Cover
Cover - USD ($) $ in Billions | 12 Months Ended | ||
Sep. 27, 2020 | Nov. 12, 2020 | Mar. 29, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Sep. 27, 2020 | ||
Document Transition Report | false | ||
Entity File Number | 0-19655 | ||
Entity Registrant Name | TETRA TECH, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 95-4148514 | ||
Entity Address, Address Line One | 3475 East Foothill Boulevard | ||
Entity Address, City or Town | Pasadena | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 91107 | ||
City Area Code | 626 | ||
Local Phone Number | 351-4664 | ||
Title of 12(b) Security | Common Stock, $0.01 par value | ||
Trading Symbol | TTEK | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 3.6 | ||
Entity Common Stock, Shares Outstanding | 53,777,381 | ||
Documents Incorporated by Reference | DOCUMENT INCORPORATED BY REFERENCE Portions of registrant's Proxy Statement for its 2021 Annual Meeting of Stockholders are incorporated by reference in Part III of this report where indicated. | ||
Entity Central Index Key | 0000831641 | ||
Current Fiscal Year End Date | --09-27 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 27, 2020 | Sep. 29, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 157,515 | $ 120,732 |
Accounts receivable, net | 649,035 | 768,720 |
Contract assets | 92,632 | 114,324 |
Prepaid expenses and other current assets | 81,094 | 62,196 |
Income taxes receivable | 19,509 | 13,820 |
Total current assets | 999,785 | 1,079,792 |
Property and equipment, net | 35,507 | 39,441 |
Right-of-use assets, operating leases | 239,396 | |
Investments in unconsolidated joint ventures | 7,332 | 6,873 |
Goodwill | 993,498 | 924,820 |
Intangible assets, net | 13,943 | 16,440 |
Deferred tax assets | 32,052 | 28,385 |
Other long-term assets | 57,045 | 51,657 |
Total assets | 2,378,558 | 2,147,408 |
Current liabilities: | ||
Accounts payable | 111,804 | 206,609 |
Accrued compensation | 199,801 | 203,384 |
Contract liabilities | 171,905 | 165,611 |
Short-term lease liabilities, operating leases | 69,650 | |
Current portion of long-term debt and other short-term borrowings | 49,264 | 12,500 |
Current contingent earn-out liabilities | 16,142 | 24,977 |
Other current liabilities | 174,890 | 156,873 |
Total current liabilities | 793,456 | 769,954 |
Deferred tax liabilities | 16,316 | 12,971 |
Long-term debt | 242,395 | 263,934 |
Long-term lease liabilities, operating leases | 191,955 | |
Long-term contingent earn-out liabilities | 16,475 | 28,015 |
Other long-term liabilities | 80,588 | 83,070 |
Commitments and contingencies (Note 17) | ||
Equity: | ||
Preferred stock – Authorized, 2,000 shares of $0.01 par value; no shares issued and outstanding at September 27, 2020 and September 29, 2019 | 0 | 0 |
Common stock – Authorized, 150,000 shares of $0.01 par value; issued and outstanding, 53,797 and 54,565 shares at September 27, 2020 and September 29, 2019, respectively | 538 | 546 |
Additional paid-in capital | 0 | 78,132 |
Accumulated other comprehensive loss | (161,786) | (160,584) |
Retained earnings | 1,198,567 | 1,071,192 |
Tetra Tech stockholders' equity | 1,037,319 | 989,286 |
Noncontrolling interests | 54 | 178 |
Total stockholders' equity | 1,037,373 | 989,464 |
Total liabilities and stockholders' equity | $ 2,378,558 | $ 2,147,408 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 27, 2020 | Sep. 29, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, authorized shares (in shares) | 2,000,000 | 2,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, authorized shares (in shares) | 150,000,000 | 150,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 53,797,000 | 54,565,000 |
Common stock, shares outstanding (in shares) | 53,797,000 | 54,565,000 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands | 12 Months Ended | ||
Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 | |
Revenue | $ 2,994,891,000 | $ 3,107,348,000 | $ 2,964,148,000 |
Gross profit | 446,535,000 | 408,183,000 | 384,458,000 |
Selling, general and administrative expenses | (204,615,000) | (200,230,000) | (190,120,000) |
Acquisition and integration expenses | 0 | (10,351,000) | 0 |
Contingent consideration – fair value adjustments | 14,971,000 | (1,085,000) | (4,252,000) |
Impairment of goodwill | (15,800,000) | (7,755,000) | 0 |
Income from operations | 241,091,000 | 188,762,000 | 190,086,000 |
Interest income | 1,375,000 | 1,732,000 | 1,824,000 |
Interest expense | (14,475,000) | (15,358,000) | (17,348,000) |
Income before income tax expense | 227,991,000 | 175,136,000 | 174,562,000 |
Income tax expense | (54,101,000) | (16,375,000) | (37,605,000) |
Net income | 173,890,000 | 158,761,000 | 136,957,000 |
Net income attributable to noncontrolling interests | (31,000) | (93,000) | (74,000) |
Net income attributable to Tetra Tech | $ 173,859,000 | $ 158,668,000 | $ 136,883,000 |
Earnings per share attributable to Tetra Tech: | |||
Basic (in dollars per share) | $ 3.21 | $ 2.89 | $ 2.46 |
Diluted (in dollars per share) | $ 3.16 | $ 2.84 | $ 2.42 |
Weighted-average common shares outstanding: | |||
Basic (in shares) | 54,235 | 54,986 | 55,670 |
Diluted (in shares) | 55,022 | 55,936 | 56,598 |
Subcontractor costs | |||
Costs of revenue | $ (646,319,000) | $ (717,711,000) | $ (763,414,000) |
Other costs of revenue | |||
Costs of revenue | $ (1,902,037,000) | $ (1,981,454,000) | $ (1,816,276,000) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 173,890 | $ 158,761 | $ 136,957 |
Other comprehensive income, net of tax | |||
Foreign currency translation adjustments, net of tax | 3,436 | (21,109) | (29,656) |
(Loss) gain on cash flow hedge valuations, net of tax | (4,638) | ||
(Loss) gain on cash flow hedge valuations, net of tax | (12,125) | 806 | |
Other comprehensive loss attributable to Tetra Tech, net of tax | (1,202) | (33,234) | (28,850) |
Other comprehensive income (loss) attributable to noncontrolling interests, net of tax | (1) | 243 | (64) |
Comprehensive income, net of tax | 172,687 | 125,770 | 108,043 |
Comprehensive income attributable to Tetra Tech, net of tax | 172,657 | 125,434 | 108,033 |
Comprehensive income attributable to noncontrolling interests, net of tax | $ 30 | $ 336 | $ 10 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | |||
Net income | $ 173,890,000 | $ 158,761,000 | $ 136,957,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 24,611,000 | 28,844,000 | 38,636,000 |
Equity in income of unconsolidated joint ventures | (6,605,000) | (4,073,000) | (4,008,000) |
Distributions of earnings from unconsolidated joint ventures | 6,310,000 | 4,048,000 | 3,440,000 |
Amortization of stock-based awards | 19,424,000 | 17,618,000 | 19,582,000 |
Deferred income taxes | 565,000 | (37,615,000) | (29,360,000) |
Provision for doubtful accounts | 1,267,000 | 16,964,000 | 7,167,000 |
Impairment of goodwill | 15,800,000 | 7,755,000 | 0 |
Fair value adjustments to contingent consideration | (14,971,000) | 1,085,000 | 4,252,000 |
(Gain) loss on sale of assets and divested business | (11,066,000) | (232,000) | 1,045,000 |
Changes in operating assets and liabilities, net of effects of business acquisitions: | |||
Accounts receivable and contract assets | 154,748,000 | (10,226,000) | (46,273,000) |
Prepaid expenses and other assets | (11,321,000) | 2,568,000 | (12,638,000) |
Accounts payable | (102,162,000) | 39,011,000 | (16,032,000) |
Accrued compensation | (8,173,000) | 18,359,000 | 27,492,000 |
Contract liabilities | 5,894,000 | (6,039,000) | 15,228,000 |
Other liabilities | 19,460,000 | (16,929,000) | 24,998,000 |
Income taxes receivable/payable | (5,192,000) | (11,386,000) | 17,596,000 |
Cash settled contingent earn-out liability | 0 | 0 | (2,349,000) |
Net cash provided by operating activities | 262,479,000 | 208,513,000 | 185,733,000 |
Cash flows from investing activities: | |||
Payments for business acquisitions, net of cash acquired | (68,488,000) | (84,159,000) | (68,256,000) |
Capital expenditures | (12,245,000) | (16,198,000) | (9,726,000) |
Proceeds from sale of assets and divested business, net | 17,710,000 | 651,000 | 35,348,000 |
Net cash used in investing activities | (63,023,000) | (99,706,000) | (42,634,000) |
Cash flows from financing activities: | |||
Proceeds from borrowings | 344,991,000 | 417,262,000 | 401,965,000 |
Repayments on long-term debt | (331,066,000) | (415,491,000) | (485,946,000) |
Repurchases of common stock | (117,188,000) | (100,000,000) | (75,000,000) |
Taxes paid on vested restricted stock | (11,166,000) | (6,893,000) | (8,871,000) |
Payments of contingent earn-out liabilities | (22,900,000) | (12,018,000) | (1,412,000) |
Debt pre-payment costs | 0 | 0 | (1,737,000) |
Stock options exercised | 10,334,000 | 11,751,000 | 13,520,000 |
Dividends paid | (34,743,000) | (29,674,000) | (24,477,000) |
Principal payments on finance leases | (1,311,000) | 0 | 0 |
Net cash used in financing activities | (163,049,000) | (135,063,000) | (181,958,000) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 207,000 | (1,727,000) | (4,947,000) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 36,614,000 | (27,983,000) | (43,806,000) |
Cash, cash equivalents and restricted cash at beginning of year | 120,901,000 | 148,884,000 | 192,690,000 |
Cash, cash equivalents and restricted cash at end of year | 157,515,000 | 120,901,000 | 148,884,000 |
Cash paid during the year for: | |||
Interest | 13,256,000 | 12,310,000 | 15,570,000 |
Income taxes, net of refunds received of $1.4 million, $5.2 million and $2.5 million | 55,039,000 | 66,038,000 | 49,842,000 |
Reconciliation of cash, cash equivalents and restricted cash: | |||
Total cash, cash equivalents and restricted cash | $ 157,515,000 | $ 148,884,000 | $ 148,884,000 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 | |
Statement of Cash Flows [Abstract] | |||
Income taxes, net of refunds received | $ 1.4 | $ 5.2 | $ 2.5 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Total Tetra Tech Equity | Total Tetra Tech EquityCumulative Effect, Period of Adoption, Adjustment | Non-Controlling Interests |
Beginning balance (in shares) at Oct. 01, 2017 | 55,873 | |||||||||
Beginning balance at Oct. 01, 2017 | $ 928,624 | $ 559 | $ 193,835 | $ (98,500) | $ 832,559 | $ 928,453 | $ 171 | |||
Comprehensive income, net of tax: | ||||||||||
Net income | 136,957 | 136,883 | 136,883 | 74 | ||||||
Foreign currency translation adjustments | (29,720) | (29,656) | (29,656) | (64) | ||||||
Gain on cash flow hedge valuations | 806 | 806 | 806 | |||||||
Comprehensive income, net of tax | 108,043 | 108,033 | 10 | |||||||
Distributions paid to noncontrolling interests | (52) | (52) | ||||||||
Cash dividends | (24,477) | (24,477) | (24,477) | |||||||
Stock-based compensation | 19,582 | 19,582 | 19,582 | |||||||
Restricted & performance shares released (in shares) | 277 | |||||||||
Restricted & performance shares released | (8,871) | $ 3 | (8,874) | (8,871) | ||||||
Stock options exercised (in shares) | 549 | |||||||||
Stock options exercised | 13,511 | $ 5 | 13,506 | 13,511 | ||||||
Shares issued for Employee Stock Purchase Plan (in shares) | 142 | |||||||||
Shares issued for Employee Stock Purchase Plan | 5,740 | $ 1 | 5,739 | 5,740 | ||||||
Stock repurchases (in shares) | (1,492) | |||||||||
Stock repurchases | (75,000) | $ (15) | (74,985) | (75,000) | ||||||
Ending balance (in shares) at Sep. 30, 2018 | 55,349 | |||||||||
Ending balance at Sep. 30, 2018 | 967,100 | $ (2,767) | $ 553 | 148,803 | (127,350) | 944,965 | $ (2,767) | 966,971 | $ (2,767) | 129 |
Comprehensive income, net of tax: | ||||||||||
Net income | 158,761 | 158,668 | 158,668 | 93 | ||||||
Foreign currency translation adjustments | (20,866) | (21,109) | (21,109) | 243 | ||||||
Gain on cash flow hedge valuations | (12,125) | (12,125) | (12,125) | |||||||
Comprehensive income, net of tax | 125,770 | 125,434 | 336 | |||||||
Distributions paid to noncontrolling interests | (287) | (287) | ||||||||
Cash dividends | (29,674) | (29,674) | (29,674) | |||||||
Stock-based compensation | 17,618 | 17,618 | 17,618 | |||||||
Restricted & performance shares released (in shares) | 183 | |||||||||
Restricted & performance shares released | (6,893) | $ 2 | (6,895) | (6,893) | ||||||
Stock options exercised (in shares) | 448 | |||||||||
Stock options exercised | 11,751 | $ 5 | 11,746 | 11,751 | ||||||
Shares issued for Employee Stock Purchase Plan (in shares) | 148 | |||||||||
Shares issued for Employee Stock Purchase Plan | 6,846 | $ 2 | 6,844 | 6,846 | ||||||
Stock repurchases (in shares) | (1,563) | |||||||||
Stock repurchases | (100,000) | $ (16) | (99,984) | (100,000) | ||||||
Ending balance (in shares) at Sep. 29, 2019 | 54,565 | |||||||||
Ending balance at Sep. 29, 2019 | 989,464 | $ 546 | 78,132 | (160,584) | 1,071,192 | 989,286 | 178 | |||
Comprehensive income, net of tax: | ||||||||||
Net income | 173,890 | 173,859 | 173,859 | 31 | ||||||
Foreign currency translation adjustments | 3,435 | 3,436 | 3,436 | (1) | ||||||
Loss on cash flow hedge valuations | (4,638) | (4,638) | (4,638) | |||||||
Comprehensive income, net of tax | 172,687 | 172,657 | 30 | |||||||
Distributions paid to noncontrolling interests | (154) | (154) | ||||||||
Cash dividends | (34,743) | (34,743) | (34,743) | |||||||
Stock-based compensation | 19,424 | 19,424 | 19,424 | |||||||
Restricted & performance shares released (in shares) | 212 | |||||||||
Restricted & performance shares released | $ (11,166) | $ 2 | (11,168) | (11,166) | ||||||
Stock options exercised (in shares) | 355 | 361 | ||||||||
Stock options exercised | $ 10,334 | $ 4 | 10,330 | 10,334 | ||||||
Shares issued for Employee Stock Purchase Plan (in shares) | 168 | |||||||||
Shares issued for Employee Stock Purchase Plan | 8,715 | $ 1 | 8,714 | 8,715 | ||||||
Stock repurchases (in shares) | (1,509) | |||||||||
Stock repurchases | (117,188) | $ (15) | (105,432) | (11,741) | (117,188) | |||||
Ending balance (in shares) at Sep. 27, 2020 | 53,797 | |||||||||
Ending balance at Sep. 27, 2020 | $ 1,037,373 | $ 538 | $ 0 | $ (161,786) | $ 1,198,567 | $ 1,037,319 | $ 54 |
Consolidated Statements of Eq_2
Consolidated Statements of Equity (Parenthetical) - $ / shares | Sep. 04, 2020 | May 29, 2020 | Feb. 28, 2020 | Dec. 13, 2019 | Aug. 30, 2019 | May 31, 2019 | Feb. 28, 2019 | Dec. 14, 2018 | Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 |
Statement of Stockholders' Equity [Abstract] | |||||||||||
Cash dividends paid per share (in dollars per share) | $ 0.17 | $ 0.17 | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.12 | $ 0.12 | $ 0.64 | $ 0.54 | $ 0.44 |
Description of Business
Description of Business | 12 Months Ended |
Sep. 27, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business We are a leading global provider of consulting and engineering services that focuses on water, environment, sustainable infrastructure, resource management, energy, and international development. We are a global company that is Leading with Science® to provide innovative solutions for our public and private clients. We typically begin at the earliest stage of a project by identifying technical solutions and developing execution plans tailored to our clients’ needs and resources. Our solutions may span the entire life cycle of consulting and engineering projects and include applied science, data analysis, research, engineering, design, construction management, and operations and maintenance. We manage our business under two reportable segments. Our Government Services Group (“GSG”) reportable segment primarily includes activities with U.S. government clients (federal, state and local) and all activities with development agencies worldwide. Our Commercial/International Services Group (“CIG”) reportable segment primarily includes activities with U.S. commercial clients and international clients other than development agencies. This alignment allows us to capitalize on our growing market opportunities and enhance the development of high-end consulting and technical solutions to meet our growing client demand. We continue to report the results of the wind-down of our non-core construction activities in the Remediation and Construction Management (“RCM”) reportable segment. Certain reclassifications were made to the prior years to conform to the current-year presentation. |
Basis of Presentation and Prepa
Basis of Presentation and Preparation | 12 Months Ended |
Sep. 27, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Preparation | Basis of Presentation and Preparation Principles of Consolidation and Presentation. The consolidated financial statements include our accounts and those of joint ventures of which we are the primary beneficiary. All significant intercompany balances and transactions have been eliminated in consolidation. Fiscal Year. We report results of operations based on 52 or 53-week periods ending on the Sunday nearest September 30. Fiscal years 2020, 2019 and 2018 each contained 52 weeks. Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires us to make estimates and assumptions. These estimates and assumptions affect the amounts reported in our consolidated financial statements and accompanying notes. Although such estimates and assumptions are based on management's best knowledge of current events and actions we may take in the future, actual results could differ materially from those estimates. Cash and Cash Equivalents. Cash and cash equivalents include highly liquid investments with original maturities of 90 days or less. We classify cash and cash equivalents as restricted when we are unable to freely use such cash and cash equivalents for our general operating purposes. Restricted cash balances are reported within our "Prepaid expenses and other current assets" on the consolidated balance sheets. Occasionally, we have book overdrafts which represent checks issued in excess of funds on deposit in our bank accounts that have not yet been paid by the applicable bank at the balance sheet date. Bank overdrafts occur when a bank honors disbursements in excess of funds on deposit in our bank accounts. We classify book and bank overdrafts as short-term borrowings on our consolidated balance sheets, and report the change in overdrafts as a financing activity in our consolidated statements of cash flows. Insurance Matters, Litigation and Contingencies. In the normal course of business, we are subject to certain contractual guarantees and litigation. In addition, we maintain insurance coverage for various aspects of our business and operations. We record in our consolidated balance sheets amounts representing our estimated liability for these legal and insurance obligations. Any adjustments to these liabilities are recorded in our consolidated statements of income. Accounts Receivable – Net. Net accounts receivable consists of billed and unbilled accounts receivable, and allowances for doubtful accounts. Billed accounts receivable represent amounts billed to clients that have not been collected. Unbilled accounts receivable, which represent an unconditional right to payment subject only to the passage of time, include unbilled amounts typically resulting from revenue recognized but not yet billed pursuant to contract terms or billed after the period end date. Most of our unbilled receivables at September 27, 2020 are expected to be billed and collected within 12 months. Unbilled accounts receivable also include amounts related to requests for equitable adjustment to contracts that provide for price redetermination. These amounts are recorded only when they can be reliably estimated and realization is probabl e. The allowance for doubtful accounts represents amounts that are expected to become uncollectible or unrealizable in the future. We determine an estimated allowance for uncollectible accounts based on management's consideration of trends in the actual and forecasted credit quality of our clients, including delinquency and payment history; type of client, such as a government agency or a commercial sector client; and general economic and industry conditions, including the potential impacts of the coronavirus disease 2019 ("COVID-19") pandemic, that may affect our clients' ability to pay. Contract Assets and Contract Liabilities. Contract assets represent revenue recognized in excess of the amounts for which we have the contractual right to bill our customers. Contract retentions, included in contract assets, represent amounts withheld by clients until certain conditions are met or the project is completed, which may extend beyond one year. Contract liabilities represent the amount of cash collected from clients and billings to clients on contracts in advance of work performed and revenue recognized. The majority of these amounts are expected be earned within 12 months and are classified as current liabilities. Property and Equipment. Property and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line method. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from our consolidated balance sheets and any resulting gain or loss is reflected in our consolidated statements of income. Expenditures for maintenance and repairs are expensed as incurred. Generally, estimated useful lives range from three Long-Lived Assets. Our policy is to evaluate the recoverability of our long-lived assets when the facts and circumstances suggest that the assets may be impaired. This assessment is performed based on the estimated undiscounted cash flows compared to the carrying value of the assets. If the future cash flows (undiscounted and without interest charges) are less than the carrying value, a write-down would be recorded to reduce the related asset to its estimated fair value. Leases. We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use ("ROU") assets, and current and long-term operating lease liabilities in the consolidated balance sheets. Our finance leases are reported in "Other long-term assets", "Other current liabilities", and "Other long-term liabilities" on our consolidated balance sheet. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, incremental borrowing rates are used based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Our operating leases are primarily for corporate and project office spaces. To a much lesser extent, we have operating leases for vehicles and equipment. Our operating leases have remaining lease terms of one month to twelve years, some of which may include options to extend the leases for up to five years. We also have finance leases which are primarily related to IT equipment. We recognize a liability for contract termination costs associated with an exit activity for costs that will continue to be incurred under a lease for its remaining term without economic benefit to us, initially measured at its fair value at the cease-use date. The fair value is determined based on the remaining lease rentals, adjusted for the effects of any prepaid or deferred items recognized under the lease, and reduced by estimated sublease rentals. Business Combinations. The cost of an acquired company is assigned to the tangible and intangible assets purchased and the liabilities assumed based on their fair values at the date of acquisition. The determination of fair values of these assets and liabilities requires us to make estimates and use valuation techniques when a market value is not readily available. Any excess of purchase price over the fair value of net tangible and intangible assets acquired is allocated to goodwill. Goodwill typically represents the value paid for the assembled workforce and enhancement of our service offerings. Transaction costs associated with business combinations are expensed as incurred. Goodwill and Intangible Assets. Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in a business acquisition. Following an acquisition, we perform an analysis to value the acquired company's tangible and identifiable intangible assets and liabilities. With respect to identifiable intangible assets, we consider backlog, non-compete agreements, client relations, trade names, patents and other assets. We amortize our intangible assets based on the period over which the contractual or economic benefits of the intangible assets are expected to be realized. We assess the recoverability of the unamortized balance of our intangible assets when indicators of impairment are present based on expected future profitability and undiscounted expected cash flows and their contribution to our overall operations. Should the review indicate that the carrying value is not fully recoverable, the excess of the carrying value over the fair value of the intangible assets would be recognized as an impairment loss. We test our goodwill for impairment on an annual basis, and more frequently when an event occurs, or circumstances indicate that the carrying value of the asset may not be recoverable. We believe the methodology that we use to review impairment of goodwill, which includes a significant amount of judgment and estimates, provides us with a reasonable basis to determine whether impairment has occurred. However, many of the factors employed in determining whether our goodwill is impaired are outside of our control and it is reasonably likely that assumptions and estimates will change in future periods. These changes could result in future impairments. We perform our annual goodwill impairment review at the beginning of our fiscal fourth quarter. Our last annual review was performed at June 29, 2020 (i.e., the first day of our fiscal fourth quarter). In addition, we regularly evaluate whether events and circumstances have occurred that may indicate a potential change in recoverability of goodwill. We perform interim goodwill impairment reviews between our annual reviews if certain events and circumstances have occurred, including a deterioration in general economic conditions, an increased competitive environment, a change in management, key personnel, strategy or customers, negative or declining cash flows, or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods. We assess goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a component. Our operating segments are the same as our reportable segments and our reporting units for goodwill impairment testing are the components one level below our reportable segments. These components constitute a business for which discrete financial information is available and where segment management regularly reviews the operating results of that component. We aggregate components within an operating segment that have similar economic characteristics. The impairment test for goodwill involves the comparison of the estimated fair value of each reporting unit to the reporting unit's carrying value, including goodwill. We estimate the fair value of reporting units based on a comparison and weighting of the income approach, specifically the discounted cash flow method and the market approach, which estimates the fair value of our reporting units based upon comparable market prices and recent transactions and also validates the reasonableness of the multiples from the income approach. The development of the present value of future cash flow projections includes assumptions and estimates derived from a review of our expected revenue growth rates, operating profit margins, discount rates, and the terminal growth rate. If the fair value of a reporting unit exceeds its carrying amount, the goodwill of that reporting unit is not considered impaired. However, if its carrying value exceeds its fair value, our goodwill is impaired, and we are required to record a non-cash charge that could have a material adverse effect on our consolidated financial statements. An impairment loss recognized, if any, should not exceed the total amount of goodwill allocated to the reporting unit. Contingent Consideration. Most of our acquisition agreements include contingent earn-out arrangements, which are generally based on the achievement of future operating income thresholds. The contingent earn-out arrangements are based upon our valuations of the acquired companies and reduce the risk of overpaying for acquisitions if the projected financial results are not achieved. The fair values of these earn-out arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates. For each transaction, we estimate the fair value of contingent earn-out payments as part of the initial purchase price and record the estimated fair value of contingent consideration as a liability in "Current contingent earn-out liabilities" and "Long-term contingent earn-out liabilities" on the consolidated balance sheets. We consider several factors when determining that contingent earn-out liabilities are part of the purchase price, including the following: (1) the valuation of our acquisitions is not supported solely by the initial consideration paid, and the contingent earn-out formula is a critical and material component of the valuation approach to determining the purchase price; and (2) the former owners of acquired companies that remain as key employees receive compensation other than contingent earn-out payments at a reasonable level compared with the compensation of our other key employees. The contingent earn-out payments are not affected by employment termination. We measure our contingent earn-out liabilities at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy. We use a probability weighted discounted income approach as a valuation technique to convert future estimated cash flows to a single present value amount. The significant unobservable inputs used in the fair value measurements are operating income projections over the earn-out period (generally two We review and re-assess the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could differ materially from the initial estimates. Changes in the estimated fair value of our contingent earn-out liabilities related to the time component of the present value calculation are reported in interest expense. Adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in operating income. Fair Value of Financial Instruments. We determine the fair values of our financial instruments, including short-term investments, debt instruments and derivative instruments based on inputs or assumptions that market participants would use in pricing an asset or a liability. We categorize our instruments using a valuation hierarchy for disclosure of the inputs used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. The classification of a financial asset or liability within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair values based on their short-term nature. The carrying amounts of our revolving credit facility approximates fair value because the interest rates are based upon variable reference rates. Certain other assets and liabilities, such as contingent earn-out liabilities and amounts related to cash-flow hedges, are required to be carried in our consolidated financial statements at fair value. Our fair value measurement methods may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Although we believe our valuation methods are appropriate and consistent with those used by other market participants, the use of different methodologies or assumptions to determine fair value could result in a different fair value measurement at the reporting date. Derivative Financial Instruments. We account for our derivative instruments as either assets or liabilities and carry them at fair value. For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated as cash flow hedges, the effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income (loss) in stockholders' equity and reclassified into income in the same period or periods during which the hedged transaction affects earnings. The ineffective portion of the gain or loss on the derivative instrument, if any, is recognized in current income. