- Revenue of $669 million, up 19% year
over year
- Backlog of $2.47 billion, up 34%
year over year
- EPS $0.46; ongoing EPS $0.49, up 17%
year over year
Tetra Tech, Inc. (NASDAQ: TTEK) today announced results for the
first quarter ended January 1, 2017.
First Quarter Results
Revenue in the first quarter totaled $669 million, up 19% year
over year. For ongoing operations1, revenue totaled $661 million,
and revenue, net of subcontractor costs2 (net revenue), was $488
million, up 22% and 18%, respectively, compared to the same period
in fiscal 2016. Operating income for the first quarter was $40
million, and on an ongoing basis totaled $43 million. Earnings per
share (EPS) were $0.46, and on an ongoing basis totaled $0.49, up
17% year over year. Backlog of $2.47 billion was up 34% year over
year.
Quarterly Dividend and Share Repurchase Program
On January 30, 2017, Tetra Tech’s Board of Directors declared a
quarterly dividend of $0.09 per share payable on March 3, 2017 to
stockholders of record as of February 17, 2017. Additionally, the
Company has $190 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
started fiscal year 2017 with very strong results, exceeding our
quarterly guidance for both net revenue and earnings. Services
across our core markets of water, environment, and infrastructure
remain in high demand, and the initial priorities established by
the new Administration represent additional opportunities for Tetra
Tech in all areas of U.S. infrastructure. Strong orders in our
federal and state and local markets increased our backlog to a
record $2.5 billion, providing a solid platform for growth as we
enter the second quarter.”
Acquisition of Eco Logical Australia
Tetra Tech today is also announcing the acquisition of Eco
Logical Australia, a multi-disciplinary consulting firm with over
160 staff that provide innovative, high-end environmental and
ecological services. Like Tetra Tech, Eco Logical has established a
reputation of Leading with Science and has built a strong presence
in the Australian environmental space. Eco Logical advances Tetra
Tech’s strategy to grow its environmental and water services in the
Asia-Pacific region. The terms of the acquisition have not been
disclosed.
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 diluted EPS for the second quarter of fiscal
2017 to range from $0.42 to $0.47. Net revenue for the second
quarter is expected to range from $450 million to $480 million. For
fiscal 2017, Tetra Tech expects diluted EPS to range from $2.00 to
$2.20 and net revenue to range from $2.0 billion to $2.1
billion.
Webcast
Investors will have the opportunity to access a live
audio-visual webcast and supplemental financial information
concerning the first quarter 2017 results through a link posted on
the Company’s website at tetratech.com on February 2, 2017 at 8:00
a.m. (PT).
Reconciliation of Revenue and Operating Results In
thousands (except for EPS data) Three Months
Ended Jan. 1, 2017 Dec. 27, 2015
% Y/Y Revenue $ 668,851 $ 560,708 19 % Subcontractor
costs (179,300 ) (139,752 ) – Net revenue $
489,551 $ 420,956 16 % Revenue $ 668,851 $
560,708 19 % RCM (8,231 ) (20,826 ) – Ongoing
revenue $ 660,620 $ 539,882 22 % Net revenue $
489,551 $ 420,956 16 % RCM (1,795 ) (7,190 ) –
Ongoing net revenue $ 487,756 $ 413,766 18 %
Operating income $ 39,855 $ 32,930 21 % RCM 3,042 5,282 – Earn-out
– 1,001 – Ongoing operating
income $ 42,897 $ 39,213 9 % EPS $ 0.46 $ 0.39
18 % RCM 0.03 0.05 – Earn-out – 0.01 – Retroactive R&D tax
credit – (0.03 ) – Ongoing EPS $ 0.49
$ 0.42 17 %
About Tetra Tech
Tetra Tech is a leading provider of consulting and engineering
services differentiated by Leading with Science in providing
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 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 news release contains forward-looking statements that are
subject to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
include information concerning future events and the future
financial performance of Tetra Tech that involve risks and
uncertainties. Readers are cautioned that these forward-looking
statements are only predictions and may differ materially from
actual future events or results. Readers are urged to read the
documents filed by Tetra Tech with the SEC, specifically the most
recent reports on Form 10-K, 10-Q, and 8-K, each as it may be
amended from time to time, which identify risk factors that could
cause actual results to differ materially from the forward-looking
statements. Among the important factors or risks that could cause
actual results or events to differ materially from those in the
forward-looking statements in this release are: continuing
worldwide political and economic uncertainties; the new U.S.
Administration’s potential changes to fiscal and tax 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; the interruption of systems and information
technology; stock price volatility; and the ability to impede a
business combination based on Delaware law and charter documents.
Any projections in this release are based on limited information
currently available to Tetra Tech, which is subject to change.
Although any such projections and the factors influencing them will
likely change, Tetra Tech will not necessarily update the
information, since Tetra Tech will only provide guidance at certain
points during the year. Readers should not place undue reliance on
forward-looking statements since such information speaks only as of
the date of this release.
1 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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170201006277/en/
Tetra Tech, Inc.Jim Wu, Investor RelationsCharlie MacPherson,
Media & Public Relations(626) 470-2844
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