Exhibit

“Despite continued market pressure on our customers as a result of current commodity pricing, our financial performance in this quarter provided a strong close to the fiscal year," said the Company's President and CEO John R. Hewitt. "Looking forward, the construction of TransCanada's Napanee Generating Station and all six terminals for Energy Transfer's Dakota Access Pipeline continue to progress and underpin the outlook for the coming year. We begin fiscal 2017 with an historically normal level of backlog and, even in this difficult market environment, expect a strong level of project awards by the end of the calendar year. Additionally, our balance sheet remains strong and Company liquidity is nearly $231 million - 32 percent higher than year-end fiscal 2015."

In addition to sound financial performance, the Company achieved record safety results for the fiscal year, with a Total Recordable Incident Rate of 0.55. "In this business, nothing is more important than the safety of our employees, customers and fellow contractors," said Hewitt. "These results are a tribute to our employees' commitment to our core values and their focus on providing quality and leadership in the work we do."

Revenue for the fourth quarter ended June 30, 2016 was $359.6 million compared to $364.4 million in the same period a year earlier, a decrease of $4.8 million, or 1.3%. In the fourth quarter ended June 30, 2016, the Company generated net income of $9.1 million, or $0.34 per fully diluted share. In the same period a year earlier, the Company earned $10.9 million, or $0.40 per fully diluted share.

On a segment basis, revenue increased $31.6 million and $2.1 million in the Storage Solutions and Electrical Infrastructure segments, driven largely by our major projects. These increases were offset by decreases in the Industrial and Oil Gas & Chemical segments of $21.9 million and $16.6 million, as a result of continued commodity price pressure.

Consolidated gross profit was $34.1 million in the three months ended June 30, 2016 compared to $40.4 million in the three months ended June 30, 2015, primarily as a result of lower gross profit in the Industrial segment. Fiscal 2016 gross margins were 9.5% compared to 11.1% in the same period a year earlier.

Selling, general and administrative costs were $19.6 million in the fourth quarter of fiscal 2016, compared to $22.0 million in the same period a year earlier due largely to a reduction in incentive compensation as well as efficiency improvements. SG&A expense as a percentage of revenue decreased to 5.5% in the three months ended June 30, 2016 as compared to 6.0% for the three months ended June 30, 2015.

Revenue for the year ended June 30, 2016 was $1.312 billion compared to $1.343 billion in the same period a year earlier, a decrease of $31.2 million, or 2.3%. In fiscal 2016, the Company earned net income of $28.9 million, or $1.07 per fully diluted share. In the same period a year earlier, the Company earned $17.2 million, or $0.63 per fully diluted share. The Company's portion of the acquired joint venture project charges recorded in fiscal 2015, which have been discussed in previous earnings releases, totaled $34.7 million. The charges, which were partially offset by lower incentive compensation, reduced earnings for the period by $0.67 per fully diluted share.

On a segment basis, revenue decreased in the Industrial and Oil Gas & Chemical segments by $127.1 million and $55.6 million, respectively, partially offset by increases of $91.1 million and $60.4 million in the Electrical Infrastructure and Storage Solutions segments, respectively. In the Industrial segment, lower commodity prices caused decreased business volumes in the iron and steel and mining markets. In the Oil Gas & Chemical segment, low prevailing commodity prices in fiscal 2016 and a significant turnaround in fiscal 2015 led to lower revenues in fiscal 2016. The increases in the Electrical Infrastructure and Storage Solutions segments is attributable to work on the major projects mentioned above.

Consolidated SG&A expenses were $85.1 million in the year ended June 30, 2016 compared to $78.6 million in the same period a year earlier. The increase in fiscal 2016 SG&A expense is primarily related to a bad debt charge of $5.2 million and $1.2 million of costs related to the Baillie Tank Equipment, Ltd. acquisition completed in February 2016. SG&A, inclusive of the bad debt charge and acquisition expense, was 6.5% of revenue in the year ended June 30, 2016 compared to 5.8% in the same period a year earlier.

Backlog at June 30, 2016 totaled $868.7 million compared to record backlog of $1.421 billion at June 30, 2015, due to two major multi-year project awards in the second half of fiscal 2015. Project awards in the three months and for the fiscal year ended June 30, 2016 totaled $195.8 million and $793.6 million, respectively.

The Company’s cash balance was $71.7 million at June 30, 2016. In fiscal 2016, the Company generated $30.3 million from operations, funded capital expenditures of $13.9 million, acquired a company for $13.0 million and repurchased shares for $10.5 million. In addition, the Company expended $8.8 million to pay off the outstanding balance under the senior credit facility. The cash balance along with availability under the senior credit facility gives the Company liquidity of $230.8 million at June 30, 2016.