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. The net gain or loss on the effective portion of a derivative instrument that is designated as an economic hedge of the foreign currency translation exposure generated by the re-measurement of certain assets and liabilities denominated in a non-functional currency in a foreign operation is reported in the same manner as a foreign currency translation adjustment. Accordingly, any gains or losses related to these derivative instruments are recognized in current income. Derivatives that do not qualify as hedges are adjusted to fair value through current income. Deferred Compensation. We maintain a non-qualified defined contribution supplemental retirement plan for certain key employees and non-employee directors that is accounted for in accordance with applicable authoritative guidance on accounting for deferred compensation arrangements where amounts earned are held in a rabbi trust and invested. Employee deferrals are deposited into a rabbi trust, and the funds are generally invested in individual variable life insurance contracts that we own and are specifically designed to informally fund savings plans of this nature. Our consolidated balance sheets reflect our investment in variable life insurance contracts in "Other long-term assets." Our obligation to participating employees is reflected in "Other long-term liabilities." The net gains and losses related to the deferred compensation plan are reported as part of “Selling, general and administrative expenses” in our consolidated statements of income . Income Taxes. We file a consolidated U.S. federal income tax return. In addition, we file other returns that are required in the states, foreign jurisdictions and other jurisdictions in which we do business. We account for certain income and expense items differently for financial reporting and income tax purposes. Deferred tax assets and liabilities are computed for the difference between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to reverse. In determining the need for a valuation allowance, management reviews both positive and negative evidence, including current and historical results of operations, future income projections, scheduled reversals of deferred tax amounts, availability of carrybacks, and potential tax planning strategies. Based on our assessment, we have concluded that a portion of the deferred tax assets will not be realized. According to the authoritative guidance on accounting for uncertainty in income taxes, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. This guidance also addresses de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and disclosure requirements for uncertain tax positions. Concentration of Credit Risk. Financial instruments that subject us to credit risk consist primarily of cash and cash equivalents and net accounts receivable. In th e event that we have surplus cash, we place our temporary cash investments with lower risk financial institutions and, by policy, limit the amount of investment exposure to any one financial institution. Approximately 28% of accounts receivable were due from various agencies of the U.S. federal government at fiscal 2020 year-end. The remaining accounts receivable are generally diversified due to the large number of organizations comprising our client base and their geographic dispersion. We perform ongoing credit evaluations of our clients and maintain an allowance for potential credit losses. Approximately 48%, 22% and 30% of our fiscal 2020 revenue was generated from our U.S. government, U.S. commercial and international clients, respectively. Foreign Currency Translation. We determine the functional currency of our foreign operating units based upon the primary currency in which they operate. These operating units maintain their accounting records in their local currency, primarily Canadian and Australian dollars, and British pounds. Where the functional currency is not the U.S. dollar, translation of assets and liabilities to U.S. dollars is based on exchange rates at the balance sheet date. Translation of revenue and expenses to U.S. dollars is based on the average rate during the period. Translation gains or losses are reported as a component of other comprehensive income (loss). Gains or losses from foreign currency transactions are included in income from operations. Recently Issued Accounting Pronouncements Adopted in Fiscal 2020. In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-02 “Leases (Topic 842)”, which is a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of ROU assets obtained in exchange for lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. In the first quarter of fiscal 2020, we adopted the standard using the modified retrospective method. The standard was applied to leases that existed or were entered into on or after September 30, 2019. Our fiscal 2020 financial statements have been presented under this standard. However, the prior-year financial statements have not been adjusted and continue to be reported in accordance with previous guidance. See Note 10, "Leases" for further discussion of the adoption and the impact on our consolidated financial statements. In August 2017, the FASB issued accounting guidance on hedging activities. The amendment better aligns an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The guidance was effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2018 (first quarter of fiscal 2020 for us). The adoption of this guidance had no impact on our consolidated financial statements. In February 2018, the FASB issued guidance on reclassification of certain tax effects from accumulated comprehensive income, which allows for a reclassification of stranded tax effects from the Tax Cuts and Jobs Act ("TCJA") from accumulated other comprehensive income to retained earnings. The guidance was effective for fiscal years beginning after December 15, 2018 (first quarter of fiscal 2020 for us). We did not reclassify our stranded effects from the TCJA, which were immaterial. Recently Issued Accounting Pronouncements Not Yet Adopted. In June 2016, the FASB issued updated guidance, Accounting Standards Update ("ASU") 2016-13, related to the measurement of credit losses for certain financial assets. This guidance replaces the current incurred loss methodology with an expected credit loss methodology. It requires us to recognize an allowance equal to our current estimate of all contractual cash flows that we do not expect to collect. Our estimate would consider relevant information about past events, current conditions, and reasonable and supportable forecasts impacting the collectability of the reported amounts. The guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019 (first quarter of fiscal 2021 for us). In anticipation of our adoption of ASU 2016-13, we have updated our presentation of gross receivables and the allowance for doubtful accounts to reflect only expected credit losses in the allowance. We do not expect the adoption in the first quarter of fiscal 2021 to have a material impact on our consolidated financial statements. In August 2018, the FASB issued updated guidance modifying certain fair value measurement disclosures. The guidance contains additional disclosures to enable users of the financial statements to better understand the entity’s assumption used to develop significant unobservable inputs for Level 3 fair value measurements, but also eliminates the requirement for entities to disclose the amount of and reasons for transfers between Level 1 and Level 2 investments within the fair value hierarchy. This guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019 (first quarter of fiscal 2021 for us). Early adoption is permitted. We do not expect the adoption of this guidance to have a significant impact on our consolidated financial statements. In December 2019, the FASB issued guidance simplifying the accounting for income taxes by removing certain exceptions to general principles in Topic 740 and amending certain existing guidance for clarity. This guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2020 (first quarter of fiscal 2022 for us). Early adoption is permitted. We do not expect the adoption of this guidance to have an impact on our consolidated financial statements. In May 2020, the Securities and Exchange Commission issued guidance amending certain financial disclosures about acquired and disposed businesses. The amendments are designed to assist registrants in making more meaningful determinations of whether a subsidiary or an acquired or disposed business is significant, and to improve the related disclosure requirements. The guidance is effective for fiscal years beginning after December 31, 2020 (first quarter of fiscal 2022 for us). We do not expect the adoption of this guidance to have an impact on our consolidated financial statements. |
Revenue and Contract Balances
Revenue and Contract Balances | 12 Months Ended |
Sep. 27, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue and Contract Balances | Revenue and Contract Balances We recognize revenue over time as the related performance obligation is satisfied by transferring control of a promised good or service to our customers. Progress toward complete satisfaction of the performance obligation is primarily measured using a cost-to-cost measure of progress method. The cost input is based primarily on contract cost incurred to date compared to total estimated contract cost. This measure includes forecasts based on the best information available and reflects our judgement to faithfully depict the value of the services transferred to the customer. For certain on-call engineering or consulting and similar contracts, we recognize revenue in the amount which we have the right to invoice the customer if that amount corresponds directly with the value of our performance completed to date. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost measure of progress method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs indicates a loss, a provision for the entire estimated loss on the contract is made in the period in which the loss becomes evident. Disaggregation of Revenue We disaggregate revenue by client sector and contract type, as we believe it best depicts how the nature, timing, and uncertainty of revenue and cash flows are affected by economic factors. The following tables present revenue disaggregated by client sector and contract type: Fiscal Year Ended September 27, September 29, September 30, 2018 (in thousands) Client Sector: U.S. state and local government $ 439,019 $ 587,364 $ 469,231 U.S. federal government (1) 993,835 941,102 974,384 U.S. commercial 674,605 719,314 788,398 International (2) 887,432 859,568 732,135 Total $ 2,994,891 $ 3,107,348 $ 2,964,148 Contract Type: Fixed-price $ 1,078,432 $ 1,048,157 $ 986,910 Time-and-materials 1,391,592 1,509,901 1,395,148 Cost-plus 524,867 549,290 582,090 Total $ 2,994,891 $ 3,107,348 $ 2,964,148 (1) Includes revenue generated under U.S. federal government contracts performed outside the United States. (2) Includes revenue generated from foreign operations, primarily in Canada, Australia, the United Kingdom, and revenue generated from non-U.S. clients. Other than the U.S. federal government, no single client accounted for more than 10% of our revenue for the twelve months ended months ended September 27, 2020 and September 29, 2019. Contract Assets and Contract Liabilities We invoice customers based on the contractual terms of each contract. However, the timing of revenue recognition may differ from the timing of invoice issuance. Contract assets represent revenue recognized in excess of the amounts for which we have the contractual right to bill our customers. Such amounts are recoverable from customers based upon various measures of performance, including achievement of certain milestones or completion of a contract. In addition, many of our time and materials arrangements are billed in arrears pursuant to contract terms that are standard within the industry, resulting in contract assets and/or unbilled receivables being recorded, as revenue is recognized in advance of billings. Contract retentions, included in contract assets, represent amounts withheld by clients until certain conditions are met or the project is completed, which may extend beyond one year. Contract liabilities consist of billings in excess of revenue recognized. Contract liabilities decrease as we recognize revenue from the satisfaction of the related performance obligation and increase as billings in advance of revenue recognition occur. Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. There were no substantial non-current contract assets or liabilities for the periods presented. Net contract assets/liabilities consisted of the following: Balance at September 27, September 29, 2019 (in thousands) Contract assets (1) $ 92,632 114,324 Contract liabilities 171,905 165,611 Net contract liabilities $ (79,273) $ (51,287) (1) Include s $12.3 million and $26.5 million of contract retentions as of September 27, 2020 and September 29, 2019, respectively. In fiscal 2020, we recognized revenue of approximately $118 million from amounts included in the contract liability balance at the end of fiscal 2019, compared to approximately $90 million for the c omparative prior-year period. We recognize revenue primarily using the cost-to-cost measure of progress method, which involves the estimates of progress towards completion. Changes in those estimates could result in the recognition of cumulative catch-up adjustments to the contract’s inception-to-date revenue, costs and profit in the period in which such changes are made. As a result, we recognized net favorable operating income adjustments o f $0.8 million fo r both fiscal 2020 and fiscal 2019, exclusive of the amounts related to claims described below. Changes in revenue and cost estimates could also result in a projected loss, determined at the contract level, which would be recorded immediately in earnings. As of September 27, 2020 and September 29, 2019, our consolidated balance sheets included liabilities for anticipated losses of $13.2 million and $11.5 million, respectively. The estimated cost to complete the related contracts as of September 27, 2020 was approximately $118 million. Accounts Receivable, Net Net accounts receivable consisted of the following: Balance at September 27, September 29, (in thousands) Billed $ 402,818 $ 496,985 Unbilled 253,364 282,297 Total accounts receivable 656,182 779,282 Allowance for doubtful accounts (7,147) (10,562) Total accounts receivable, net $ 649,035 $ 768,720 Billed accounts receivable represent amounts billed to clients that have not been collected. Unbilled accounts receivable, which represent an unconditional right to payment subject only to the passage of time, include unbilled amounts typically resulting from revenue recognized but not yet billed pursuant to contract terms or billed after the period end date. Most of our unbilled receivables at September 27, 2020 are expected to be billed and collected within 12 months. The allowance for doubtful accounts represents amounts that are expected to become uncollectible or unrealizable in the future. We determine an estimated allowance for uncollectible accounts based on management's consideration of trends in the actual and forecasted credit quality of our clients, including delinquency and payment history; type of client, such as a government agency or a commercial sector client; and general economic and industry conditions, including the potential impacts of the COVID-19 pandemic, that may affect our clients' ability to pay. Total accounts receivable at September 27, 2020 and September 29, 2019 included approximate ly $14 million and $15 million, respectively, related to claims, including requests for equitable adjustment, on contracts that provide for price redetermination. Claims are amounts in excess of agreed contract prices that we seek to collect from our clients or other third parties for delays, errors in specifications and designs, contract terminations, change orders in dispute or unapproved as to both scope and price, or other causes of unanticipated additional costs. Factors considered in determining whether revenue associated with claims (including change orders in dispute and unapproved change orders in regards to both scope and price) should be recognized include the following: (a) the contract or other evidence provides a legal basis for the claim, (b) additional costs were caused by circumstances that were unforeseen at the contract date and not the result of deficiencies in our performance, (c) claim-related costs are identifiable and considered reasonable in view of the work performed, and (d) evidence supporting the claim is objective and verifiable. This can lead to a situation in which costs are recognized in one period and revenue is recognized in a subsequent period when a client agreement is obtained, or a claims resolution occurs. We regularly evaluate all unsettled claim amounts and record appropriate adjustments to operating earnings when it is probable that the claim will result in a different contract value than the amount previously estimated. In fiscal 2020, we recorded net losses in operating income related to claims of $4.4 million in our CIG segment. In fiscal 2019 , we recognized reductions of revenue of $26.7 million and $4.6 million, and related losses in operating income of $28.2 million and $5.7 million in our CIG and RCM segments, respectively, primarily due to the resolution of several claims in fiscal 2019 for amounts lower than we previously expected. No single client accounted for more than 10% of our accounts receivable at September 27, 2020 and September 29, 2019. Remaining Unsatisfied Performance Obligations (“RUPOs”) Our RUPOs represent a measure of the total dollar value of work to be performed on contracts awarded and in progress. We had $3.2 billion of RUPOs as of September 27, 2020. RUPOs increase with awards from new contracts or additions on existing contracts and decrease as work is performed and revenue is recognized on existing contracts. RUPOs may also decrease when projects are canceled or modified in scope. We include a contract within our RUPOs when the contract is awarded and an agreement on contract terms has been reached. We expect to satisfy our RUPOs as of September 27, 2020 over the following periods: Amount (in thousands) Within 12 months $ 1,846,527 Beyond 1,372,446 Total $ 3,218,973 Although RUPOs reflect business that is considered to be firm, cancellations, deferrals or scope adjustments may occur. RUPOs are adjusted to reflect any known project cancellations, revisions to project scope and cost, foreign currency exchange fluctuations and project deferrals, as appropriate. Our operations and maintenance contracts can generally be terminated by the clients without a substantive financial penalty. Therefore, the remaining performance obligations on such contracts are limited to the notice period required for the termination (usually 30, 60, or 90 days). |
Stock Repurchase and Dividends
Stock Repurchase and Dividends | 12 Months Ended |
Sep. 27, 2020 | |
Stock Repurchase And Dividends [Abstract] | |
Stock Repurchase and Dividends | Stock Repurchase and DividendsOn November 5, 2018, the Board of Directors authorized a stock repurchase program ("2019 Program") under which we could repurchase up to $200 million of our common stock. This was in addition to the $25 million remaining as of fiscal 2018 year-end under the previous stock repurchase program ("2018 Program"). On January 27, 2020, the Board of Directors authorized a new $200 million stock repurchase program ("2020 Program"). As of September 27, 2020, we had a remaining balance of $207.8 million available under the 2019 and 2020 programs. The following table summarizes stock repurchases in the open market and settled in fiscal 2019 and fiscal 2020: Fiscal Year Stock Repurchase Program Shares Repurchased Average Price Paid per Share Total Cost 2019 2018 Program 430,559 $ 58.06 $ 25,000 2019 2019 Program 1,131,962 $ 66.26 75,000 2019 Total 1,562,521 $ 64.00 $ 100,000 2020 2019 Program 1,508,747 $ 77.67 $ 117,188 The following table presents dividends declared and paid in fiscal 2020 and 2019: Declare Date Dividend Paid Per Share Record Date Payment Date Dividends Paid November 11, 2019 $ 0.15 December 2, 2019 December 13, 2019 $ 8,190 January 27, 2020 $ 0.15 February 12, 2020 February 28, 2020 8,225 April 27, 2020 $ 0.17 May 13, 2020 May 29, 2020 9,175 July 27, 2020 $ 0.17 August 21, 2020 September 4, 2020 9,153 Total dividends paid as of September 27, 2020 $ 34,743 November 5, 2018 $ 0.12 November 30, 2018 December 14, 2018 $ 6,654 January 28, 2019 $ 0.12 February 13, 2019 February 28, 2019 6,616 April 29, 2019 $ 0.15 May 15, 2019 May 31, 2019 8,219 July 29, 2019 $ 0.15 August 14, 2019 August 30, 2019 8,185 Total dividends paid as of September 29, 2019 $ 29,674 Subsequent Event. On November 9, 2020, the Board of Directors declared a quarterly cash dividend of $0.17 per share payable on December 11, 2020 to stockholders of record as of the close of business on November 30, 2020. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 12 Months Ended |
Sep. 27, 2020 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures In fiscal 2018, we acquired Glumac, headquartered in Portland, Oregon. Glumac is a leader in sustainable infrastructure design with more than 300 employees and is part of our GSG segment. The fair value of the purchase price for Glumac was $38.4 million. This amount is comprised of $20.0 million of initial cash payments made to the sellers and $18.4 million for the estimated fair value of contingent earn-out obligations, with a maximum of $20.0 million payable, based upon the achievement of specified operating income targets in each of the three years following the acquisition. In fiscal 2018, we acquired Norman Disney & Young (“NDY”), a leader in sustainable infrastructure engineering design. NDY is an Australian-based global engineering design firm with more than 700 professionals operating in offices throughout Australia, the Asia-Pacific region, the United Kingdom, and Canada and is part of our CIG segment. The fair value of the purchase price for NDY was $56.1 million. This amount is comprised of $46.9 million of initial cash payments made to the sellers, $1.6 million held in escrow, and $7.6 million for the estimated fair value of contingent earn-out obligations, with a maximum amount of $20.2 million, based upon the achievement of specified operating income targets in each of the three years following the acquisition. In fiscal 2018, we divested our non-core utility field services operations in the CIG segment for net proceeds after transaction costs of $30.2 million. This operation generated approximately $70 million in annual revenue primarily from our U.S. commercial clients. We also divested non-core assets during the third quarter of fiscal 2018 resulting in a pre-tax loss of $3.4 million, which is included in selling, general and administrative expenses for fiscal 2018. In fiscal 2019, we acquired eGlobalTech ("EGT"), a high-end information technology solutions, cloud migration, cybersecurity, and management consulting firm based in Arlington, Virginia. EGT is part of our GSG segment. The fair value of the purchase price was $49.1 million. This amount was comprised of a $24.7 million promissory note issued to the sellers (which was subsequently paid in full in the third quarter of fiscal 2019), $3.3 million of payables related to estimated post-closing adjustments for net assets acquired, and $21.1 million for the estimated fair value of contingent earn-out obligations, with a maximum of $25.0 million, based upon the achievement of specified operating income targets in each of the three years following the acquisition. In fiscal 2019, we acquired WYG plc (“WYG”), which employs approximately 1,600 staff primarily in the United Kingdom and Europe, delivering consulting and engineering solutions for complex projects across key service areas including planning, water and environment, transport, infrastructure, the built environment, architecture, urban design, surveying, asset management, program management, and international development. WYG’s United Kingdom based consulting and engineering business is part of our CIG segment, while its international development business is part of our GSG segment. The fair value of the purchase price was $54.2 million, entirely paid in cash. In addition, we assumed net debt of $11.5 million, which was subsequently paid in full in the fourth quarter of fiscal 2019. We also incurred $10.4 million in acquisition and integration costs related to the WYG acquisition in the fourth quarter of fiscal 2019. In fiscal 2020, we acquired Segue Technologies, Inc. ("SEG"), a leading information technology management consulting firm based in Arlington, Virginia. SEG is part of our GSG segment. The fair value of the purchase price w as $40.9 million. T his amount was comprised of $29.6 million in initial cash payments made to the sellers and $11.3 million for the estimated fair value of contingent earn-out obligations, with a maximum of $20.0 million, based upon the achievement of specified operating income targets in each of the three years following the acquisition. In fiscal 2020, we acquired BlueWater Federal Solutions, Inc. ("BWF"), a leading information technology management consulting firm based in Chantilly, Virginia. BWF is part of our GSG segment. The fair value of the purchase price w as $48.5 million. T his amount was comprised of $41.8 million in initial cash payments made to the sellers, $1.5 million of payables related to estimated post-closing adjustments for net assets acquired, and $5.2 million for the estimated fair value of contingent earn-out obligations, with a maximum of $8.0 million, based upon the achievement of specified operating income targets in each of the three years following the acquisition. Goodwill additions