Unaudited Investors Report | 2018 | 2019 | 2020 | 2021 | ||||||||||||||||
($ in Thousands, Except Per Share Data) | Total | Total | 1st Qtr | 2nd Qtr | 6 mos | 3rd Qtr | 9 mos | 4th Qtr | Total | 1st Qtr | ||||||||||
REVENUE - ADJUSTED (1) | 2,960,525 | 3,122,590 | 797,478 | 734,128 | 1,531,606 | 709,723 | 2,241,329 | 753,364 | 2,994,693 | 765,104 | ||||||||||
REVENUE, NET OF SUBCONTRACTOR COSTS ["Net Revenue" (2)] | ||||||||||||||||||||
Government Services Group (GSG) | 1,212,334 | 1,329,381 | 329,706 | 321,042 | 650,748 | 319,234 | 969,982 | 330,101 | 1,300,083 | 344,918 | ||||||||||
Commercial / International Services Group (CIG) - Adjusted (1) | 996,329 | 1,076,742 | 284,279 | 263,484 | 547,762 | 241,037 | 788,799 | 259,713 | 1,048,512 | 260,253 | ||||||||||
NET REVENUE - ADJUSTED (1) | 2,208,662 | 2,406,123 | 613,985 | 584,526 | 1,198,510 | 560,271 | 1,758,781 | 589,814 | 2,348,595 | 605,171 | ||||||||||
Remediation and Construction Management (RCM) / Claims | (7,928) | (16,485) | 37 | (65) | (28) | 5 | (23) | - | (23) | - | ||||||||||
OTHER COSTS OF REVENUE - ADJUSTED (1) (3) (6) | 1,807,213 | 1,967,396 | 505,064 | 481,476 | 986,540 | 450,377 | 1,436,917 | 465,464 | 1,902,381 | 488,866 | ||||||||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES - ADJUSTED (1) (3) | 185,146 | 198,195 | 46,421 | 50,440 | 96,861 | 50,313 | 147,174 | 55,813 | 202,987 | 50,053 | ||||||||||
ACQUISITION AND INTEGRATION EXPENSES | - | 10,351 | - | - | - | - | - | - | - | - | ||||||||||
PURCHASE ACCOUNTING / NON-CORE DISPOSITIONS (GAINS) | 9,187 | 21,785 | (800) | (3,155) | (3,955) | (3,944) | (7,899) | 1,803 | (6,096) | - | ||||||||||
INCOME FROM OPERATIONS, AS REPORTED | 190,086 | 188,762 | 63,302 | 47,530 | 110,832 | 63,525 | 174,356 | 66,735 | 241,092 | 66,252 | ||||||||||
INCOME FROM OPERATIONS - ADJUSTED (1) (2) (3) (6) | 216,303 | 240,532 | 62,501 | 52,609 | 115,109 | 59,582 | 174,690 | 68,537 | 243,227 | 66,252 | ||||||||||
GSG | 168,211 | 185,263 | 42,048 | 36,937 | 78,985 | 43,100 | 122,085 | 48,174 | 170,259 | 47,700 | ||||||||||
CIG | 86,908 | 104,278 | 30,832 | 26,134 | 56,968 | 24,355 | 81,321 | 30,819 | 112,140 | 29,559 | ||||||||||
Corporate (4) | (38,816) | (49,009) | (10,379) | (10,462) | (20,844) | (7,873) | (28,716) | (10,456) | (39,172) | (11,007) | ||||||||||
RCM / Claims | (17,030) | (19,633) | 1 | - | 1 | (1) | - | - | - | - | ||||||||||
OPERATING MARGIN - ADJUSTED [% of Net Revenue] (1) (2) (3) (6) | 9.8% | 10.0% | 10.2% | 9.0% | 9.6% | 10.6% | 9.9% | 11.6% | 10.4% | 10.9% | ||||||||||
GSG | 13.5% | 13.9% | 12.8% | 11.5% | 12.1% | 13.5% | 12.6% | 14.6% | 13.1% | 13.8% | ||||||||||
CIG | 8.8% | 9.7% | 10.8% | 9.9% | 10.4% | 10.1% | 10.3% | 11.9% | 10.7% | 11.4% | ||||||||||
Interest Expense | ||||||||||||||||||||
15,524 | 13,626 | 3,348 | 3,500 | 6,848 | 3,564 | 10,412 | 2,688 | 13,100 | 3,026 | |||||||||||
INCOME BEFORE INCOME TAX EXPENSE | 174,562 | 175,136 | 59,954 | 44,029 | 103,983 | 59,961 | 163,944 | 64,047 | 227,991 | 63,226 | ||||||||||
