Michael Hall - Chairman John Hewitt - Chief Executive Officer and President Kevin Cavanah - Chief Financial Officer and Vice President

Steven Schwartz - First Analysis Securities Corporation Tahira Afzal - KeyBanc Capital Markets Inc. Fred Buonocore - CJS Securities, Inc. Michael Harrison - First Analysis Matt Duncan - Stephens Inc. Martin Malloy - Johnson Rice & Company, L.L.C. Richard Wesolowski - Sidoti & Company, LLC

Greetings, and welcome to the Matrix Service Co. Third Quarter 2011 Results. [Operator Instructions] It is now my pleasure to introduce your host, Kevin Cavanah, CFO. Thank you, sir. You may begin.

Thank you, Dan. I would now like to take a moment to read the following. Various remarks that the company may make about future expectations, plans and prospects for Matrix Service Co. constitute forward-looking statements for the purposes of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various factors, including those discussed in our annual report on Form 10-K for our fiscal year ended June 30, 2010, and in subsequent filings made by the company with the SEC. I would now like to turn the call over to Mike Hall, Chairman of the Board of Directors of Matrix Service Co. Mike?

Thank you, Kevin, and good morning to everybody. We appreciate you joining us today to discuss the results of our third quarter ended March 31, 2011. Joining me on the call today, along with Kevin Cavanah, is John Hewitt, the company's newly appointed President and Chief Executive Officer. Throughout his career, John has demonstrated his strong leadership and extensive industry experience through the successful management of many large and diverse EPC companies. John brings a strategic vision for the future direction and growth of the company and the Board of Directors believes John is highly qualified and well-prepared to lead Matrix Service. I'm pleased to have John as a key member of our management team. I would now like to turn the call over to John for a few comments.

Thank you very much, Mike, for the kind introduction. I'm very pleased to be joining the outstanding team here at Matrix Service Co, and look forward to working with our leadership as we continue to execute on the company's strategic growth plans. I cannot tell you how excited I am to become part of the Matrix Service Co. family. I've spent my entire career in the Industrial Engineering and Construction business, working throughout North America and some international locations. Over the past 25 years, I've held various operating and leadership positions at Aker Solutions ASA and its predecessor companies. Most recently, I served as Senior Vice President of Aker Solutions where I was responsible for providing executive oversight on major capital projects in the Power and LNG markets. Prior to that, from 2007 to 2009, I served as President, Aker Solutions Engineering and Construction, U.S. Operations, where I was responsible for managing all their Construction Services in North America. From 2004 to 2007, I served as President, Aker Construction, where I had complete P&L responsibility for a multidiscipline Industrial Construction business operating once again throughout North America. My market experience is spread among power, oil and gas, metals, chemicals and other miscellaneous industrial arenas. I have executed capital and maintenance projects in excess of $2 billion. Over the next 3 months, I will be spending time in all the company's offices to meet managers and employees to get a deeper understanding of the company. I'll also be visiting some of our project sites and meeting our key clients. Once again, I am very excited to be part of the excellent management team at Matrix Service Company and working with them to achieve our growth ambitions. I'll be happy to answer any questions at the conclusion of our call today and look forward to meeting many of you in the coming months.

