Tetra Tech, Inc. (NASDAQ: TTEK) today announced results for the fourth
quarter and fiscal year ended September 30, 2012.
Fourth Quarter Results
Revenue in the fourth quarter was $719.4 million compared to $675.7
million in the same period last year. Revenue, net of subcontractor costs1,
in the fourth quarter was $536.3 million, up 12.7% compared to $475.9
million in the same period last year. Operating income was $48.5
million, up 11.6% compared to $43.4 million in the fourth quarter last
year. Diluted earnings per share (EPS) were $0.47, up 11.9% compared to
$0.42 in the fourth quarter last year. Diluted EPS included costs
related to the reorganization of the Company's operations, including the
elimination of the Engineering and Architecture Services (EAS) segment,
and purchase accounting-related adjustments, resulting in a net diluted
EPS reduction of $0.01. Earnings before interest, taxes, depreciation,
and amortization (EBITDA2), were $62.9 million, up 11.5%
compared to $56.4 million in the fourth quarter last year. Backlog was a
record high $2.14 billion, up 9.7% compared to $1.95 billion at the end
of the fourth quarter last year. Cash generated from operations was
$29.8 million compared to $33.2 million in the fourth quarter last year.
Fiscal Year Results
Revenue for fiscal 2012 was $2.71 billion compared to $2.57 billion in
fiscal 2011. Revenue, net of subcontractor costs, was $2.02 billion, up
12.8% compared to $1.79 billion in fiscal 2011. Operating income was
$166.4 million, up 13.6% compared to $146.4 million in fiscal 2011.
Diluted EPS were $1.63, up 14.0% compared to $1.43 in fiscal 2011.
EBITDA were $222.3 million, up 11.9% compared to $198.6 million in
fiscal 2011. Cash generated from operations was $158.0 million, up 20.1%
compared to $131.6 million in fiscal 2011.
Tetra Tech's Chairman and CEO, Dan Batrack commented, "Tetra Tech
finished the year with a strong fourth quarter that resulted in 13% net
revenue growth and 10% backlog growth. Based on net revenue, our
international business is now the largest client sector and the fastest
growth market, having grown 19% organically in the fourth quarter. Our
record backlog, expansions into Brazil and oil & gas, and the realigned
organization provide a solid foundation for continued growth in 2013."
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.
2 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.
In thousands (except EPS data)
Net income attributable to Tetra Tech
Weighted-average common shares outstanding:
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 2013 to
be in the range of $0.37 to $0.41. Revenue, net of subcontractor costs,
for the first quarter is expected to range from $490 million to $540
million. For fiscal 2013, Tetra Tech expects diluted EPS to be $1.80 to
$1.95. Revenue, net of subcontractor costs, for fiscal 2013 is expected
to range from $2.1 billion to $2.3 billion.
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 8, 2012 at 8:00 a.m. (PT).
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, environment, energy,
infrastructure, and natural resources. With more than 13,000 employees
worldwide, Tetra Tech's capabilities span the entire project life cycle.
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: worldwide political and economic
uncertainties; the effect of the Budget Control Act of 2011;
fluctuations in annual revenue, expenses and operating results; the
cyclicality in demand for U.S. state and local government and U.S.
commercial services; credit risks associated with certain U.S.
commercial clients; concentration of revenues from U.S. government
agencies and potential funding disruptions by these agencies; violations
of U.S. government contractor regulations; dependence on winning or
renewing U.S. federal, state and local 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; risks associated with international operations; 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 workforce utilization; 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; 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; 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; 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 computer, information and communications
technology and systems; the ability to impede a business combination
based on Delaware law and charter documents; and stock price volatility.
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.
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