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

  1. Excludes Remediation and Construction Management, non-cash claim settlements
  2. 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
  3. Excludes purchase accounting and non-core dispositions, and acquisition and integration expenses
  4. Corporate costs not allocable to the segments (e.g., acquisition costs, amortization expense, stock option expense, etc.)
  5. Excludes non-recurring tax benefits
  6. 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

  1. Includes amortization of deferred financing fee
  2. 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.