Tetra Tech reports third quarter results


Pasadena, California — (Business Wire— Tetra Tech, Inc

Third quarter results

Tetra Tech posted strong third-quarter results in revenue, net income, operating income and EPS. Third quarter revenue totaled $890 million plus revenue, net of subcontractor expenses (net revenue).1 It was 720 million dollars, increased by 11% and 13% over the year, respectively. Operating income was $84 million, up 20% year-over-year, reflecting a 70 basis point increase in operating margin. Earnings per share (“EPS”) were $1.09, up 15 percent. Cash from operations was $98 million, up 42% year over year, and DSO improved to 58.8 days. Backlog increased to $3.51 billion, up 8 percent year over year, and on a constant currency basis increased 12 percent year over year to $3.65 billion.

Share a quarterly dividend and buyback program.

Tetra Tech’s board of directors has approved a dividend of $0.23 per share, a 15% increase from last year, to be paid to shareholders on August 26, 2022 through August 12, 2022. During the third quarter, Tetra Tech repurchased $50 million. Common stock. Additionally, the company has $398 million remaining in its authorized share repurchase program. In the first nine months of the fiscal year, the company returned $184 million to shareholders through a combination of stock repurchases and dividends, maintaining a net debt ratio of 0.1x.2

Chairman and CEO comments

Tetra Tech Chairman and CEO Dan Batrac commented, “Tetra Tech delivered strong third quarter results with double-digit revenue and earnings growth. The strong performance was driven by continued demand for our diversity. Lead by science® approach and our Tetra Tech Delta Technologies water, environment and sustainable infrastructure projects. The addition of Tiga further expands our digital water practice with industry-leading software engineers and digital transformation consultants experienced in solving complex water and data challenges. Given the strength and track record of our end markets, we are raising our guidance outlook for both net income and EPS for fiscal 2022.

_______________

1

Non-GAAP financial measures that the Company believes provide valuable perspectives on its business results. See Reconciliation of GAAP and Non-GAAP Items.

2

The net debt service ratio is defined as total debt less cash and cash equivalents divided by 12-month adjusted EBITDA. See Rule G Information and Reconciliation of GAAP and Non-GAAP Items.

Results of nine months

Nine-month revenue of $2.60 billion and net income of $2.10 billion, up 12% and 14%, respectively, from the same period in fiscal 2021. % of last fiscal year (adjusted EPS of $3.25, up 19%). Cash flow from operations was $276 million, up 22 percent year over year.

Business view

The following statements are based on current expectations. These statements are forward-looking, and actual results could differ materially. These statements do not include the impact of transactions that may be completed or developments occurring after the date of this release. The Business Outlook section should be read in conjunction with the information in the forward-looking statements at the end of this release.

Tetra Tech expects fourth-quarter 2022 EPS to be in the range of $1.13 to $1.18 and net income to be in the range of $676 million to $726 million. On a constant currency basis and adjusting for one additional week in the fourth quarter of 2021, the midpoint of our net income guidance represents double-digit growth from last year’s fourth quarter. For fiscal 2022, Tetra Tech is increasing adjusted EPS from $4.38 to $4.43 now and increasing net income guidance from $2.78 billion to $2.83 billion.3

Webcast

Investors will have access to a live audio-visual webcast of fiscal 2022 third quarter results and additional financial information at a link posted on the company’s website at tetratech.com on August 4, 2022 at 8:00 am (PT). ).

_______________

3

Reconciliation of net income guidance to a directly comparable GAAP measure is not available without reasonable effort because the Company cannot predict the amount and timing of all elements required to provide such a reconciliation with sufficient accuracy.