Thanks, John. The company continues to experience generally improving market conditions and strong bid volume in both the Construction Services and Repair and Maintenance Services segments. As we discussed in our last call, our long-term outlook for backlog is positive, which is reflected in the backlog growth in both segments in the third quarter and from the fiscal year ended June 30, 2010. Safety performance remains a critical focus area and is essential to our long-term success. As we mentioned on our last conference call, we completed calendar year 2010 with the lowest total recordable incident rate in the company's history. Further, our results for the 9 months to-date in fiscal 2011 are also positive with a recordable rate trending below that achieved in fiscal 2010. Revenues for the 3 month and 9 month periods increased over the same periods last year with backlog also up over the 3 and 9-month periods. The operating results for the quarter are in line with our expectations driven by stronger demand for Construction Services in the Aboveground Storage Tank market and Repair and Maintenance Services in the Electrical and Instrumentation and Downstream Petroleum markets. AST Construction revenues increased 42% in the third quarter compared to the same period last year. And the Electrical and Instrumentation, Repair and Maintenance business increased 210% over the same period. The Repair and Maintenance Service segment, which has been soft during the past few quarters, experienced strong growth in the third quarter compared to the same period last year. Consolidated gross margins improved in the third quarter, driven by better recovery of overhead cost due to higher business volume and a lower cost structure. We realized strong gross margins in the Construction Service segment, largely to due to outstanding project execution and project-specific performance bonuses, which resulted in the recognition of margins above historic levels. Cost reductions implemented in fiscal 2009 and '10 continue to positively impact our improving operating results in the 3 and 9-month periods. As a result of these cost reductions, the company has increased our absorption of construction overhead costs, which has contributed to our gross margin improvement. SG&A expenses were lower for the 3 and 9-month periods compared to the prior year. However, when normalizing for non-routine charges related to acquired claims receivables in the 3 and 9-month periods last year, SG&A expenses were up $1.2 million and $2.4 million in the respective 3 and 9-month periods this fiscal year. Additional SG&A expenses relate primarily to incentive compensation increases versus the prior year based on improved performance. We will continue to manage our cost structure as the business grows in order to maintain the appropriate level of resources. Our outlook remains positive and we continue to see attractive project opportunities across our core markets. We believe demand for AST Construction Services will continue to be strong, as will E&I opportunities, in both the Construction Services and Repair and Maintenance Service segments. The Aboveground Storage Tank business continues to gain momentum with a number of projects planned in Cushing, Oklahoma and other terminal facilities in North America. The development of the Canadian oil sands and related pipelines to transport crude oil to the Gulf Coast continues to be a key driver for the AST market. Recent research reports have highlighted the excess crude inflow capacity into Cushing compared to the smaller outflow capacity to the Gulf Coast as a key driver for additional storage capacity over the next several quarters. This, combined with improving economics for terminal operators, is expected to support additional investment in storage assets. Matrix Service remains a leading provider in this market given our reputation for quality engineering, fabrication and construction services. Further, our proximity to key terminal facilities in Cushing, coupled with our significant equipment and personnel capabilities, positions the company to respond quickly to the growing number of opportunities. The AST Repair and Maintenance business has improved somewhat in recent months and we continue to pursue opportunities in the United States and Canada. However, the level of competition in the Repair and Maintenance market remains high, which is keeping margins below historic levels. The Electrical and Instrumentation business continues to be a significant part of our growth strategy. We are targeting opportunities in the power delivery, power generation, downstream petroleum and renewable energy markets, which we believe will allow us to expand our market share in the Northeast corridor, the Mid-Atlantic States and in other growth areas throughout North America. We have added equipment, tools and personnel to position the company to capture a significant amount of work required to construct and upgrade power systems. We are also expanding beyond our traditional Substation business to include transmission and distribution construction and maintenance as we see a growing market for capital expansion and maintenance to the high-voltage infrastructure required by many of our utility customers. Our capabilities also position the company to construct and maintain generating stations, compressor stations, renewable facilities and other energy-related electrical infrastructure projects. As we mentioned on our last conference call, the calendar year 2011 outlook for the Downstream Petroleum market is positive based on refinery utilization rates and improving frac spreads. This trend also bodes well for improved construction activity in this market. Turnaround activity in the third fiscal quarter was higher compared to the prior year and we expect turnaround activity in the fourth fiscal quarter to be strong as well. The timing of future awards continues to be uncertain. In addition, it is difficult to achieve attractive margins given the high level of competition in the turnaround market. We are pleased with the results through the 9 months of fiscal 2011 and are encouraged by the level of business activity going into the fourth quarter. As a result, we expect earnings for fiscal 2011 will be at the higher end of our guidance range of $0.60 to $0.75 per fully diluted share. We now expect that revenues for fiscal 2011 will be in the range of $630 million to $650 million. I will now turn the call over to Kevin to discuss financial results.

