Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. MATRIX SERVICE CO (866273) 10-Q published on May 09, 2019 at 4:01 pm
Reporting Period: Mar 30, 2019
Our effective tax rates for the three and nine months ended March 31, 2019 were 30.5% and 27.9%, respectively, compared to 14.2% and 38.1% for the same periods a year ago. We expected our fiscal 2019 effective tax rate to be approximately 27.0%. The effective tax rates for both periods in fiscal 2019 were negatively impacted by a valuation allowance of $0.6 million placed on foreign tax credits generated by our operations in Canada, which we believe will not be utilized prior to their expiration. The effective tax rate for the nine months ended March 31, 2019 was positively impacted by $0.3 million of excess tax benefits related to the vesting of stock-based compensation.
Revenue for the Electrical Infrastructure segment increased $2.3 million to $60.7 million in the three months ended March 31, 2019 compared to $58.4 million in the same period a year earlier. The increase is primarily due to an increase in power generation package work, largely offset by reductions in power delivery and our strategic shift away from larger power generation EPC work. The segment gross margin was 10.2% in fiscal 2019 and 3.0% in fiscal 2018. The fiscal 2019 segment gross margin was positively impacted by strong project execution on power generation package work. The segment gross margin of 3.0% in fiscal 2018 was negatively impacted by lower than expected direct margins, under recovery of construction overhead costs due to lower than anticipated volumes, and increased competition.
Revenue for the Oil Gas & Chemical segment was $82.5 million in the three months ended March 31, 2019 compared to $68.4 million in the same period a year earlier. The increase of $14.2 million is primarily due to higher volumes of turnaround and maintenance work. The segment gross margin was 13.0% for the three months ended March 31, 2019 compared to 6.9% in the same period last year. The fiscal 2019 segment gross margin benefited from improved recovery of construction overhead costs and strong execution on capital projects. The fiscal 2018 segment gross margin was negatively impacted by lower than previously forecasted direct margins on a limited number of projects and the under-recovery of construction overhead costs.
Our effective tax rate for the nine months ended March 31, 2019 was 27.9% compared to 38.1% for the same period a year ago. We expected our effective tax rate to be approximately 27.0% in fiscal 2019 and 32.0% in fiscal 2018. The effective tax rate in fiscal 2019 was negatively impacted by a valuation allowance of $0.6 million placed on foreign tax credits generated by our operations in Canada, which we believe will not be utilized prior to their expiration. This was partially offset by $0.3 million of excess tax benefits related to the vesting of stock-based compensation. The effective tax rate for the nine months ended March 31, 2018 was negatively impacted by $1.3 million of unfavorable stock-based compensation tax adjustments, largely offset by a favorable $1.0 million domestic deferred tax remeasurement adjustment in connection with accounting for the Tax Cuts and Jobs Act.
Revenue for the Storage Solutions segment was $372.9 million in the nine months ended March 31, 2019 compared to $218.3 million in the same period a year earlier, an increase of $154.6 million. The increase in segment revenue is primarily a result of increased tank and terminal construction work, and higher levels of repair and maintenance spending. The segment gross margin was 9.5% in the nine months ended March 31, 2019 and 7.8% in the nine months ended March 31, 2018. For the first and second quarters of fiscal 2019, gross margin was negatively impacted by the wind down of lower margin work awarded in a highly competitive environment and lower than previously forecasted margins on a limited number of those projects. The fiscal 2018 segment gross margin was negatively impacted by lower volumes, which led to the under-recovery of construction overhead costs.