resulting from the above business combinations are primarily attributable to the existing workforce of the acquired companies and the synergies expected to arise after the acquisitions. The goodwill additions related to our fiscal 2019 acquisitions represent the value of a workforce with emerging technology and new techniques that incorporate artificial intelligence, data analytics and advanced cybersecurity solutions for government and commercial clients, and expanding our geographic presence in the United Kingdom with a strong platform for growth in the United Kingdom and Europe. The fiscal 2020 goodwill additions represent the value of a workforce with distinct expertise in the high-end information technology field, in the areas of data analytics, modeling and simulation, cloud, and agile software development. In addition, these acquired capabilities, when combined with our existing global consulting and engineering business, result in opportunities that allow us to provide services under contracts that could not have been pursued individually by either us or the acquired companies. The results of these acquisitions were included in our consolidated financial statements from their respective closing dates. These acquisitions were not considered material to our consolidated financial statements. As a result, no pro forma information has been provided. Backlog, client relations and trade name intangible assets include the fair value of existing contracts and the underlying customer relationships with lives ranging from one three Most of our acquisition agreements include contingent earn-out agreements, which are generally based on the achievement of future operating income thresholds. The contingent earn-out arrangements are based on our valuations of the acquired companies and reduce the risk of overpaying for acquisitions if the projected financial results are not achieved. The fair values of any earn-out arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates. For each transaction, we estimate the fair value of contingent earn-out payments as part of the initial purchase price and record the estimated fair value of contingent consideration as a liability in “Current contingent earn-out liabilities” and “Long-term contingent earn-out liabilities” on the consolidated balance sheets. We consider several factors when determining that contingent earn-out liabilities are part of the purchase price, including the following: (1) the valuation of our acquisitions is not supported solely by the initial consideration paid, and the contingent earn-out formula is a critical and material component of the valuation approach to determining the purchase price; and (2) the former owners of acquired companies that remain as key employees receive compensation other than contingent earn-out payments at a reasonable level compared with the compensation of our other key employees. The contingent earn-out payments are not affected by employment termination. We measure our contingent earn-out liabilities at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy. We use a probability-weighted discounted income approach as a valuation technique to convert future estimated cash flows to a single present value amount. The significant unobservable inputs used in the fair value measurements are operating income projections over the earn-out period (generally two We review and re-assess the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could differ materially from the initial estimates. Changes in the estimated fair value of our contingent earn-out liabilities related to the time component of the present value calculation are reported in interest expense. Adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in operating income. In each quarter during fiscal 2020, we evaluated our estimates for contingent consideration liabilities for the remaining earn-out periods for each individual acquisition, which included a review of their financial results to-date, the status of ongoing projects in their RUPOs, and the inventory of prospective new contract awards. In addition, we considered the potential impact of the global economic disruption due to the COVID-19 pandemic on our operating income projections over the various earn-out periods. During fiscal 2020, we recorded adjustments to our contingent earn-out liabilities and reported related net gains in operating income of $15.0 million, substantially all in the fourth quarter. These gains primarily resulted from updated valuations of the contingent consideration liabilities for NDY, EGT, and SEG. The acquisition agreement for NDY included a contingent earn-out agreement based on the achievement of operating income thresholds (in Australian dollars) in each of the first three years beginning on the acquisition date, which was in the second quarter of fiscal 2018. The maximum earn-out obligation over the three-year earn-out period was A$25 million (A$7.4 million in year one, and A$8.8 million each in years two and three). These amounts could be earned primarily on a pro-rata basis for operating income within a predetermined range in each year. NDY was required to meet a minimum operating income threshold in each year to earn any contingent consideration. The determination of the fair value of the purchase price for NDY on the acquisition date included our estimate of the fair value of the related contingent earn-out obligation. The initial valuation was primarily based on probability-weighted internal estimates of NDY's operating income during each earn-out period. Based on these estimates, we calculated an initial fair value at the acquisition date of A$9.4 million for NDY's contingent earn-out liability in the second quarter of fiscal 2018. In determining that NDY would earn 38% of the maximum potential earn-out, we considered several factors including NDY's recent historical revenue and operating income levels and growth rates. We also considered the recent trend in NDY's backlog level. NDY's actual financial performance in the first two earn-out periods exceeded our original estimates at the acquisition date. As a result, we increased the related contingent consideration liability and recognized losses of $2.1 million (A$3.0 million) an d $5.4 million (A$7.9 million) in fis cal 2018 and fiscal 2019, respectively. In the fourth quarter of fiscal 2020, we evaluated our estimate of NDY’s contingent consideration liability for the third and final earn-out period. This assessment included a review of NDY’s actual and forecasted results for the third earn-out period, which included an evaluation of the status of ongoing projects in NDY’s backlog, and the inventory of prospective new contract awards and the impact of the COVID-19 pandemic on the Australian economy and NDY's operations. As a result of this assessment, we concluded that NDY’s operating income in the third earn-out period would be lower than previously estimated, and we reduced NDY’s contingent earn-out liability to $1.8 million (A$2.6 million), which resulted in a gain of $3.7 million (A$5.2 million). The acquisition agreement for EGT included a contingent earn-out agreement based on the achievement of operating income thresholds in each of the first three years beginning on the acquisition date, which was in the second quarter of fiscal 2019. The maximum earn-out obligation over the three-year earn-out period was $25 million ($8.5 million in year one, $9.0 million in year two, and $7.5 million in year three). In each of the first two earn-out years, EGT was to receive a portion of the contingent consideration if EGT achieved a minimum operating income threshold. The remaining contingent consideration could be earned primarily on a pro-rata basis for operating income within a predetermined range in each year. EGT was required to meet a minimum operating income threshold in each year to earn any of this contingent consideration. The determination of the fair value of the purchase price for EGT on the acquisition date included our estimate of the fair value of the related contingent earn-out obligation. The initial valuation was primarily based on probability-weighted internal estimates of EGT's operating income during each earn-out period. Based on these estimates, we calculated an initial fair value at the acquisition date of $21.1 million for EGT's contingent earn-out liability in the second quarter of fiscal 2019. In determining that EGT would earn 84% of the maximum potential earn-out, we considered several factors including EGT's recent historical revenue and operating income levels and growth rates. We also considered the recent trend in EGT's backlog level and the prospects for the U.S. federal information technology market. In the third quarter of fiscal 2020, EGT achieved and was paid the maximum earn-out obligation for the first earn-out period. Subsequently, we evaluated our estimate of EGT’s contingent consideration liability for the second and third earn-out periods. This assessment included a review of EGT’s actual and forecasted results for the second and third earn-out periods, which included an evaluation of the status of ongoing projects in EGT’s backlog, and the inventory of prospective new contract awards. As a result of this assessment, we concluded that EGT's operating income in the second and third earn-out period would be lower than previously estimated. Accordingly, in the fourth quarter of fiscal 2020, we reduced EGT’s contingent earn-out liability to $7.5 million, which resulted in a gain of $4.7 million. The acquisition agreement for SEG included a contingent earn-out agreement based on the achievement of operating income thresholds in each of the first three years beginning on the acquisition date, which was in the second quarter of fiscal 2020. The maximum earn-out obligation over the three-year earn-out period was $20 million ($5.0 million, $7.0 million and $8.0 million for years one, two and three, respectively). SEG was to receive a portion of the contingent consideration if SEG achieved a minimum operating income threshold in each year of the earn-out period. The remaining contingent consideration could be earned primarily on a pro-rata basis for operating income within a predetermined range in each year. SEG was required to meet a minimum operating income threshold in each year to earn any of this contingent consideration. The determination of the fair value of the purchase price for SEG on the acquisition date included our estimate of the fair value of the related contingent earn-out obligation. The initial valuation was primarily based on probability-weighted internal estimates of SEG's operating income during each earn-out period. Based on these estimates, we calculated an initial fair value at the acquisition date of $11.3 million for SEG's contingent earn-out liability in the second quarter of fiscal 2020. In determining that SEG would earn 57% of the maximum potential earn-out, we considered several factors including SEG's recent historical revenue and operating income levels and growth rates. We also considered the recent trend in SEG's backlog level and the prospects for the U.S. federal information technology market. SEG’s actual financial performance in the first earn-out period on a year to date basis was below our original expectation at the acquisition date. As a result, in the fourth quarter of fiscal 2020, we evaluated our estimate of SEG’s contingent consideration liability for all earn-out periods. This assessment included a review of SEG’s financial results in the first earn-out period, the status of ongoing projects in SEG’s backlog, the inventory of prospective new contract awards, and future synergies with other Tetra Tech operating units. As a result of this assessment, we concluded that SEG’s operating income in all earn-out periods would be lower than originally anticipated. Accordingly, in the fourth quarter of fiscal 2020, we reduced the SEG contingent earn-out liability to $8.1 million, which resulted in a gain of $3.4 million. In fiscal 2019, we recorded adjustments to our contingent earn-out liabilities and reported a related net loss of $1.1 million in operating income. These adjustments resulted from the updated valuations of the contingent consideration liabilities, which reflect updated projections of acquired companies' financial performance during their respective earn-out periods. In fiscal 2018, we recorded adjustments to our contingent earn-out liabilities and reported related losses in operating income of $4.3 million. These losses resulted from updated valuations of the contingent consideration liabilities for NDY, Eco Logical Australia and Cornerstone Environmental Group, as the actual and expected financial performance during the earn-out periods exceeded our original estimates at the acquisition dates. At September 27, 2020, there was a total potential maximum o f $70.9 million of outstanding contingent consideration related to acquisitions. Of this amount, $32.6 million was estimated as the fair value and a ccrued on our consolidated balance sheet. If the global economic disruption due to the COVID-19 pandemic is prolonged, we could have more significant reductions in our contingent earn-out liabilities and related gains in operating income in future periods. The following table summarizes the changes in the carrying value of estimated contingent earn-out liabilities: Fiscal Year Ended September 27, September 29, September 30, (in thousands) Beginning balance $ 52,992 $ 35,290 $ 2,438 Acquisition date fair value of contingent earn-out liabilities 16,581 27,704 32,210 Change in fair value of contingent earn-out liabilities 1,162 1,489 1,005 Re-measurement of contingent earn-out liabilities (14,971) 1,085 4,252 Foreign exchange impact (247) (558) (854) Earn-out payments: Reported as cash used in operating activities — — (2,349) Reported as cash used in financing activities (22,900) (12,018) (1,412) Ending balance $ 32,617 $ 52,992 $ 35,290 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Sep. 27, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The following table summarizes the changes in the carrying value of goodwill: GSG CIG Total (in thousands) Balance at September 30, 2018 $ 389,741 $ 409,079 $ 798,820 Acquisitions 53,098 93,601 146,699 Impairment — (7,755) (7,755) Translation and other (1,037) (11,907) (12,944) Balance at September 29, 2019 441,802 483,018 924,820 Acquisitions 74,882 5,294 80,176 Impairment — (15,800) (15,800) Translation and other (369) 4,671 4,302 Balance at September 27, 2020 $ 516,315 $ 477,183 $ 993,498 The goodwill additions related to our fiscal 2020 acquisitions of SEG and BWF and adjustments of the final valuations for our fiscal 2019 acquisitions. The purchase price allocations for the SEG and BWF acquisitions are preliminary and subject to adjustment based upon the final determinations of the net assets acquired and information to perform the final valuations. Our goodwill was also impacted by foreign currency translation related to the goodwill balances of our foreign subsidiaries with functional currencies that are different than our reporting currency. We perform our annual goodwill impairment review at the beginning of our fiscal fourth quarter. Our last review at June 29, 2020 (i.e. the first day of our fourth quarter in fiscal 2020), indicated that we had no impairment of goodwill, and all of our reporting units had estimated fair values that were in excess of their carrying values, including goodwill. All of our reporting units had estimated fair values that exceeded their carrying values by more than 80%, with the exception of our Asia/Pacific ("ASP") reporting unit, which is in our CIG reportable segment. Our ASP reporting unit had an estimated fair value that exceeded its carrying value by less than 20%. We also regularly evaluate whether events and circumstances have occurred that may indicate a potential change in the recoverability of goodwill. We perform interim goodwill impairment reviews between our annual reviews if certain events and circumstances have occurred, such as a deterioration in general economic conditions; an increase in the competitive environment; a change in management, key personnel, strategy or customers; negative or declining cash flows; or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods. Although we believe that our estimates of fair value for these reporting units are reasonable, if financial performance for these reporting units falls significantly below our expectations or market prices for similar business decline, the goodwill for these reporting units could become impaired. On September 2, 2020, Australia announced that it had fallen into economic recession, defined as two consecutive quarters of negative growth, for the first time since 1991 including 7% negative growth in the quarter ending in June 2020. This prompted a strategic review of our ASP reporting unit. As a result of the economic recession in Australia, our revenue growth and profit margin forecasts for the ASP reporting unit declined from the previous forecast used for our annual goodwill impairment review as of June 29, 2020. We also performed an interim goodwill impairment review of our ASP reporting unit in September 2020 and recorded a $15.8 million goodwill impairment charge. The impaired goodwill related to our acquisitions of Coffey and NDY. As a result of the impairment charge, the estimated fair value of our ASP reporting unit equaled its carrying value of $144.9 million, including $95.5 million of goodwill, at September 27, 2020. During the fourth quarter of fiscal 2019, we performed an interim goodwill impairment review of our RFS reporting unit and recorded a $7.8 million goodwill impairment charge. As a result of the impairment charge, the estimated fair value of the RFS reporting unit equaled its carrying value of $61 million at September 29, 2019, including the remaining $48.8 million of goodwill. The gross amounts of goodwill for GSG were $534.0 million and $459.5 million at fiscal 2020 and 2019 year-ends, respectively, excluding accumulated impairment of $17.7 million for each period. The gross amounts of goodwill for CIG were $598.7 million and $588.7 million at fiscal 2020 and 2019 year-ends, respectively, excluding accumulated impairment of $121.5 million and $105.7 million, respectively. The following table presents the gross amount and accumulated amortization of our acquired identifiable intangible assets with finite useful lives included in "Intangible assets, net" on the consolidated balance sheets: Fiscal Year Ended September 27, 2020 September 29, 2019 Weighted- Gross Accumulated Gross Accumulated ($ in thousands) Client relations 2.9 $ 60,775 $ (53,392) $ 56,779 $ (50,455) Backlog 0.7 37,682 (32,761) 32,229 (24,968) Technology and trade names 1.8 7,964 (6,325) 7,714 (4,859) Total $ 106,421 $ (92,478) $ 96,722 $ (80,282) Foreign currency translation adjustments reduced net identifiable intangible asse ts by $0.4 million and $0.3 million in fiscal 2020 and 2019, respectively. Amortization expense for the identifiable intangible assets for fiscal 2020, 2019 and 2018 was $11.6 million, $11.6 million and $18.2 million, respectively. Estimated amortization expense for the succeeding four fiscal years is as follows: Amount (in thousands) 2021 $ 8,786 2022 2,652 2023 1,915 2024 590 Total $ 13,943 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Sep. 27, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consisted of the following: Fiscal Year Ended September 27, September 29, (in thousands) Equipment, furniture and fixtures $ 90,942 $ 114,652 Leasehold improvements 34,382 34,881 Land and buildings 187 371 Total property and equipment 125,511 149,904 Accumulated depreciation (90,004) (110,463) Property and equipment, net $ 35,507 $ 39,441 The depreciation expense related to property and equipment w as $13.0 million, $17.3 million and $19.6 million for fiscal 2020, 2019 and 2018, respectively. As of September 29, 2019, we classified $5.4 million of net assets related to the disposal of our Canadian turn-key pipeline activities as held-for-sale, and reported them as "Prepaid expense s and other current |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 27, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income before income taxes, by geographic area, was as follows: Fiscal Year Ended September 27, September 29, September 30, (in thousands) Income before income taxes: United States $ 209,443 $ 185,535 $ 180,034 Foreign 18,548 (10,399) (5,472) Total income before income taxes $ 227,991 $ 175,136 $ 174,562 Income tax expense consisted of the following: Fiscal Year Ended September 27, September 29, September 30, (in thousands) Current: Federal $ 24,102 $ 30,051 $ 46,840 State 6,872 8,923 9,228 Foreign 20,398 15,016 10,897 Total current income tax expense 51,372 53,990 66,965 Deferred: Federal 2,187 (9,108) (22,072) State 870 (1,195) (1,471) Foreign (328) (27,312) (5,817) Total deferred income tax expense 2,729 (37,615) (29,360) Total income tax expense $ 54,101 $ 16,375 $ 37,605 Total income tax expense was different from the amount computed by applying the U.S. federal statutory rate to pre-tax income as follows: Fiscal Year Ended September 27, September 29, September 30, Tax at federal statutory rate 21.0% 21.0% 24.5% State taxes, net of federal benefit 2.7 3.4 4.2 Research and Development ("R&D") credits (2.2) (4.7) (1.4) Domestic production deduction — — (0.2) Tax differential on foreign earnings 0.7 1.0 0.5 Non-taxable foreign interest income (1.1) (1.7) (2.0) Goodwill 1.5 0.9 1.7 Stock compensation (2.2) (2.4) (2.7) Valuation allowance 1.6 (13.5) (0.5) Change in uncertain tax positions 0.4 2.4 1.9 Revaluation of deferred taxes — (1.4) (8.4) Deferred tax adjustments (1.3) (0.4) 2.1 Transition tax on foreign earnings — 1.4 — Other 2.6 3.3 1.8 Total income tax expense 23.7% 9.3% 21.5% The effective tax rates for fiscal 2020, 2019 and 2018 were 23.7%, 9.3% and 21.5%, respectively. The goodwill impairment charges in fiscal 2020 and fiscal 2019 and certain of the transaction charges in fiscal 2019 did not have related tax benefits. Income tax expense was reduced by $8.3 million, $6.4 million, $5.1 million of excess tax benefits on share-based payments in fiscal 2020, 2019, and 2018, respectively. Additionally, we analyzed our deferred tax liabilities for the Tax Cuts and Jobs Act's ("TCJA's") lower tax rates and recorded a deferred tax benefit of $2.6 million and $10.1 million in fiscal 2019 and fiscal 2018, respectively . Also, valuation allowances of $22.3 million in Australia were released due to sufficient positive evidence obtained during the second quarter of fiscal 2019. The valuation allowances were primarily related to net operating loss and research and development credit carryforwards and other temporary differences. We evaluated the positive evidence against any negative evidence and determined that it was more likely than not that the deferred tax assets would be realized. The factors used to assess the likelihood of realization were the past performance of the related entities, our forecast of future taxable income, and available tax planning strategies that could be implemented to realize the deferred tax assets. Excluding the impact of the non-deductible goodwill impairment charges and transaction costs, the excess tax benefits on share-based payments, the net deferred tax benefits from the TCJA, and the valuation allowance release, our effective tax rates in fiscal 2020, 2019, and 2018 were 25.6%, 24.6%, and 30.3% respectively. We are currently under examination by the Internal Revenue Service for fiscal year 2018, the Canada Revenue Agency for fiscal years 2011 through 2016, and the California Franchise Tax Board for fiscal years 2014 through 2016. We are also subject to various other state audits. Temporary differences comprising the net deferred income tax asset shown on the accompanying consolidated balance sheets were as follows: Fiscal Year Ended September 27, September 29, (in thousands) Deferred Tax Assets: State taxes $ 1,146 $ 764 Reserves and contingent liabilities 6,262 5,500 Allowance for doubtful accounts 6,283 7,506 Accrued liabilities 28,223 28,232 Lease liabilities, operating leases 66,941 — Stock-based compensation 5,905 6,700 Loss carry-forwards 43,475 39,782 Valuation allowance (24,395) (20,543) Total deferred tax assets 133,840 67,941 Deferred Tax Liabilities: Unbilled revenue (14,451) (21,886) Prepaid expense (5,967) (3,026) Right-of-use assets, operating leases (66,941) — Intangibles (29,130) (26,482) Property and equipment (1,615) (1,133) Total deferred tax liabilities (118,104) (52,527) Net deferred tax assets $ 15,736 $ 15,414 At September 27, 2020, undistributed earnings of our foreign subsidiaries, primarily in Canada, amounting to approximately $66.9 million are expected to be permanently reinvested. Accordingly, no provision for foreign withholding taxes has been made. Upon distribution of those earnings, we would be subject to foreign withholding taxes. Assuming the permanently reinvested foreign earnings were repatriated under the laws and rates applicable at September 27, 2020, the incremental foreign withholding taxes applicable to those earnings would be approximately $2.0 million. At September 27, 2020, we had available unused state net operating loss ("NOL") carry forwards of $43.7 million that expire at various dates from 2024 to 2037; and available foreign NOL carry forwards of $138.4 million, of which $31.6 million expire at various dates from 2024 to 2040, and $106.8 million have no expiration date. In addition, we had foreign capital loss carryforwards of $13.8 million and foreign research and development credits of $4.3 million that do not have expiration dates. We have performed an assessment of positive and negative evidence regarding the realization of the deferred tax assets. This assessment included the evaluation of scheduled reversals of deferred tax liabilities, availability of carrybacks, cumulative losses in recent years, estimates of projected future taxable income, and tax planning strategies. Although realization is not assured, based on our assessment, we have concluded that it is more likely than not that the assets will be realized except for the assets related to the loss carry-forwards and certain foreign intangibles for which a valuation allowance of $24.4 million has been provided. At September 27, 2020, we had $9.2 million of unrecognized tax benefits, all of which, if recognized, would affect our effective tax rate. It is reasonably possible that the amount of the unrecognized tax benefits with respect to certain of our unrecognized tax positions may significantly decrease in the next 12 months. These changes would be the result of ongoing examinations. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Fiscal Year Ended September 27, September 29, September 30, (in thousands) Beginning balance $ 9,169 $ 8,328 $ 9,337 Additions for current year tax positions 700 1,342 1,928 Additions for prior year tax positions — 356 1,116 Reductions for prior year tax positions (641) (100) — Settlements — (757) (4,053) Ending balance $ 9,228 $ 9,169 $ 8,328 We recognize potential interest and penalties related to unrecognized tax benefits in income tax expense. During fiscal years 2020, 2019 and 2018, we accrued additional interest and penalties of $0.8 million, $2.6 million and $0.6 million, respectively, and recorded reductions in accrued interest and penalties of $0, $0.2 million and $0.3 million, respectively, as a result of audit settlements and other prior-year adjustments. The amount of interest and penalties accrued at September 27, 2020, September 29, 2019 and September 30, 2018 was $4.4 million, $3.6 million and $1.2 million, respectively. