EX-99.1 2 a09-33442_1ex99d1.htm EX-99.1

Exhibit 99.1

 

November 11, 2009

 

Tetra Tech Reports Record Fourth Quarter and Fiscal 2009 Results

 

·                  Record annual and Q4 net revenue: $1.4 billion and $367 million

·                  Record annual and Q4 diluted EPS: $1.43 and $0.33

·                  Record annual and Q4 operating cash flow: $198 million and $91 million

 

Pasadena, California. Tetra Tech, Inc. (NASDAQ: TTEK) today announced results for the fourth quarter and fiscal year ended September 27, 2009.

 

Fiscal Year Results

 

Revenue for fiscal 2009 was $2,287.5 million, up 6.6% from $2,145.3 million, and revenue, net of subcontractor costs, was $1,386.1 million, an increase of 11.3% from $1,245.5 million for the same period last year.  Income from operations was $121.9 million, up 14.6% from $106.4 million for the same period last year.  Net income was $87.0 million, up 42.9% from $60.9 million for the same period last year.  Diluted earnings per share (EPS) were $1.43, up 40.2% from $1.02 for the same period last year.  Diluted EPS included approximately $0.21 from a tax benefit related to prior years’ research and experimentation tax credits.  Cash generated from operations improved to $198.2 million, up 189.9% compared to $68.4 million for the same period last year.

 

Fourth Quarter Results

 

Revenue in the quarter was $575.1 million, down 11.4% from $649.2 million, and revenue, net of subcontractor costs, was $367.0 million, up 5.2% from $348.8 million for the same quarter last year. Income from operations was $32.7 million, up 6.1% from $30.8 million for the same quarter last year.  Net income was $20.5 million, up 12.6% from $18.2 million for the same quarter last year.  Diluted EPS was $0.33, up 10.0% from $0.30 for the same quarter last year.  Backlog was $1.58 billion, down 4.0% from $1.65 billion at the end of the same quarter last year.  Cash generated from operations improved to $90.8 million, up 259.2% from $25.3 million for the same quarter last year.

 

Tetra Tech’s Chairman and CEO Dan Batrack commented, “Tetra Tech concluded the fiscal year with strong fourth quarter performance highlighted by growth in our federal and international business.  While fiscal 2009 presented a challenging economic environment, we were successful in growing our business, improving our operating margin, winning key new orders, and expanding internationally during the year.  Our strong cash generation provides us with a record cash position and a solid foundation for future growth.  Tetra Tech’s core markets – water, environment, and energy – remain a priority to our customers and the public.  Our fiscal 2010 forecast reflects solid growth for the year, with modest growth in the first half and additional strength in the back half.”

 



 

In thousands (except EPS data)

 

 

 

Three Months Ended

 

Fiscal Year Ended

 

 

 

Sept. 27,
2009

 

Sept. 28,
2008

 

Sept. 27,
2009

 

Sept. 28,
2008

 

Revenue

 

$

575,120

 

$

649,204

 

$

2,287,484

 

$

2,145,254

 

Revenue, net of subcontractor costs

 

366,970

 

348,764

 

1,386,137

 

1,245,545

 

Income from operations

 

32,693

 

30,810

 

121,889

 

106,400

 

Interest expense, net

 

(444

)

(388

)

(2,684

)

(2,987

)

Income tax expense

 

(11,754

)

(12,224

)

(32,177

)

(42,507

)

Net income

 

$

20,495

 

$

18,198

 

$

87,028

 

$

60,906

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.34

 

$

0.31

 

$

1.45

 

$

1.04

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

$

0.33

 

$

0.30

 

$

1.43

 

$

1.02

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

60,750

 

59,508

 

60,135

 

58,813

 

Diluted

 

61,905

 

60,563

 

60,994

 

59,632

 

 

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 2010 to be in the range of $0.28 to $0.30.  Revenue, net of subcontractor costs, for the first quarter is expected to range from $330 million to $345 million.  For fiscal 2010, Tetra Tech expects diluted EPS to be $1.25 to $1.35.  Revenue, net of subcontractor costs, for fiscal 2010 is expected to range from $1.45 billion to $1.55 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 web site at www.tetratech.com on November 12, 2009 at 8:00 a.m. (PST).