Thanks, Mike. In the third quarter, the company earned $0.18 per fully diluted share on revenues of $136.3 million, compared to breakeven earnings on revenues of $122 million in the same period last year. Construction Services segment revenues decreased marginally to $75.7 million compared to $76.3 million in the same quarter last year. Aboveground Storage Tank revenues and the Construction Services segment increased 42%, offset by lower revenues in the Downstream Petroleum and Electrical and Instrumentation markets. Repair and Maintenance Services segment revenues increased to $60.6 million in the quarter compared to $45.7 million in the prior year. The improvements in the Repair and Maintenance Services segment were driven by significant growth in E&I. Repair and Maintenance Service revenue increased in Downstream Petroleum market due to higher turnaround activity in the third quarter compared to the last year. Consolidated gross profit was $18.6 million in the quarter versus $13.3 million in the third quarter last year. Construction Services gross margins were 17.4% in the quarter compared to 13.2% in the prior year. The increase in Construction Services gross margins is due to improved recovery of overhead costs, a favorable mix of higher margin work and strong project execution. Repair and Maintenance Services gross margins were 8.9% in the quarter compared to 7% in the prior year. The Repair and Maintenance Service margins continued to be impacted by the high level of competition, which is keeping pricing below historic levels. Consolidated gross margins were 13.6% in the quarter compared to 10.9% in the prior-year period. Third quarter SG&A expenses were $10.9 million as compared to $13.2 million in the prior year. The prior year included non-routine charges of $3.5 million related to acquired claim receivables while the current quarter included higher incentive compensation costs due to improved operating results. In the 9-month period, the company earned $0.50 per fully diluted share on revenues of $463.4 million compared to $0.34 per fully diluted share on revenues of $410.1 million in the same period last year. Construction Services segment revenues increased to $278.8 million for the 9 months compared to $234.6 million in the same period last year, while the Repair and Maintenance Services segment revenues increased to $184.6 million in the 9 months compared to $175.5 million in the prior year. Consolidated gross profit was $54 million for the 9 months versus $49.2 million last year. In the 9-month period, Construction Services gross margins were 13.4% and Repair and Maintenance Services gross margins were 9%. Consolidated gross margins were 11.7% in the 9 months as compared to 12% in the prior year period. SG&A expenses for the 9-month period were $32.7 million compared to $34.7 million in the prior year. Consolidated backlog increased to $383.9 million at March 31, 2011, an increase of $17.9 million or 4.9% in the 3 months ended March 31, 2011, and a $30.7 million, or 8.7% increase in the 9 months ended March 31, 2011. Our cash balance was $63.4 million at the end of the third quarter as compared to $50.9 million at the end of fiscal 2010. The increase in our cash balance reflects the growth in our business volume and improved profitability during fiscal 2011. Overall liquidity remains strong and we continue to fund the business with cash flow from operations. Our strong balance sheet and bonding capacity provides significant financial flexibility in the future for our strategic plans. With that, we would like to open the call up for questions.

[Operator Instructions] Our first question comes from Matt Duncan of Stephens Inc. Matt Duncan - Stephens Inc.: John, first question I've got is for you. Can you talk a bit about what attracted you to your new role?

Yes. The company was very attractive to me because I thought there was some great opportunities there for growth in the organization and growth for me, personally. I'm about, personally, about the challenges and the growth opportunities and I felt as though that this company would provide those opportunities to me. And that the -- I was very impressed with the management team that I met and the Board of Directors and felt that, that was an extremely strong group, and that it had a very good foundation to build upon. Matt Duncan - Stephens Inc.: Kevin, can you talk a little bit about the impact that weather had on you guys this quarter. I know you have told us on your last conference call you expected your June quarter to be much stronger than March. I guess I was still a little surprised by how low revenues were -- clearly, weather had some impact. When you look at the shortfall versus -- my model anyway was all in construction. Talk a bit about how you think your revenues may have been impacted by the winter weather.