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Sep. 27, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following: Fiscal Year Ended September 27, September 29, (in thousands) Credit facilities $ 291,659 $ 276,434 Less: Current portion of long-term debt and other short-term borrowings (49,264) (12,500) Long-term debt, less current portion and other short-term borrowings $ 242,395 $ 263,934 On July 30, 2018, we entered into a Second Amended and Restated Credit Agreement (“Amended Credit Agreement”) with a total borrowing capacity of $1 billion that will mature in July 2023. The Amended Credit Agreement is a $700 million senior secured, five-year facility that provides for a $250 million term loan facility (the “Amended Term Loan Facility”), a $450 million revolving credit facility (the “Amended Revolving Credit Facility”), and a $300 million accordion feature that allows us to increase the Amended Credit Agreement to $1 billion subject to lender approval. The Amended Credit Agreement allows us to, among other things, (i) refinance indebtedness under our Credit Agreement dated as of May 7, 2013; (ii) finance certain permitted open market repurchases of our common stock, permitted acquisitions, and cash dividends and distributions; and (iii) utilize the proceeds for working capital, capital expenditures and other general corporate purposes. The Amended Revolving Credit Facility includes a $100 million sublimit for the issuance of standby letters of credit, a $20 million sublimit for swingline loans, and a $200 million sublimit for multicurrency borrowings and letters of credit. The entire Amended Term Loan Facility was drawn on July 30, 2018. The Amended Term Loan Facility is subject to quarterly amortization of principal at 5% annually beginning December 31, 2018. We may borrow on the Amended Revolving Credit Facility, at our option, at either (a) a Eurocurrency rate plus a margin that ranges from 1.00% to 1.75% per annum, or (b) a base rate for loans in U.S. dollars (the highest of the U.S. federal funds rate plus 0.50% per annum, the bank’s prime rate or the Eurocurrency rate plus 1.00%) plus a margin that ranges from 0% to 0.75% per annum. In each case, the applicable margin is based on our Consolidated Leverage Ratio, calculated quarterly. The Amended Term Loan Facility is subject to the same interest rate provisions. The Amended Credit Agreement expires on July 30, 2023, or earlier at our discretion upon payment in full of loans and other obligations. At September 27, 2020, we had $254.9 million in outstanding borrowings under the Amended Credit Agreement, which was comprised of $228.1 million under the Amended Term Loan Facility and $26.8 million outstanding under the Amended Revolving Credit Facility at a year-to-date weighted-average interest rate of 2.31% per annum. In addition, we had $0.7 million in standby letters of credit under the Amended Credit Agreement. Our average effective weighted-average interest rate on borrowings outstanding during the year-to-date period ended September 27, 2020 under the Amended Credit Agreement, including the effects of interest rate swap agreements described in Note 14, "Derivative Financial Instruments", was 3.52%. At September 27, 2020, we had $422.4 million of available credit under the Amended Revolving Credit Facility, all of which could be borrowed without a violation of our debt covenants. The Amended Credit Agreement contains certain affirmative and restrictive covenants, and customary events of default. The financial covenants provide for a maximum Consolidated Leverage Ratio of 3.00 to 1.00 (total funded debt/EBITDA, as defined in the Amended Credit Agreement) and a minimum Consolidated Interest Coverage Ratio of 3.00 to 1.00 (EBITDA/Consolidated Interest Charges, as defined in the Amended Credit Agreement). Our obligations under the Amended Credit Agreement are guaranteed by certain of our domestic subsidiaries and are secured by first priority liens on (i) the equity interests of certain of our subsidiaries, including those subsidiaries that are guarantors or borrowers under the Amended Credit Agreement, and (ii) the accounts receivable, general intangibles and intercompany loans, and those of our subsidiaries that are guarantors or borrowers. At September 27, 2020, we were in compliance with these covenants with a consolidated leverage ratio of 1.10x and a consolidated interest coverage ratio of 19.76x. In addition to the Amended Credit Agreement, we maintain other credit facilities, which may be used for bank overdrafts, short-term cash advances and bank guarantees. At September 27, 2020, th ere was $36.6 million outstanding under these facilities and the aggregate amount of standby letters of credit outstanding was $69.7 million. As of September 27, 2020, we had bank overdrafts of $33.6 million related to our U.S. disbursement bank accounts. This balance is reported in the "Current portion of long-term debt and other short-term borrowings" within our fiscal 2020 year-end consolidated balance sheet. The change in bank overdraft balance is classified as cash flows from financing activities within our consolidated statements of cash flows as we believe these overdrafts to be a form of short-term financing from the bank due to our ability to fund the overdraft with the $50.0 million overdraft protection on the bank accounts or our other credit facilities if needed. The following table presents scheduled maturities of our long-term debt: Amount (in thousands) 2021 49,264 2022 15,625 2023 226,770 Total $ 291,659 |
Leases
Leases | 12 Months Ended |
Sep. 27, 2020 | |
Leases [Abstract] | |
Leases | Leases In February 2016, the FASB issued Leases (Topic 842), which is a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of ROU assets obtained in exchange for lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We elected to adopt the standard, and available practical expedients, effective September 30, 2019 (the first day of our fiscal 2020). These practical expedients allowed us to keep the lease classification assessed under the previous lease accounting standard (ASC 840) without reassessment under the new standard, and allowed all separate lease components, including non-lease components, to be accounted for as a single lease component for all existing leases prior to adoption of the new standard. We adopted this new standard under the modified retrospective transition approach without adjusting comparative periods in the financial statements, as allowed under Leases (Topic 842), and implemented internal controls and key system functionality to enable the preparation of financial information on adoption. The standard had a material impact on our consolidated balance sheets but did not have an impact on the consolidated income statements. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while accounting for finance leases remained substantially unchanged. Our finance leases are primarily for certain IT equipment and the related ROU and lease liabilities were immaterial, and included in "Other current liabilities" and "Other long-term liabilities" accordingly in the consolidated balance sheet at September 27, 2020 . We determine if an arrangement is a lease at inception. Operating leases are included in operating lease ROU assets and current and long-term operating lease liabilities in the consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, incremental borrowing rates are used based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Our operating leases are primarily for corporate and project office spaces. To a much lesser extent, we have operating leases for vehicles and equipment. Our operating leases have remaining lease terms of one month to twelve years, some of which may include options to extend the leases for up to five years. The components of lease costs for the fiscal year ended September 27, 2020 are as follows: Fiscal Year Ended (in thousands) Operating lease cost $ 87,348 Sublease income (2,216) Other 72 Total lease cost $ 85,204 Supplemental cash flow information related to leases for fiscal 2020 is as follows: Amount (in thousands) Operating cash flows for operating leases $ 80,289 Right-of-use assets obtained in exchange for new operating lease liabilities $ 317,587 Supplemental balance sheet and other information related to leases as of September 27, 2020 are as follows: Amount (in thousands) Operating leases: Right-of-use assets $ 239,396 Lease liabilities: Current $ 69,650 Long-term 191,955 Total operating lease liabilities $ 261,605 Weighted-average remaining lease term: Operating leases 5 years Weighted-average discount rate: Operating leases 2.5 % As of September 27, 2020 , we have no material additional operating leases that have not yet commenced. A maturity analysis of the future undiscounted cash flows associated with our operating lease liabilities as of September 27, 2020 is as follows: Amount (in thousands) 2021 $ 75,074 2022 64,972 2023 44,733 2024 30,991 2025 21,466 Beyond 44,169 Total lease payments 281,405 Less: imputed interest (19,800) Total present value of lease liabilities $ 261,605 As of September 29, 2019, $343.5 million of minimum rental commitments on operating leases was payable as follows: $108.8 million in fiscal 2020, $66.4 million in fiscal 2021, $51.4 million in fiscal 2022, $36.5 million in fiscal 2023, $25.8 million in fiscal 2024, and $54.6 million thereafter. Rental expense for fiscal 2019 was $79.3 million. |
Leases | Leases In February 2016, the FASB issued Leases (Topic 842), which is a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of ROU assets obtained in exchange for lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We elected to adopt the standard, and available practical expedients, effective September 30, 2019 (the first day of our fiscal 2020). These practical expedients allowed us to keep the lease classification assessed under the previous lease accounting standard (ASC 840) without reassessment under the new standard, and allowed all separate lease components, including non-lease components, to be accounted for as a single lease component for all existing leases prior to adoption of the new standard. We adopted this new standard under the modified retrospective transition approach without adjusting comparative periods in the financial statements, as allowed under Leases (Topic 842), and implemented internal controls and key system functionality to enable the preparation of financial information on adoption. The standard had a material impact on our consolidated balance sheets but did not have an impact on the consolidated income statements. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while accounting for finance leases remained substantially unchanged. Our finance leases are primarily for certain IT equipment and the related ROU and lease liabilities were immaterial, and included in "Other current liabilities" and "Other long-term liabilities" accordingly in the consolidated balance sheet at September 27, 2020 . We determine if an arrangement is a lease at inception. Operating leases are included in operating lease ROU assets and current and long-term operating lease liabilities in the consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, incremental borrowing rates are used based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Our operating leases are primarily for corporate and project office spaces. To a much lesser extent, we have operating leases for vehicles and equipment. Our operating leases have remaining lease terms of one month to twelve years, some of which may include options to extend the leases for up to five years. The components of lease costs for the fiscal year ended September 27, 2020 are as follows: Fiscal Year Ended (in thousands) Operating lease cost $ 87,348 Sublease income (2,216) Other 72 Total lease cost $ 85,204 Supplemental cash flow information related to leases for fiscal 2020 is as follows: Amount (in thousands) Operating cash flows for operating leases $ 80,289 Right-of-use assets obtained in exchange for new operating lease liabilities $ 317,587 Supplemental balance sheet and other information related to leases as of September 27, 2020 are as follows: Amount (in thousands) Operating leases: Right-of-use assets $ 239,396 Lease liabilities: Current $ 69,650 Long-term 191,955 Total operating lease liabilities $ 261,605 Weighted-average remaining lease term: Operating leases 5 years Weighted-average discount rate: Operating leases 2.5 % As of September 27, 2020 , we have no material additional operating leases that have not yet commenced. A maturity analysis of the future undiscounted cash flows associated with our operating lease liabilities as of September 27, 2020 is as follows: Amount (in thousands) 2021 $ 75,074 2022 64,972 2023 44,733 2024 30,991 2025 21,466 Beyond 44,169 Total lease payments 281,405 Less: imputed interest (19,800) Total present value of lease liabilities $ 261,605 As of September 29, 2019, $343.5 million of minimum rental commitments on operating leases was payable as follows: $108.8 million in fiscal 2020, $66.4 million in fiscal 2021, $51.4 million in fiscal 2022, $36.5 million in fiscal 2023, $25.8 million in fiscal 2024, and $54.6 million thereafter. Rental expense for fiscal 2019 was $79.3 million. |
Stockholders' Equity and Stock
Stockholders' Equity and Stock Compensation Plans | 12 Months Ended |
Sep. 27, 2020 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity and Stock Compensation Plans | Stockholders' Equity and Stock Compensation Plans At September 27, 2020, we had the following stock-based compensation plans: • Employee Stock Purchase Plan ("ESPP"). Purchase rights to purchase common stock are granted to our eligible full and part-time employees, and shares of common stock are issued upon exercise of the purchase rights. An aggregate of 611,265 shares may be issued pursuant to such exercise. The maximum amount that an employee can contribute during a purchase right period is $5,000. The exercise price of a purchase right is the lesser of 100% of the fair market value of a share of common stock on the first day of the purchase right period (the business day preceding January 1) or 85% of the fair market value on the last day of the purchase right period (December 15, or the business day preceding December 15 if December 15 is not a business day). • 2005 Equity Incentive Plan. Key employees and non-employee directors may be granted equity awards, including stock options, restricted stock and restricted stock units ("RSUs"). Options granted before March 6, 2006 vested at 25% on the first anniversary of the grant date, and the balance vests monthly thereafter, such that these options become fully vested no later than four years from the date of grant. These options expire no later than ten years from the date of grant. Options granted on and after March 6, 2006 vest at 25% on each anniversary of the grant date. These options expire no later than eight years from the grant date. RSUs granted to date vest at 25% on each anniversary of the grant date. • 2015 Equity Incentive Plan ("2015 EIP"). Key employees and non-employee directors may be granted equity awards, including stock options, performance share units ("PSUs") and RSUs. Shares issued with respect to awards granted under the 2015 EIP other than stock options or stock appreciation rights, which are referred to as "full value awards", are counted against the 2015 EIP's aggregate share limit as three shares for every share or unit actually issued. No awards have been made under the 2015 Equity Incentive Plan since the adoption of the 2018 Equity Incentive Plan on March 8, 2018 described below. • 2018 Equity Incentive Plan ("2018 EIP") . Key employees and non-employee directors may be granted equity awards, including stock options, PSUs and RSUs. Shares issued with respect to awards granted under the 2018 EIP other than stock options or stock appreciation rights, which are referred to as "full value awards", are counted against the 2018 EIP's aggregate share limit as one share for every share or unit issued. At September 27, 2020, there were 2.5 million shares available for future awards pursuant to the 2018 EIP. The following table presents our stock-based compensation and related income tax benefits: Fiscal Year Ended September 27, September 29, September 30, (in thousands) Total stock-based compensation $ 19,424 $ 17,618 $ 19,582 Income tax benefit related to stock-based compensation (4,318) (4,016) (5,288) Stock-based compensation, net of tax benefit $ 15,106 $ 13,602 $ 14,294 Stock Options The following table presents our stock option activity for fiscal year ended September 27, 2020: Number of Weighted- Weighted- Aggregate Outstanding on September 29, 2019 894 $ 33.28 Exercised (355) 28.63 Forfeited — — Outstanding at September 27, 2020 539 36.34 5.04 $ 29,623 Vested or expected to vest at September 27, 2020 539 36.34 5.04 29,623 Exercisable on September 27, 2020 437 34.17 4.62 24,932 The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between our closing stock price on the last trading day of fiscal 2020 and the exercise price, times the number of shares) t hat would have been received by the in-the-money option holders if they had exercised their options on September 27, 2020. This amount will change based on the fair market value of our stock. At September 27, 2020, we expect to recognize $0.7 million of unrecognized compensation cost related to stock option grants over a weighted-average period of one year. No stock options were granted in fiscal 2019 and fiscal 2020. The weighted-average fair value of stock options granted during fiscal 2018 was $14.82. The aggregate intrinsic value of options exercised during fiscal 2020, 2019 and 2018 was $22.4 million, $20.4 million and $14.4 million, respectively. The fair value of our stock options was estimated on the date of grant using the Black-Scholes option pricing model. There were no options granted in fiscal 2020 and 2019. The following assumptions were used in the calculation for fiscal 2018: Fiscal Year Ended September 30, Dividend yield 1.0% Expected stock price volatility 36.1% - 38.8% Risk-free rate of return, annual 1.7% - 2.9% For purposes of the Black-Scholes model, forfeitures were estimated based on historical experience. For the fiscal 2018 year-end, we based our expected stock price volatility on historical volatility behavior and current implied volatility behavior. Our risk-free rate of return was based on constant maturity rates provided by the U.S. Treasury. The expected life was based on historical experience. Net cash proceeds from the exercise of stock op tions were $10.3 million, $11.8 million and $13.5 million for fiscal 2020, 2019 and 2018, respectively. Our policy is to issue shares from our authorized shares upon the exercise of stock options. The actual income tax benefit realized from exercises of nonqualified stock options and disqualifying dispositions of qualified options for fiscal 2020, 2019 and 2018 was $8.3 million, $6.4 million and $5.1 million, respectiv ely. RSU and PSU RSU awards are granted to our key employee and non-employee directors. The fair value of the RSU was determined at the date of grant using the market price of the underlying common stock as of the date of grant. All of the RSUs have time-based vesting over a four-year period, except that RSUs awarded to directors vest after one year. The total compensation cost of the awards is then amortized over their applicable vesting period on a straight-line basis. PSU awards are granted to our executive officers and non-employee directors. All of the PSUs are performance-based and vest, if at all, after the conclusion of the three-year performance period. The number of PSUs that ultimately vest is based on 50% growth in our EPS and 50% on our relative total shareholder return over the vesting period. For these performance-based awards, our expected performance is reviewed to estimate the percentage of shares that will vest. The total compensation cost of the awards is then amortized over their applicable vesting period on a straight-line basis. A summary of the RSU and PSU activity under our stock plans is as follows: RSU PSU Number of Weighted- Number of Weighted- Nonvested balance at October 1, 2017 511 $ 33.19 376 $ 36.05 Granted 199 48.16 99 57.40 Vested (184) 31.85 (270) 31.66 Adjustment (1) — — 131 31.66 Forfeited (38) 36.39 (13) 41.80 Nonvested balance at September 30, 2018 488 39.56 323 44.27 Granted 179 66.26 90 80.41 Vested (180) 36.95 (108) 31.63 Adjustment (1) — — 79 31.63 Forfeited (17) 48.56 — — Nonvested balance at September 29, 2019 470 50.42 384 53.67 Granted 168 83.92 74 99.85 Vested (178) 46.87 (162) 47.28 Adjustment (1) — — 64 48.36 Forfeited (16) 65.43 (5) 83.98 Nonvested balance at September 27, 2020 444 63.93 355 64.83 (1) For fiscal 2018, includes a payout adjustment of 130,730 PSUs due to the actual performance level achieved for PSUs granted in fiscal 2015 that vested fiscal 2018. For fiscal 2019, includes a payout a djustment of 79,465 PSUs due to the actual performance level achieved for PSUs granted in fiscal 2016 that vested during fiscal 2019. For fiscal 2020 includes a payout adjustment of 63,643 PSUs due to the actual performance level achieved for PSUs granted in fiscal 2017 that vested during fiscal 2020. During fiscal 2020, 2019 and 2018, we awarded 167,525, 179,478 and 198,960 shares of RSUs, respectively, to our key employees and non-employee directors. The weighted-average grant-date fair value of RSUs granted during fiscal 2020, 2019 and 2018 was $83.92, $66.26 and $48.16, respectively. At September 27, 2020, there were 443,504 RSUs outstanding. RSU forfeitures result from employment terminations prior to vesting. Forfeited shares return to the pool of authorized shares available for award. During fiscal 2020, 2019 and 2018, we awarded 74,011, 89,816 and 99,217 shares of PSUs, respectively, to our executive officers and non-employee directors. The weighted-average grant-date fair value of PSUs granted during fiscal 2020, 2019 and 2018 was $99.85, $80.41 and $57.40, respectively. The stock-based compensation expense related to RSUs and PSUs for fiscal 2020, 2019 and 2018 was $17.7 million, $15.4 million and $15.5 million, respectively, and was included in total stock-based compensation expense. At September 27, 2020, there was $27.7 million of unrecognized stock-based compensation costs related to nonvested RSUs and PSUs that will be substantially recognized by the end of fiscal 2022. ESPP The following table summarizes shares purchased, weighted-average purchase price, and cash received for shares purchased under the ESPP: Fiscal Year Ended September 27, September 29, September 30, (in thousands, except for purchase price) Shares purchased 168 148 141 Weighted-average purchase price per share $ 51.77 $ 46.38 $ 40.38 Cash received from exercise of purchase rights $ 8,715 $ 6,844 $ 5,727 The grant date fair value of each award granted under the ESPP was estimated using the Black-Scholes option pricing model with the following assumptions: Fiscal Year Ended September 27, September 29, September 30, Dividend yield 1.0% 1.0% 1.0% Expected stock price volatility 26.5% 26.7% 24.0% Risk-free rate of return, annual 1.6% 2.6% 1.8% Expected life (in years) 1 1 1 For fiscal 2020, 2019 and 2018, we based our expected stock price volatility on historical volatility behavior and current implied volatility behavior. The risk-free rate of return was based on constant maturity rates provided by the U.S. Treasury. The expected life was based on the ESPP terms and conditions. Stock-based compensation expense for fiscal 2020, 2019 and 2018 included $1.2 million, $0.9 million and $0.6 million, respectively, related to the ESPP. The unrecognized stock-based compensation costs for awards granted under the ESPP at fiscal 2020 and 2019 year-ends were $0.3 million and $0.2 million, respectively. At September 27, 2020, ESPP participants had accumulated $8.5 million to purchase our common stock. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Sep. 27, 2020 | |
Retirement Benefits [Abstract] | |
Retirement Plans | Retirement Plans We have defined contribution plans in various countries where we have employees. This primarily includes 401(k) plans in the United States. For fiscal 2020, 2019 and 2018, employer contributions to the U.S. plans were $25.0 million, $23.3 million and $22.4 million, respectively. Additionally, we have established a non-qualified deferred compensation plan for certain key employees and non-employee directors. These eligible employees and non-employee directors may elect to defer the receipt of salary, incentive payments, restricted stock, PSU and RSU awards, and non-employee director fees. The plan is accounted for in accordance with applicable authoritative guidance on accounting for deferred compensation arrangements where amounts earned are held in a rabbi trust and invested. Employee deferrals are deposited into a rabbi trust, and the funds are generally invested in individual variable life insurance contracts that we own and are specifically designed to informally fund savings plans of this nature. At September 27, 2020 and September 29, 2019, the consolidated balance sheets reflect assets of $35.1 million and $30.4 million, respectively, related to the deferred compensation plan in "Other long-term assets," and liabilities of $35.0 million and $29.5 million, respectively, related to the deferred compensation plan in "Other long-term liabilities." The net gains and losses related to the deferred compensation plan are reported as part of “Selling, general and administrative expenses” in our consolidated statements of income |
Earnings per Share
Earnings per Share | 12 Months Ended |
Sep. 27, 2020 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The following table sets forth the number of weighted-average shares used to compute basic and diluted EPS: Fiscal Year Ended September 27, September 29, September 30, (in thousands, except per share data) Net income attributable to Tetra Tech $ 173,859 $ 158,668 $ 136,883 Weighted-average common shares outstanding – basic 54,235 54,986 55,670 Effect of diluted stock options and unvested restricted stock 787 950 928 Weighted-average common stock outstanding – diluted 55,022 55,936 56,598 Earnings per share attributable to Tetra Tech: Basic $ 3.21 $ 2.89 $ 2.46 Diluted $ 3.16 $ 2.84 $ 2.42 For fiscal 2020 and 2019, no options were excluded from the calculation of dilutive potential common shares. For fiscal 2018, 0.1 million options were ex cluded from the calculation of dilutive potential common shares. These options were not included in the computation of dilutive potential comm on shares because the assumed proceeds per share exceeded the average market price per share for that period. Therefore, their inclusion would have been anti-dilutive. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Sep. 27, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments We often use certain interest rate derivative contracts to hedge interest rate exposures on our variable rate debt. Also, we may enter into foreign currency derivative contracts with financial institutions to reduce the risk that cash flows and earnings could adversely be affected by foreign currency exchange rate fluctuations. Our hedging program is not designated for trading or speculative purposes. We recognize derivative instruments as either assets or liabilities on the accompanying consolidated balance sheets at fair value. We record changes in the fair value (i.e., gains or losses) of the derivatives that have been designated as cash flow hedges in our consolidated balance sheets as accumulated other comprehensive income, and in our consolidated statements of income for those derivatives designated as fair value hedges. In fiscal 2018, we entered into five interest rate swap agreements that we designated as cash flow hedges to fix the interest rates on the borrowings under our term loan facility. As of September 27, 2020, the notional principal of our outstanding interest swap agreements was $228.1 million ($45.6 million each.) The interest rate swaps have a fixed interest rate of 2.79% and expire in July 2023 for all five agreements. At September 27, 2020 and September 29, 2019, the fair value of the effective portion of our interest rate swap agreements designated as cash flow hedges before tax effect was $(15.5) million and $(10.9) million, respectively, of which we expect to reclassify $5.8 million from accumulated other comprehensive loss to interest expense within the next 12 months. The fair values of our outstanding derivatives designated as hedging instruments were as follows: Fair Value of Derivative Balance Sheet Location September 27, September 29, (in thousands) Interest rate swap agreements Other current liabilities $ 15,512 $ 11,009 Changes in the fair value of the interest rate swap agreements are presented on the consolidated statements of comprehensive income as follows: Fiscal Year Ended September 27, 2020 September 29, 2019 September 30, 2018 (in thousands) (Loss) gain recognized in other comprehensive income, net of tax Interest rate swap agreements (4,638) (12,125) 806 There were no ineffective portions of derivative instruments. Accordingly, no amounts were excluded from effectiveness testing for our interest rate swap agreements. We had no other derivative instruments that were not designated as hedging instruments for fiscal 2020, 2019 and 2018. |
Reclassifications Out of Accumu
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Sep. 27, 2020 | |
Equity [Abstract] | |
