- Revenue $859 million, up 12% Y/Y
- Net revenue $679 million, up 12% Y/Y
- EPS $1.25, up 30% Y/Y; Adjusted EPS $1.19, up 24%
Y/Y
- Cash flow from operations $82 million, up 148% Y/Y
Tetra Tech, Inc. (NASDAQ: TTEK), a leading provider of high-end
consulting and engineering services, today announced results for
the first quarter ended January 2, 2022.
First Quarter Results
Tetra Tech achieved record first quarter results in revenue, net
revenue, earnings, cash flow, and backlog. Revenue in the first
quarter totaled $859 million and revenue, net of subcontractor
costs (net revenue)1, was $679 million, each up 12% year-over-year.
Earnings per share (“EPS”) was $1.25 on a GAAP basis and adjusted
EPS1 was $1.19, up 30% and 24% year-over-year, respectively. Cash
generated from operations was $82 million, up 148% year-over-year.
Backlog at the end of the quarter was $3.45 billion, up 8%
year-over-year.
Quarterly Dividend and Share Repurchase Program
On January 31, 2022, Tetra Tech’s Board of Directors declared a
$0.20 per share dividend, an 18% increase over the prior year,
payable on February 25, 2022, to stockholders of record as of
February 11, 2022. In the first quarter, Tetra Tech repurchased $50
million of common stock. Additionally, as of January 2, 2022, the
Company had $498 million remaining under the approved share
repurchase programs. The Company has returned $137 million to
shareholders in the last twelve months through a combination of
share repurchases and dividends while reducing its net debt ratio
from 0.5x a year ago to 0.2x 2.
Chairman and CEO Comments
Tetra Tech Chairman and CEO Dan Batrack, commented, “Tetra Tech
had a strong start to fiscal 2022 with record first quarter
revenue, earnings, and cash flow. Our performance was driven by
double digit revenue growth and a 120-basis point expansion in
operating margin. We continue to expand our differentiated
technical services by Leading with Science® to respond to the
increasing global demand to address water, environmental and
climate change priorities. Given the strength of our performance,
as well as achieving a record high first quarter backlog, we are
increasing our guidance outlook for both net revenue and EPS for
fiscal 2022.”
_____________________
1 Non-GAAP financial measures which the
Company believes provide valuable perspectives on its business
results. Refer to Reconciliation of GAAP and non-GAAP Items.
2 The net debt leverage ratio is defined
as total debt less cash and cash equivalents divided by 12-month
adjusted EBITDA. Refer to Regulation G Information and
Reconciliation of GAAP and non-GAAP Items.
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 EPS for the second quarter of fiscal 2022 to
range from $0.86 to $0.91 and net revenue to range from $620
million to $670 million. For fiscal 2022, Tetra Tech is increasing
EPS to now range from $4.15 to $4.30, and net revenue to range from
$2.65 billion to $2.80 billion3.
Webcast
Investors will have the opportunity to access a live
audio-visual webcast and supplemental financial information
concerning the first quarter fiscal 2022 results through a link
posted on the Company’s website at tetratech.com on February 3,
2022, at 8:00 a.m. (PT).
Reconciliation of GAAP and Non-GAAP
Items
In thousands (except EPS data)
Three Months Ended
Jan. 2, 2022
Dec. 27, 2020
Revenue
$
858,510
$
765,104
Subcontractor Costs
(179,177
)
(159,933
)
Net revenue
$
679,333
$
605,171
EPS
$
1.25
$
0.96
COVID-19 Credits
(0.06
)
-
Adjusted EPS
$
1.19
$
0.96
Current portion of long-term debt
$
16,728
$
26,179
Long-term debt
246,875
275,983
Less: Cash and cash equivalents
(205,542
)
(163,438
)
Net debt
$
58,061
$
138,724
Trailing 12-month EBITDA
$
315,567
$
271,558
Net debt leverage ratio
0.2x
0.5x
_____________________
3 Reconciliation of the net revenue
guidance to the most directly comparable GAAP measure is not
available without unreasonable efforts because the Company cannot
predict the magnitude and timing of all the components required to
provide such reconciliation with sufficient precision.
About Tetra Tech
Tetra Tech is a leading provider of high-end consulting and
engineering services for projects worldwide. With 21,000 associates
working together, Tetra Tech provides clear solutions to complex
problems in water, environment, sustainable infrastructure,
renewable energy, and international development. We are Leading
with Science® to provide sustainable and resilient solutions for
our clients. 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: the impact of the COVID-19 pandemic; 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 fiscal year
ended October 3, 2021, and Tetra Tech’s Quarterly Reports on Form
10-Q for fiscal year 2022, 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220202005743/en/
Jim Wu, Investor Relations Charlie MacPherson, Media &
Public Relations (626) 470-2844
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