Exhibit 99.1
July 21, 2004
Tetra Tech Reports Third Quarter 2004 Results
Pasadena, California. Tetra Tech, Inc. (NASDAQ: TTEK) today announced third quarter results for fiscal year 2004. Revenue for the quarter ended June 27, 2004 was $375.5 million, up 19.8% from revenue of $313.6 million for the same quarter last year. Revenue, net of subcontractor costs, for the quarter was $263.2 million, up 13.5% from $231.8 million a year ago. Income from operations for the quarter was $17.4 million, 31.8% less than the $25.6 million for last year’s third quarter. Net income for the quarter was $9.0 million, down 34.6% from $13.8 million a year ago. Diluted earnings per share were 16 cents compared to 25 cents for the previous year, a 36.0% decrease.
Revenue for the nine months ended June 27, 2004 was $1,044.0 million, up 31.8% from revenue of $792.1 million for the same period last year. Revenue, net of subcontractor costs, for the nine months was $747.7 million, up 23.5% from $605.6 million a year ago. Income from operations for the nine-month period was $65.3 million, 2.1% more than the $64.0 million for the nine-month period last year. Net income for the nine-month period was $35.0 million, compared to a net loss of $80.3 million last year due to cumulative effect of an accounting change of $114.7 million in 2003. Diluted earnings per share before the cumulative effect of accounting change for the nine-month period was 61 cents compared to 62 cents last year, a 1.6% decrease.
Summary of Financial Results:
(in thousands, except per share data)
|
| Third Quarter Ended |
| Nine Months Ended |
| ||||||||
|
| June 27, 2004 |
| June 29, 2003 |
| June 27, 2004 |
| June 29, 2003 |
| ||||
Revenue |
| $ | 375,527 |
| $ | 313,556 |
| $ | 1,044,024 |
| $ | 792,100 |
|
Revenue, Net of Subcontractor Costs |
| 263,174 |
| 231,792 |
| 747,697 |
| 605,644 |
| ||||
Income from Operations |
| 17,439 |
| 25,564 |
| 65,345 |
| 64,011 |
| ||||
Income Before Cumulative Effect of Accounting Change |
| 9,031 |
| 13,811 |
| 35,002 |
| 34,375 |
| ||||
Net Income/(Loss) |
| 9,031 |
| 13,811 |
| 35,002 |
| (80,294 | ) | ||||
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EPS Before Cumulative Effect of Accounting Change: |
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Basic(1) |
| 0.16 |
| 0.25 |
| 0.63 |
| 0.63 |
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Diluted |
| 0.16 |
| 0.25 |
| 0.61 |
| 0.62 |
| ||||
Basic Shares Outstanding(1) |
| 56,104 |
| 54,788 |
| 55,831 |
| 54,639 |
| ||||
Diluted Shares Outstanding |
| 57,157 |
| 56,086 |
| 57,339 |
| 55,503 |
| ||||
(1) EPS-basic and basic shares outstanding have been revised for the periods ended June 29, 2003 to include 1,235,000 shares of common stock issuable upon the exchange of exchangeable shares of a subsidiary.
Business Outlook
The following statements are based on current expectations. These statements are forward-looking and the actual results could differ materially. These statements do not include the potential impact of material corporate transactions that may be completed after the date of this release. The Business Outlook section should be read in conjunction with the information on “Forward-Looking Statements” at the end of this release.
Revenue, net of subcontractor costs, for the fourth quarter is expected to range from approximately $260 million to $285 million. Tetra Tech expects diluted earnings per share for the fourth quarter to be approximately 24 cents. However, the Company continues to assess and make changes in its civil infrastructure and communications businesses. The speed of implementing these changes and the stability of market conditions in these business areas will impact the Company’s ability to meet its guidance.
About Tetra Tech (www.tetratech.com)
Tetra Tech is a leading provider of consulting, engineering and technical services. With nearly 9,000 associates located in the United States and internationally, the Company supports commercial and government clients in the areas of resource management and infrastructure. Tetra Tech’s services include research and development, applied science and technology, engineering design, construction management, and operations and maintenance.
Investors will have the opportunity to access a live audio-visual webcast concerning the third quarter results through a link posted on the Company’s website at www.tetratech.com on July 22, 2004 at 8:00 a.m. (PDT)
CONTACT: Li-San Hwang, CEO or Mike Bieber, Investor Relations (626) 351-4664
This news release contains forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include information concerning future events and the future financial performance of Tetra Tech that involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results. Readers are urged to read the documents filed by Tetra Tech with the SEC, specifically the most recent reports on Form 10-K, 10-Q and 8-K, each as it may be amended from time to time, which identify risk factors that could cause actual results to differ materially from the forward-looking statements. Among the important factors or risks that could cause actual results or events to differ materially from those in the forward-looking statements in this release are: acquisition strategy risks; fluctuations in quarterly operating results and stock price; the impact of downturns in the financial markets on clients; management of growth strategy; credit risks associated with commercial clients; the consolidation of client base; loss of key personnel or the inability to attract and retain qualified personnel; changes in existing laws and regulations; concentration of revenues from agencies of the Federal government and reductions in spending by these agencies; audit of contracts with governmental agencies; losses under fixed-price contracts or termination of contracts at the client’s discretion; backlog cancellation or adjustment; inability to find qualified subcontractors; competition; risks of professional and other liabilities; conflict of interest issues; and foreign currency fluctuations. The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto included in Tetra Tech’s most recent reports on Form 10-Q and Form 10-K, each as it may be amended from time to time. Tetra Tech’s results of operations for the fiscal quarter ended June 27, 2004 are not necessarily indicative of Tetra Tech’s operating results for any future periods. Any projections in this release are based on limited information currently available to Tetra Tech, which is subject to change. Although any such projections and the factors influencing them will likely change, Tetra Tech will not necessarily update the information, since Tetra Tech will only provide guidance at certain points during the year. Such information speaks only as of the date of this release.