I think the impact on revenues from weather was -- it did impact us but it was minimal. I think that we picked up some work in emergency work for, like, for E&I because of weather, but it did have some negative impacts on a lot of our construction. Overall, I don't think it was the primary driver to the -- the lower revenues. I think as Mike said earlier, the results in the quarter including the revenue volume were pretty much in line with our expectations. We expected lower revenues in the quarter. We knew our E&I revenues would be lower. It's just that time of the year that we're not going to take down the infrastructure due to the power demands. We also have construction projects planned that are going to be commencing in the fourth quarter that didn't start in the third quarter. And then we did have -- we've expected improved turnaround -- it was good in the quarter, but we think it'll be even better in the fourth. Matt Duncan - Stephens Inc.: That's helpful. And then on the gross margin side on Construction, you mentioned that you got some performance bonuses for good projects execution. Can you quantify those for us and maybe what would gross margin would look like without those? And then help us think about what we ought to think about in terms of gross margins on a go-forward basis? It seems like 13.6% is a little high, maybe go-forward, just trying to make sure we calibrate our models properly.

Let's talk about it on a segment basis, and we'll start with Construction Services. There's really 2 things that led to it. Number one was just -- we're doing a better job of absorbing our overhead cost, controlling our cost structure and it has been a big driver on the Construction Services side. Now strong execution was a big impact in this quarter in Construction Services. It allowed us to achieve the 17.4% margins. There's a number of areas in which that impacted us. Number one, we had minimal margin fade this quarter. We did a good job of -- on all of our projects and we didn't have that -- a big, bad project offsetting good work; secondly, we did earn in -- some project incentives on projects due to the strong execution. We're always going to have some level of incentives in our -- we hope we always have some level of incentives in our operating income, but I think it was higher in the third quarter; and then we also -- the execution allowed us to come in under our cost estimates. Whenever we're estimating a project, we're going to have a contingency estimate in there and if we do a good job of operating or executing the work, then we're going to be able to come in under our cost estimates. So we did that. I don't think you can expect 17% gross margins on Construction Services work in every quarter. This quarter, I think it was just everything was working well. But even without the incentives, we still, because of that project execution, we still would have been in line with the really strong gross margins we earned back in the heyday back in 2008 timeframe. We're still -- we’ve still got a competitive environment as our mix of work changes, Construction Service margins maybe -- I don't know, 12%, 13%. On the Repair and Maintenance side, it was really 2 factors, the better absorption, offset by the continued pressure we see on pricing. Matt Duncan - Stephens Inc.: Kevin, is something around 12% for a consolidated gross margin probably more realistic, at least in the next couple of quarters?

I think that's probably more realistic. Matt Duncan - Stephens Inc.: That's helpful. And then last thing I've got, and I'll jump back in queue, Mike, can you talk a bit about the acquisition pipeline? You guys continue to build a cash balance. You're now at $63 million and no debt, probably you yourself is a bit under-levered. What are your plans for putting your cash to use and growing the business through acquisitions?

Well, as I've mentioned in the past, we really don't comment on acquisitions as to where we are and with respect to any specific acquisition. So in terms of where we are now, there's really no comment. Our approach on a go-forward basis to use our liquidity is to have it available to grow the business whether that be organically or through acquisitions. And obviously, John’s new and will have some thoughts on the types of acquisitions and in what areas and what kinds of diversifications we'll be looking at. Acquisitions, particularly, tuck-in acquisitions are still critical to the company's future success and growth strategy. And we intend to use our liquidity to fund our future needs both organically and through acquisitions. And, I mean, the fourth quarter we'll be using cash because of all the turnaround activity. There's no question about it. In the third quarter, we built cash significantly because of some positive working capital changes. It can swing significantly from month-to-month and -- but we do have substantial liquidity that we do plan to use to grow the business on a go-forward basis.

