- Record quarterly revenue of $760
million, up 14% year over year
- Operating income of $49 million, up
22% year over year
- EPS of $0.81; ongoing EPS of $0.65,
up 33% year over year
Tetra Tech, Inc. (NASDAQ: TTEK) today announced results for the
first quarter ended December 31, 2017.
First Quarter Results
For the first quarter, Tetra Tech generated record high
quarterly revenue and diluted earnings per share (EPS). Revenue in
the first quarter totaled $760 million, up 14% year over year. For
ongoing operations1, revenue totaled $753 million, and revenue, net
of subcontractor costs2 (net revenue), was $544 million, up 14% and
11%, respectively, compared to the same period in fiscal 2017.
Operating income for the first quarter was $49 million, and on an
ongoing basis totaled $50 million, up 16% year over year. EPS was
$0.81; excluding the one-time benefit from revaluing deferred tax
liabilities as a result of the new U.S. tax law enacted in December
2017, EPS from ongoing operations totaled $0.65, up 33% year over
year. Backlog at the end of the quarter was $2.43 billion.
Quarterly Dividend and Share Repurchase Program
On January 29, 2018, Tetra Tech’s Board of Directors declared a
quarterly dividend of $0.10 per share payable on March 2, 2018 to
stockholders of record as of February 14, 2018. Additionally, as of
December 31, 2017, the Company had $75 million remaining under the
previously approved $200 million share repurchase program.
Comments on Results
Tetra Tech’s Chairman and CEO Dan Batrack commented, “Tetra Tech
delivered record quarterly results to start fiscal 2018 with net
revenue and earnings that exceeded the high end of our guidance
range for the first quarter. We continue to see strong demand
across our end markets for our Leading with Science® consulting
services. Our broad-based growth has been led by work for U.S.
state and local clients, which has increased organically at a
double-digit rate for six consecutive quarters. Given the strength
of our performance to date and outlook, we are increasing both our
net revenue and EPS guidance for fiscal 2018.”
Business Outlook
The following statements are based on current expectations.
These statements are forward-looking and the actual results could
differ materially. These statements do not include the potential
impact of transactions that may be completed or developments that
become evident after the date of this release. The Business Outlook
section should be read in conjunction with the information on
forward-looking statements at the end of this release.
Tetra Tech expects ongoing EPS for the second quarter of fiscal
2018 to be in the range of $0.48 to $0.53 and net revenue for the
second quarter to be in the range of $490 million to $515 million.
For fiscal 2018, Tetra Tech is increasing guidance, and now expects
ongoing EPS to be in the range of $2.40 to $2.60 and net revenue to
range from $2.10 billion to $2.20 billion.
Webcast
Tetra Tech is hosting a live audio-visual webcast concerning the
first quarter 2018 results on February 1, 2018 at 8:00 a.m. (PT).
Interested parties may access the presentation through a link
posted on the Company’s website at
tetratech.com/investor-relations. A replay of the webcast will be
available on the Company’s website.
Reconciliation of Revenue and Operating Results In
thousands (except for EPS data)
Three Months Ended
Dec. 31, 2017 Jan. 1, 2017 % Y/Y
Revenue $ 759,749 $ 668,851 14% RCM (6,807 )
(8,231 ) – Ongoing revenue $ 752,942 $ 660,620 14%
Revenue $ 759,749 $ 668,851 14% Subcontractor Costs
(214,902 ) (179,300 ) – Net revenue $ 544,847 $ 489,551 11%
RCM (1,152 ) (1,795 ) – Ongoing net revenue $ 543,695
$ 487,756 11% Operating income $ 48,589 $
39,855 22% RCM 1,158 3,042 – Ongoing
operating income $ 49,747 $ 42,897 16% EPS $
0.81 $ 0.46 76% RCM 0.01 0.03 – Revaluation of deferred tax
liabilities (0.17 ) – – Ongoing EPS $ 0.65
$ 0.49 33%
About Tetra Tech
Tetra Tech is a leading, global provider of consulting and
engineering services. We are differentiated by Leading with
Science® to provide innovative technical solutions to our clients.
We support global commercial and government clients focused on
water, environment, infrastructure, resource management, energy,
and international development. With more than 16,000 associates
worldwide, Tetra Tech provides clear solutions to complex problems.
For more information about Tetra Tech, please visit tetratech.com,
follow us on Twitter (@TetraTech), or like us on Facebook.
