The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from Business Wire

Tetra Tech Reports Strong Second Quarter Results

<ul> <li class='bwlistitemmargb'> <b>Net Revenue up 32% to $430 million</b> </li> <li class='bwlistitemmargb'> <b>Diluted EPS up 21% to $0.28</b> </li> <li class='bwlistitemmargb'> <b>Backlog up 19% to $1.99 billion</b> </li> <li class='bwlistitemmargb'> <b>Increasing FY11 guidance</b> </li> </ul> <p> </p>

Wednesday, May 04, 2011

Tetra Tech Reports Strong Second Quarter Results16:35 EDT Wednesday, May 04, 2011 PASADENA, Calif. (Business Wire) -- Tetra Tech, Inc. (NASDAQ: TTEK) today announced results for the second quarter ended April 3, 2011. Second Quarter Results Revenue in the quarter was $612.6 million, up 30.5% compared to $469.5 million in the second quarter last year. Revenue, net of subcontractor costs1, was $430.3 million, up 32.0% compared to $325.9 million in the second quarter last year. Operating income was $29.3 million, up 24.4% compared to $23.5 million in the second quarter last year. Net income was $17.5 million, up 22.1% compared to $14.3 million in the second quarter last year. Diluted earnings per share (EPS) were $0.28, up 20.6% compared to $0.23 in the second quarter last year. Backlog was $1.99 billion, up 18.7% compared to $1.67 billion at the end of the second quarter last year. Cash generated from operations was $33.7 million compared to $45.2 million in the second quarter last year. Six-Month Results Revenue for the six-month period was $1.22 billion, up 21.0% compared to $1.01 billion in the year-ago period. Revenue, net of subcontractor costs, was $835.9 million, up 24.9% compared to $669.4 million in the year-ago period. Operating income was $63.6 million, up 16.4% compared to $54.6 million in the year-ago period. Net income was $39.8 million, up 20.5% compared to $33.0 million in the year-ago period. Diluted EPS were $0.64, up 19.4% compared to $0.53 in the year-ago period. Cash generated from operations was $42.6 million, up 6.4% compared to $40.1 million in year-ago period. Commenting on the quarter's results, Tetra Tech's Chairman and CEO, Dan Batrack, remarked, “Tetra Tech had a strong second quarter highlighted by growth of 32% in net revenue, 21% in EPS, and 19% in backlog. Our international business more than tripled as a result of strong organic growth in mining and recent Canadian acquisitions. Net revenue in our commercial business grew 14%, driven by the improving economy. Despite budgetary concerns, our federal business remained strong as a result of long-term high-priority and regulatory-driven programs. We are increasingly confident in the Company's business outlook due to strong demand for our water-related services in mining, energy, and international development. As a result, we are increasing our net revenue and EPS guidance for the year.”     In thousands (except EPS data)Three Months EndedSix Months Ended April 3, 2011   March 28, 2010 April 3, 2011   March 28, 2010 Revenue $ 612,566 $ 469,528 $ 1,223,690 $ 1,011,485 Subcontractor costs   (182,260 )   (143,594 )   (387,805 )   (342,059 ) Revenue, net of subcontractor costs 430,306 325,934 835,885 669,426 Operating income 29,256 23,527 63,581 54,643 Interest expense, net (1,471 ) (352 ) (2,776 ) (607 ) Income tax expense   (9,704 )   (8,846 )   (19,970 )   (20,998 ) Net income including noncontrolling interests 18,081 14,329 40,835 33,038 Net income attributable to noncontrolling interests   (581 )   -     (1,034 )   -   Net income $ 17,500   $ 14,329   $ 39,801   $ 33,038     Earnings per share attributable to Tetra Tech: Basic $ 0.28   $ 0.23   $ 0.64   $ 0.54   Diluted $ 0.28   $ 0.23   $ 0.64   $ 0.53     Weighted-average common shares outstanding: Basic 62,121 61,511   61,836 61,291 Diluted 62,945 62,168   62,638 62,083 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 third quarter of fiscal 2011 to be in the range of $0.33 to $0.37. Revenue, net of subcontractor costs, for the third quarter is expected to range from $450 million to $475 million. For fiscal 2011, Tetra Tech is increasing its diluted EPS guidance to a range of $1.34 to $1.42. Revenue, net of subcontractor costs, for fiscal 2011 is now expected to range from $1.7 billion to $1.8 billion. Webcast Investors will have the opportunity to access a live audio-visual webcast and supplemental financial information concerning the second quarter results through a link posted on the Company's website at www.tetratech.com on May 5, 2011 at 8:00 a.m. (PDT). About Tetra Tech (www.tetratech.com) Tetra Tech is a leading provider of consulting, engineering, program management, construction, and technical services addressing the resource management and infrastructure markets. The Company supports government and commercial clients by providing innovative solutions focused on water, the environment, and energy. With approximately 12,000 employees worldwide, Tetra Tech's capabilities span the entire project life cycle. Forward-Looking StatementsThis 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:worldwide political and economic uncertainties; fluctuations in annual revenue, expenses and operating results; the cyclicality in demand for state and local government and commercial services; credit risks associated with certain commercial clients; concentration of revenues from government agencies and funding disruptions by these agencies; a shift in U.S. defense spending; a delay in the completion of the U.S. government budget process; violations of government contractor regulations; dependence on winning or renewing federal, state and local government contracts; the delay or unavailability of public funding; the government's right to modify, delay, curtail or terminate contracts at its convenience; the failure to properly manage projects; the loss of key personnel or the inability to attract and retain qualified personnel; the use of estimates and assumptions in the preparation of financial statements; the ability to maintain adequate utilization of our workforce; the use of the percentage-of-completion method of accounting; the inability to accurately estimate contract risks, revenue and costs; the failure to win or renew contracts with private and public sector clients; acquisition strategy and integration risks; goodwill or other intangible asset impairment; growth strategy management; backlog cancellation and adjustments; risks associated with international operations; the failure of partners to perform on joint projects; the failure of subcontractors to satisfy their obligations; changes in resource management or infrastructure industry laws, regulations or programs; changes in capital markets and the access to capital; credit agreement covenants; industry competition; volatility of common stock value; liability related to legal proceedings; 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 environmental laws and regulations; force majeure events; protection of intellectual property rights; and reliance on third-party software to run critical systems. 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 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. Tetra Tech, Inc.Jorge Casado, Investor RelationsTalia Starkey, Media & Public Relations626-470-2844