Matrix Service (MTRX) risk factors, FY2024 10-K

Other

1. 01Our results of operations depend upon the award of new contracts, the timing of those awards, and the progress of work for those contracts
2. 02Demand for our products and services is cyclical and is vulnerable to the level of capital and maintenance spending of our customers and to downturns in the industries and markets we serve, as well as conditions in the general economy
3. 03Our profitability could be negatively impacted if we are not able to maintain appropriate utilization of our workforce
4. 04An inability to attract and retain qualified personnel, and in particular, engineers, project managers, and skilled craft workers, could impact our ability to perform on our contracts, which could harm our business and impair our future revenue and profitability
5. 05The loss of one or more of our significant customers could adversely affect us
6. 06Our backlog is subject to unexpected fluctuations, adjustments and cancellations and does not include the full value of our long-term maintenance contracts, and therefore, may not be a reliable indicator of our future earnings
7. 07The terms of our contracts could expose us to unforeseen costs and costs not within our control, which may not be recoverable and could adversely affect our results of operations and financial condition
8. 08We may incur significant costs in providing services in excess of original project scope without having an approved change order
9. 09Our business may be affected by difficult work sites and environments, which may adversely affect our overall business
10. 10We are susceptible to severe weather conditions, including those caused by climate change or otherwise, which may harm our business and financial results
11. 11Our business has been affected by inflation, supply chain disruptions and shortages of materials and labor
12. 12Domestic and foreign trade tariffs could raise the price and reduce the availability of raw materials to us, which could negatively impact our operating results and financial condition
13. 13Unsatisfactory safety performance may subject us to penalties, affect customer relationships, result in higher operating costs, negatively impact employee morale and result in higher employee turnover
14. 14We are exposed to credit risk from customers. If we experience delays and/or defaults in customer payments, we could suffer liquidity problems or we could be unable to recover amounts owed to us
15. 15We contribute to multiemployer plans that could result in liabilities to us if those plans are terminated or if we withdraw from those plans
16. 16A failure or outage in our operational systems or cyber security attacks on any of our systems, or those of third parties, may adversely affect our financial results

Financial Risks

1. 17Our Credit Agreement imposes restrictions that may limit business alternatives
2. 18We may be unable to compete for projects if we are not able to obtain surety bonds or letters of credit
3. 19Our use of percentage-of-completion accounting for fixed-price contracts could result in a reduction or elimination of previously reported profits
4. 20Actual results could differ from the estimates and assumptions that we use to prepare our financial statements
5. 21Earnings for future periods may be affected by impairment charges

Legal, Insurance, Regulatory and Compliance Risks

1. 22We are involved, and are likely to continue to be involved in legal proceedings, which will increase our costs and, if adversely determined, could have a material effect on our financial condition, results of operations, cash flows and liquidity
2. 23Our projects expose us to potential professional liability, product liability, pollution liability, warranty and other claims, which could be expensive, damage our reputation and harm our business. We may not be able to obtain or maintain adequate insurance to cover these claims
3. 24Employee, subcontractor or partner misconduct or our overall failure to comply with laws or regulations could harm our reputation, damage our relationships with customers, reduce our revenue and profits, and subject us to criminal and civil enforcement actions
4. 25Our operations are subject to environmental laws and regulations, including those concerning emissions into the air; discharges into waterways; generation, storage, handling, treatment and disposal of hazardous material and wastes; and health and safety
5. 26Climate change legislation or regulations restricting emissions of “greenhouse gases” could result in reduced demand for certain services and products we provide
6. 27We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws
7. 28Economic, political and other risks associated with international operations could adversely affect our business