 

2



 

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 10,000 employees worldwide, Tetra Tech’s capabilities span the entire project life cycle.

 

CONTACTS:
Jorge Casado, Investor Relations
Talia Starkey, Media & Public Relations
(626) 470-2844

 

Forward-Looking Statements

 

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; fluctuations in annual revenue, expenses and operating results; the cyclicality in demand for state and local government services; 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; impact of downturns in the financial markets and reductions in government budgets; violations of government contractor regulations; dependence on winning or renewing federal, state and local government contracts; 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 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 risks; goodwill impairment; growth strategy management; adverse resolution of an IRS examination; backlog cancellation and adjustments; risks associated with international operations; the failure of partners to perform on joint projects; the inability to find qualified subcontractors; the failure of subcontractors to satisfy their obligations; changes in existing environmental laws, regulations or programs; credit risks associated with commercial clients; changes in capital markets and the access to capital; credit agreement covenants; industry competition; the volatility of common stock value; liability risks and the ability to obtain or maintain adequate insurance; the ability to obtain adequate bonding; safety programs; conflict of interest issues; force majeure events; protection of intellectual property rights; and the implementation of the enterprise resource planning system. 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.

 

3



 

TETRA TECH, INC.

Consolidated Balance Sheets

(in thousands, except par value)

 

 

 

September 27,
2009

 

September 28,
2008

 

Assets

 

 

 

 

 

Current Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

89,185

 

$

50,902

 

Accounts receivable - net

 

506,316

 

625,786

 

Prepaid expenses and other current assets

 

55,167

 

36,774

 

Income taxes receivable

 

5,222

 

4,275

 

Deferred income taxes

 

 

2,316

 

Total current assets

 

655,890

 

720,053

 

 

 

 

 

 

 

Property and equipment:

 

 

 

 

 

Land and buildings

 

10,555

 

7,588

 

Equipment, furniture and fixtures

 

126,249

 

112,780

 

Leasehold improvements

 

13,740

 

10,804

 

Total

 

150,544

 

131,172

 

Accumulated depreciation and amortization

 

(79,616

)

(69,784

)

Property and equipment - net

 

70,928

 

61,388

 

 

 

 

 

 

 

Deferred income taxes

 

 

6,498

 

Income taxes receivable

 

 

14,953

 

Goodwill

 

319,685

 

221,545

 

Intangible assets - net

 

33,769

 

14,609

 

Other assets

 

17,633

 

17,499

 

 

 

 

 

 

 

Total Assets

 

$

1,097,905

 

$

1,056,545

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

Accounts payable

 

$

149,352

 

$

223,304

 

Accrued compensation

 

88,793

 

101,699

 

Billings in excess of costs on uncompleted contracts

 

105,162

 

100,336

 

Deferred income taxes

 

9,645

 

 

Current portion of long-term obligations

 

4,320

 

3,926

 

Other current liabilities

 

74,964

 

58,634

 

Total current liabilities

 

432,236

 

487,899

 

 

 

 

 

 

 

Deferred income taxes

 

4,615

 

 

Long-term obligations

 

6,530

 

53,292

 

Other long-term liabilities

 

8,046

 

3,840

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

Preferred stock - Authorized, 2,000 shares of $0.01 par value; no shares issued and outstanding as of September 27, 2009 and September 28, 2008

 

 

 

Common stock - Authorized, 150,000 shares of $0.01 par value; issued and outstanding, 61,257 and 59,875 shares as of September 27, 2009 and September 28, 2008, respectively

 

613

 

599

 

Additional paid-in capital

 

350,571

 

314,860

 

Accumulated other comprehensive income

 

12,226

 

15

 

Retained earnings

 

283,068

 

196,040

 

Total stockholders’ equity

 

646,478

 

511,514

 

 

 

 

 

 

 

Total Liabilities and Stockholders’ Equity

 

$

1,097,905

 

$

1,056,545

 

 



 

Tetra Tech, Inc.