Our next question is from Fred Buonocore of CJS Securities. Fred Buonocore - CJS Securities, Inc.: John, I'll start off with a question for you as well, realizing you've only been with the company for a very short period of time, as you look at the business and bringing in the various experiences that you've had in the past, what are the single most or the most significant opportunities that you see maybe to improve or gain some upside to what the business is currently generating?

Like I said, I've been with the company short time, like 2 hours, but obviously, have sat and looked at some of the financials and strategic plans. I think the strategic plans in the organization are solid. I think there's opportunities for some geographic expansion. I think there's some opportunities for us to be looking at some different markets that the company is not in now. And then I think there's also opportunities to expand and grow the -- and strengthen the markets that they're in currently. So without -- certainly, my thoughts and visions aren't totally solidified today but I'm spending quite a bit of time, with the management group, with the Board of Directors, to look at those opportunities. And we're going to be working through those over the course of the next couple of months. Fred Buonocore - CJS Securities, Inc.: That's great, thank you. And secondly, just asking about backlog. The outlook for year-end backlog, can we see another increase as we move through the next quarter finishing up the year? And any comments that you have on outlook for 2012? It seems to make sense that it would be a growth year, can it be -- can you give us any more color on expectations there?

Well, in terms of the backlog, and I've mentioned it before, backlog can be lumpy. The long-term trend is positive. When I say long-term trend, it may be down for a quarter, it will be up for a couple of quarters, it could go down, it could go up for 4 quarters in a row. But the long-term trend is up. We are looking at significant numbers of projects now and we’re somewhat at the mercy of when they execute those contracts. And if it happens to be in June or May, it’ll show up in our quarterly backlog. If it's July, it will not show up in backlog. We had a -- and I won't quantify it, but a very good April in terms of booking additional business. And we expect that to continue because the bidding activity is up significantly and we're going to continue to capture our fair share. So the long-term trend for our backlog is up. And then that will translate into next year's performance. We would expect next year's performance to be better than this year, substantially better than this year. And as we're taking advantage of the market that is pretty positive and continues to be positive. When you look at frac spreads, frac spreads are increasing, that bodes well for the construction activity in the Downstream Petroleum industry. You look at oil prices, and oil prices are high and some people say they're going higher, and some people say they're going lower, but that helps our business. We’re seeing our global storage is increasing and storage at Cushing is expected to increase over the next few quarters next year. We're seeing opportunities in aviation fueling, gas market opportunities. Our read is that the engineering houses are getting very active which is a leading indicator. So our AST construction remains strong, our turnaround activities for the rest of the calendar year 2011 are very positive, which falls into our fiscal 2012. Some of the back-end technology opportunities are starting to come along and the opportunities are improving there. So the only thing that's somewhat unclear right now, we think, is the nuclear industry. We're not really sure where that's going, except to say, that there'll probably be more maintenance and safety regulations coming out for existing plants that will help our business, because we did receive our NR-Stamp, which is going to help us in that area of focus. So overall, we're pretty positive and that's really all I really want to say about 2012 except to say it should be pretty good. Fred Buonocore - CJS Securities, Inc.: Okay, that's helpful. I'll get back in line.

Our next question is from Rich Wesolowski of Sidoti & Company. Richard Wesolowski - Sidoti & Company, LLC: Mike, you had the -- or you mentioned the back up in Cushing. With the other oil futures currently having flattened out over the last few months, has the bidding activity at the terminal flattened out as well?