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | Reclassifications Out of Accumulated Other Comprehensive Income (Loss) The accumulated balances and reporting period activities for fiscal 2020 and 2019 related to reclassifications out of accumulated other comprehensive income are summarized as follows: Foreign Gain (Loss) Accumulated (in thousands) Balances at September 30, 2018 $ (128,602) $ 1,252 $ (127,350) Other comprehensive loss before reclassifications (21,109) (11,247) (32,356) Amounts reclassified from accumulated other comprehensive income Interest rate contracts, net of tax (1) — (878) (878) Net current-period other comprehensive loss (21,109) (12,125) (33,234) Balances at September 29, 2019 $ (149,711) $ (10,873) $ (160,584) Other comprehensive income before reclassifications 3,436 (599) 2,837 Amounts reclassified from accumulated other comprehensive income Interest rate contracts, net of tax (1) — (4,039) (4,039) Net current-period other comprehensive income (loss) 3,436 (4,638) (1,202) Balances at September 27, 2020 $ (146,275) $ (15,511) $ (161,786) (1) This accumulated other comprehensive component is reclassified to "Interest expense" in our consolidated statements of income. See Note 14, "Derivative Financial Instruments", for more information. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Sep. 27, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Derivative Instruments. For additional information about our derivative financial instruments (see Note 2, "Basis of Presentation and Preparation" and Note 14, "Derivative Financial Instruments"). Contingent Consideration. We measure our contingent earn-out liabilities at fair value on a recurring basis (see Note 2, "Basis of Presentation and Preparation" and Note 5, "Acquisitions and Divestitures" for further information). Debt. The fair value of long-term debt was determined using the present value of future cash flows based on the borrowing rates currently available for debt with similar terms and maturities (Level 2 measurement). The carrying value of our long-term debt approximated fair value at September 27, 2020 and September 29, 2019. At September 27, 2020, we had borrowings of $254.9 million outstanding under our Amended Credit Agreement, which were used to fund our business acquisitions, working capital needs, stock repurchases, dividends, capital expenditures and contingent earn-outs. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 27, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We are subject to certain claims and lawsuits typically filed against the consulting and engineering profession, alleging primarily professional errors or omissions. We carry professional liability insurance, subject to certain deductibles and policy limits, against such claims. However, in some actions, parties are seeking damages that exceed our insurance coverage or for which we are not insured. While management does not believe that the resolution of these claims will have a material adverse effect, individually or in aggregate, on our financial position, results of operations or cash flows, management acknowledges the uncertainty surrounding the ultimate resolution of these matters. On July 15, 2019, following an initial January 14, 2019 filing, the Civil Division of the United States Attorney's Office filed an amended complaint in intervention in three qui tam actions filed against our subsidiary, Tetra Tech EC, Inc. ("TtEC"), in the U.S. District Court for the Northern District of California. The complaint alleges False Claims Act violations and breach of contract related to TtEC's contracts to perform environmental remediation services at the former Hunters Point Naval Shipyard in San Francisco, California. TtEC disputes the claims and will defend this matter vigorously. We are currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any. |
Reportable Segments
Reportable Segments | 12 Months Ended |
Sep. 27, 2020 | |
Segment Reporting [Abstract] | |
Reportable Segments | Reportable Segments We managed ou r operations under two reportable segments. Our GSG reportable segment primarily includes activities with U.S. government clients (federal, state and local) and all activities with development agencies worldwide. Our CIG reportable segment primarily includes activities with U.S. commercial clients and international clients other than development agencies. Additionally, we continue to report the results of the wind-down of our non-core construction activities in the RCM reportable segment. Our reportable segments are described as follows: GSG: GSG provides consulting and engineering services primarily to U.S. government clients (federal, state and local) and development agencies worldwide. GSG supports U.S. government civilian and defense agencies with services in water, environment, sustainable infrastructure, information technology, and disaster management. GSG also provides engineering design services for U.S. municipal and commercial clients, especially in water infrastructure, solid waste, and high-end sustainable infrastructure designs. GSG also leads our support for development agencies worldwide, especially in the United States, United Kingdom, and Australia. CIG: CIG primarily provides consulting and engineering services to U.S. commercial clients, and international clients that include both commercial and government sectors. CIG supports commercial clients across the Fortune 500, energy utilities, industrial, manufacturing, aerospace, and resource management markets. CIG also provides infrastructure and related environmental, engineering and project management services to commercial and local government clients across Canada, in Asia Pacific (primarily Australia and New Zealand), the United Kingdom, as well as Brazil and Chile. RCM: We continued to report the results of the wind-down of our non-core construction activities in the RCM reportable segment for fiscal 2020. As of September 27, 2020, there was no remaining backlog for RCM as the projects were complete. Management evaluates the performance of these reportable segments based upon their respective segment operating income before the effect of amortization expense related to acquisitions, and other unallocated corporate expenses. We account for inter-segment revenues and transfers as if they were to third parties; that is, by applying a negotiated fee onto the costs of the services performed. All significant intercompany balances and transactions are eliminated in consolidation. The following tables present summarized financial information of our reportable segments: Reportable Segments Fiscal Year Ended September 27, September 29, September 30, 2018 (in thousands) Revenue GSG $ 1,778,922 $ 1,820,671 $ 1,694,871 CIG 1,266,059 1,342,509 1,323,142 RCM 198 (1,542) 14,199 Elimination of inter-segment revenue (50,288) (54,290) (68,064) Total revenue $ 2,994,891 $ 3,107,348 $ 2,964,148 Income from operations GSG $ 168,669 $ 185,263 $ 168,211 CIG 114,022 79,633 74,451 RCM — (5,933) (4,573) Corporate (1) (41,600) (70,201) (48,003) Total income from operations $ 241,091 $ 188,762 $ 190,086 (1) Includes goodwill and intangible assets impairment charges, amortization of intangibles, other costs and other income not allocable to segments. The intangible asset amortization expense for fiscal 2020, 2019 and 2018 was $11.6 million, $11.6 million and $18.2 million, respectively. Additionally, Corporate results included income (loss) for fair value adjustments to contingent consideration liabilities of $15.0 million, $(1.1) million and $(4.3) million for fiscal 2020, 2019 and 2018, respectively. Corporate results in fiscal 2020 and 2019 also included $15.8 million and $7.8 million goodwill impairment charges, respectively. See Note 6 - "Goodwill and Intangible Assets" for more information. Balance at September 27 2020 (1) September 29, (in thousands) Total Assets GSG $ 649,417 $ 587,040 CIG 479,238 450,276 RCM 14,258 15,608 Corporate (2) 1,235,645 1,094,484 Total assets $ 2,378,558 $ 2,147,408 (1) Fiscal 2020 includes recognition of ROU assets for leases (substantially all operating leases) upon the adoption of ASU 2016-02 in the first quarter of fiscal 2020. (2) Corporate assets consist of intercompany eliminations and assets not allocated to our reportable segments including goodwill, intangible assets, deferred income taxes and certain other assets. Geographic Information Fiscal Year Ended September 27, 2020 September 29, 2019 September 30, 2018 Revenue Long-Lived Assets (2,3) Revenue Long-Lived Assets (2) Revenue Long-Lived Assets (2) United States $ 2,107,457 $ 230,933 $ 2,247,780 $ 51,859 $ 2,232,013 $ 57,256 Foreign countries (1) 887,434 108,348 859,568 46,113 732,135 28,235 (1) Includes revenue and long-lived assets from our foreign operations, primarily in Canada, Australia and the United Kingdom, and revenue generated from non-U.S. clients. (2) Excludes goodwill, intangible assets and deferred income taxes. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Sep. 27, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions We often provide services to unconsolidated joint ventures. Our revenue related to services we provided to unconsolidated joint ventures for fiscal 2020, 2019 and 2018 was $88.2 million, $99.1 million and $75.0 million, respectively. Our related reimbursable costs for fiscal 2020, 2019 and 2018 were approximately $86.4 million, $98.5 million and $76.6 million, respectively. Our consolidated balance sheets also included the following amounts related to these services: Balance at September 27, 2020 September 29, 2019 (in thousands) Accounts receivable, net $ 20,884 $ 19,351 Contract assets 3,261 9,681 Contract liabilities 478 111 |
Quarterly Financial Information
Quarterly Financial Information - Unaudited | 12 Months Ended |
Sep. 27, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information - Unaudited | Quarterly Financial Information – Unaudited In the opinion of management, the following unaudited quarterly data for the fiscal years ended September 27, 2020 and September 29, 2019 reflect all adjustments necessary for a fair statement of the results of operations. In the second quarter of fiscal 2020, we incurred incremental costs totaling $8.2 million to address the COVID-19 pandemic. In the fourth quarter of fiscal 2020, we recorded adjustments to our contingent earn-out liabilities and reported related net gains in operating income of $13.5 million. Additionally, we recorded a $15.8 million goodwill impairment charge related to the ASP reporting unit, which is in our CIG segment. We sold non-core equipment related to the disposal of our Canadian turn-key pipeline activities throughout fiscal 2020 which resulted in gains of $0.8 million, $2.2 million, $4.5 million, and $1.0 million in the first, second, third, and fourth quarters of fiscal 2020, respectively. In the second quarter of fiscal 2019, deferred tax valuation allowances of $22.3 million i n Australia were released due to sufficient positive evidence obtained. During the fourth quarter of fiscal 2019, we decided to dispose of the Canadian turn-key pipeline activities in our CIG segment. As a result, we recorded a $7.8 million goodwill impairment charge and other charges for severance and other disposition costs totaling $10.9 million. Also in the fourth quarter of fiscal 2019, we incurred acquisition and transaction charges of $10.4 million related to the acquisition of WYG. First Second Third Fourth (in thousands, except per share data) Fiscal Year 2020 Revenue $ 797,623 $ 734,133 $ 709,771 $ 753,364 Income from operations 63,302 47,530 63,525 66,735 Net income attributable to Tetra Tech 47,310 36,397 45,497 44,654 Earnings per share attributable to Tetra Tech: Basic $ 0.87 $ 0.67 $ 0.84 $ 0.83 Diluted $ 0.85 $ 0.66 $ 0.83 $ 0.82 Weighted-average common shares outstanding: Basic 54,560 54,699 53,985 53,841 Diluted 55,438 55,463 54,692 54,603 Fiscal Year 2019 Revenue $ 717,431 $ 722,621 $ 825,793 $ 841,502 Income from operations 55,711 47,545 64,841 20,665 Net income attributable to Tetra Tech 41,997 55,911 49,233 11,527 Earnings per share attributable to Tetra Tech: Basic $ 0.76 $ 1.01 $ 0.90 $ 0.21 Diluted $ 0.75 $ 1.00 $ 0.88 $ 0.21 Weighted-average common shares outstanding: Basic 55,390 55,143 54,819 54,617 Diluted 56,366 55,985 55,768 55,618 |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | 12 Months Ended |
Sep. 27, 2020 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS AND RESERVES For the Fiscal Years Ended September 30, 2018, September 29, 2019 and September 27, 2020 (in thousands) Balance at Charged to Deductions (2) Other (3) Balance at Allowance for doubtful accounts (1) : Fiscal 2018 $ 3,987 $ 1,496 $ (295) — $ 5,188 Fiscal 2019 5,188 7,242 (1,868) — 10,562 Fiscal 2020 10,562 1,472 (4,887) — 7,147 Income tax valuation allowance: Fiscal 2018 $ 25,326 $ 900 $ — $ (4,747) $ 21,479 Fiscal 2019 21,479 255 (23,714) 22,523 20,543 Fiscal 2020 20,543 3,852 — — 24,395 (1) Reflects updated presentation of allowance for doubtful accounts to include expected credit losses in anticipation of our adoption of ASU 2016-13 in the first quarter of fiscal 2021. (2) Primarily represents write-offs of uncollectible amounts, net of recoveries for the allowance for doubtful accounts. The income tax valuation amount represents the release of valuation allowances in Australia. (3) Includes loss in foreign jurisdictions, currency adjustments, and valuation allowance adjustments related to net operating loss carry-forwards. |
Basis of Presentation and Pre_2
Basis of Presentation and Preparation (Policies) | 12 Months Ended |
Sep. 27, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation and Presentation | Principles of Consolidation and Presentation. The consolidated financial statements include our accounts and those of joint ventures of which we are the primary beneficiary. All significant intercompany balances and transactions have been eliminated in consolidation. |
Fiscal Year | Fiscal Year. We report results of operations based on 52 or 53-week periods ending on the Sunday nearest September 30. Fiscal years 2020, 2019 and 2018 each contained 52 weeks. |
Use of Estimates | Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires us to make estimates and assumptions. These estimates and assumptions affect the amounts reported in our consolidated financial statements and accompanying notes. Although such estimates and assumptions are based on management's best knowledge of current events and actions we may take in the future, actual results could differ materially from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents. Cash and cash equivalents include highly liquid investments with original maturities of 90 days or less. We classify cash and cash equivalents as restricted when we are unable to freely use such cash and cash equivalents for our general operating purposes. Restricted cash balances are reported within our "Prepaid expenses and other current assets" on the consolidated balance sheets. Occasionally, we have book overdrafts which represent checks issued in excess of funds on deposit in our bank accounts that have not yet been paid by the applicable bank at the balance sheet date. Bank overdrafts occur when a bank honors disbursements in excess of funds on deposit in our bank accounts. We classify book and bank overdrafts as |
Insurance Matters, Litigation and Contingencies | Insurance Matters, Litigation and Contingencies. In the normal course of business, we are subject to certain contractual guarantees and litigation. In addition, we maintain insurance coverage for various aspects of our business and operations. We record in our consolidated balance sheets amounts representing our estimated liability for these legal and insurance obligations. Any adjustments to these liabilities are recorded in our consolidated statements of income. |
Accounts Receivable - Net | Accounts Receivable – Net. Net accounts receivable consists of billed and unbilled accounts receivable, and allowances for doubtful accounts. Billed accounts receivable represent amounts billed to clients that have not been collected. Unbilled accounts receivable, which represent an unconditional right to payment subject only to the passage of time, include unbilled amounts typically resulting from revenue recognized but not yet billed pursuant to contract terms or billed after the period end date. Most of our unbilled receivables at September 27, 2020 are expected to be billed and collected within 12 months. Unbilled accounts receivable also include amounts related to requests for equitable adjustment to contracts that provide for price redetermination. These amounts are recorded only when they can be reliably estimated and realization is probabl |
Revenue and Contract Assets and Liabilities | Contract Assets and Contract Liabilities. Contract assets represent revenue recognized in excess of the amounts for which we have the contractual right to bill our customers. Contract retentions, included in contract assets, represent amounts withheld by clients until certain conditions are met or the project is completed, which may extend beyond one year. Contract liabilities represent the amount of cash collected from clients and billings to clients on contracts in advance of work performed and revenue recognized. The majority of these amounts are expected be earned within 12 months and are classified as current liabilities. We recognize revenue over time as the related performance obligation is satisfied by transferring control of a promised good or service to our customers. Progress toward complete satisfaction of the performance obligation is primarily measured using a cost-to-cost measure of progress method. The cost input is based primarily on contract cost incurred to date compared to total estimated contract cost. This measure includes forecasts based on the best information available and reflects our judgement to faithfully depict the value of the services transferred to the customer. For certain on-call engineering or consulting and similar contracts, we recognize revenue in the amount which we have the right to invoice the customer if that amount corresponds directly with the value of our performance completed to date. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost measure of progress method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs indicates a loss, a provision for the entire estimated loss on the contract is made in the period in which the loss becomes evident. We invoice customers based on the contractual terms of each contract. However, the timing of revenue recognition may differ from the timing of invoice issuance. Contract assets represent revenue recognized in excess of the amounts for which we have the contractual right to bill our customers. Such amounts are recoverable from customers based upon various measures of performance, including achievement of certain milestones or completion of a contract. In addition, many of our time and materials arrangements are billed in arrears pursuant to contract terms that are standard within the industry, resulting in contract assets and/or unbilled receivables being recorded, as revenue is recognized in advance of billings. Contract retentions, included in contract assets, represent amounts withheld by clients until certain conditions are met or the project is completed, which may extend beyond one year. |
Property and Equipment | Property and Equipment. Property and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line method. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from our consolidated balance sheets and any resulting gain or loss is reflected in our consolidated statements of income. Expenditures for maintenance and repairs are expensed as incurred. Generally, estimated useful lives range from three |
Long-Lived Assets | Long-Lived Assets. Our policy is to evaluate the recoverability of our long-lived assets when the facts and circumstances suggest that the assets may be impaired. This assessment is performed based on the estimated undiscounted cash flows compared to the carrying value of the assets. If the future cash flows (undiscounted and without interest charges) are less than the carrying value, a write-down would be recorded to reduce the related asset to its estimated fair value. |
Leases | Leases. We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use ("ROU") assets, and current and long-term operating lease liabilities in the consolidated balance sheets. Our finance leases are reported in "Other long-term assets", "Other current liabilities", and "Other long-term liabilities" on our consolidated balance sheet. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, incremental borrowing rates are used based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Our operating leases are primarily for corporate and project office spaces. To a much lesser extent, we have operating leases for vehicles and equipment. Our operating leases have remaining lease terms of one month to twelve years, some of which may include options to extend the leases for up to five years. We also have finance leases which are primarily related to IT equipment. We recognize a liability for contract termination costs associated with an exit activity for costs that will continue to be incurred under a lease for its remaining term without economic benefit to us, initially measured at its fair value at the cease-use date. The fair value is determined based on the remaining lease rentals, adjusted for the effects of any prepaid or deferred items recognized under the lease, and reduced by estimated sublease rentals. |
Business Combinations | Business Combinations. The cost of an acquired company is assigned to the tangible and intangible assets purchased and the liabilities assumed based on their fair values at the date of acquisition. The determination of fair values of these assets and liabilities requires us to make estimates and use valuation techniques when a market value is not readily available. Any excess of purchase price over the fair value of net tangible and intangible assets acquired is allocated to goodwill. Goodwill typically represents the value paid for the assembled workforce and enhancement of our service offerings. Transaction costs associated with business combinations are expensed as incurred. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets. Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in a business acquisition. Following an acquisition, we perform an analysis to value the acquired company's tangible and identifiable intangible assets and liabilities. With respect to identifiable intangible assets, we consider backlog, non-compete agreements, client relations, trade names, patents and other assets. We amortize our intangible assets based on the period over which the contractual or economic benefits of the intangible assets are expected to be realized. We assess the recoverability of the unamortized balance of our intangible assets when indicators of impairment are present based on expected future profitability and undiscounted expected cash flows and their contribution to our overall operations. Should the review indicate that the carrying value is not fully recoverable, the excess of the carrying value over the fair value of the intangible assets would be recognized as an impairment loss. We test our goodwill for impairment on an annual basis, and more frequently when an event occurs, or circumstances indicate that the carrying value of the asset may not be recoverable. We believe the methodology that we use to review impairment of goodwill, which includes a significant amount of judgment and estimates, provides us with a reasonable basis to determine whether impairment has occurred. However, many of the factors employed in determining whether our goodwill is impaired are outside of our control and it is reasonably likely that assumptions and estimates will change in future periods. These changes could result in future impairments. We perform our annual goodwill impairment review at the beginning of our fiscal fourth quarter. Our last annual review was performed at June 29, 2020 (i.e., the first day of our fiscal fourth quarter). In addition, we regularly evaluate whether events and circumstances have occurred that may indicate a potential change in recoverability of goodwill. We perform interim goodwill impairment reviews between our annual reviews if certain events and circumstances have occurred, including a deterioration in general economic conditions, an increased competitive environment, a change in management, key personnel, strategy or customers, negative or declining cash flows, or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods. We assess goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a component. Our operating segments are the same as our reportable segments and our reporting units for goodwill impairment testing are the components one level below our reportable segments. These components constitute a business for which discrete financial information is available and where segment management regularly reviews the operating results of that component. We aggregate components within an operating segment that have similar economic characteristics. |
Contingent Consideration | Contingent Consideration. Most of our acquisition agreements include contingent earn-out arrangements, which are generally based on the achievement of future operating income thresholds. The contingent earn-out arrangements are based upon our valuations of the acquired companies and reduce the risk of overpaying for acquisitions if the projected financial results are not achieved. The fair values of these earn-out arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates. For each transaction, we estimate the fair value of contingent earn-out payments as part of the initial purchase price and record the estimated fair value of contingent consideration as a liability in "Current contingent earn-out liabilities" and "Long-term contingent earn-out liabilities" on the consolidated balance sheets. We consider several factors when determining that contingent earn-out liabilities are part of the purchase price, including the following: (1) the valuation of our acquisitions is not supported solely by the initial consideration paid, and the contingent earn-out formula is a critical and material component of the valuation approach to determining the purchase price; and (2) the former owners of acquired companies that remain as key employees receive compensation other than contingent earn-out payments at a reasonable level compared with the compensation of our other key employees. The contingent earn-out payments are not affected by employment termination. We measure our contingent earn-out liabilities at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy. We use a probability weighted discounted income approach as a valuation technique to convert future estimated cash flows to a single present value amount. The significant unobservable inputs used in the fair value measurements are operating income projections over the earn-out period (generally two We review and re-assess the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could differ materially from the initial estimates. Changes in the estimated fair value of our contingent earn-out liabilities |
Fair Value of Financial Instruments | Fair Value of Financial Instruments. We determine the fair values of our financial instruments, including short-term investments, debt instruments and derivative instruments based on inputs or assumptions that market participants would use in pricing an asset or a liability. We categorize our instruments using a valuation hierarchy for disclosure of the inputs used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. The classification of a financial asset or liability within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair values based on their short-term nature. The carrying amounts of our revolving credit facility approximates fair value because the interest rates are based upon variable reference rates. Certain other assets and liabilities, such as contingent earn-out liabilities and amounts related to cash-flow hedges, are required to be carried in our consolidated financial statements at fair value. Our fair value measurement methods may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Although we believe our valuation methods are appropriate and consistent with those used by other market participants, the use of different methodologies or assumptions to determine fair value could result in a different fair value measurement at the reporting date. |
Derivative Financial Instruments | Derivative Financial Instruments. We account for our derivative instruments as either assets or liabilities and carry them at fair value. For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated as cash flow hedges, the effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income (loss) in stockholders' equity and reclassified into income in the same period or periods during which the hedged transaction affects earnings. The ineffective portion of the gain or loss on the derivative instrument, if any, is recognized in current income. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. The net gain or loss on the effective portion of a derivative instrument that is designated as an economic hedge of the foreign currency translation exposure generated by the re-measurement of certain assets and liabilities denominated in a non-functional currency in a foreign operation is reported in the same manner as a foreign currency translation adjustment. Accordingly, any gains or losses related to these derivative instruments are recognized in current income. Derivatives that do not qualify as hedges are adjusted to fair value through current income. |