Consolidated Statements of Income

(in thousands, except per share data)

 

 

 

Three Months Ended

 

Fiscal Year Ended

 

 

 

September 27,

 

September 28,

 

September 27,

 

September 28,

 

 

 

2009

 

2008

 

2009

 

2008

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

575,120

 

$

649,204

 

$

2,287,484

 

$

2,145,254

 

Subcontractor costs

 

(208,150

)

(300,440

)

(901,347

)

(899,709

)

Revenue, net of subcontractor costs

 

366,970

 

348,764

 

1,386,137

 

1,245,545

 

Other contract costs

 

(294,676

)

(274,484

)

(1,108,512

)

(991,358

)

Gross profit

 

72,294

 

74,280

 

277,625

 

254,187

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

(39,601

)

(43,470

)

(155,736

)

(147,787

)

Income from operations

 

32,693

 

30,810

 

121,889

 

106,400

 

 

 

 

 

 

 

 

 

 

 

Interest expense - net

 

(444

)

(388

)

(2,684

)

(2,987

)

Income before income tax expense

 

32,249

 

30,422

 

119,205

 

103,413

 

Income tax expense

 

(11,754

)

(12,224

)

(32,177

)

(42,507

)

 

 

 

 

 

 

 

 

 

 

Net income

 

$

20,495

 

$

18,198

 

$

87,028

 

$

60,906

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.34

 

$

0.31

 

$

1.45

 

$

1.04

 

Diluted

 

$

0.33

 

$

0.30

 

$

1.43

 

$

1.02

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

60,750

 

59,508

 

60,135

 

58,813

 

Diluted

 

61,905

 

60,563

 

60,994

 

59,632

 

 



 

TETRA TECH, INC

Consolidated Statements of Cash Flows

(in thousands)

 

 

 

Fiscal Year Ended

 

 

 

September 27,

 

September 28,

 

 

 

2009

 

2008

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

Net income

 

$

87,028

 

$

60,906

 

 

 

 

 

 

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization

 

27,256

 

18,639

 

Stock-based compensation

 

9,392

 

8,296

 

Excess tax benefits from stock-based compensation

 

(2,025

)

(1,663

)

Deferred income taxes

 

(3,772

)

10,662

 

Provision for losses on contracts and related receivables

 

24,207

 

6,571

 

Exchange gain

 

(20

)

(234

)

Gain on disposal of property and equipment

 

(296

)

(1,220

)

 

 

 

 

 

 

Changes in operating assets and liabilities, net of effects of acquisitions:

 

 

 

 

 

Accounts receivable

 

156,174

 

(156,139

)

Prepaid expenses and other assets

 

(10,769

)

(9,377

)

Accounts payable

 

(104,268

)

58,401

 

Accrued compensation

 

(12,935

)

19,440

 

Billings in excess of costs on uncompleted contracts

 

(5,102

)

42,110

 

Other liabilities

 

(3,180

)

19,453

 

Income taxes receivable/payable

 

36,558

 

(7,465

)

Net cash provided by operating activities

 

198,248

 

68,380

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

Capital expenditures

 

(19,803

)

(17,768

)

Payments for business acquisitions, net of cash acquired

 

(114,743

)

(77,771

)

Proceeds from sale of discontinued operation

 

192

 

3,614

 

Proceeds from sale of property and equipment

 

1,055

 

2,089

 

Net cash used in investing activities

 

(133,299

)

(89,836

)

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

Payments on long-term obligations

 

(168,711

)

(41,713

)

Proceeds from borrowings under long-term obligations

 

118,290

 

15,000

 

Excess tax benefits from stock-based compensation

 

2,025

 

1,663

 

Net proceeds from issuance of common stock

 

20,336

 

20,667

 

Net cash used in financing activities

 

(28,060

)

(4,383

)

 

 

 

 

 

 

EFFECT OF EXCHANGE RATE CHANGES ON CASH

 

1,394

 

 

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 

38,283

 

(25,839

)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 

50,902

 

76,741

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$

89,185

 

$

50,902

 

 

 

 

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION:

 

 

 

 

 

Cash paid (received) during the year for:

 

 

 

 

 

Interest

 

$

2,475

 

$

3,977

 

Income taxes, net of refunds received

 

$

(152

)

$

34,228