Income Tax Expense | 37,605 | 16,375 | 12,636 | 7,616 | 20,252 | 14,458 | 34,710 | 19,391 | 54,101 | 10,778 | ||||||||||
NET INCOME ATTRIBUTABLE TO TETRA TECH | 136,883 | 158,668 | 47,310 | 36,398 | 83,708 | 45,497 | 129,205 | 44,654 | 173,859 | 52,436 | ||||||||||
DILUTED AVERAGE SHARES | 56,598 | 55,936 | 55,438 | 55,463 | 55,380 | 54,692 | 55,161 | 54,603 | 55,022 | 54,637 | ||||||||||
DILUTED EPS ATTRIBUTABLE TO TETRA TECH, AS REPORTED | $ | 2.42 | $ | 2.84 | $ | 0.85 | $ | 0.66 | $ | 1.51 | $ | 0.83 | $ | 2.34 | $ | 0.82 | $ | 3.16 | $ | 0.96 |
ADJUSTED DILUTED EPS (1) (2) (3) (5) (6) | $ | 2.64 | $ | 3.17 | $ | 0.84 | $ | 0.73 | $ | 1.57 | $ | 0.78 | $ | 2.34 | $ | 0.91 | $ | 3.26 | $ | 0.96 |
ADJUSTED EBITDA (1) (2) (3) (6) | 253,876 | 269,175 | 68,729 | 59,166 | 127,895 | 65,833 | 193,728 | 74,081 | 267,809 | 72,478 | ||||||||||
ADJUSTED EBITDA MARGIN [% of Net Revenue] | 11.5% | 11.2% | 11.2% | 10.1% | 10.7% | 11.8% | 11.0% | 12.6% | 11.4% | 12.0% | ||||||||||
DAYS IN SALES OUTSTANDING | 85.4 | 77.6 | 73.3 | 71.5 | 71.5 | 70.4 | 70.4 | 67.7 | 67.7 | 67.3 | ||||||||||
CASH FLOW FROM OPERATIONS | 185,733 | 208,513 | (18,024) | 101,223 | 83,199 | 111,351 | 194,550 | 67,929 | 262,479 | 33,180 | ||||||||||
CAPITAL EXPENDITURES | 9,726 | 16,198 | 3,331 | 2,546 | 5,877 | 3,483 | 9,360 | 2,885 | 12,245 | 1,795 | ||||||||||
Y/Y ADJUSTED NET REVENUE GROWTH % (1) (2) | 8.6% | 8.9% | 11.1% | (0.9%) | 4.9% | (10.1%) | (0.4%) | (7.9%) | (2.4%) | (1.4%) | ||||||||||
GSG | 13.6% | 9.7% | 8.7% | 1.6% | 5.1% | (9.5%) | (0.2%) | (7.7%) | (2.2%) | 4.6% | ||||||||||
CIG | 3.0% | 8.1% | 13.9% | (3.9%) | 4.6% | (10.9%) | (0.7%) | (8.1%) | (2.6%) | (8.5%) | ||||||||||
NET REVENUE % BY CLIENT TYPE - ADJUSTED | ||||||||||||||||||||
International | 28% | 30% | 34% | 33% | 34% | 30% | 32% | 31% | 32% | 31% | ||||||||||
U.S. Commercial | 27% | 24% | 24% | 24% | 24% | 25% | 24% | 24% | 24% | 22% | ||||||||||
U.S. Federal Government | 30% | 28% | 28% | 30% | 29% | 31% | 30% | 30% | 30% | 31% | ||||||||||
U.S. State & Local Government | 15% | 18% | 14% | 13% | 13% | 14% | 14% | 15% | 14% | 16% | ||||||||||
NET REVENUE % BY CONTRACT TYPE - ADJUSTED | ||||||||||||||||||||
Fixed-Price | 33% | 34% | 34% | 36% | 35% | 39% | 36% | 36% | 36% | 34% | ||||||||||
Time-and-Materials | 50% | 50% | 49% | 49% | 49% | 45% | 49% | 49% | 49% | 49% | ||||||||||
Cost-Plus | 17% | 16% | 17% | 15% | 16% | 16% | 16% | 15% | 15% | 17% | ||||||||||
BACKLOG | 2,663,814 | 3,091,857 | 3,165,768 | 2,989,098 | 2,989,098 | 3,066,594 | 3,066,594 | 3,239,285 | 3,239,285 | 3,188,061 |
- Excludes Remediation and Construction Management, non-cash claim settlements
- Non-GAAPfinancial measure. For a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures, please visit tetratech.com/investor-presentations.html
- Excludes purchase accounting and non-core dispositions, and acquisition and integration expenses
- Corporate costs not allocable to the segments (e.g., acquisition costs, amortization expense, stock option expense, etc.)