Not really. I mean, we’re seeing significant bidding activity in Cushing and other areas of the country, really. Richard Wesolowski - Sidoti & Company, LLC: Is it something that -- you mentioned that Cushing will be good for the next few quarters or even into next years, is it something that you see that can be exhausted over the next year? Or is it something with a longer tail than that?

It's a longer tail than that. Richard Wesolowski - Sidoti & Company, LLC: If you look at the last couple of, say, year, few quarters, of award tallies in the construction segment, did June and the September quarters really stand out as off the charts -- and you guys haven't really announced any big awards over that time. It's been good after that but not as high. What accounted for that spurt?

Well, I think when you look at the announcements, we had a number of higher projects that we combined together and put out a news release on some of these -- the projects. When you look at the backlog growth over the last 9 months, it's really been driven by our AST business which has made up the bulk of the increase. So it's really our AST business, the others have done well, but the AST has really driven the growth.

And the AST, while we haven't seen individual projects that have been the size when we've and announced them, there's been a lot of smaller awards, smaller tank packages as companies -- as companies came out of the recession, they are a little more hesitant that they didn't do 20-tank package, they would do a 4-tank package.

And they're taking bigger projects and dividing them into smaller segments. So you may have a 20-tank project that they are going to stage at 4 tanks or 5 tanks each, and do one -- and then 5 months later or 4 months later, do the second one and then the third one. They're not doing the 20-tanker like they used to. Richard Wesolowski - Sidoti & Company, LLC: You have reported an abrupt fall off in Construction revenue from refineries and also in the E&I, is that a sign of good projects, a couple were completed or was it something else?

We had a large project in the E&I business that was completed in the second quarter and that really caused the drop off in the E&I construction side of the business. Repair and Maintenance continues to be very strong in the E&I side. We would expect to replace that backlog and construction activity to grow in the future in E&I. Again, it can be lumpy because it is construction work. Richard Wesolowski - Sidoti & Company, LLC: Okay. If I look at your E&I revenue, it's now 1/4 of the company. How much of that comes from utilities versus oil and gas versus other heavy industrial sectors?

I would say the bulk of it is utilities. Richard Wesolowski - Sidoti & Company, LLC: And then lastly, the R&M margin is settled in that 8%, 9% range, whereas in the past, you've had revenue of $250 million, $275 million. You were doing 10% and even up to 15%. Is pricing the big difference between today and the prior years? And is there the potential for real sizable R&M margin expansion in '12 and '13?

Pricing is really what's driving the margins in the Repair and Maintenance side because the man-hours utilization is really up and the volume is up. But because of much lower pricing, it's really had a negative impact on the ability to grow margins. We've been able to grow margins which we did in the last quarter, but that's really the result of a cost structure that's much better now than it was a year or so ago. In the future, we would expect, and when you start looking at some of the Repair and Maintenance, whether it's AST, which can take place in marketing terminals or in Downstream Petroleum or you look at E&I work which takes place in -- primarily in utilities where we have a number of contractor of choice arrangements. If, in fact, the whole volume of activities starts picking up, we hopefully will see a less competitive environment which would allow for a little better pricing. I don't see in the near-term though where we're going to be able to get our Repair and Maintenance margins back to these historic levels that we saw 2 or 3 years ago.

Our next question comes from Martin Malloy of Johnson Rice. Martin Malloy - Johnson Rice & Company, L.L.C.: In terms of the large amount of AST capacity that’s expected to be added at Cushing and the amount that's been announced by the owners and operators, how much of that would you say has been awarded thus far? Is it 25% or 50%?

I really don't have -- I don't have the answer to that, to be honest with you. We can try to do some research and find out on that. Martin Malloy - Johnson Rice & Company, L.L.C.: And then you mentioned getting into or expanding into electric transmission, distribution, construction and maintenance. How -- can you talk a little bit about your strategy for doing that? Is that through acquisitions or hiring people and growing organically?

It's primarily going to be through hiring people growing organically. When we picked up the S.M. Electric acquisition, it provided us some capabilities in that area that we’re now starting to expand and grow, but it's going to be primarily through organic internal growth.