Deferred Compensation | Deferred Compensation. We maintain a non-qualified defined contribution supplemental retirement plan for certain key employees and non-employee directors that is accounted for in accordance with applicable authoritative guidance on accounting for deferred compensation arrangements where amounts earned are held in a rabbi trust and invested. Employee deferrals are deposited into a rabbi trust, and the funds are generally invested in individual variable life insurance contracts that we own and are specifically designed to informally fund savings plans of this nature. Our consolidated balance sheets reflect our investment in variable life insurance contracts in "Other long-term assets." Our obligation to participating employees is reflected in "Other long-term liabilities." The net gains and losses related to the deferred compensation plan are reported as part of “Selling, general and administrative expenses” in our consolidated statements of income |
Income Taxes | Income Taxes. We file a consolidated U.S. federal income tax return. In addition, we file other returns that are required in the states, foreign jurisdictions and other jurisdictions in which we do business. We account for certain income and expense items differently for financial reporting and income tax purposes. Deferred tax assets and liabilities are computed for the difference between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to reverse. In determining the need for a valuation allowance, management reviews both positive and negative evidence, including current and historical results of operations, future income projections, scheduled reversals of deferred tax amounts, availability of carrybacks, and potential tax planning strategies. Based on our assessment, we have concluded that a portion of the deferred tax assets will not be realized. According to the authoritative guidance on accounting for uncertainty in income taxes, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. This guidance also addresses de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and disclosure requirements for uncertain tax positions. |
Concentration of Credit Risk | Concentration of Credit Risk. Financial instruments that subject us to credit risk consist primarily of cash and cash equivalents and net accounts receivable. In th |
Foreign Currency Translation | Foreign Currency Translation. We determine the functional currency of our foreign operating units based upon the primary currency in which they operate. These operating units maintain their accounting records in their local currency, primarily Canadian and Australian dollars, and British pounds. Where the functional currency is not the U.S. dollar, translation of assets and liabilities to U.S. dollars is based on exchange rates at the balance sheet date. Translation of revenue and expenses to U.S. dollars is based on the average rate during the period. Translation gains or losses are reported as a component of other comprehensive income (loss). Gains or losses from foreign currency transactions are included in income from operations. |
Recently Issued Accounting Pronouncements Adopted in Fiscal 2020 and Not Yet Adopted | Recently Issued Accounting Pronouncements Adopted in Fiscal 2020. In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-02 “Leases (Topic 842)”, which is a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of ROU assets obtained in exchange for lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. In the first quarter of fiscal 2020, we adopted the standard using the modified retrospective method. The standard was applied to leases that existed or were entered into on or after September 30, 2019. Our fiscal 2020 financial statements have been presented under this standard. However, the prior-year financial statements have not been adjusted and continue to be reported in accordance with previous guidance. See Note 10, "Leases" for further discussion of the adoption and the impact on our consolidated financial statements. In August 2017, the FASB issued accounting guidance on hedging activities. The amendment better aligns an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The guidance was effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2018 (first quarter of fiscal 2020 for us). The adoption of this guidance had no impact on our consolidated financial statements. In February 2018, the FASB issued guidance on reclassification of certain tax effects from accumulated comprehensive income, which allows for a reclassification of stranded tax effects from the Tax Cuts and Jobs Act ("TCJA") from accumulated other comprehensive income to retained earnings. The guidance was effective for fiscal years beginning after December 15, 2018 (first quarter of fiscal 2020 for us). We did not reclassify our stranded effects from the TCJA, which were immaterial. Recently Issued Accounting Pronouncements Not Yet Adopted. In June 2016, the FASB issued updated guidance, Accounting Standards Update ("ASU") 2016-13, related to the measurement of credit losses for certain financial assets. This guidance replaces the current incurred loss methodology with an expected credit loss methodology. It requires us to recognize an allowance equal to our current estimate of all contractual cash flows that we do not expect to collect. Our estimate would consider relevant information about past events, current conditions, and reasonable and supportable forecasts impacting the collectability of the reported amounts. The guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019 (first quarter of fiscal 2021 for us). In anticipation of our adoption of ASU 2016-13, we have updated our presentation of gross receivables and the allowance for doubtful accounts to reflect only expected credit losses in the allowance. We do not expect the adoption in the first quarter of fiscal 2021 to have a material impact on our consolidated financial statements. In August 2018, the FASB issued updated guidance modifying certain fair value measurement disclosures. The guidance contains additional disclosures to enable users of the financial statements to better understand the entity’s assumption used to develop significant unobservable inputs for Level 3 fair value measurements, but also eliminates the requirement for entities to disclose the amount of and reasons for transfers between Level 1 and Level 2 investments within the fair value hierarchy. This guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019 (first quarter of fiscal 2021 for us). Early adoption is permitted. We do not expect the adoption of this guidance to have a significant impact on our consolidated financial statements. In December 2019, the FASB issued guidance simplifying the accounting for income taxes by removing certain exceptions to general principles in Topic 740 and amending certain existing guidance for clarity. This guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2020 (first quarter of fiscal 2022 for us). Early adoption is permitted. We do not expect the adoption of this guidance to have an impact on our consolidated financial statements. In May 2020, the Securities and Exchange Commission issued guidance amending certain financial disclosures about acquired and disposed businesses. The amendments are designed to assist registrants in making more meaningful determinations of whether a subsidiary or an acquired or disposed business is significant, and to improve the related disclosure requirements. The guidance is effective for fiscal years beginning after December 31, 2020 (first quarter of fiscal 2022 for us). We do not expect the adoption of this guidance to have an impact on our consolidated financial statements. |
Revenue and Contract Balances (
Revenue and Contract Balances (Tables) | 12 Months Ended |
Sep. 27, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Summary of revenue disaggregated by client sector and contract type | The following tables present revenue disaggregated by client sector and contract type: Fiscal Year Ended September 27, September 29, September 30, 2018 (in thousands) Client Sector: U.S. state and local government $ 439,019 $ 587,364 $ 469,231 U.S. federal government (1) 993,835 941,102 974,384 U.S. commercial 674,605 719,314 788,398 International (2) 887,432 859,568 732,135 Total $ 2,994,891 $ 3,107,348 $ 2,964,148 Contract Type: Fixed-price $ 1,078,432 $ 1,048,157 $ 986,910 Time-and-materials 1,391,592 1,509,901 1,395,148 Cost-plus 524,867 549,290 582,090 Total $ 2,994,891 $ 3,107,348 $ 2,964,148 (1) Includes revenue generated under U.S. federal government contracts performed outside the United States. (2) Includes revenue generated from foreign operations, primarily in Canada, Australia, the United Kingdom, and revenue generated from non-U.S. clients. |
Summary of net contract assets/liabilities | Net contract assets/liabilities consisted of the following: Balance at September 27, September 29, 2019 (in thousands) Contract assets (1) $ 92,632 114,324 Contract liabilities 171,905 165,611 Net contract liabilities $ (79,273) $ (51,287) (1) Include s $12.3 million and $26.5 million of contract retentions as of September 27, 2020 and September 29, 2019, respectively. |
Components of net accounts receivable | Net accounts receivable consisted of the following: Balance at September 27, September 29, (in thousands) Billed $ 402,818 $ 496,985 Unbilled 253,364 282,297 Total accounts receivable 656,182 779,282 Allowance for doubtful accounts (7,147) (10,562) Total accounts receivable, net $ 649,035 $ 768,720 |
Remaining performance obligation, expected timing | We expect to satisfy our RUPOs as of September 27, 2020 over the following periods: Amount (in thousands) Within 12 months $ 1,846,527 Beyond 1,372,446 Total $ 3,218,973 |
Stock Repurchase and Dividends
Stock Repurchase and Dividends (Tables) | 12 Months Ended |
Sep. 27, 2020 | |
Stock Repurchase And Dividends [Abstract] | |
Schedule of stock repurchase activity | The following table summarizes stock repurchases in the open market and settled in fiscal 2019 and fiscal 2020: Fiscal Year Stock Repurchase Program Shares Repurchased Average Price Paid per Share Total Cost 2019 2018 Program 430,559 $ 58.06 $ 25,000 2019 2019 Program 1,131,962 $ 66.26 75,000 2019 Total 1,562,521 $ 64.00 $ 100,000 2020 2019 Program 1,508,747 $ 77.67 $ 117,188 |
Summary of dividends declared and paid | The following table presents dividends declared and paid in fiscal 2020 and 2019: Declare Date Dividend Paid Per Share Record Date Payment Date Dividends Paid November 11, 2019 $ 0.15 December 2, 2019 December 13, 2019 $ 8,190 January 27, 2020 $ 0.15 February 12, 2020 February 28, 2020 8,225 April 27, 2020 $ 0.17 May 13, 2020 May 29, 2020 9,175 July 27, 2020 $ 0.17 August 21, 2020 September 4, 2020 9,153 Total dividends paid as of September 27, 2020 $ 34,743 November 5, 2018 $ 0.12 November 30, 2018 December 14, 2018 $ 6,654 January 28, 2019 $ 0.12 February 13, 2019 February 28, 2019 6,616 April 29, 2019 $ 0.15 May 15, 2019 May 31, 2019 8,219 July 29, 2019 $ 0.15 August 14, 2019 August 30, 2019 8,185 Total dividends paid as of September 29, 2019 $ 29,674 |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 12 Months Ended |
Sep. 27, 2020 | |
Business Combinations [Abstract] | |
Summary of changes in the carrying value of estimated contingent earn-out liabilities | The following table summarizes the changes in the carrying value of estimated contingent earn-out liabilities: Fiscal Year Ended September 27, September 29, September 30, (in thousands) Beginning balance $ 52,992 $ 35,290 $ 2,438 Acquisition date fair value of contingent earn-out liabilities 16,581 27,704 32,210 Change in fair value of contingent earn-out liabilities 1,162 1,489 1,005 Re-measurement of contingent earn-out liabilities (14,971) 1,085 4,252 Foreign exchange impact (247) (558) (854) Earn-out payments: Reported as cash used in operating activities — — (2,349) Reported as cash used in financing activities (22,900) (12,018) (1,412) Ending balance $ 32,617 $ 52,992 $ 35,290 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Sep. 27, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of changes in carrying value of goodwill | The following table summarizes the changes in the carrying value of goodwill: GSG CIG Total (in thousands) Balance at September 30, 2018 $ 389,741 $ 409,079 $ 798,820 Acquisitions 53,098 93,601 146,699 Impairment — (7,755) (7,755) Translation and other (1,037) (11,907) (12,944) Balance at September 29, 2019 441,802 483,018 924,820 Acquisitions 74,882 5,294 80,176 Impairment — (15,800) (15,800) Translation and other (369) 4,671 4,302 Balance at September 27, 2020 $ 516,315 $ 477,183 $ 993,498 |
Summary of acquired identifiable intangible assets with finite useful lives | The following table presents the gross amount and accumulated amortization of our acquired identifiable intangible assets with finite useful lives included in "Intangible assets, net" on the consolidated balance sheets: Fiscal Year Ended September 27, 2020 September 29, 2019 Weighted- Gross Accumulated Gross Accumulated ($ in thousands) Client relations 2.9 $ 60,775 $ (53,392) $ 56,779 $ (50,455) Backlog 0.7 37,682 (32,761) 32,229 (24,968) Technology and trade names 1.8 7,964 (6,325) 7,714 (4,859) Total $ 106,421 $ (92,478) $ 96,722 $ (80,282) |
Estimated amortization expense for the succeeding five years and beyond | Estimated amortization expense for the succeeding four fiscal years is as follows: Amount (in thousands) 2021 $ 8,786 2022 2,652 2023 1,915 2024 590 Total $ 13,943 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Sep. 27, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of components of property and equipment | Property and equipment consisted of the following: Fiscal Year Ended September 27, September 29, (in thousands) Equipment, furniture and fixtures $ 90,942 $ 114,652 Leasehold improvements 34,382 34,881 Land and buildings 187 371 Total property and equipment 125,511 149,904 Accumulated depreciation (90,004) (110,463) Property and equipment, net $ 35,507 $ 39,441 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 27, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of income before income taxes, by geographical area | Income before income taxes, by geographic area, was as follows: Fiscal Year Ended September 27, September 29, September 30, (in thousands) Income before income taxes: United States $ 209,443 $ 185,535 $ 180,034 Foreign 18,548 (10,399) (5,472) Total income before income taxes $ 227,991 $ 175,136 $ 174,562 |
Schedule of components of income tax expense | Income tax expense consisted of the following: Fiscal Year Ended September 27, September 29, September 30, (in thousands) Current: Federal $ 24,102 $ 30,051 $ 46,840 State 6,872 8,923 9,228 Foreign 20,398 15,016 10,897 Total current income tax expense 51,372 53,990 66,965 Deferred: Federal 2,187 (9,108) (22,072) State 870 (1,195) (1,471) Foreign (328) (27,312) (5,817) Total deferred income tax expense 2,729 (37,615) (29,360) Total income tax expense $ 54,101 $ 16,375 $ 37,605 |
Schedule of reconciliation of income tax expense and effective income tax rates | Total income tax expense was different from the amount computed by applying the U.S. federal statutory rate to pre-tax income as follows: Fiscal Year Ended September 27, September 29, September 30, Tax at federal statutory rate 21.0% 21.0% 24.5% State taxes, net of federal benefit 2.7 3.4 4.2 Research and Development ("R&D") credits (2.2) (4.7) (1.4) Domestic production deduction — — (0.2) Tax differential on foreign earnings 0.7 1.0 0.5 Non-taxable foreign interest income (1.1) (1.7) (2.0) Goodwill 1.5 0.9 1.7 Stock compensation (2.2) (2.4) (2.7) Valuation allowance 1.6 (13.5) (0.5) Change in uncertain tax positions 0.4 2.4 1.9 Revaluation of deferred taxes — (1.4) (8.4) Deferred tax adjustments (1.3) (0.4) 2.1 Transition tax on foreign earnings — 1.4 — Other 2.6 3.3 1.8 Total income tax expense 23.7% 9.3% 21.5% |
Schedule of temporary differences comprising the net deferred income tax asset | Temporary differences comprising the net deferred income tax asset shown on the accompanying consolidated balance sheets were as follows: Fiscal Year Ended September 27, September 29, (in thousands) Deferred Tax Assets: State taxes $ 1,146 $ 764 Reserves and contingent liabilities 6,262 5,500 Allowance for doubtful accounts 6,283 7,506 Accrued liabilities 28,223 28,232 Lease liabilities, operating leases 66,941 — Stock-based compensation 5,905 6,700 Loss carry-forwards 43,475 39,782 Valuation allowance (24,395) (20,543) Total deferred tax assets 133,840 67,941 Deferred Tax Liabilities: Unbilled revenue (14,451) (21,886) Prepaid expense (5,967) (3,026) Right-of-use assets, operating leases (66,941) — Intangibles (29,130) (26,482) Property and equipment (1,615) (1,133) Total deferred tax liabilities (118,104) (52,527) Net deferred tax assets $ 15,736 $ 15,414 |
Reconciliation of the beginning and ending amounts of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Fiscal Year Ended September 27, September 29, September 30, (in thousands) Beginning balance $ 9,169 $ 8,328 $ 9,337 Additions for current year tax positions 700 1,342 1,928 Additions for prior year tax positions — 356 1,116 Reductions for prior year tax positions (641) (100) — Settlements — (757) (4,053) Ending balance $ 9,228 $ 9,169 $ 8,328 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Sep. 27, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt consisted of the following: Fiscal Year Ended September 27, September 29, (in thousands) Credit facilities $ 291,659 $ 276,434 Less: Current portion of long-term debt and other short-term borrowings (49,264) (12,500) Long-term debt, less current portion and other short-term borrowings $ 242,395 $ 263,934 |
Schedule of maturities of long-term debt | The following table presents scheduled maturities of our long-term debt: Amount (in thousands) 2021 49,264 2022 15,625 2023 226,770 Total $ 291,659 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Sep. 27, 2020 | |
Leases [Abstract] | |
Summary of components of lease cost | The components of lease costs for the fiscal year ended September 27, 2020 are as follows: Fiscal Year Ended (in thousands) Operating lease cost $ 87,348 Sublease income (2,216) Other 72 Total lease cost $ 85,204 Supplemental cash flow information related to leases for fiscal 2020 is as follows: Amount (in thousands) Operating cash flows for operating leases $ 80,289 Right-of-use assets obtained in exchange for new operating lease liabilities $ 317,587 |
Summary of supplemental balance sheet and other information | Supplemental balance sheet and other information related to leases as of September 27, 2020 are as follows: Amount (in thousands) Operating leases: Right-of-use assets $ 239,396 Lease liabilities: Current $ 69,650 Long-term 191,955 Total operating lease liabilities $ 261,605 Weighted-average remaining lease term: Operating leases 5 years Weighted-average discount rate: Operating leases 2.5 % |
Summary of maturity of future undiscounted cash flows associated with operating lease liabilities | A maturity analysis of the future undiscounted cash flows associated with our operating lease liabilities as of September 27, 2020 is as follows: Amount (in thousands) 2021 $ 75,074 2022 64,972 2023 44,733 2024 30,991 2025 21,466 Beyond 44,169 Total lease payments 281,405 Less: imputed interest (19,800) Total present value of lease liabilities $ 261,605 |
Stockholders' Equity and Stoc_2
Stockholders' Equity and Stock Compensation Plans (Tables) | 12 Months Ended |
Sep. 27, 2020 | |
Stockholders' Equity Note [Abstract] | |
Schedule of the stock-based compensation and related income tax benefits | The following table presents our stock-based compensation and related income tax benefits: Fiscal Year Ended September 27, September 29, September 30, (in thousands) Total stock-based compensation $ 19,424 $ 17,618 $ 19,582 Income tax benefit related to stock-based compensation (4,318) (4,016) (5,288) Stock-based compensation, net of tax benefit $ 15,106 $ 13,602 $ 14,294 |
Schedule of stock option activity | The following table presents our stock option activity for fiscal year ended September 27, 2020: Number of Weighted- Weighted- Aggregate Outstanding on September 29, 2019 894 $ 33.28 Exercised (355) 28.63 Forfeited — — Outstanding at September 27, 2020 539 36.34 5.04 $ 29,623 Vested or expected to vest at September 27, 2020 539 36.34 5.04 29,623 Exercisable on September 27, 2020 437 34.17 4.62 24,932 |
Schedule of assumptions used in the calculation of the fair value of stock options using the Black-Scholes option pricing model | The following assumptions were used in the calculation for fiscal 2018: Fiscal Year Ended September 30, Dividend yield 1.0% Expected stock price volatility 36.1% - 38.8% Risk-free rate of return, annual 1.7% - 2.9% |
Schedule of RSU and PSU activity | A summary of the RSU and PSU activity under our stock plans is as follows: RSU PSU Number of Weighted- Number of Weighted- Nonvested balance at October 1, 2017 511 $ 33.19 376 $ 36.05 Granted 199 48.16 99 57.40 Vested (184) 31.85 (270) 31.66 Adjustment (1) — — 131 31.66 Forfeited (38) 36.39 (13) 41.80 Nonvested balance at September 30, 2018 488 39.56 323 44.27 Granted 179 66.26 90 80.41 Vested (180) 36.95 (108) 31.63 Adjustment (1) — — 79 31.63 Forfeited (17) 48.56 — — Nonvested balance at September 29, 2019 470 50.42 384 53.67 Granted 168 83.92 74 99.85 Vested (178) 46.87 (162) 47.28 Adjustment (1) — — 64 48.36 Forfeited (16) 65.43 (5) 83.98 Nonvested balance at September 27, 2020 444 63.93 355 64.83 (1) For fiscal 2018, includes a payout adjustment of 130,730 PSUs due to the actual performance level achieved for PSUs granted in fiscal 2015 that vested fiscal 2018. For fiscal 2019, includes a payout a djustment of 79,465 PSUs due to the actual performance level achieved for PSUs granted in fiscal 2016 that vested during fiscal 2019. For fiscal 2020 includes a payout adjustment of 63,643 PSUs due to the actual performance level achieved for PSUs granted in fiscal 2017 that vested during fiscal 2020. |
Summary of shares purchased, weighted-average purchase price, and cash received, for shares purchased under the ESPP | The following table summarizes shares purchased, weighted-average purchase price, and cash received for shares purchased under the ESPP: Fiscal Year Ended September 27, September 29, September 30, (in thousands, except for purchase price) Shares purchased 168 148 141 Weighted-average purchase price per share $ 51.77 $ 46.38 $ 40.38 Cash received from exercise of purchase rights $ 8,715 $ 6,844 $ 5,727 |
Schedule of the assumptions used in the Black-Scholes option pricing model in estimating the grant date fair value of each award granted under the ESPP | The grant date fair value of each award granted under the ESPP was estimated using the Black-Scholes option pricing model with the following assumptions: Fiscal Year Ended September 27, September 29, September 30, Dividend yield 1.0% 1.0% 1.0% Expected stock price volatility 26.5% 26.7% 24.0% Risk-free rate of return, annual 1.6% 2.6% 1.8% Expected life (in years) 1 1 1 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Sep. 27, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of number of weighted-average shares used to compute basic and diluted EPS | The following table sets forth the number of weighted-average shares used to compute basic and diluted EPS: Fiscal Year Ended September 27, September 29, September 30, (in thousands, except per share data) Net income attributable to Tetra Tech $ 173,859 $ 158,668 $ 136,883 Weighted-average common shares outstanding – basic 54,235 54,986 55,670 Effect of diluted stock options and unvested restricted stock 787 950 928 Weighted-average common stock outstanding – diluted 55,022 55,936 56,598 Earnings per share attributable to Tetra Tech: Basic $ 3.21 $ 2.89 $ 2.46 Diluted $ 3.16 $ 2.84 $ 2.42 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Sep. 27, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair values of the entity's outstanding derivatives designated as hedging instruments | The fair values of our outstanding derivatives designated as hedging instruments were as follows: Fair Value of Derivative Balance Sheet Location September 27, September 29, (in thousands) Interest rate swap agreements Other current liabilities $ 15,512 $ 11,009 |
Schedule of changes in the fair value of interest rate swap agreements presented on the consolidated statements of comprehensive income | Changes in the fair value of the interest rate swap agreements are presented on the consolidated statements of comprehensive income as follows: Fiscal Year Ended September 27, 2020 September 29, 2019 September 30, 2018 (in thousands) (Loss) gain recognized in other comprehensive income, net of tax Interest rate swap agreements (4,638) (12,125) 806 |
Reclassifications Out of Accu_2
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Sep. 27, 2020 | |
Equity [Abstract] | |
Summary of reclassifications out of accumulated other comprehensive income (loss) | The accumulated balances and reporting period activities for fiscal 2020 and 2019 related to reclassifications out of accumulated other comprehensive income are summarized as follows: Foreign Gain (Loss) Accumulated (in thousands) Balances at September 30, 2018 $ (128,602) $ 1,252 $ (127,350) Other comprehensive loss before reclassifications (21,109) (11,247) (32,356) Amounts reclassified from accumulated other comprehensive income Interest rate contracts, net of tax (1) — (878) (878) Net current-period other comprehensive loss (21,109) (12,125) (33,234) Balances at September 29, 2019 $ (149,711) $ (10,873) $ (160,584) Other comprehensive income before reclassifications 3,436 (599) 2,837 Amounts reclassified from accumulated other comprehensive income Interest rate contracts, net of tax (1) — (4,039) (4,039) Net current-period other comprehensive income (loss) 3,436 (4,638) (1,202) Balances at September 27, 2020 $ (146,275) $ (15,511) $ (161,786) (1) This accumulated other comprehensive component is reclassified to "Interest expense" in our consolidated statements of income. See Note 14, "Derivative Financial Instruments", for more information. |
Reportable Segments (Tables)
Reportable Segments (Tables) | 12 Months Ended |
Sep. 27, 2020 | |
Segment Reporting [Abstract] | |
Summarized financial information of reportable segments | The following tables present summarized financial information of our reportable segments: Reportable Segments Fiscal Year Ended September 27, September 29, September 30, 2018 (in thousands) Revenue GSG $ 1,778,922 $ 1,820,671 $ 1,694,871 CIG 1,266,059 1,342,509 1,323,142 RCM 198 (1,542) 14,199 Elimination of inter-segment revenue (50,288) (54,290) (68,064) Total revenue $ 2,994,891 $ 3,107,348 $ 2,964,148 Income from operations GSG $ 168,669 $ 185,263 $ 168,211 CIG 114,022 79,633 74,451 RCM — (5,933) (4,573) Corporate (1) (41,600) (70,201) (48,003) Total income from operations $ 241,091 $ 188,762 $ 190,086 (1) Includes goodwill and intangible assets impairment charges, amortization of intangibles, other costs and other income not allocable to segments. The intangible asset amortization expense for fiscal 2020, 2019 and 2018 was $11.6 million, $11.6 million and $18.2 million, respectively. Additionally, Corporate results included income (loss) for fair value adjustments to contingent consideration liabilities of $15.0 million, $(1.1) million and $(4.3) million for fiscal 2020, 2019 and 2018, respectively. Corporate results in fiscal 2020 and 2019 also included $15.8 million and $7.8 million goodwill impairment charges, respectively. See Note 6 - "Goodwill and Intangible Assets" for more information. Balance at September 27 2020 (1) September 29, (in thousands) Total Assets GSG $ 649,417 $ 587,040 CIG 479,238 450,276 RCM 14,258 15,608 Corporate (2) 1,235,645 1,094,484 Total assets $ 2,378,558 $ 2,147,408 (1) Fiscal 2020 includes recognition of ROU assets for leases (substantially all operating leases) upon the adoption of ASU 2016-02 in the first quarter of fiscal 2020. (2) Corporate assets consist of intercompany eliminations and assets not allocated to our reportable segments including goodwill, intangible assets, deferred income taxes and certain other assets. |