In conjunction with the earnings release, Matrix Service Company will host a conference call with John R. Hewitt, President and CEO, and Kevin S. Cavanah, Vice President and CFO. The call will take place at 10:30 a.m. (Eastern) / 9:30 a.m. (Central) on Wednesday, August 31, 2016 and will be simultaneously broadcast live over the Internet which can be accessed at the Company’s website at matrixservicecompany.com on the Investors’ page under Conference Calls/Events. Please allow extra time prior to the call to visit the site and download the streaming media software required to listen to the Internet broadcast. The conference call will be recorded and will be available for replay within one hour of completion of the live call and can be accessed following the same link as the live call.

This release contains forward-looking statements that are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are generally accompanied by words such as “anticipate,” “continues,” “expect,” “forecast,” “outlook,” “believe,” “estimate,” “should” and “will” and words of similar effect that convey future meaning, concerning the Company’s operations, economic performance and management’s best judgment as to what may occur in the future. Future events involve risks and uncertainties that may cause actual results to differ materially from those we currently anticipate. The actual results for the current and future periods and other corporate developments will depend upon a number of economic, competitive and other influences, including those factors discussed in the “Risk Factors” and “Forward Looking Statements” sections and elsewhere in the Company’s reports and filings made from time to time with the Securities and Exchange Commission. Many of these risks and uncertainties are beyond the control of the Company, and any one of which, or a combination of which, could materially and adversely affect the results of the Company's operations and its financial condition. We undertake no obligation to update information contained in this release.



	Three Months Ended						Twelve Months Ended
	June 30, 2016			June 30, 2015			June 30, 2016			June 30, 2015
Revenues	$	359,635		$	364,417		$	1,311,917		$	1,343,135
Cost of revenues	325,536			324,013			1,185,926			1,255,765
Gross profit	34,099			40,404			125,991			87,370
Selling, general and administrative expenses	19,600			22,030			85,109			78,568
Operating income	14,499			18,374			40,882			8,802
Other income (expense):
Interest expense	(96		)	(290		)	(852		)	(1,236		)
Interest income	43			78			190			468
Other	(256		)	(123		)	(567		)	158
Income before income tax expense	14,190			18,039			39,653			8,192
Provision for federal, state and foreign income taxes	5,056			6,819			14,116			10,090
Net income (loss)	9,134			11,220			25,537			(1,898		)
Less: Net income (loss) attributable to noncontrolling interest	—			304			(3,326		)	(19,055		)
Net income attributable to Matrix Service Company	$	9,134		$	10,916		$	28,863		$	17,157
Basic earnings per common share	$	0.35		$	0.41		$	1.09		$	0.64
Diluted earnings per common share	$	0.34		$	0.40		$	1.07		$	0.63
Weighted average common shares outstanding:
Basic	26,434			26,633			26,597			26,603
Diluted	26,774			27,132			27,100			27,177



	June 30, 2016			June 30, 2015
Assets
Current assets:
Cash and cash equivalents	$	71,656		$	79,239
Accounts receivable, less allowances (2016 - $8,403; 2015 - $561)	190,434			199,149
Costs and estimated earnings in excess of billings on uncompleted contracts	104,001			86,071
Inventories	3,935			2,773
Income taxes receivable	9			579
Other current assets	5,411			5,660
Total current assets	375,446			373,471
Property, plant and equipment, at cost:
Land and buildings	39,224			32,746
Construction equipment	90,386			87,561
Transportation equipment	49,046			47,468
Office equipment and software	29,577			28,874
Construction in progress	7,475			5,196
Total property, plant and equipment - at cost	215,708			201,845
Accumulated depreciation	(130,977		)	(116,782		)
Property, plant and equipment - net	84,731			85,063
Goodwill	78,293			71,518
Other intangible assets	20,999			23,961
Deferred income taxes	3,719			3,729
Other assets	1,779			3,947
Total assets	$	564,967		$	561,689