- Excludes non-recurring tax benefits
- Excludes Q2 Fiscal 2020 incremental costs to address COVID-19 (primarily severance)
Tetra Tech, Inc.
Regulation G Information
December 27, 2020
Reconciliation of Revenue to Revenue, Net of Subcontractor Costs ("Net Revenue")(in millions)
2020 | 2021 | ||||||||||
2018 | 2019 | 1st Qtr | 2nd Qtr | 6 mos | 3rd Qtr | 9 mos | 4th Qtr | Total | 1st Qtr | ||
Consolidated | |||||||||||
Revenue (As Reported) | 2,964.1 | 3,107.3 | 797.6 | 734.1 | 1,531.7 | 709.8 | 2,241.5 | 753.4 | 2,994.9 | 765.1 | |
RCM / Non-Cash Claims | (3.6) | 15.2 | (0.1) | - | (0.1) | (0.1) | (0.2) | - | (0.2) | - | |
Adjusted Revenue | 2,960.5 | 3,122.5 | 797.5 | 734.1 | 1,531.6 | 709.7 | 2,241.3 | 753.4 | 2,994.7 | 765.1 | |
Adjusted Subcontractor Costs | (751.8) | (716.4) | (183.5) | (149.6) | (333.1) | (149.4) | (482.7) | (163.6) | (646.1) | (159.9) | |
Adjusted Net Revenue | 2,208.7 | 2,406.1 | 614.0 | 584.5 | 1,198.5 | 560.3 | 1,758.6 | 589.8 | 2,348.6 | 605.2 | |
GSG Segment | |||||||||||
Revenue | 1,694.9 | 1,820.7 | 457.4 | 436.9 | 894.3 | 432.2 | 1,326.5 | 452.4 | 1,778.9 | 468.6 | |
Subcontractor Costs | (482.6) | (491.4) | (127.7) | (115.9) | (243.6) | (112.9) | (356.5) | (122.3) | (478.8) | (123.7) | |
Adjusted Net Revenue | 1,212.3 | 1,329.3 | 329.7 | 321.0 | 650.7 | 319.3 | 970.0 | 330.1 | 1,300.1 | 344.9 | |
CIG Segment | |||||||||||
Revenue | 1,323.1 | 1,342.5 | 351.2 | 308.4 | 659.6 | 291.0 | 950.6 | 315.5 | 1,266.1 | 311.0 | |
Non-Cash Claims | 10.6 | 13.7 | - | - | - | - | - | - | - | - | |
Adjusted Revenue | 1,333.7 | 1,356.2 | 351.2 | 308.4 | 659.6 | 291.0 | 950.6 | 315.5 | 1,266.1 | 311.0 | |
Subcontractor Costs | (337.4) | (279.5) | (66.9) | (45.0) | (111.8) | (50.0) | (161.8) | (55.7) | (217.4) | (50.7) | |
Adjusted Net Revenue | 996.3 | 1,076.7 | 284.3 | 263.4 | 547.8 | 241.0 | 788.8 | 259.8 | 1,048.7 | 260.3 | |
RCM Segment | |||||||||||
Revenue | 14.2 | (1.5) | 0.1 | - | 0.1 | 0.1 | 0.2 | - | 0.2 | - | |
Subcontractor Costs | (11.6) | (1.3) | (0.1) | - | (0.1) | (0.1) | (0.2) | - | (0.2) | - | |
Net Revenue | 2.6 | (2.8) | - | - | - | - | - | - | - | - | |
Reconciliation of Net Income Attributable to Tetra Tech to EBITDA | |||||||||||
(in thousands) | |||||||||||
2020 | 2021 | ||||||||||
2018 | 2019 | 1st Qtr | 2nd Qtr | 6 mos | 3rd Qtr | 9 mos | 4th Qtr | Total | 1st Qtr | ||
Net Income Attributable to Tetra Tech | 136,883 | 158,668 | 47,310 | 36,398 | 83,708 | 45,497 | 129,205 | 44,654 | 173,859 | 52,436 | |
Interest Expense1 | 15,524 | 13,626 | 3,348 | 3,500 | 6,848 | 3,564 | 10,412 | 2,688 | 13,100 | 3,026 | |
Depreciation2 | 19,592 | 17,285 | 3,293 | 3,133 | 6,426 | 3,686 | 10,112 | 2,905 | 13,017 | 2,882 | |
Amortization2 | 18,249 | 11,559 | 2,942 | 3,442 | 6,384 | 2,570 | 8,954 | 2,640 | 11,594 | 3,356 | |
Contingent Consideration | 5,753 | 3,085 | - | (971) | (971) | 550 | (421) | (12,950) | (13,371) | - | |
Goodwill Impairment | - | 7,755 | - | - | - | - | - | 15,800 | 15,800 | - | |
Income Tax Expense (Benefit) | 37,605 | 16,375 | 12,637 | 7,615 | 20,252 | 14,458 | 34,710 | 19,391 | 54,101 | 10,778 | |
