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Press release from Business Wire

Tetra Tech Reports Strong Fourth Quarter and Fiscal 2011 Results

<ul class='bwalignl'> <li class='bwlistitemmargb'> <b>Q4 Net Revenue up 22%</b><sup>1</sup><b> to $476 million</b> </li> <li class='bwlistitemmargb'> <b>Q4 Diluted EPS up 20%</b><sup>1</sup><b> to $0.42</b> </li> <li class='bwlistitemmargb'> <b>FY11 Net Revenue up 25%</b><sup>1</sup><b> to $1.79 billion</b> </li> <li class='bwlistitemmargb'> <b>FY11 Diluted EPS up 18%</b><sup>1</sup><b> to $1.43</b> </li> </ul>

Wednesday, November 09, 2011

Tetra Tech Reports Strong Fourth Quarter and Fiscal 2011 Results18:01 EST Wednesday, November 09, 2011 PASADENA, Calif. (Business Wire) -- Tetra Tech, Inc. (NASDAQ: TTEK) today announced results for the fourth quarter and fiscal year ended October 2, 2011. Fourth Quarter ResultsPro-forma1: Tetra Tech's fourth quarter of fiscal 2011 had 13 weeks while the fourth quarter of fiscal 2010 had 14 weeks. The pro-forma presentation excludes the benefit of the additional week in the fourth quarter of fiscal 2010. On this basis, revenue in the fourth quarter of fiscal 2011 was $675.7 million, up 16.0% compared to $582.5 million in the fourth quarter last year. Revenue, net of subcontractor costs2, was $475.9 million, up 21.6% compared to $391.4 million in the fourth quarter last year. Earnings before interest, taxes, depreciation, and amortization (EBITDA3), were $56.4 million, up 28.8% compared to $43.8 million in the fourth quarter last year. Operating income was $43.4 million, up 25.5% compared to $34.6 million in the fourth quarter last year. Net income was $26.4 million, up 22.5% compared to $21.6 million in the fourth quarter last year. Diluted EPS were $0.42, up 20.0% compared to $0.35 in the fourth quarter last year. GAAP: On a GAAP basis, which includes the results of the additional week in the fourth quarter of fiscal 2010, revenue in the fourth quarter of fiscal 2011 was $675.7 million, up 7.7% compared to $627.4 million last year. Revenue, net of subcontractor costs, was $475.9 million, up 13.1% compared to $420.7 million in the fourth quarter last year. EBITDA were $56.4 million, up 21.6% compared to $46.4 million in the fourth quarter last year. Operating income was $43.4 million, up 17.0% compared to $37.1 million in the fourth quarter last year. Net income was $26.4 million, up 14.1% compared to $23.1 million in the fourth quarter last year. Diluted EPS were $0.42, up 13.5% compared to $0.37 in the fourth quarter last year. Backlog was $1.95 billion, up 5.2% compared to $1.85 billion at the end of fiscal 2010. Cash from operations was $33.2 million, compared to $42.3 million in the fourth quarter last year. Fiscal Year ResultsPro-forma1: Tetra Tech's fiscal 2011 had 52 weeks while fiscal 2010 had 53 weeks. The pro-forma presentation excludes the benefit of the additional week in fiscal 2010. Revenue for fiscal 2011 was $2,573.1 million, up 19.3% compared to $2,156.3 million in fiscal 2010. Revenue, net of subcontractor costs, was $1,792.3 million, up 25.3% compared to $1,431.0 million in fiscal 2010. EBITDA were $198.6 million, up 28.2% compared to $155.0 million in fiscal 2010. Operating income was $146.4 million, up 20.1% compared to $122.0 million in fiscal 2010. Net income was $90.0 million, up 19.7% compared to $75.2 million in fiscal 2010. Diluted EPS in fiscal 2011 were $1.43, up 18.2% compared to $1.21 in fiscal 2010. GAAP: On a GAAP basis, which includes the results of the additional week in fiscal 2010, revenue for fiscal 2011 was $2,573.1 million, up 16.9% compared to $2,201.2 million in fiscal 2010. Revenue, net of subcontractor costs, was $1,792.3 million, up 22.7% compared to $1,460.2 million in fiscal 2010. EBITDA were $198.6 million, up 26.0% compared to $157.6 million in fiscal 2010. Operating income was $146.4 million, up 17.6% compared to $124.5 million in fiscal 2010. Net income was $90.0 million, up 17.2% compared to $76.8 million in fiscal 2010. Diluted EPS in fiscal 2011 were $1.43, up 15.3% compared to $1.24 in fiscal 2010. Cash from operations was $131.6 million, up 23.2% compared to $106.8 million in fiscal 2010. Tetra Tech's Chairman and CEO, Dan Batrack said, “Tetra Tech had a strong fiscal 2011 and finished with record results. For the fiscal year, we exceeded our 15% long-term growth goals for revenue and income. This growth was driven by strong demand for our water-related services provided to mining, energy and industrial clients. Over the past year, we have successfully expanded our geographic reach and diversified our customer mix. Today approximately 30% of our net revenue is represented by our international clients. For fiscal 2012, we expect our organic growth to increase as a result of international expansion. Our fiscal 2012 forecast reflects continued growth in the international and commercial markets and stability in our government markets.” 