Our next question is from Tahira Afzal of KeyBanc Capital Markets. Tahira Afzal - KeyBanc Capital Markets Inc.: John, of course, first question for you. You're coming from Aker. Aker has obviously been seeing a lot of changes with the Jacobs signed portions, et cetera. I would love to know how much that influenced your decision to look outside. And then number two, Aker's had great traction on an international basis. As you look at Matrix, do you see any opportunities there that you can really strategically leverage outside of the U.S.? And as you said, perhaps it's early at this point.

The changes that Aker had, I would say, did not have a great impact on my decision to come to Matrix. Aker is a good company and they got a good, strong management team. So this was an opportunity for me, I felt, to come to an organization that I really felt very strongly about as a platform to grow the business. On an international basis, I think international work is going to be part of the portfolio of this company but we need to do that in a very measured and a very strategic basis with a good, strong tactical plan and not rush into an international expansion. As a company, as a Construction Services business, where you're selling know-how and logistics management and labor management -- management of labor, you need to be able to find the best way to export that offshore. And now that's certainly something that's going to be in our planning and thinking here going forward. Tahira Afzal - KeyBanc Capital Markets Inc.: Second question is for Mike. Mike, it's been a while since we really talked about really leveraging Hake Group and its potential. But now, there's a lot of talk about EPA regulation around scrubber retrospect. And the first word coming out of utilities is that the spending is going to be very high, much more than the last cycle and the Downstream right now seems pretty compressed. So I would love to get a sense in terms of how you're positioning Matrix to take advantage of this opportunity. And as we look into 2012, more so for you, maybe the back half of your fiscal year, how you see that opportunity playing out?

Well, it is a very good opportunity for us. We have experience particular -- not only in the Hake Group but also in our merit operations, the old Hake Group being our union environment. So we have experience in both sides of our business to take advantage of the scrubber work, and we do a lot of that and have done lot of that. I think it's not really going to be required until another 2 or 3 years, I believe, in 2015. And we're seeing more and more activity, but it's slower than we thought it was going to be. We really think it's going to have a much bigger impact for us in 2013 and '14 and into '15. They’ll be some activity next year, but we think the growth is really going to be in the following 2 or 3 fiscal years after '12. Tahira Afzal - KeyBanc Capital Markets Inc.: And I guess, last question is in terms of AST tanks. Obviously, that's the linchpin or the core area of focus, or has been, for Matrix in the past. We've talked about the fact that, that maybe diversification is a great idea, because this market has such sharp ups and downs, technically speaking. And it seems from your commentary today, Mike, it seems like we're going to see a nice push right now, but would love to see that as we go further into 2013, 2014. Strategically, which are the end markets you'd like to grow in?

I think the end markets -- and you really hit a very good point, we do rely a lot in the petroleum industry and we would very much like to diversify in other industrial areas and in the power industry, and even moving into some of the upstream versus downstream or midstream versus downstream. So that will be where we're going to be focusing our growth, both internally and through acquisition. It really has to make sense. And we really do need to diversify, which is in our long-term strategy to do just that.

Our next question is from Mike Harrison of First Analysis Securities Corporation. Steven Schwartz - First Analysis Securities Corporation: It's actually Steve Schwartz sitting in for Mike today. And just if I heard you guys right, E&I construction actually benefited from some weather issues. Did I hear that correctly?

No, I didn't mean that -- if I said that, that's not what my intention was. I think that there could have been some E&I emergency work that benefited, but the normal, new construction work would've probably been negatively impacted. Steven Schwartz - First Analysis Securities Corporation: And on the Construction side, for that part of the business, E&I, I think you mentioned it was pretty lumpy, but I'm wondering if there's an opportunity to return to revenue levels in the mid-20s as a quarterly run rate.