Schedule of geographic information | Geographic Information Fiscal Year Ended September 27, 2020 September 29, 2019 September 30, 2018 Revenue Long-Lived Assets (2,3) Revenue Long-Lived Assets (2) Revenue Long-Lived Assets (2) United States $ 2,107,457 $ 230,933 $ 2,247,780 $ 51,859 $ 2,232,013 $ 57,256 Foreign countries (1) 887,434 108,348 859,568 46,113 732,135 28,235 (1) Includes revenue and long-lived assets from our foreign operations, primarily in Canada, Australia and the United Kingdom, and revenue generated from non-U.S. clients. (2) Excludes goodwill, intangible assets and deferred income taxes. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Sep. 27, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | Our consolidated balance sheets also included the following amounts related to these services: Balance at September 27, 2020 September 29, 2019 (in thousands) Accounts receivable, net $ 20,884 $ 19,351 Contract assets 3,261 9,681 Contract liabilities 478 111 |
Quarterly Financial Informati_2
Quarterly Financial Information - Unaudited (Tables) | 12 Months Ended |
Sep. 27, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of unaudited quarterly data | First Second Third Fourth (in thousands, except per share data) Fiscal Year 2020 Revenue $ 797,623 $ 734,133 $ 709,771 $ 753,364 Income from operations 63,302 47,530 63,525 66,735 Net income attributable to Tetra Tech 47,310 36,397 45,497 44,654 Earnings per share attributable to Tetra Tech: Basic $ 0.87 $ 0.67 $ 0.84 $ 0.83 Diluted $ 0.85 $ 0.66 $ 0.83 $ 0.82 Weighted-average common shares outstanding: Basic 54,560 54,699 53,985 53,841 Diluted 55,438 55,463 54,692 54,603 Fiscal Year 2019 Revenue $ 717,431 $ 722,621 $ 825,793 $ 841,502 Income from operations 55,711 47,545 64,841 20,665 Net income attributable to Tetra Tech 41,997 55,911 49,233 11,527 Earnings per share attributable to Tetra Tech: Basic $ 0.76 $ 1.01 $ 0.90 $ 0.21 Diluted $ 0.75 $ 1.00 $ 0.88 $ 0.21 Weighted-average common shares outstanding: Basic 55,390 55,143 54,819 54,617 Diluted 56,366 55,985 55,768 55,618 |
Description of Business (Detail
Description of Business (Details) | 12 Months Ended |
Sep. 27, 2020segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 2 |
Basis of Presentation and Pre_3
Basis of Presentation and Preparation - Cash and Cash Equivalents and Accounts Receivable (Details) | 12 Months Ended |
Sep. 27, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Maximum term of original maturity to classify instrument as cash equivalent | 90 days |
Period for billing and collecting unbilled receivables | 12 months |
Basis of Presentation and Pre_4
Basis of Presentation and Preparation - Property and Equipment (Details) | 12 Months Ended |
Sep. 27, 2020 | |
Equipment | Minimum | |
Estimated useful lives | |
Estimated useful lives | 3 years |
Equipment | Maximum | |
Estimated useful lives | |
Estimated useful lives | 7 years |
Furniture and fixtures | Minimum | |
Estimated useful lives | |
Estimated useful lives | 3 years |
Furniture and fixtures | Maximum | |
Estimated useful lives | |
Estimated useful lives | 7 years |
Basis of Presentation and Pre_5
Basis of Presentation and Preparation - Leases (Details) | Sep. 27, 2020 |
Lessee, Lease, Description [Line Items] | |
Renewal term (up to) | 5 years |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 month |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 12 years |
Basis of Presentation and Pre_6
Basis of Presentation and Preparation - Goodwill and Intangible Assets (Details) | 12 Months Ended |
Sep. 27, 2020Level | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of levels below reportable segments at which goodwill impairment testing is performed | 1 |
Basis of Presentation and Pre_7
Basis of Presentation and Preparation - Contingent Consideration, and Concentration of Credit Risk (Details) | 12 Months Ended |
Sep. 27, 2020Institution | |
Concentration of Credit Risk | |
Financial institutions, in any such number of which investment exposure is limited | 1 |
Accounts receivable due from various agencies of the U.S. federal government (as a percent) | 28.00% |
Minimum | |
Contingent Consideration | |
Period for contingent earn-out payments | 2 years |
Maximum | |
Contingent Consideration | |
Period for contingent earn-out payments | 3 years |
U.S. government | |
Concentration of Credit Risk | |
Revenue from customers (as a percent) | 48.00% |
U.S. commercial | |
Concentration of Credit Risk | |
Revenue from customers (as a percent) | 22.00% |
International | |
Concentration of Credit Risk | |
Revenue from customers (as a percent) | 30.00% |
Revenue and Contract Balances -
Revenue and Contract Balances - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 27, 2020 | Jun. 28, 2020 | Mar. 29, 2020 | Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 30, 2018 | Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 753,364 | $ 709,771 | $ 734,133 | $ 797,623 | $ 841,502 | $ 825,793 | $ 722,621 | $ 717,431 | $ 2,994,891 | $ 3,107,348 | $ 2,964,148 |
Fixed-price | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 1,078,432 | 1,048,157 | 986,910 | ||||||||
Time-and-materials | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 1,391,592 | 1,509,901 | 1,395,148 | ||||||||
Cost-plus | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 524,867 | 549,290 | 582,090 | ||||||||
U.S. state and local government | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 439,019 | 587,364 | 469,231 | ||||||||
U.S. federal government | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 993,835 | 941,102 | 974,384 | ||||||||
U.S. commercial | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 674,605 | 719,314 | 788,398 | ||||||||
International | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 887,432 | $ 859,568 | $ 732,135 |
Revenue and Contract Balances_2
Revenue and Contract Balances - Summary of Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands | Sep. 27, 2020 | Sep. 29, 2019 |
Disaggregation of Revenue [Line Items] | ||
Contract assets | $ 92,632 | $ 114,324 |
Contract liabilities | 171,905 | 165,611 |
Net contract liabilities | (79,273) | (51,287) |
Contract retentions | ||
Disaggregation of Revenue [Line Items] | ||
Contract assets | $ 12,300 | $ 26,500 |
Revenue and Contract Balances_3
Revenue and Contract Balances - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 27, 2020 | Sep. 29, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Contract liability revenue recognized during the period | $ 118,000 | $ 90,000 |
Favorable operating income adjustments | 800 | 800 |
Liabilities for anticipated losses | 13,200 | 11,500 |
Estimated cost to complete the related contracts | $ 118,000 | |
Period for billing and collecting unbilled receivables | 12 months | |
Unbilled accounts receivable related to claims and requests for equitable adjustment on contracts | $ 14,000 | 15,000 |
Remaining unsatisfied performance obligation | $ 3,218,973 | |
Remaining performance obligation, termination notice period one | 30 days | |
Remaining performance obligation, termination notice period two | 60 years | |
Remaining performance obligation, termination notice period three | 90 days | |
CIG | ||
Disaggregation of Revenue [Line Items] | ||
Losses from claim settlement | $ 4,400 | 28,200 |
Reduction in the revenue related to the evaluation of the claims | 26,700 | |
RCM | ||
Disaggregation of Revenue [Line Items] | ||
Losses from claim settlement | 5,700 | |
Reduction in the revenue related to the evaluation of the claims | $ 4,600 |
Revenue and Contract Balances_4
Revenue and Contract Balances - Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Sep. 27, 2020 | Sep. 29, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Billed | $ 402,818 | $ 496,985 |
Unbilled | 253,364 | 282,297 |
Total accounts receivable | 656,182 | 779,282 |
Allowance for doubtful accounts | (7,147) | (10,562) |
Total accounts receivable, net | $ 649,035 | $ 768,720 |
Revenue and Contract Balances_5
Revenue and Contract Balances - Remaining Unsatisfied Performance Obligations (Details) $ in Thousands | Sep. 27, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining unsatisfied performance obligation | $ 3,218,973 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-09-28 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining unsatisfied performance obligation | $ 1,846,527 |
Remaining unsatisfied performance obligation, expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-09-27 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining unsatisfied performance obligation | $ 1,372,446 |
Remaining unsatisfied performance obligation, expected timing of satisfaction |
Stock Repurchase and Dividend_2
Stock Repurchase and Dividends - Narrative (Details) - USD ($) | Dec. 11, 2020 | Nov. 09, 2020 | Sep. 04, 2020 | May 29, 2020 | Feb. 28, 2020 | Dec. 13, 2019 | Aug. 30, 2019 | May 31, 2019 | Feb. 28, 2019 | Dec. 14, 2018 | Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 | Jan. 27, 2020 | Nov. 05, 2018 |
Subsequent Event [Line Items] | |||||||||||||||
Maximum repurchase amount under stock repurchase program | $ 200,000,000 | $ 200,000,000 | |||||||||||||
Remaining authorized repurchase amount | $ 207,800,000 | $ 25,000,000 | |||||||||||||
Dividend paid per share (in dollars per share) | $ 0.17 | $ 0.17 | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.12 | $ 0.12 | $ 0.64 | $ 0.54 | $ 0.44 | ||||
Forecast | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Dividend paid per share (in dollars per share) | $ 0.17 | ||||||||||||||
Subsequent Event | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Quarterly cash dividend declared (in dollars per share) | $ 0.17 |
Stock Repurchase and Dividend_3
Stock Repurchase and Dividends - Schedule of shares repurchased (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Sep. 27, 2020 | Sep. 29, 2019 | |
Equity, Class of Treasury Stock [Line Items] | ||
Shares Repurchased (in shares) | 1,562,521 | |
Average Price Paid per Share (in dollars per share) | $ 64 | |
Total Cost | $ 100,000 | |
2018 Program | ||
Equity, Class of Treasury Stock [Line Items] | ||
Shares Repurchased (in shares) | 430,559 | |
Average Price Paid per Share (in dollars per share) | $ 58.06 | |
Total Cost | $ 25,000 | |
2019 Program | ||
Equity, Class of Treasury Stock [Line Items] | ||
Shares Repurchased (in shares) | 1,508,747 | 1,131,962 |
Average Price Paid per Share (in dollars per share) | $ 77.67 | $ 66.26 |
Total Cost | $ 117,188 | $ 75,000 |
Stock Repurchase and Dividend_4
Stock Repurchase and Dividends - Schedule of Dividends Declared and Paid (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 04, 2020 | May 29, 2020 | Feb. 28, 2020 | Dec. 13, 2019 | Aug. 30, 2019 | May 31, 2019 | Feb. 28, 2019 | Dec. 14, 2018 | Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 |
Stock Repurchase And Dividends [Abstract] | |||||||||||
Dividend paid per share (in dollars per share) | $ 0.17 | $ 0.17 | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.12 | $ 0.12 | $ 0.64 | $ 0.54 | $ 0.44 |
Dividends paid | $ 9,153 | $ 9,175 | $ 8,225 | $ 8,190 | $ 8,185 | $ 8,219 | $ 6,616 | $ 6,654 | $ 34,743 | $ 29,674 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Narrative (Details) $ in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||
Sep. 27, 2020USD ($) | Sep. 27, 2020AUD ($) | Sep. 29, 2019USD ($) | Jul. 01, 2018USD ($) | Mar. 29, 2020USD ($) | Mar. 31, 2019USD ($) | Apr. 01, 2018AUD ($) | Sep. 27, 2020USD ($) | Sep. 29, 2019USD ($)employee | Sep. 29, 2019AUD ($)employee | Sep. 30, 2018USD ($)employee | Sep. 30, 2018AUD ($)employee | Sep. 27, 2020AUD ($) | |
Business Acquisition | |||||||||||||
Contingent earn-out liability | $ 32,600 | $ 32,600 | |||||||||||
Aggregate maximum of contingent consideration | 70,900 | 70,900 | |||||||||||
Proceeds from divestiture of business | 17,710 | $ 651 | $ 35,348 | ||||||||||
Fair value adjustments to contingent consideration liabilities | $ 14,971 | (1,085) | (4,252) | ||||||||||
Minimum | |||||||||||||
Business Acquisition | |||||||||||||
Earn-out period | 2 years | ||||||||||||
Maximum | |||||||||||||
Business Acquisition | |||||||||||||
Earn-out period | 3 years | ||||||||||||
Existing customer contracts | Minimum | |||||||||||||
Business Acquisition | |||||||||||||
Useful life of intangible assets | 1 year | ||||||||||||
Existing customer contracts | Maximum | |||||||||||||
Business Acquisition | |||||||||||||
Useful life of intangible assets | 10 years | ||||||||||||
Technology and trade names | Minimum | |||||||||||||
Business Acquisition | |||||||||||||
Useful life of intangible assets | 3 years | ||||||||||||
Technology and trade names | Maximum | |||||||||||||
Business Acquisition | |||||||||||||
Useful life of intangible assets | 5 years | ||||||||||||
Non-core field services business | Disposed of by Sale | |||||||||||||
Business Acquisition | |||||||||||||
Proceeds from divestiture of business | 30,200 | ||||||||||||
Disposal group revenue | $ 70,000 | ||||||||||||
Loss on disposition of business | $ 3,400 | ||||||||||||
Glumac | |||||||||||||
Business Acquisition | |||||||||||||
Number of employees | employee | 300 | 300 | |||||||||||
Aggregate fair value of purchase prices | $ 38,400 | ||||||||||||
Cash paid to the sellers | 20,000 | ||||||||||||
Contingent earn-out liability | 18,400 | ||||||||||||
Aggregate maximum of contingent consideration | $ 20,000 | ||||||||||||
Earn-out period | 3 years | 3 years | |||||||||||
NDY | |||||||||||||
Business Acquisition | |||||||||||||
Number of employees | employee | 700 | 700 | |||||||||||
Aggregate fair value of purchase prices | $ 56,100 | ||||||||||||
Cash paid to the sellers | 46,900 | ||||||||||||
Contingent earn-out liability | 1,800 | $ 9.4 | $ 1,800 | 7,600 | $ 2.6 | ||||||||
Aggregate maximum of contingent consideration | $ 25 | $ 20,200 | |||||||||||
Earn-out period | 3 years | 3 years | 3 years | ||||||||||
Escrow deposit | $ 1,600 | ||||||||||||
Fair value adjustments to contingent consideration liabilities | 3,700 | $ 5.2 | (5,400) | $ (7.9) | $ (2,100) | $ (3) | |||||||
Maximum contingent consideration, year one | $ 7.4 | ||||||||||||
Maximum contingent consideration, year two | 8.8 | ||||||||||||
Maximum contingent consideration, year three | $ 8.8 | ||||||||||||
Percentage of maximum potential earn-out | 38.00% | ||||||||||||
eGlobalTech | |||||||||||||
Business Acquisition | |||||||||||||
Aggregate fair value of purchase prices | 49,100 | ||||||||||||
Contingent earn-out liability | 7,500 | $ 21,100 | $ 21,100 | 7,500 | 21,100 | ||||||||
Aggregate maximum of contingent consideration | 25,000 | $ 25,000 | $ 25,000 | ||||||||||
Earn-out period | 3 years | 3 years | 3 years | ||||||||||
Debt assumed | $ 24,700 | ||||||||||||
Purchase price related to payables | 3,300 | $ 3,300 | |||||||||||
Fair value adjustments to contingent consideration liabilities | 4,700 | ||||||||||||
Maximum contingent consideration, year one | $ 8,500 | ||||||||||||
Maximum contingent consideration, year two | 9,000 | ||||||||||||
Maximum contingent consideration, year three | $ 7,500 | ||||||||||||
Percentage of maximum potential earn-out | 84.00% | ||||||||||||
WYG plc | |||||||||||||
Business Acquisition | |||||||||||||
Number of employees | employee | 1,600 | 1,600 | |||||||||||
Aggregate fair value of purchase prices | $ 54,200 | ||||||||||||
Debt assumed | $ 11,500 | ||||||||||||
Acquisition and integration costs | $ 10,400 | ||||||||||||
SEG | |||||||||||||
Business Acquisition | |||||||||||||
Aggregate fair value of purchase prices | 40,900 | ||||||||||||
Cash paid to the sellers | 29,600 | ||||||||||||
Contingent earn-out liability | 8,100 | $ 11,300 | 8,100 | ||||||||||
Aggregate maximum of contingent consideration | 20,000 | $ 20,000 | $ 20,000 | ||||||||||
Earn-out period | 3 years | 3 years | |||||||||||
Fair value adjustments to contingent consideration liabilities | 3,400 | ||||||||||||
Maximum contingent consideration, year one | $ 5,000 | ||||||||||||
Maximum contingent consideration, year two | 7,000 | ||||||||||||
Maximum contingent consideration, year three | $ 8,000 | ||||||||||||
Percentage of maximum potential earn-out | 57.00% | ||||||||||||
BWF | |||||||||||||
Business Acquisition | |||||||||||||
Aggregate fair value of purchase prices | $ 48,500 | ||||||||||||
Cash paid to the sellers | 41,800 | ||||||||||||
Contingent earn-out liability | 5,200 | 5,200 | |||||||||||
Aggregate maximum of contingent consideration | $ 8,000 | $ 8,000 | |||||||||||
Earn-out period | 3 years | ||||||||||||
Payables related to estimated post-closing adjustments | $ 1,500 |
Acquisitions and Divestitures_2
Acquisitions and Divestitures - Changes in the Carrying Value of Estimated Contingent Earn-Out Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 27, 2020 | Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 | |
Earn-out payments: | ||||
Reported as cash used in operating activities | $ 0 | $ 0 | $ (2,349) | |
Reported as cash used in financing activities | (22,900) | (12,018) | (1,412) | |
Contingent consideration | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 52,992 | 35,290 | 2,438 | |
Acquisition date fair value of contingent earn-out liabilities | 16,581 | 27,704 | 32,210 | |
Earnings adjustment to contingent earn-out liabilities | $ (13,500) | |||
Foreign exchange impact | (247) | (558) | (854) | |
Earn-out payments: | ||||
Reported as cash used in operating activities | 0 | 0 | (2,349) | |
Reported as cash used in financing activities | (22,900) | (12,018) | (1,412) | |
Ending balance | $ 32,617 | 32,617 | 52,992 | 35,290 |
Interest expense | Contingent consideration | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Earnings adjustment to contingent earn-out liabilities | 1,162 | 1,489 | 1,005 | |
Operating income | Contingent consideration | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Earnings adjustment to contingent earn-out liabilities | $ (14,971) | $ 1,085 | $ 4,252 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Changes in Carrying Value of Goodwill (Details) - USD ($) | Jun. 29, 2020 | Sep. 27, 2020 | Sep. 29, 2019 | Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 |
Goodwill [Roll Forward] | ||||||
Balance at beginning of the period | $ 924,820,000 | $ 798,820,000 | ||||
Acquisitions | 80,176,000 | 146,699,000 | ||||
Impairment | $ 0 | $ (15,800,000) | $ (7,800,000) | (15,800,000) | (7,755,000) | $ 0 |
Translation and other | 4,302,000 | (12,944,000) | ||||
Balance at end of the period | 993,498,000 | 924,820,000 | 993,498,000 | 924,820,000 | 798,820,000 | |
GSG | ||||||
Goodwill [Roll Forward] | ||||||
Balance at beginning of the period | 441,802,000 | 389,741,000 | ||||
Acquisitions | 74,882,000 | 53,098,000 | ||||
Impairment | 0 | 0 | ||||
Translation and other | (369,000) | (1,037,000) | ||||
Balance at end of the period | 516,315,000 | 441,802,000 | 516,315,000 | 441,802,000 | 389,741,000 | |
CIG | ||||||
Goodwill [Roll Forward] | ||||||
Balance at beginning of the period | 483,018,000 | 409,079,000 | ||||
Acquisitions | 5,294,000 | 93,601,000 | ||||
Impairment | (15,800,000) | (7,755,000) | ||||
Translation and other | 4,671,000 | (11,907,000) | ||||
Balance at end of the period | $ 477,183,000 | $ 483,018,000 | $ 477,183,000 | $ 483,018,000 | $ 409,079,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Narrative (Details) - USD ($) | Jun. 29, 2020 | Sep. 27, 2020 | Sep. 27, 2020 | Jun. 28, 2020 | Sep. 29, 2019 | Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 |
Goodwill [Line Items] | ||||||||
Impairment of goodwill | $ 0 | $ 15,800,000 | $ 7,800,000 | $ 15,800,000 | $ 7,755,000 | $ 0 | ||
Carrying value | $ 2,378,558,000 | 2,378,558,000 | 2,147,408,000 | 2,378,558,000 | 2,147,408,000 | |||
Goodwill | 993,498,000 | 993,498,000 | 924,820,000 | 993,498,000 | 924,820,000 | 798,820,000 | ||
Foreign currency translation adjustments | 400,000 | 300,000 | ||||||
Amortization expense for intangible assets | 11,600,000 | 11,600,000 | 18,200,000 | |||||
Australia | ||||||||
Goodwill [Line Items] | ||||||||
Percentage negative growth | 7.00% | |||||||
GSG | ||||||||
Goodwill [Line Items] | ||||||||
Impairment of goodwill | 0 | 0 | ||||||
Goodwill | 516,315,000 | 516,315,000 | 441,802,000 | 516,315,000 | 441,802,000 | 389,741,000 | ||
Gross amounts of goodwill | 534,000,000 | 534,000,000 | 459,500,000 | 534,000,000 | 459,500,000 | |||
Accumulated impairment | 17,700,000 | 17,700,000 | 17,700,000 | 17,700,000 | 17,700,000 | |||
CIG | ||||||||
Goodwill [Line Items] | ||||||||
Impairment of goodwill | 15,800,000 | 7,755,000 | ||||||
Goodwill | 477,183,000 | 477,183,000 | 483,018,000 | 477,183,000 | 483,018,000 | $ 409,079,000 | ||
Gross amounts of goodwill | 598,700,000 | 598,700,000 | 588,700,000 | 598,700,000 | 588,700,000 | |||
Accumulated impairment | 121,500,000 | 121,500,000 | 105,700,000 | 121,500,000 | 105,700,000 | |||
All reporting units excluding ASP reporting unit | ||||||||
Goodwill [Line Items] | ||||||||
Percentage of excess of fair value over carrying value | 80.00% | |||||||
ASP | ||||||||
Goodwill [Line Items] | ||||||||
Impairment of goodwill | 15,800,000 | |||||||
Carrying value | 144,900,000 | 144,900,000 | 144,900,000 | |||||
Goodwill | $ 95,500,000 | $ 95,500,000 | $ 95,500,000 | |||||
ASP | CIG | ||||||||
Goodwill [Line Items] | ||||||||
Percentage of excess of fair value over carrying value | 20.00% | |||||||
RFS | ||||||||
Goodwill [Line Items] | ||||||||
Impairment of goodwill | 7,800,000 | |||||||
Carrying value | 61,000,000 | 61,000,000 | ||||||
Goodwill | $ 48,800,000 | $ 48,800,000 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Gross Amount, Accumulated Amortization and Estimated Amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 27, 2020 | Sep. 29, 2019 | |
Finite-lived intangible assets | ||
Gross Amount | $ 106,421 | $ 96,722 |
Accumulated Amortization | (92,478) | (80,282) |
Estimated amortization expense | ||
2021 | 8,786 | |
2022 | 2,652 | |
2023 | 1,915 | |
2024 | 590 | |
Total | $ 13,943 | 16,440 |
Client relations | ||
Finite-lived intangible assets | ||
Weighted- Average Remaining Life (in years) | 2 years 10 months 24 days | |
Gross Amount | $ 60,775 | 56,779 |
Accumulated Amortization | $ (53,392) | (50,455) |
Backlog | ||
Finite-lived intangible assets | ||
Weighted- Average Remaining Life (in years) | 8 months 12 days | |
Gross Amount | $ 37,682 | 32,229 |
Accumulated Amortization | $ (32,761) | (24,968) |
Technology and trade names | ||
Finite-lived intangible assets | ||
Weighted- Average Remaining Life (in years) | 1 year 9 months 18 days | |
Gross Amount | $ 7,964 | 7,714 |
Accumulated Amortization | $ (6,325) | $ (4,859) |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Sep. 27, 2020 | Jun. 28, 2020 | Mar. 29, 2020 | Dec. 29, 2019 | Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 | |
Property and Equipment | |||||||
Property and equipment, gross | $ 125,511 | $ 125,511 | $ 149,904 | ||||
Accumulated depreciation | (90,004) | (90,004) | (110,463) | ||||
Property and equipment, net | 35,507 | 35,507 | 39,441 | ||||
Depreciation expense related to property and equipment | 13,000 | 17,300 | $ 19,600 | ||||
Assets held-for-sale | 5,400 | ||||||
Gain on sale of property and equipment | 1,000 | $ 4,500 | $ 2,200 | $ 800 | 8,500 | ||
Equipment, furniture and fixtures | |||||||
Property and Equipment | |||||||
Property and equipment, gross | 90,942 | 90,942 | 114,652 | ||||
Leasehold improvements | |||||||
Property and Equipment | |||||||
Property and equipment, gross | 34,382 | 34,382 | 34,881 | ||||
Land and buildings | |||||||
Property and Equipment | |||||||
Property and equipment, gross | $ 187 | $ 187 | $ 371 |
Income Taxes - Summary (Details
Income Taxes - Summary (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 | |
Income before income taxes: | |||
United States | $ 209,443 | $ 185,535 | $ 180,034 |
Foreign | 18,548 | (10,399) | (5,472) |
Total income before income taxes | 227,991 | 175,136 | 174,562 |
Current: | |||
Federal | 24,102 | 30,051 | 46,840 |
State | 6,872 | 8,923 | 9,228 |
Foreign | 20,398 | 15,016 | 10,897 |
Total current income tax expense | 51,372 | 53,990 | 66,965 |
Deferred: | |||
Federal | 2,187 | (9,108) | (22,072) |
State | 870 | (1,195) | (1,471) |
Foreign | (328) | (27,312) | (5,817) |
Total deferred income tax expense | 2,729 | (37,615) | (29,360) |
Total income tax expense | $ 54,101 | $ 16,375 | $ 37,605 |
Reconciliation of effective income tax rate | |||
Tax at federal statutory rate | 21.00% | 21.00% | 24.50% |
State taxes, net of federal benefit | 2.70% | 3.40% | 4.20% |
Research and Development ("R&D") credits | (2.20%) | (4.70%) | (1.40%) |
Domestic production deduction | 0.00% | 0.00% | (0.20%) |
Tax differential on foreign earnings | 0.70% | 1.00% | 0.50% |
Non-taxable foreign interest income | (1.10%) | (1.70%) | (2.00%) |
Goodwill | 1.50% | 0.90% | 1.70% |
Stock compensation | (2.20%) | (2.40%) | (2.70%) |
Valuation allowance | 1.60% | (13.50%) | (0.50%) |
Change in uncertain tax positions | 0.40% | 2.40% | 1.90% |
Revaluation of deferred taxes | 0 | (0.014) | (0.084) |
Deferred tax adjustments | (1.30%) | (0.40%) | 2.10% |
Transition tax on foreign earnings | 0 | 0.014 | 0 |
Other | 2.60% | 3.30% | 1.80% |
Total income tax expense | 23.70% | 9.30% | 21.50% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2019 | Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 | Oct. 01, 2017 | |
Valuation Allowance [Line Items] | |||||
Effective tax rate | 23.70% | 9.30% | 21.50% | ||
Reduction in income tax expense due to excess tax benefits on share-based payments | $ 8,300,000 | $ 6,400,000 | $ 5,100,000 | ||
TCJA deferred income tax benefit | $ 2,600,000 | $ 10,100,000 | |||
Effective tax rates, excluding impact of non-deductible goodwill impairment and transaction costs, excess tax benefits on share-based payments, TCJA, and valuation allowance release | 25.60% | 24.60% | 30.30% | ||
Undistributed earnings of foreign subsidiaries | $ 66,900,000 | ||||
Incremental federal tax due to repatriation of foreign earnings | 2,000,000 | ||||
Valuation allowance | 24,395,000 | $ 20,543,000 | |||
Unrecognized tax benefits | 9,228,000 | 9,169,000 | $ 8,328,000 | $ 9,337,000 | |
Accrual of additional interest and penalties | 800,000 | 2,600,000 | 600,000 | ||
Reduction in accrued interest and penalties | 0 | 200,000 | 300,000 | ||
Amount of interest and penalties accrued | 4,400,000 | $ 3,600,000 | $ 1,200,000 | ||
Foreign | |||||
Valuation Allowance [Line Items] | |||||
Decrease in deferred tax valuation allowance | $ 22,300,000 | ||||
Net operating loss carry forwards which expire at various dates | 31,600,000 | ||||
Net operating loss carryforwards | 138,400,000 | ||||
Net operating loss carry forwards which have no expiration date | 106,800,000 | ||||
Capital loss carryforwards | 13,800,000 | ||||
Research and development credits | 4,300,000 | ||||
State | |||||
Valuation Allowance [Line Items] | |||||
Net operating loss carry forwards which expire at various dates | $ 43,700,000 |
Income Taxes - Schedule of temp
Income Taxes - Schedule of temporary differences comprising the net deferred income tax liability (Details) - USD ($) $ in Thousands | Sep. 27, 2020 | Sep. 29, 2019 |
Deferred Tax Assets: | ||
State taxes | $ 1,146 | $ 764 |
Reserves and contingent liabilities | 6,262 | 5,500 |
Allowance for doubtful accounts | 6,283 | 7,506 |
Accrued liabilities | 28,223 | 28,232 |
Lease liabilities, operating leases | 66,941 | |
Stock-based compensation | 5,905 | 6,700 |
Loss carry-forwards | 43,475 | 39,782 |
Valuation allowance | (24,395) | (20,543) |
Total deferred tax assets | 133,840 | 67,941 |
Deferred Tax Liabilities: | ||
Unbilled revenue | (14,451) | (21,886) |
Prepaid expense | (5,967) | (3,026) |
Right-of-use assets, operating leases | (66,941) | |
Intangibles | (29,130) | (26,482) |
Property and equipment | (1,615) | (1,133) |
Total deferred tax liabilities | (118,104) | (52,527) |
Net deferred tax assets | $ 15,736 | $ 15,414 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 | |
Reconciliation of unrecognized tax benefits [Roll Forward] | |||
Beginning balance | $ 9,169 | $ 8,328 | $ 9,337 |
Additions for current year tax positions | 700 | 1,342 | 1,928 |
Additions for prior year tax positions | 0 | 356 | 1,116 |
Reductions for prior year tax positions | (641) | (100) | 0 |
Settlements | 0 | (757) | (4,053) |
Ending balance | $ 9,228 | $ 9,169 | $ 8,328 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 27, 2020 | Sep. 29, 2019 |
Debt Disclosure [Abstract] | ||
Credit facilities | $ 291,659 | $ 276,434 |
Less: Current portion of long-term debt and other short-term borrowings | (49,264) | (12,500) |
Long-term debt, less current portion and other short-term borrowings | $ 242,395 | $ 263,934 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) | Jul. 30, 2018 | Sep. 27, 2020 |
Long-term debt | ||
Bank overdrafts | $ 33,600,000 | |
Bank overdraft protection | 50,000,000 | |
Standby Letters of Credit | ||
Long-term debt | ||
Letters of credit outstanding | 69,700,000 | |