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 first quarter of fiscal 2012 to be in the range of $0.33 to $0.36. Revenue, net of subcontractor costs, for the first quarter is expected to range from $450 million to $500 million. For fiscal 2012, Tetra Tech expects diluted EPS to be $1.50 to $1.63. Revenue, net of subcontractor costs, for fiscal 2012 is expected to range from $1.9 billion to $2.1 billion. Webcast Investors will have the opportunity to access a live audio-visual webcast and supplemental financial information concerning the fourth quarter results through a link posted on the Company's website at www.tetratech.com on November 10, 2011 at 8:00 a.m. (PST).           In thousands (except EPS data)Three Months EndedFiscal Year Ended Oct. 2,2011     Oct. 3,2010 Oct. 2,2011     Oct. 3,2010 Revenue $ 675,662 $ 627,382 $ 2,573,144 $ 2,201,232 Subcontractor costs   (199,724 )   (206,707 )   (780,817 )   (741,002 ) Revenue, net of subcontractor costs 475,938 420,675 1,792,327 1,460,230 Operating income 43,433 37,124 146,422 124,474 Interest expense, net (1,452 ) (443 ) (5,930 ) (1,387 ) Income tax expense   (14,582 )   (13,539 )   (47,510 )   (46,268 ) Net income including noncontrolling interests 27,399 23,142 92,982 76,819 Net income attributable to noncontrolling interests   (1,000 )   -     (2,943 )   -   Net income $ 26,399   $ 23,142   $ 90,039   $ 76,819     Earnings per share: Basic $ 0.42   $ 0.38   $ 1.45   $ 1.25   Diluted $ 0.42   $ 0.37   $ 1.43   $ 1.24     Weighted-average common shares outstanding: Basic 62,310 61,580   62,053 61,430 Diluted 62,864 61,999   62,775 62,087   About Tetra Tech (www.tetratech.com) Tetra Tech is a leading provider of consulting, engineering, program management, construction management, and technical services. The Company supports government and commercial clients by providing innovative solutions to complex problems focused on water, natural resources, the environment, infrastructure, and energy. With more than 13,000 employees worldwide, Tetra Tech's capabilities span the entire project life cycle.   Tetra Tech, Inc.Regulation G InformationReconciliation of Net Income to EBITDA           In thousandsThree Months EndedFiscal Year Ended Oct. 2,2011     Oct. 3,2010 Oct. 2,2011     Oct. 3,2010 Net income attributable toTetra Tech $ 26,399 $ 23,142 $ 90,039 $ 76,819 Interest expense, net 1,452 443 5,930 1,387 Income tax expense 14,582 13,539 47,510 46,268 Depreciation 6,737 5,443 27,138 20,402 Amortization   7,232   3,832   27,979   12,683 EBITDA $ 56,402 $ 46,399 $ 198,596 $ 157,559   Comparison of fiscal 2010 to pro-forma 2010 with 52 weeks   In thousands (except EPS data)Fourth Quarter 2010Fiscal Year 2010 As Reported Pro-formafor 13 weeks As Reported Pro-formafor 52 weeks Revenue $ 627,382 $ 582,478 $ 2,201,232 $ 2,156,327 Revenue, net of subcontractor costs 420,675 391,430 1,460,230 1,430,984 EBITDA 46,399 43,805 157,559 154,965 Operating income 37,124 34,605 124,474 121,955 Net income 23,142 21,552 76,819 75,230 Diluted earnings per share 0.37 0.35 1.24 1.21   Pro-forma results were determined by subtracting one week of fourth quarter fiscal 2010 results from as reported figures. 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; delays in U.S. federal debt ceiling legislation; a disruption in U.S. government funding; shifts in U.S. defense spending; delays 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 reports results of operations based on 52 and 53-week periods ending near September 30 of each year. Fiscal years 2011 and 2010 contained 52 and 53 weeks, respectively. The Company believes the pro-forma information presented for the one-week difference provides important data for comparative purposes. A table reconciling the pro-forma data can be found at the end of this release. 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. 3 EBITDA is a non-GAAP financial measure. The Company believes EBITDA is a useful representation of operating performance because of significant amounts of acquisition-related non-cash amortization expense. A table reconciling net income attributable to Tetra Tech to EBITDA can be found at the end of this release. Tetra Tech, Inc.Jim Wu, Investor RelationsTalia Starkey, Media & Public Relations(626) 470-2844