon the purchase of shares, the participants received all stockholder rights including dividend and voting rights and were permitted to sell their shares at any time.

Effective January 1, 2026, the Board of Directors terminated the 2011 ESPP.

There were 11,391 shares issued in fiscal 2026, 17,148 shares issued in fiscal 2025, and 19,775 shares in fiscal 2024 under the 2011 ESPP.

Effective January 1, 2026, the Company adopted the Matrix Service Company 2026 Employee Stock Purchase Plan ("2026 ESPP"), which was approved by stockholders on November 4, 2025.

The 2026 ESPP is intended to qualify as an "Employee Stock Purchase Plan" under Section 423 of the Internal Revenue Code of 1986, and allows eligible employees to purchase shares of the Company's common stock at a discount through payroll deductions.

The ESPP initially authorized the issuance of up to 1,000,000 shares of common stock.

The purchase price is currently equal to 90% of the fair market value of the Company's common stock on the purchase date.

Offering periods are generally 3 months, and participation is voluntary.

As of June 30, 2026, there were 994,555 shares available for purchase.

There were 5,445 shares issued in fiscal 2026.

Note 13 - Segment Information

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• 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, hydrogen, ammonia, propane, butane, liquid nitrogen/liquid oxygen, and liquid petroleum.

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.

delivers integrated engineering, procurement and construction ("EPC") services, along with repair, maintenance and fabrication services for bulk liquid, cryogenic, and refrigerated storage and terminal facilities supporting both traditional and emerging energy markets, including LNG, NGLs, petroleum products, chemicals, hydrogen, and ammonia.

We also manufacture and sell specialty, precision-engineered 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.

delivers comprehensive construction, maintenance, upgrades and fabrication services for power generation facilities and power infrastructure systems for a variety of customers, including public and private utilities, energy producers and data center customers.

We also deliver integrated EPC, fabrication, and upgrade services for LNG peak shaving facilities.

• 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 primarily in the extraction of non-ferrous metals, cement, agriculture, wastewater treatment facilities and other industrial customers.

delivers engineering, construction, maintenance, and repair services across diverse heavy industrial and energy transition markets, including midstream and downstream energy, chemicals, mining and

minerals, renewable fuels, and hydrogen.

We also engineer and construct highly specialized infrastructure, notably thermal vacuum test chambers for the aerospace and defense sectors.

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

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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.

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.

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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;

We eliminate intersegment revenues;

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.

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Corporate assets consist primarily of centrally managed cash, restricted cash, prepaid expenses, corporate fixed assets, and corporate operating lease right-of-use assets.

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

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Selling, general and administrative expenses 22,091 9,389 6,066 26,061 63,607

Restructuring costs 323 718 138 2,393 3,572

Restructuring costs and other 2,649 1,855 1,019 4,440 9,963

Operating income (loss) $ 3,131 $ 20,348 $ ( 2,570 ) $ ( 30,527 ) $ ( 9,618 )

(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.

(1) Total revenues are net of inter-segment revenues which are primarily Storage and Terminal Solutions and were $3.1 million for the year ended June 30, 2026.

Capital expenditures $ 2,537 $ 1,452 $ 118 $ 1,376 $ 5,483

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Selling, general and administrative expenses 23,538 12,363 8,293 26,979 71,173

Restructuring costs — 52 215 234 501

Restructuring costs and other 323 718 138 2,393 3,572

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.

(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

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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 969 37 972 1,164 3,142

Restructuring costs and other — 52 215 234 501

Operating income (loss) $ ( 8,526 ) $ 336 $ 11,283 $ ( 33,206 ) $ ( 30,113 )

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

Matrix Service Company

Notes to Consolidated Financial Statements (continued)

Total Assets by Segment

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Customer two 17.5 % 0.3 % 53.3 % — %

Fiscal Year ended June 30, 2024

Customer three 10.0 % 17.3 % — % 6.5 %

Customer four 10.3 % — % — % 28.2 %

Fiscal Year ended June 30, 2025

Customer two 17.4 % 0.7 % 52.7 % — %

Customer one 10.5 % 21.0 % 1.6 % — %

Fiscal Year ended June 30, 2024

Customer four 10.5 % 27.7 % — % — %

Customer five 10.3 % — % — % 28.2 %

Note 14— Restructuring Costs

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.

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

Note 14 - Restructuring Costs and Other

Fiscal Years Ended

June 30, 2026 June 30, 2025

(In thousands)

Restructuring Costs by Type:

CEO and CFO transition $ 3,588 $ —

Lease impairment 2,935 —

Severance and other personnel-related costs 3,012 3,397

Total facility costs 216 4,746

Total other intangible asset impairments — 1,525

Other costs 139 582

Total restructuring costs $ 3,142 $ 25,055

Other 428 175

Total Restructuring costs and other $ 9,963 $ 3,572

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.

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.

During the fourth quarter of fiscal 2026, we took further action aimed at reducing our cost structure, which included eliminating multiple positions, including the Chief Administrative Officer position.

Our restructuring plan was substantially complete as of June 30, 2026.

During fiscal 2026, we recorded $2.9 million of operating lease and fixed asset impairments associated with certain real estate leases that we exited as part of our organizational 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.

In connection with the Board’s succession planning, on February 2, 2026, John R.

Hewitt and the Company entered into a transition agreement providing for Mr.

Hewitt to transition from his role as President and Chief Executive Officer and step down effective June 30, 2026.

Restructuring costs and other include $1.6 million in expense associated with cash severance payable in the first quarter of fiscal 2027, as well as $1.0 million in expense associated with stock-based compensation that will continue to settle after Mr.

Hewitt’s separation.

In April 2026, we also announced a transition and separation agreement with Kevin Cavanah, our Chief Financial Officer, and have commenced a search for a new Chief Financial Officer.

Restructuring costs and other include $0.8 million in expense associated with cash severance payable in the first quarter of fiscal 2027 pursuant to Mr.

Cavanah's agreement.

Matrix Service Company

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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