Sep. 20--Matrix Service Co. is another of the energy-related companies that have not been setting the world on fire lately, but has strong fundamentals and substantial potential for growth.

The company provides general industrial construction and repair and maintenance services to the petroleum, petrochemical, power, bulk storage terminal, pipeline and industrial gas industries.

In Matrix's fourth quarter that ended May 31, net income was $6.7 million or 26 cents per share, a 24.7 percent decrease from 2008's fourth quarter. Revenue was $179.9 million, a 7.3 percent decline from the fourth quarter last year.

For the 2009 fiscal year, Matrix's net income was $30.6 million or $1.16 per share, a 43 percent increase from 2008's net income of $21.4 million or 80 cents per share. Revenue for the year was $689.7 million, a 5.7 percent decrease from 2008's $731.3 million.

James Redman, who follows Matrix for Gibraltar Capital Management, said he likes Matrix because the company has an attractive portfolio of services.

In addition, he said, Matrix is preparing to enter the electrical

transmission business as well as providing services to the nuclear industry.

"They have no debt, lots of flexibility," Redman said. "Their biggest threat would be margin contraction because of the domination by larger competitors -- Bechtel Corp. and Fluor Corp. I don't think it's a big threat, but it's something to keep your eyes on."

Philip Shain, an analyst with Fredric E. Russell Investment Management Co., sees a lot of growth potential for Matrix.

"The oil and gas sector has been at the point of much consolidation, which should lead to more contract opportunities for Matrix," Shain said. "In the next year, as the energy business continues to grow, so will the stock price of companies like Matrix, which is a strong company and able to capitalize."

A downside for Matrix?

"There's always the possibility of taking on too much risk, although I don't see it because of their strong management and strong focus," Shain said.Matrix Service Co. is another of the energy-related companies that have not been setting the world on fire lately, but has strong fundamentals and substantial potential for growth.

The company provides general industrial construction and repair and maintenance services to the petroleum, petrochemical, power, bulk storage terminal, pipeline and industrial gas industries.

In Matrix's fourth quarter, net income was $6.7 million or 26 cents per share, a 24.7 percent decrease from 2008's fourth quarter. Revenue was $179.9 million, a 7.3 percent decline from the fourth quarter last year.

For the 2009 fiscal year, Matrix's net income was $30.6 million or $1.16 per share, a 43 percent increase from 2008's net income of $21.4 million or 80 cents per share. Revenue for the year was $689.7 million, a 5.7 percent decrease from 2008's $731.3 million.

James Redman, who follows Matrix for Gibraltar Capital Management, said he likes Matrix because the company has an attractive portfolio of services.

In addition, he said, Matrix is preparing to enter the electrical transmission business as well as providing services to the nuclear industry.

"They have no debt, lots of flexibility," Redman said. "Their biggest threat would be margin contraction because of the domination by larger competitors

e_SEmD

Bechtel Corp. and Fluor Corp. I don't think it's a big threat, but it's something to keep your eyes on."

Philip Shain, an analyst with Fredric E. Russell Investment Management Co., sees a lot of growth potential for Matrix.

"The oil and gas sector has been at the point of much consolidation, which should lead to more contract opportunities for Matrix," Shain said. "In the next year, as the energy business continues to grow, so will the stock price of companies like Matrix, which is a strong company and able to capitalize."

A downside for Matrix?

"There's always the possibility of taking on too much risk, although I don't see it because of their strong management and strong focus," Shain said.

D.R. Stewart 581-8451 don.stewart@tulsaworld.com

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