Yes, but I don't think that's going to happen this next quarter. We're going to be growing at that -- when you start looking at run rates at that level, yes, that's the plan and that's the objective as we continue to expand the areas that we're really focusing on for E&I construction. Steven Schwartz - First Analysis Securities Corporation: Okay. And then just as far as the better absorption on overhead costs, if I just frame it up this way, help me understand this -- last quarter, that December quarter, you guys had $136 million in revenue -- or I'm sorry, $175 million, and this quarter $136 million. So how, on a lower level of revenue, do you end up getting much better absorption?

When we were talking about the better absorption, we’re comparing third quarter of this year to third quarter of last year and our revenues were up in that period. But it's not just a man-hour driven item. It's related to -- there's been a lot of work to improve our cost structure and make sure that our staff's, our infrastructure's at the right size for the volume of business that we have. Steven Schwartz - First Analysis Securities Corporation: Okay. And then just one last one and this is regarding the nuclear opportunity. You mentioned you got your NR-Stamp. Is that relatively new?

Yes, it is. Steven Schwartz - First Analysis Securities Corporation: It is, okay. So did it happen in the first quarter? Michael Harrison - First Analysis: Yes, it did. About 3 or 4 weeks ago.

Our next question is a follow-up question from Rich Wesolowski of Sidoti & Company. Richard Wesolowski - Sidoti & Company, LLC: Would you comment on where your costs are for steel versus, say, 6 months ago? And what you can do and what you are doing to limit the effect on profitability?

Well, steel is up considerably over 6 months ago. Availability is still pretty good. We're not having any difficulty getting the steel. We typically lock in our steel purchases with our contracts, and when we bid the contract and if there's increases, we really negotiate contracts where the customer takes the risk on the steel, if he does not or they don't want us to lock it in. But we typically lock it in when we get it awarded or have a 30-day period after our bid so that we really don't have significant commodity risk in our bidding and construction activity. Richard Wesolowski - Sidoti & Company, LLC: Is the ability to negotiate that with the customer an improvement in the bidding terms that you would see 18 months ago or 2 years ago?

No. That really hasn't changed much. Richard Wesolowski - Sidoti & Company, LLC: And last one, for Kevin, how much cash would you say you need to leave in the balance sheet to bond large bids and to absorb any working capital growth that would come with the backlog gains? How much is really excess cash on the balance sheet?

Well, I like to hold the cash, but I don't know if we've been in an optimal level we're looking for. Right now, we do have the flexibility to do some things strategically with the level of cash. I mean, we obviously have more than what would be required, but as we look in the fourth quarter, we're going to see a significant increase in the volume of work and we're going to see some of that cash be used to fund some working capital. And we're still looking at other things to do with that cash such as strategic acquisitions, tuck-in acquisitions. So we're always going to -- I think pry try to keep $20 million, $30 million of cash on hand, but we feel good with the balance we've got right now.

Our next question is a follow-up from Fred Buonocore of CJS securities. Fred Buonocore - CJS Securities, Inc.: Not to beat the dead horse but following up on Matt and other previous questions about the margin in the Construction Services in the quarter. So we kind of talked about the gross margins in that business reverting to more like the 12% to 13% range, where they have been in recent, previous quarters. Does that -- I'm realizing you're not giving specific guidance there, but does that sort of range factor in more average-type execution or does it factor in the kind of execution that you saw this quarter, but no big bonuses? Just trying to think about how normalized that range is.

I think it's more of an average -- we had some margins, exceptional performance this quarter. If we repeated that type of execution on our projects, we would be able to achieve strong margins like that again. I think the 12% to 13% range we talked about is kind of a normal margin -- normal level of execution.

It appears there are no further questions at this time. I would like to turn the conference back over to John Hewitt for closing statements.

Thank you for joining us on the call today and we look forward to talking with you all in the near future. Thank you very much.

This concludes today's teleconference. You may now disconnect your lines at this time. And thank you for your participation.