EBITDA | 233,606 | 228,353 | 69,530 | 53,117 | 122,647 | 70,325 | 192,972 | 75,128 | 268,100 | 72,478 | |
Acquisition & Integration Expenses | - | 10,351 | - | - | - | - | - | - | - | - | |
Non-Core Dispositions | 3,434 | 10,945 | (800) | (2,184) | (2,984) | (4,493) | (7,477) | (1,047) | (8,524) | - | |
RCM / Non-Cash Claims | 16,836 | 19,526 | (1) | - | (1) | 1 | - | - | - | - | |
COVID-19 | - | - | - | 8,233 | 8,233 | - | 8,233 | - | 8,233 | - | |
Adjusted EBITDA | 253,876 | 269,175 | 68,729 | 59,166 | 127,895 | 65,833 | 193,728 | 74,081 | 267,809 | 72,478 |
- Includes amortization of deferred financing fee
- Varies slightly from the Statements of Cash Flows, which includes amortization of deferred financing fee
Tetra Tech, Inc.
Consolidated Balance Sheets
(unaudited - in thousands, except par value)
December 27, | September 27, | ||||
2020 | 2020 | ||||
Assets | |||||
Current assets: | |||||
Cash and cash equivalents | $ | 163,438 | $ | 157,515 | |
Accounts receivable, net | 673,763 | 649,035 | |||
Contract assets | 91,598 | 92,632 | |||
Prepaid expenses and other current assets | 91,597 | 81,094 | |||
Income taxes receivable | 15,050 | 19,509 | |||
Total current assets | 1,035,446 | 999,785 | |||
Property and equipment, net | 35,141 | 35,507 | |||
Right-of-use assets, operating leases | 225,787 | 239,396 | |||
Investments in unconsolidated joint ventures | 7,919 | 7,332 | |||
Goodwill | 1,017,909 | 993,498 | |||
Intangible assets, net | 10,893 | 13,943 | |||
Deferred tax assets | 34,511 | 32,052 | |||
Other long-term assets | 47,266 | 57,045 | |||
Total assets | $ | 2,414,872 | $ | 2,378,558 | |
Liabilities and Equity | |||||
Current liabilities: | |||||
Accounts payable | $ | 135,435 | $ | 111,804 | |
Accrued compensation | 138,112 | 199,801 | |||
Contract liabilities | 199,297 | 171,905 | |||
Short-term lease liabilities, operating leases | 69,612 | 69,650 | |||
Current portion of long-term debt and other sthort-term borrowings | 26,179 | 49,264 | |||
Current contingent earn-out liabilities | 10,945 | 16,142 | |||
Other current liabilities | 175,141 | 174,890 | |||
Total current liabilities | 754,721 | 793,456 | |||
Deferred tax liabilities | 18,462 | 16,316 | |||
Long-term debt | 275,983 | 242,395 | |||
Long-term lease liabilities, operating leases | 181,473 | 191,955 | |||
Long-term contingent earn-out liabilities | 15,074 | 16,475 | |||
Other long-term liabilities | 63,905 | 80,588 | |||
Equity: | |||||
Preferred stock - authorized, 2,000 shares of $0.01 par value; no shares | |||||
issued and outstanding at December 27, 2020 and September 27, 2020 | - | - | |||
Common stock - authorized, 150,000 shares of $0.01 par value; issued | |||||
and outstanding, 54,193 and 53,797 shares at December 27, 2020 and | |||||
September 27, 2020, respectively | 542 | 538 | |||
Accumulated other comprehensive loss | (127,919) | (161,786) | |||
Retained earnings | 1,232,563 | 1,198,567 | |||
Tetra Tech stockholders' equity | 1,105,186 | 1,037,319 | |||
Noncontrolling interests | 68 | 54 | |||
Total stockholders' equity | 1,105,254 | 1,037,373 | |||
Total liabilities and stockholders' equity | $ | 2,414,872 | $ | 2,378,558 | |
Tetra Tech, Inc.