Reconciliation of GAAP and non-GAAP items

In thousands (except EPS data)

Three months passed

Nine months have passed

July 3,

2022

June 27,

2021

July 3,

2022

June 27,

2021

Income

$

890,231

$

801,633

$

2,601,485

$

2,321,500

Subcontractor costs

(169,745)

)

(163,590

)

(502,024

)

(478,461)

)

net income

$

720,486

$

638,043

$

2,099,461

$

1,843,039

EPS

$

1.09

$

0.95

$

3.32

$

2.74

Covid-19 credits

(0.01

)

(0.07

)

Adjusted EPS

$

1.08

$

0.95

$

3.25

$

2.74

July 3,

2022

June 27,

2021

Current portion of long-term debt

$

27,081

$

16,252

Long term debt

234,375

234,020

Less: cash and cash

(217,384

)

(234,266

)

Net debt

$

44,072

$

16,006

Tracking 12-month EBITDA

$

345,414

$

287,551

Net debt ratio

0.1x

0.1x

About Tetra Tech

Tetra Tech is a leading provider of consulting and engineering services for projects worldwide. With 21,000 associates working together, Tetra Tech provides transparent solutions to complex problems in water, environment, sustainable infrastructure, renewable energy and global development. we are Lead by science® To provide sustainable and strong solutions to our customers. 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 was released in 2011. Contains forward-looking statements within the meaning of the Private Securities Litigation Amendment Act of 1995. The use of words such as “expect,” “anticipate,” “may,” “could,” “planned,” and “believe,” among others, generally identify forward-looking statements. These forward-looking statements are based on current operating, financial, economic and other information, and are subject to numerous risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from future events or results. Various factors, many of which are beyond our control, could cause actual future results or events to differ materially from those projected in forward-looking statements in this release, including but not limited to: the impact of the COVID-19 pandemic; Continued international political and economic instability; potential changes in fiscal policies by the US administration; The cycle of demand for our general services; exchange of oil and gas demand and mining services; risks associated with international operations; collection of revenue from US government agencies and termination of funding by such agencies; dependence on the US government winning or renewing contracts; delays or non-availability of public funds on US government contracts; The right of the US Government to change, delay, reduce or terminate the Terms at any time; Compliance with government procurement laws and regulations; credit risks associated with certain customers in certain geographic areas or industries; acquisition strategy and integration risks; goodwill or other intangible asset impairment; Failure to comply with international anti-bribery laws; non-compliance with domestic and international export laws; failure to properly manage projects; loss of key personnel or inability to attract and retain qualified personnel; the ability of our employees to obtain government-issued qualifications; use of estimates and assumptions to prepare financial statements; Ability to maintain adequate manpower utilization; Use of the percentage-of-completion method of accounting; failure to accurately estimate and control contract costs; failure to adequately respond to our claims for additional contract costs; failure to win or renew contracts with private and public sector clients; Management of growth strategy; Backlog cancellations and adjustments; risks associated with cyber security breaches; failure of partners on joint projects; Failure of subcontractors to fulfill their obligations; Requirements for payment of liquidated damages based on contract performance; Acceptance of new legal requirements; changes in property management, environmental or infrastructure industry laws, regulations or programs; changes in capital markets and access to capital; Loan agreement covenants; industry competition; liability related to legal proceedings, investigations and disputes; Having third party insurance coverage; Ability to find adequate connections; employee, agent or partner misconduct; Personnel risks associated with international travel; Safety programs; conflict of interest; Liabilities related to reports and opinions; liabilities related to environmental protection laws and regulations; force majeure events; Protection of intellectual property rights; stock price volatility; ability to prohibit business combinations based on Delaware law and charter documents; and other risks and uncertainties in Tetra Tech’s current 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. , and Tetra Tech’s Quarterly Reports on Form 10-Q for fiscal year 2022, as well as Tetra Tech’s other SEC filings. Readers should not place undue reliance on forward-looking statements because such information speaks only as of the date hereof. Tetra Tech does not intend to update any forward-looking statements and expressly disclaims any obligation to do so.

Non-GAAP financial measures

We present certain non-GAAP financial measures in accordance with Regulation G of the Securities Exchange Act of 1934, as amended, to supplement our financial results presented in accordance with generally accepted accounting principles (“GAAP”) in the United States. We present these non-GAAP financial measures because we believe they provide valuable insight into our financial results. However, non-GAAP measures have limitations as analytical tools and should not be considered in isolation and are not a basis for, or a substitute for, GAAP measures. In addition, other companies may define non-GAAP measures differently which may allow investors to compare Tetra Tech’s non-GAAP measures with 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.





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