	June 30, 2016			June 30, 2015
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	141,445		$	125,792
Billings on uncompleted contracts in excess of costs and estimated earnings	58,327			96,704
Accrued wages and benefits	27,716			26,725
Accrued insurance	9,246			8,100
Income taxes payable	2,675			3,268
Other accrued expenses	6,621			6,498
Total current liabilities	246,030			267,087
Deferred income taxes	3,198			1,244
Borrowings under senior revolving credit facility	—			8,804
Other liabilities	173			—
Total liabilities	249,401			277,135
Commitments and contingencies
Matrix Service Company Stockholders’ equity:
Common stock—$.01 par value; 60,000,000 shares authorized; 27,888,217 shares issued as of June 30, 2016 and June 30, 2015; 26,297,145 and 26,440,823 shares outstanding as of June 30, 2016 and June 30, 2015	279			279
Additional paid-in capital	126,958			123,038
Retained earnings	223,257			194,394
Accumulated other comprehensive income	(6,845		)	(5,926		)
	343,649			311,785
Less treasury stock, at cost — 1,591,072 and 1,447,394 shares as of June 30, 2016 and June 30, 2015	(26,907		)	(18,489		)
Total Matrix Service Company stockholders' equity	316,742			293,296
Noncontrolling interest	(1,176		)	(8,742		)
Total stockholders' equity	315,566			284,554
Total liabilities and stockholders’ equity	$	564,967		$	561,689




	Electrical Infrastructure			Oil Gas & Chemical			Storage Solutions		Industrial			Total
Three Months Ended June 30, 2016
Gross revenues	$	97,574		$	64,291		$	164,664	$	33,369		$	359,898
Less: inter-segment revenues	—			76			186		1			263
Consolidated revenues	97,574			64,215			164,478		33,368			359,635
Gross profit	10,165			4,283			18,077		1,574			34,099
Operating income (loss)	$	5,719		$	74		$	9,144	$	(438	)	$	14,499

Three Months Ended June 30, 2015
Gross revenues	$	95,496		$	82,596		$	133,178	$	57,146		$	368,416
Less: inter-segment revenues	—			1,810			314		1,875			3,999
Consolidated revenues	95,496			80,786			132,864		55,271			364,417
Gross profit	7,532			6,395			18,089		8,388			40,404
Operating income	$	2,191		$	1,241		$	10,284	$	4,658		$	18,374

Twelve Months Ended June 30, 2016
Gross revenues	$	349,011		$	252,973		$	564,738	$	149,744		$	1,316,466
Less: inter-segment revenues	—			3,178			1,226		145			4,549
Consolidated revenues	349,011			249,795			563,512		149,599			1,311,917
Gross profit	29,301			18,553			67,843		10,294			125,991
Operating income (loss)	$	11,144		$	(3,503	)	$	33,449	$	(208	)	$	40,882

Twelve Months Ended June 30, 2015
Gross revenues	$	257,930		$	310,826		$	504,155	$	281,319		$	1,354,230
Less: inter-segment revenues	—			5,466			1,032		4,597			11,095
Consolidated revenues	257,930			305,360			503,123		276,722			1,343,135
Gross profit (loss)	(31,444		)	25,394			58,085		35,335			87,370
Operating income (loss)	$	(44,293	)	$	7,064		$	29,069	$	16,962		$	8,802



	Electrical Infrastructure			Oil Gas & Chemical			Storage Solutions			Industrial			Total
	(In thousands)
Backlog as of March 31, 2016	$	383,929		$	101,047		$	482,867		$	64,630		$	1,032,473
Project awards	83,436			54,646			40,624			17,128			195,834
Revenue recognized	(97,574		)	(64,215		)	(164,478		)	(33,368		)	(359,635		)
Backlog as of June 30, 2016	$	369,791		$	91,478		$	359,013		$	48,390		$	868,672



	Electrical Infrastructure			Oil Gas & Chemical			Storage Solutions			Industrial			Total
	(In thousands)
Backlog as of June 30, 2015	$	493,973		$	132,985		$	670,493		$	123,147		$	1,420,598
Project awards	224,829			208,288			274,045			86,448			793,610
Project delays and cancellations	—			—			(22,013		)	(11,606		)	(33,619		)
Revenue recognized	(349,011		)	(249,795		)	(563,512		)	(149,599		)	(1,311,917		)
Backlog as of June 30, 2016	$	369,791		$	91,478		$	359,013		$	48,390		$	868,672


•	Company achieves fourth quarter earnings per share of $0.34; full year earnings per share of $1.07


•	Strong quarterly revenue of $359.6 million despite a challenging business environment


•	In fiscal 2016, the Company purchased over 650 thousand shares totaling $10.5 million


•	Fiscal 2017 guidance for revenue of $1.30 billion to $1.45 billion and fully diluted EPS of $1.10 to $1.40


•	minimum customer commitments on cost plus arrangements; and


•	certain time and material arrangements in which the estimated value is firm or can be estimated with a reasonable amount of certainty in both timing and amount.


•	fixed-price awards;