Forward-Looking Statements
This release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
The use of words such as "anticipate," "expect," "could," "may,"
"intend," "plan" and "believe," among others, generally identify
forward-looking statements. These forward-looking statements are
based on currently available operating, financial, economic and
other information, and are subject to a number of risks and
uncertainties. Readers are cautioned that these forward-looking
statements are only predictions and may differ materially from
actual future events or results. A variety of factors, many of
which are beyond our control, could cause actual future results or
events to differ materially from those projected in the
forward-looking statements in this release, including but not
limited to: continuing worldwide political and economic
uncertainties; the U.S. Administration’s potential changes to
fiscal policies; the cyclicality in demand for our overall
services; the fluctuation in demand for oil and gas, and mining
services; risks related to international operations; concentration
of revenues from U.S. government agencies and potential funding
disruptions by these agencies; dependence on winning or renewing
U.S. government contracts; the delay or unavailability of public
funding on U.S. government contracts; the U.S. government’s right
to modify, delay, curtail or terminate contracts at its
convenience; compliance with government procurement laws and
regulations; credit risks associated with certain clients in
certain geographic areas or industries; acquisition strategy and
integration risks; goodwill or other intangible asset impairment;
the failure to comply with worldwide anti-bribery laws; the failure
to comply with domestic and international export laws; the failure
to properly manage projects; the loss of key personnel or the
inability to attract and retain qualified personnel; the ability of
our employees to obtain government granted eligibility; the use of
estimates and assumptions in the preparation of financial
statements; the ability to maintain adequate workforce utilization;
the use of the percentage-of-completion method of accounting; the
inability to accurately estimate and control contract costs; the
failure to adequately recover on our claims for additional contract
costs; the failure to win or renew contracts with private and
public sector clients; growth strategy management; backlog
cancellation and adjustments; risks relating to cyber security
breaches; the failure of partners to perform on joint projects; the
failure of subcontractors to satisfy their obligations;
requirements to pay liquidated damages based on contract
performance; the adoption of new legal requirements; changes in
resource management, environmental or infrastructure industry laws,
regulations or programs; changes in capital markets and the access
to capital; credit agreement covenants; industry competition;
liability related to legal proceedings, investigations, and
disputes; the availability of third-party insurance coverage; the
ability to obtain adequate bonding; employee, agent, or partner
misconduct; employee risks related to international travel; safety
programs; conflict of interest issues; liabilities relating to
reports and opinions; liabilities relating to environmental laws
and regulations; force majeure events; protection of intellectual
property rights; stock price volatility; the ability to impede a
business combination based on Delaware law and charter documents;
and other risks and uncertainties as may be described in Tetra
Tech’s periodic filings with the Securities and Exchange
Commission, including those described in the “Risk Factors” section
of Tetra Tech’s Annual Report on Form 10-K for the year ended
October 1, 2017, and Tetra Tech’s Quarterly Reports on Form 10-Q
for fiscal year 2018, as well as in Tetra Tech’s other filings with
the SEC. Readers should not place undue reliance on forward-looking
statements since such information speaks only as of the date of
this release. Tetra Tech does not intend to update forward-looking
statements and expressly disclaims any obligation to do so.
Non-GAAP Financial Measures
To supplement the financial results presented in accordance with
generally accepted accounting principles in the United States
(“GAAP”), we present certain non-GAAP financial measures within the
meaning of Regulation G under the Securities Exchange Act of 1934,
as amended. We provide these non-GAAP financial measures because we
believe they provide a valuable perspective on our financial
results. However, non-GAAP measures have limitations as analytical
tools and should not be considered in isolation and are not in
accordance with, or a substitute for, GAAP measures. In addition,
other companies may define non-GAAP measures differently which
limits the ability of investors to compare non-GAAP measures of
Tetra Tech to those used by our peer companies. A reconciliation of
these non-GAAP financial measures to the most directly comparable
GAAP financial measures is included in this release.
_______________
1 Measures presented for ongoing operations are non-GAAP
financial measures. Refer to Reconciliation of Revenue and
Operating Results table for a reconciliation to GAAP. 2 Tetra
Tech’s revenue includes a significant amount of subcontractor costs
and, therefore, the Company believes revenue, net of subcontractor
costs, which is a non-GAAP financial measure, provides a valuable
perspective on its business results. Refer to Reconciliation of
Revenue and Operating Results table for a reconciliation to GAAP.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180131006199/en/
Tetra Tech, Inc.Jim Wu, Investor RelationsCharlie MacPherson,
Media & Public Relations(626) 470-2844
Tetra Tech (NASDAQ:TTEK)
Historical Stock Chart
From Mar 2024 to Apr 2024
Tetra Tech (NASDAQ:TTEK)
Historical Stock Chart
From Apr 2023 to Apr 2024