Amended Credit Agreement | ||
Long-term debt | ||
Accordion feature, higher borrowing capacity option | $ 1,000,000,000 | |
Maximum borrowing capacity | $ 700,000,000 | |
Debt instrument term | 5 years | |
Accordion feature, increase limit | $ 300,000,000 | |
Annual principal payment, amortization percentage | 5.00% | |
Amount outstanding under credit facility | $ 254,900,000 | |
Weighted-average interest rate (as a percent) | 2.31% | |
Weighted-average rate including the effects of interest rate swap agreement (as a percent) | 3.52% | |
Debt covenant, maximum consolidated leverage ratio | 3 | |
Debt covenant, minimum consolidated interest coverage ratio | 3 | |
Consolidated leverage ratio | 1.10 | |
Consolidated fixed charge coverage ratio | 19.76 | |
Amended Credit Agreement | Federal Funds Effective Swap Rate | ||
Long-term debt | ||
Basis spread on variable rate | 0.50% | |
Amended Credit Agreement | Term Loan Facility | ||
Long-term debt | ||
Maximum borrowing capacity | $ 250,000,000 | |
Borrowings outstanding | $ 228,100,000 | |
Amended Credit Agreement | Revolving Credit Facility | ||
Long-term debt | ||
Maximum borrowing capacity | $ 450,000,000 | |
Borrowings outstanding | 26,800,000 | |
Amount available for borrowing under facility | 422,400,000 | |
Amended Credit Agreement | Revolving Credit Facility | Eurodollar | Minimum | ||
Long-term debt | ||
Basis spread on variable rate | 1.00% | |
Amended Credit Agreement | Revolving Credit Facility | Eurodollar | Maximum | ||
Long-term debt | ||
Basis spread on variable rate | 1.75% | |
Amended Credit Agreement | Revolving Credit Facility | Prime Rate or Eurodollar Rate | ||
Long-term debt | ||
Basis spread on variable rate | 1.00% | |
Amended Credit Agreement | Revolving Credit Facility | Prime Rate or Eurodollar Rate | Minimum | ||
Long-term debt | ||
Basis spread on variable rate | 0.00% | |
Amended Credit Agreement | Revolving Credit Facility | Prime Rate or Eurodollar Rate | Maximum | ||
Long-term debt | ||
Basis spread on variable rate | 0.75% | |
Amended Credit Agreement | Standby Letters of Credit | ||
Long-term debt | ||
Maximum borrowing capacity | $ 100,000,000 | |
Letters of credit outstanding | 700,000 | |
Amended Credit Agreement | Swingline loan | ||
Long-term debt | ||
Maximum borrowing capacity | 20,000,000 | |
Amended Credit Agreement | Multicurrency borrowings and letter of credit | ||
Long-term debt | ||
Maximum borrowing capacity | $ 200,000,000 | |
Other credit facilities | ||
Long-term debt | ||
Amount outstanding under credit facility | $ 36,600,000 |
Long-Term Debt - Scheduled Matu
Long-Term Debt - Scheduled Maturities of Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 27, 2020 | Sep. 29, 2019 |
Debt Disclosure [Abstract] | ||
2021 | $ 49,264 | |
2022 | 15,625 | |
2023 | 226,770 | |
Credit facilities | $ 291,659 | $ 276,434 |
Leases - Narrative (Details)
Leases - Narrative (Details) | Sep. 27, 2020 |
Lessee, Lease, Description [Line Items] | |
Renewal term (up to) | 5 years |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 month |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 12 years |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Details) $ in Thousands | 12 Months Ended |
Sep. 27, 2020USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 87,348 |
Sublease income | (2,216) |
Other | 72 |
Total lease cost | $ 85,204 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) $ in Thousands | 12 Months Ended |
Sep. 27, 2020USD ($) | |
Leases [Abstract] | |
Operating cash flows for operating leases | $ 80,289 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 317,587 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet and Other Information (Details) $ in Thousands | Sep. 27, 2020USD ($) |
Operating leases: | |
Right-of-use assets | $ 239,396 |
Lease liabilities: | |
Current | 69,650 |
Long-term | 191,955 |
Total operating lease liabilities | $ 261,605 |
Weighted-average remaining lease term: | |
Operating leases | 5 years |
Weighted-average discount rate: | |
Operating leases | 2.50% |
Leases - Maturity Analysis of t
Leases - Maturity Analysis of the Future Undiscounted Cash Flow of Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 29, 2019 | Sep. 27, 2020 | |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2021 | $ 75,074 | |
2022 | 64,972 | |
2023 | 44,733 | |
2024 | 30,991 | |
2025 | 21,466 | |
Beyond | 44,169 | |
Total lease payments | 281,405 | |
Less: imputed interest | (19,800) | |
Total present value of lease liabilities | $ 261,605 | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
Minimum rental commitments on operating leases | $ 343,500 | |
2020 | 108,800 | |
2021 | 66,400 | |
2022 | 51,400 | |
2023 | 36,500 | |
2024 | 25,800 | |
Thereafter | 54,600 | |
Rental expense | $ 79,300 |
Stockholders' Equity and Stoc_3
Stockholders' Equity and Stock Compensation Plans - Summary (Details) - USD ($) | 12 Months Ended | ||
Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 | |
Stock-based compensation and related income tax benefits | |||
Total stock-based compensation | $ 19,424,000 | $ 17,618,000 | $ 19,582,000 |
Income tax benefit related to stock-based compensation | (4,318,000) | (4,016,000) | (5,288,000) |
Stock-based compensation, net of tax benefit | $ 15,106,000 | 13,602,000 | 14,294,000 |
RSUs | |||
Stockholder's equity and stock compensation plans | |||
Vesting period | 4 years | ||
ESPP | |||
Stockholder's equity and stock compensation plans | |||
Available for future awards (in shares) | 611,265 | ||
Maximum amount that an employee can contribute during a purchase right period | $ 5,000 | ||
Exercise price as percentage of fair market value on the first day of purchase right period | 100.00% | ||
Exercise price as percentage of fair market value on the last day of purchase right period | 85.00% | ||
Stock-based compensation and related income tax benefits | |||
Total stock-based compensation | $ 1,200,000 | $ 900,000 | $ 600,000 |
2015 EIP | |||
Stockholder's equity and stock compensation plans | |||
The number every share or unit issued counts against aggregate share limit (in shares) | 3 | ||
2018 EIP | |||
Stockholder's equity and stock compensation plans | |||
Available for future awards (in shares) | 2,500,000 | ||
Grant date prior to March 6, 2006 | 2005 EIP | Stock options | |||
Stockholder's equity and stock compensation plans | |||
Vesting period | 4 years | ||
Expiration period | 10 years | ||
Grant date prior to March 6, 2006 | 2005 EIP | Stock options | First anniversary of grant date and monthly thereafter | |||
Stockholder's equity and stock compensation plans | |||
Percentage of vesting rights after specified period | 25.00% | ||
Grant date on or after March 6, 2006 | 2005 EIP | Stock options | |||
Stockholder's equity and stock compensation plans | |||
Expiration period | 8 years | ||
Grant date on or after March 6, 2006 | 2005 EIP | Stock options | Each anniversary of grant date | |||
Stockholder's equity and stock compensation plans | |||
Percentage of vesting rights after specified period | 25.00% | ||
Grant date on or after March 6, 2006 | 2005 EIP | RSUs | Each anniversary of grant date | |||
Stockholder's equity and stock compensation plans | |||
Percentage of vesting rights after specified period | 25.00% |
Stockholders' Equity and Stoc_4
Stockholders' Equity and Stock Compensation Plans - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 | |
Number of Options (in thousands) | |||
Outstanding at the beginning of the year (in shares) | 894,000 | ||
Exercised (in shares) | (355,000) | ||
Forfeited (in shares) | 0 | ||
Outstanding at the end of the period (in shares) | 539,000 | 894,000 | |
Vested or expected to vest at the end of the period (in shares) | 539,000 | ||
Exercisable at the end of the period (in shares) | 437,000 | ||
Weighted- Average Exercise Price per Share | |||
Outstanding at the beginning of the year (in dollars per share) | $ 33.28 | ||
Exercised (in dollars per share) | 28.63 | ||
Forfeited (in dollars per share) | 0 | ||
Outstanding at the end of the period (in dollars per share) | 36.34 | $ 33.28 | |
Vested or expected to vest at the end of the period (in dollars per share) | 36.34 | ||
Exercisable at the end of the period (in dollars per share) | $ 34.17 | ||
Weighted- Average Remaining Contractual Term (in years) | |||
Outstanding at the end of the period | 5 years 14 days | ||
Vested or expected to vest at the end of the period | 5 years 14 days | ||
Exercisable at the end of the period | 4 years 7 months 13 days | ||
Aggregate Intrinsic Value (in thousands) | |||
Outstanding at the end of the period | $ 29,623 | ||
Vested or expected to vest at the end of the period | 29,623 | ||
Exercisable at the end of the period | $ 24,932 | ||
Assumptions used in the Black-Scholes option-pricing model | |||
Options granted in the period (in shares) | 0 | 0 | |
Proceeds from exercise of stock options | $ 10,334 | $ 11,751 | $ 13,520 |
Stock options | |||
Assumptions used in the Black-Scholes option-pricing model | |||
Dividend yield | 1.00% | ||
Expected stock price volatility, minimum (as a percent) | 36.10% | ||
Expected stock price volatility, maximum (as a percent) | 38.80% | ||
Risk-free rate of return, annual, minimum (as a percent) | 1.70% | ||
Risk-free rate of return, annual, maximum (as a percent) | 2.90% | ||
Unrecognized compensation cost | $ 700 | ||
Weighted-average period to recognize the unrecognized compensation cost | 1 year | ||
Weighted-average fair value of stock options granted (in dollars per share) | $ 14.82 | ||
Aggregate intrinsic value of options exercised | $ 22,400 | 20,400 | $ 14,400 |
Proceeds from exercise of stock options | 10,300 | 11,800 | 13,500 |
Income tax benefit realized from exercises of nonqualified stock options and disqualifying dispositions of qualified options | $ 8,300 | $ 6,400 | $ 5,100 |
Stockholders' Equity and Stoc_5
Stockholders' Equity and Stock Compensation Plans - RSU and PSU (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 | |
Weighted-Average Grant Date Fair Value | |||
Stock-based compensation expense | $ 19,424 | $ 17,618 | $ 19,582 |
RSUs | |||
Stockholder's equity and stock compensation plans | |||
Vesting period | 4 years | ||
Number of Shares | |||
Nonvested balance at the beginning of the period (in shares) | 470,000 | 488,000 | 511,000 |
Granted (in shares) | 167,525 | 179,478 | 198,960 |
Vested (in shares) | (178,000) | (180,000) | (184,000) |
Forfeited (in shares) | (16,000) | (17,000) | (38,000) |
Nonvested balance at the end of the period (in shares) | 443,504 | 470,000 | 488,000 |
Weighted-Average Grant Date Fair Value | |||
Nonvested balance at the beginning of the period (in dollars per share) | $ 50.42 | $ 39.56 | $ 33.19 |
Granted (in dollars per share) | 83.92 | 66.26 | 48.16 |
Vested (in dollars per share) | 46.87 | 36.95 | 31.85 |
Forfeited (in dollars per share) | 65.43 | 48.56 | 36.39 |
Nonvested balance at the end of the period (in dollars per share) | $ 63.93 | $ 50.42 | $ 39.56 |
PSUs | |||
Stockholder's equity and stock compensation plans | |||
Vesting period | 3 years | ||
Percentage of shares that ultimately vest depending on growth in diluted earnings per share | 50.00% | ||
Percentage of shares that ultimately vest based on relative total shareholder return over the vesting period | 50.00% | ||
Number of Shares | |||
Nonvested balance at the beginning of the period (in shares) | 384,000 | 323,000 | 376,000 |
Granted (in shares) | 74,011 | 89,816 | 99,217 |
Vested (in shares) | (162,000) | (108,000) | (270,000) |
Adjustment (in shares) | 63,643 | 79,465 | 130,730 |
Forfeited (in shares) | (5,000) | 0 | (13,000) |
Nonvested balance at the end of the period (in shares) | 355,000 | 384,000 | 323,000 |
Weighted-Average Grant Date Fair Value | |||
Nonvested balance at the beginning of the period (in dollars per share) | $ 53.67 | $ 44.27 | $ 36.05 |
Granted (in dollars per share) | 99.85 | 80.41 | 57.40 |
Vested (in dollars per share) | 47.28 | 31.63 | 31.66 |
Adjustment (in dollars per share) | 48.36 | 31.63 | 31.66 |
Forfeited (in dollars per share) | 83.98 | 0 | 41.80 |
Nonvested balance at the end of the period (in dollars per share) | $ 64.83 | $ 53.67 | $ 44.27 |
RSUs and PSUs | |||
Weighted-Average Grant Date Fair Value | |||
Stock-based compensation expense | $ 17,700 | $ 15,400 | $ 15,500 |
Unrecognized compensation cost | $ 27,700 | ||
Director | RSUs | |||
Stockholder's equity and stock compensation plans | |||
Vesting period | 1 year |
Stockholders' Equity and Stoc_6
Stockholders' Equity and Stock Compensation Plans - ESPP (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 | |
Stockholder's equity and stock compensation plans | |||
Cash received from exercise of purchase rights | $ 10,334 | $ 11,751 | $ 13,520 |
Assumptions used in the Black-Scholes option-pricing model | |||
Stock-based compensation expense | $ 19,424 | $ 17,618 | $ 19,582 |
ESPP | |||
Stockholder's equity and stock compensation plans | |||
Shares purchased (in shares) | 168 | 148 | 141 |
Weighted-average purchase price per share (in dollars per share) | $ 51.77 | $ 46.38 | $ 40.38 |
Cash received from exercise of purchase rights | $ 8,715 | $ 6,844 | $ 5,727 |
Assumptions used in the Black-Scholes option-pricing model | |||
Dividend yield | 1.00% | 1.00% | 1.00% |
Expected stock price volatility | 26.50% | 26.70% | 24.00% |
Risk-free rate of return, annual | 1.60% | 2.60% | 1.80% |
Expected life (in years) | 1 year | 1 year | 1 year |
Stock-based compensation expense | $ 1,200 | $ 900 | $ 600 |
Unrecognized compensation cost | 300 | $ 200 | |
Accumulated amount by participants to purchase the entity's common stock | $ 8,500 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |||
Employer contributions to the plans | $ 25 | $ 23.3 | $ 22.4 |
Assets related to deferred compensation plans | 35.1 | 30.4 | |
Liabilities related to deferred compensation plans | $ 35 | $ 29.5 |
Earnings per Share - Calculatio
Earnings per Share - Calculation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 27, 2020 | Jun. 28, 2020 | Mar. 29, 2020 | Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 30, 2018 | Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |||||||||||
Net income attributable to Tetra Tech | $ 44,654 | $ 45,497 | $ 36,397 | $ 47,310 | $ 11,527 | $ 49,233 | $ 55,911 | $ 41,997 | $ 173,859 | $ 158,668 | $ 136,883 |
Weighted-average common shares outstanding – basic (in shares) | 53,841 | 53,985 | 54,699 | 54,560 | 54,617 | 54,819 | 55,143 | 55,390 | 54,235 | 54,986 | 55,670 |
Effect of diluted stock options and unvested restricted stock (in shares) | 787 | 950 | 928 | ||||||||
Weighted-average common stock outstanding – diluted (in shares) | 54,603 | 54,692 | 55,463 | 55,438 | 55,618 | 55,768 | 55,985 | 56,366 | 55,022 | 55,936 | 56,598 |
Earnings per share attributable to Tetra Tech: | |||||||||||
Basic (in dollars per share) | $ 0.83 | $ 0.84 | $ 0.67 | $ 0.87 | $ 0.21 | $ 0.90 | $ 1.01 | $ 0.76 | $ 3.21 | $ 2.89 | $ 2.46 |
Diluted (in dollars per share) | $ 0.82 | $ 0.83 | $ 0.66 | $ 0.85 | $ 0.21 | $ 0.88 | $ 1 | $ 0.75 | $ 3.16 | $ 2.84 | $ 2.42 |
Earnings per Share - Antidiluti
Earnings per Share - Antidilutive Securities (Details) - shares | 12 Months Ended | ||
Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |||
Securities excluded from the calculation of dilutive potential common shares (in shares) | 0 | 0 | 100,000 |
Derivative Financial Instrume_3
Derivative Financial Instruments - General Information (Details) | 12 Months Ended | ||
Sep. 27, 2020USD ($)instrument | Sep. 30, 2018instrumentagreement | Sep. 29, 2019USD ($)instrument | |
Not designated as hedging instruments | |||
Derivative financial instruments | |||
Number of derivative instruments | instrument | 0 | 0 | 0 |
Interest rate swap agreements | Designated as cash flow hedges | Derivatives designated as hedging instruments | |||
Derivative financial instruments | |||
Number of derivative agreements | agreement | 5 | ||
Notional Amount | $ 228,100,000 | ||
Fixed Rate | 2.79% | ||
Loss to be reclassified during next twelve months | $ 5,800,000 | ||
Period of reclassification from accumulated other comprehensive income to interest expense | 12 months | ||
Interest rate swap agreements | Designated as cash flow hedges | Derivatives designated as hedging instruments | Other current liabilities | |||
Derivative financial instruments | |||
Fair value of interest rate swap agreements | $ (15,500,000) | $ (10,900,000) | |
Interest Rate Swap 1 | Designated as cash flow hedges | Derivatives designated as hedging instruments | |||
Derivative financial instruments | |||
Notional Amount | 45,600,000 | ||
Interest Rate Swap 2 | Designated as cash flow hedges | Derivatives designated as hedging instruments | |||
Derivative financial instruments | |||
Notional Amount | 45,600,000 | ||
Interest Rate Swap 3 | Designated as cash flow hedges | Derivatives designated as hedging instruments | |||
Derivative financial instruments | |||
Notional Amount | 45,600,000 | ||
Interest Rate Swap 4 | Designated as cash flow hedges | Derivatives designated as hedging instruments | |||
Derivative financial instruments | |||
Notional Amount | 45,600,000 | ||
Interest Rate Swap 5 | Designated as cash flow hedges | Derivatives designated as hedging instruments | |||
Derivative financial instruments | |||
Notional Amount | 45,600,000 | ||
Foreign currency forward contracts and interest rate swap agreements | Derivatives designated as hedging instruments | |||
Derivative financial instruments | |||
Ineffective portion | 0 | ||
Amounts excluded from effectiveness testing | $ 0 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Fair Value of Outstanding Derivatives (Details) - USD ($) $ in Thousands | Sep. 27, 2020 | Sep. 29, 2019 |
Interest rate swap agreements | Derivatives designated as hedging instruments | Designated as cash flow hedges | Other current liabilities | ||
Derivative financial instruments | ||
Interest rate swap agreements | $ 15,512 | $ 11,009 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Schedule of Changed in FV of Cash Flow Hedges (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
(Loss) gain recognized in other comprehensive income, net of tax | $ (4,638) | ||
(Loss) gain recognized in other comprehensive income, net of tax | $ (12,125) | $ 806 | |
Interest rate swap agreements | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
(Loss) gain recognized in other comprehensive income, net of tax | $ (4,638) | ||
(Loss) gain recognized in other comprehensive income, net of tax | $ (12,125) | $ 806 |
Reclassifications Out of Accu_3
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 27, 2020 | Sep. 29, 2019 | |
Reclassifications out of accumulated other comprehensive income (loss) | ||
Beginning balance | $ 989,464 | $ 967,100 |
Amounts reclassified from accumulated other comprehensive income | ||
Ending balance | 1,037,373 | 989,464 |
Accumulated Other Comprehensive Income (Loss) | ||
Reclassifications out of accumulated other comprehensive income (loss) | ||
Beginning balance | (160,584) | (127,350) |
Other comprehensive income (loss) before reclassifications | 2,837 | (32,356) |
Amounts reclassified from accumulated other comprehensive income | ||
Net current-period other comprehensive income (loss) | (1,202) | (33,234) |
Ending balance | (161,786) | (160,584) |
Accumulated Other Comprehensive Income (Loss) | Interest rate contracts | ||
Amounts reclassified from accumulated other comprehensive income | ||
Interest rate contracts, net of tax | (4,039) | (878) |
Foreign Currency Translation Adjustments | ||
Reclassifications out of accumulated other comprehensive income (loss) | ||
Beginning balance | (149,711) | (128,602) |
Other comprehensive income (loss) before reclassifications | 3,436 | (21,109) |
Amounts reclassified from accumulated other comprehensive income | ||
Net current-period other comprehensive income (loss) | 3,436 | (21,109) |
Ending balance | (146,275) | (149,711) |
Foreign Currency Translation Adjustments | Interest rate contracts | ||
Amounts reclassified from accumulated other comprehensive income | ||
Interest rate contracts, net of tax | 0 | 0 |
Gain (Loss) on Derivative Instruments | ||
Reclassifications out of accumulated other comprehensive income (loss) | ||
Beginning balance | (10,873) | 1,252 |
Other comprehensive income (loss) before reclassifications | (11,247) | |
Amounts reclassified from accumulated other comprehensive income | ||
Net current-period other comprehensive income (loss) | (12,125) | |
Ending balance | (10,873) | |
Gain (Loss) on Derivative Instruments | Interest rate contracts | ||
Amounts reclassified from accumulated other comprehensive income | ||
Interest rate contracts, net of tax | $ (878) | |
Gain (Loss) on Derivative Instruments | ||
Reclassifications out of accumulated other comprehensive income (loss) | ||
Other comprehensive income (loss) before reclassifications | (599) | |
Amounts reclassified from accumulated other comprehensive income | ||
Net current-period other comprehensive income (loss) | (4,638) | |
Ending balance | (15,511) | |
Gain (Loss) on Derivative Instruments | Interest rate contracts | ||
Amounts reclassified from accumulated other comprehensive income | ||
Interest rate contracts, net of tax | $ (4,039) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) $ in Millions | Sep. 27, 2020USD ($) |
Amended Credit Agreement | |
Long-term debt | |
Amount outstanding under credit facility | $ 254.9 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Jul. 15, 2019action |
Commitments and Contingencies Disclosure [Abstract] | |
Number of qui tam actions | 3 |
Reportable Segments - Financial
Reportable Segments - Financial Information (Details) | Jun. 29, 2020USD ($) | Sep. 27, 2020USD ($) | Jun. 28, 2020USD ($) | Mar. 29, 2020USD ($) | Dec. 29, 2019USD ($) | Sep. 29, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 30, 2018USD ($) | Sep. 27, 2020USD ($)segment | Sep. 29, 2019USD ($) | Sep. 30, 2018USD ($) |
Financial information concerning reportable segments | ||||||||||||
Number of reportable segments | segment | 2 | |||||||||||
Revenue | $ 753,364,000 | $ 709,771,000 | $ 734,133,000 | $ 797,623,000 | $ 841,502,000 | $ 825,793,000 | $ 722,621,000 | $ 717,431,000 | $ 2,994,891,000 | $ 3,107,348,000 | $ 2,964,148,000 | |
Income from operations | 66,735,000 | $ 63,525,000 | $ 47,530,000 | $ 63,302,000 | 20,665,000 | $ 64,841,000 | $ 47,545,000 | $ 55,711,000 | 241,091,000 | 188,762,000 | 190,086,000 | |
Amortization expense for intangible assets | 11,600,000 | 11,600,000 | 18,200,000 | |||||||||
Fair value adjustments to contingent consideration liabilities | 14,971,000 | (1,085,000) | (4,252,000) | |||||||||
Impairment of goodwill | $ 0 | 15,800,000 | 7,800,000 | 15,800,000 | 7,755,000 | 0 | ||||||
Total Assets | 2,378,558,000 | 2,147,408,000 | 2,378,558,000 | 2,147,408,000 | ||||||||
GSG | ||||||||||||
Financial information concerning reportable segments | ||||||||||||
Impairment of goodwill | 0 | 0 | ||||||||||
CIG | ||||||||||||
Financial information concerning reportable segments | ||||||||||||
Impairment of goodwill | 15,800,000 | 7,755,000 | ||||||||||
Operating segments | GSG | ||||||||||||
Financial information concerning reportable segments | ||||||||||||
Revenue | 1,778,922,000 | 1,820,671,000 | 1,694,871,000 | |||||||||
Income from operations | 168,669,000 | 185,263,000 | 168,211,000 | |||||||||
Total Assets | 649,417,000 | 587,040,000 | 649,417,000 | 587,040,000 | ||||||||
Operating segments | CIG | ||||||||||||
Financial information concerning reportable segments | ||||||||||||
Revenue | 1,266,059,000 | 1,342,509,000 | 1,323,142,000 | |||||||||
Income from operations | 114,022,000 | 79,633,000 | 74,451,000 | |||||||||
Total Assets | 479,238,000 | 450,276,000 | 479,238,000 | 450,276,000 | ||||||||
Operating segments | RCM | ||||||||||||
Financial information concerning reportable segments | ||||||||||||
Revenue | 198,000 | (1,542,000) | 14,199,000 | |||||||||
Income from operations | 0 | (5,933,000) | (4,573,000) | |||||||||
Total Assets | 14,258,000 | 15,608,000 | 14,258,000 | 15,608,000 | ||||||||
Elimination of inter-segment revenue | ||||||||||||
Financial information concerning reportable segments | ||||||||||||
Revenue | (50,288,000) | (54,290,000) | (68,064,000) | |||||||||
Corporate | ||||||||||||
Financial information concerning reportable segments | ||||||||||||
Income from operations | (41,600,000) | (70,201,000) | $ (48,003,000) | |||||||||
Total Assets | $ 1,235,645,000 | $ 1,094,484,000 | $ 1,235,645,000 | $ 1,094,484,000 |
Reportable Segments - Geographi
Reportable Segments - Geographic Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 27, 2020 | Jun. 28, 2020 | Mar. 29, 2020 | Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 30, 2018 | Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 | |
Reportable Segments | |||||||||||
Revenue | $ 753,364 | $ 709,771 | $ 734,133 | $ 797,623 | $ 841,502 | $ 825,793 | $ 722,621 | $ 717,431 | $ 2,994,891 | $ 3,107,348 | $ 2,964,148 |
United States | |||||||||||
Reportable Segments | |||||||||||
Revenue | 2,107,457 | 2,247,780 | 2,232,013 | ||||||||
Long-Lived Assets | 230,933 | 51,859 | 230,933 | 51,859 | 57,256 | ||||||
Foreign countries | |||||||||||
Reportable Segments | |||||||||||
Revenue | 887,434 | 859,568 | 732,135 | ||||||||
Long-Lived Assets | $ 108,348 | $ 46,113 | $ 108,348 | $ 46,113 | $ 28,235 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |||
Related party revenues | $ 88,200 | $ 99,100 | $ 75,000 |
Related party expenses | 86,400 | 98,500 | $ 76,600 |
Accounts receivable, net | 20,884 | 19,351 | |
Contract assets | 3,261 | 9,681 | |
Contract liabilities | $ 478 | $ 111 |
Quarterly Financial Informati_3
Quarterly Financial Information - Unaudited (Details) - USD ($) $ / shares in Units, shares in Thousands | Jun. 29, 2020 | Sep. 27, 2020 | Jun. 28, 2020 | Mar. 29, 2020 | Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 30, 2018 | Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 |
Business Acquisition | ||||||||||||
COVID-19 incremental costs | $ 8,200,000 | |||||||||||
Impairment of goodwill | $ 0 | $ 15,800,000 | $ 7,800,000 | $ 15,800,000 | $ 7,755,000 | $ 0 | ||||||
Gain on sale of property and equipment | 1,000,000 | $ 4,500,000 | 2,200,000 | $ 800,000 | 8,500,000 | |||||||
Severance and other disposition costs | 10,900,000 | |||||||||||
Revenue | 753,364,000 | 709,771,000 | 734,133,000 | 797,623,000 | 841,502,000 | $ 825,793,000 | $ 722,621,000 | $ 717,431,000 | 2,994,891,000 | 3,107,348,000 | 2,964,148,000 | |
Income from operations | 66,735,000 | 63,525,000 | 47,530,000 | 63,302,000 | 20,665,000 | 64,841,000 | 47,545,000 | 55,711,000 | 241,091,000 | 188,762,000 | 190,086,000 | |
Net income attributable to Tetra Tech | $ 44,654,000 | $ 45,497,000 | $ 36,397,000 | $ 47,310,000 | $ 11,527,000 | $ 49,233,000 | $ 55,911,000 | $ 41,997,000 | $ 173,859,000 | $ 158,668,000 | $ 136,883,000 | |
Earnings per share attributable to Tetra Tech: | ||||||||||||
Basic (in dollars per share) | $ 0.83 | $ 0.84 | $ 0.67 | $ 0.87 | $ 0.21 | $ 0.90 | $ 1.01 | $ 0.76 | $ 3.21 | $ 2.89 | $ 2.46 | |
Diluted (in dollars per share) | $ 0.82 | $ 0.83 | $ 0.66 | $ 0.85 | $ 0.21 | $ 0.88 | $ 1 | $ 0.75 | $ 3.16 | $ 2.84 | $ 2.42 | |
Weighted-average common shares outstanding: | ||||||||||||
Basic (in shares) | 53,841 | 53,985 | 54,699 | 54,560 | 54,617 | 54,819 | 55,143 | 55,390 | 54,235 | 54,986 | 55,670 | |
Diluted (in shares) | 54,603 | 54,692 | 55,463 | 55,438 | 55,618 | 55,768 | 55,985 | 56,366 | 55,022 | 55,936 | 56,598 | |
Foreign | ||||||||||||
Business Acquisition | ||||||||||||
Decrease in deferred tax valuation allowance | $ 22,300,000 | |||||||||||
Contingent consideration | ||||||||||||
Business Acquisition | ||||||||||||
Net gains in earnings for adjustments on contingent earn-out liabilities | $ 13,500,000 | |||||||||||
WYG plc | ||||||||||||
Business Acquisition | ||||||||||||
Business Combination, Acquisition Related Costs | $ 10,400,000 |
SCHEDULE II - VALUATION AND Q_2
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 | |
Allowance for doubtful accounts | |||
Changes in valuation and qualifying accounts and reserves | |||
Balance at Beginning of Period | $ 10,562 | $ 5,188 | $ 3,987 |
Charged to Costs and Expenses | 1,472 | 7,242 | 1,496 |
Deductions | (4,887) | (1,868) | (295) |
Other | 0 | 0 | 0 |
Balance at End of Period | 7,147 | 10,562 | 5,188 |
Income tax valuation allowance | |||
Changes in valuation and qualifying accounts and reserves | |||
Balance at Beginning of Period | 20,543 | 21,479 | 25,326 |
Charged to Costs and Expenses | 3,852 | 255 | 900 |
Deductions | 0 | (23,714) | 0 |
Other | 0 | 22,523 | (4,747) |
Balance at End of Period | $ 24,395 | $ 20,543 | $ 21,479 |
Uncategorized Items - ttek-2020
Label | Element | Value |
Restricted Cash | us-gaap_RestrictedCash | $ 2,699,000 |
Restricted Cash | us-gaap_RestrictedCash | 169,000 |
Restricted Cash | us-gaap_RestrictedCash | $ 0 |