Consolidated Statements of Income
(unaudited - in thousands, except per share data)
Three Months Ended | |||||
December 27, | December 29, | ||||
2020 | 2019 | ||||
Revenue | $ | 765,104 | $ | 797,623 | |
Subcontractor costs | (159,933) | (183,600) | |||
Other costs of revenue | (488,861) | (504,286) | |||
Gross profit | 116,310 | 109,737 | |||
Selling, general and administrative expenses | (50,058) | (46,435) | |||
Income from operations | 66,252 | 63,302 | |||
Interest expense | (3,026) | (3,349) | |||
Income before income tax expense | 63,226 | 59,953 | |||
Income tax expense | (10,778) | (12,636) | |||
Net income | 52,448 | 47,317 | |||
Net income attributable to noncontrolling interests | (12) | (7) | |||
Net income attributable to Tetra Tech | $ | 52,436 | $ | 47,310 | |
Earnings per share attributable to Tetra Tech: | |||||
Basic | $ | 0.97 | $ | 0.87 | |
Diluted | $ | 0.96 | $ | 0.85 | |
Weighted-average common shares outstanding: | |||||
Basic | 53,927 | 54,560 | |||
Diluted | 54,637 | 55,438 | |||
Tetra Tech, Inc.
Consolidated Statements of Cash Flows
(in thousands)
Three Months Ended
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization
Equity in income of unconsolidated joint ventures Distributions of earnings from unconsolidated joint ventures Amortization of stock-based awards
Deferred income taxes
Gain on sale of property and equipment
Changes in operating assets and liabilities:
Accounts receivable and contract assets
Prepaid expenses and other assets
Accounts payable
Accrued compensation
Contract liabilities
Other liabilities
Income taxes receivable/payable
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Capital expenditures
Proceeds from sale of property and equipment
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from borrowings
Repayments on long-term debt
Repurchases of common stock
Taxes paid on vested restricted stock
Stock options exercised
Dividends paid
Payments of contingent earn-out liabilities
Principal payments on finance leases
Net cash (used in) provided by financing activities
Effect of exchange rate changes on cash, cash equivalents and restricted cash
Net increase (decrease) in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash at beginning of period Cash, cash equivalents and restricted cash at end of period
Supplemental information:
Cash paid during the period for: Interest
Income taxes, net of refunds received of $1.1 million and $0.3 million
Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents
Restricted cash
Total cash, cash equivalents and restricted cash
December 27,
2020
$ | 52,448 |
6,238 | |
(1,107) | |
931 | |
4,898 | |
954 | |
(7) | |
(11,400) | |
11,813 | |
23,631 | |
(61,690) | |
27,392 | |
(23,373) | |
2,452 | |
33,180 | |
(1,795) | |
9 | |
(1,786) | |
123,533 | |
(114,752) | |
(15,000) | |
(17,330) | |
7,495 | |
(9,198) | |
(7,037) | |
(538) | |
(32,827) | |
7,356 | |
5,923 | |
157,515 | |
$ | 163,438 |
$ | 1,968 |
$ | 5,696 |
$ | 163,438 |
- | |
$ | 163,438 |
December 29,
2019
$ 47,317
6,235
(1,675)
1,447
4,482
2,173
(897)
44,040
(2,053)
(66,381)
(79,098)
38,207
(14,917)
3,096
(18,024)
(3,331)
455
(2,876)
198,364
(141,550)
(21,177)
(10,818)
1,413
(8,190)
(9,236)
-
8,806
2,200
(9,894)
120,901
$ 111,007
$ | 3,082 |
$ | 5,579 |
$ 110,833 174
$ 111,007
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Disclaimer
Tetra Tech Inc. published this content on 27 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 January 2021 22:45:00 UTC.