2
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TETRA TECH, INC. | |
|
Unaudited Investors Report |
| 2000 |
| 2001 |
| 2002 |
| 2003 |
| 2004 |
| |||||||||||||||||||||||||||||||||||
($ in Thousands, Except Per Share Data) |
| Total |
| Total |
| Total |
| 1st Qtr |
| 2nd Qtr |
| 6 mos |
| 3rd Qtr |
| 9 mos |
| 4 Qtr |
| Total |
| 1st Qtr |
| 2nd Qtr |
| 6 mos |
| 3rd Qtr |
| 9 mos |
| |||||||||||||||
REVENUE |
| 794,578 |
| 973,944 |
| 966,223 |
| 233,080 |
| 245,464 |
| 478,544 |
| 313,556 |
| 792,100 |
| 339,950 |
| 1,132,050 |
| 337,102 |
| 331,395 |
| 668,497 |
| 375,527 |
| 1,044,024 |
| |||||||||||||||
REVENUE, NET OF SUBCONTRACTOR COST |
| 598,121 |
| 730,064 |
| 740,715 |
| 180,982 |
| 192,870 |
| 373,852 |
| 231,792 |
| 605,644 |
| 255,128 |
| 860,772 |
| 241,705 |
| 242,818 |
| 484,523 |
| 263,174 |
| 747,697 |
| |||||||||||||||
Resource Management |
| 246,851 |
| 292,299 |
| 356,983 |
| 91,548 |
| 105,282 |
| 196,830 |
| 144,550 |
| 341,380 |
| 155,556 |
| 496,936 |
| 142,689 |
| 141,661 |
| 284,350 |
| 147,730 |
| 432,080 |
| |||||||||||||||
Infrastructure |
| 343,629 |
| 432,642 |
| 377,888 |
| 87,800 |
| 86,029 |
| 173,829 |
| 86,536 |
| 260,365 |
| 96,640 |
| 357,005 |
| 97,179 |
| 99,173 |
| 196,352 |
| 113,339 |
| 309,691 |
| |||||||||||||||
Elimination/Other |
| 7,641 |
| 5,123 |
| 5,844 |
| 1,634 |
| 1,559 |
| 3,193 |
| 706 |
| 3,899 |
| 2,932 |
| 6,831 |
| 1,837 |
| 1,984 |
| 3,821 |
| 2,105 |
| 5,926 |
| |||||||||||||||
GROSS PROFIT |
| 145,249 |
| 170,590 |
| 158,562 |
| 37,608 |
| 41,795 |
| 79,403 |
| 49,871 |
| 129,274 |
| 51,340 |
| 180,614 |
| 47,859 |
| 48,117 |
| 95,976 |
| 43,423 |
| 139,399 |
| |||||||||||||||
GROSS PROFIT % |
| 24.3 | % | 23.4 | % | 21.4 | % | 20.8 | % | 21.7 | % | 21.2 | % | 21.5 | % | 21.3 | % | 20.1 | % | 21.0 | % | 19.8 | % | 19.8 | % | 19.8 | % | 16.5 | % | 18.6 | % | |||||||||||||||
SEGMENT INCOME FROM OPERATIONS |
| 80,708 |
| 58,434 |
| 71,233 |
| 17,258 |
| 21,505 |
| 38,763 |
| 25,971 |
| 64,734 |
| 29,704 |
| 94,438 |
| 24,467 |
| 24,526 |
| 48,993 |
| 18,144 |
| 67,137 |
| |||||||||||||||
Resource Management |
| 32,901 |
| 35,034 |
| 44,902 |
| 10,141 |
| 10,333 |
| 20,474 |
| 17,841 |
| 38,315 |
| 21,329 |
| 59,644 |
| 14,392 |
| 18,429 |
| 32,821 |
| 16,649 |
| 49,470 |
| |||||||||||||||
Infrastructure |
| 48,886 |
| 23,120 |
| 31,377 |
| 7,166 |
| 9,796 |
| 16,962 |
| 8,536 |
| 25,498 |
| 5,299 |
| 30,797 |
| 9,764 |
| 6,985 |
| 16,749 |
| 1,810 |
| 18,559 |
| |||||||||||||||
Elimination/Other |
| (1,079 | ) | 280 |
| (5,046 | ) | (49 | ) | 1,376 |
| 1,327 |
| (406 | ) | 921 |
| 3,076 |
| 3,997 |
| 311 |
| (888 | ) | (577 | ) | (315 | ) | (892 | ) | |||||||||||||||
SEGMENT INCOME FROM OPERATIONS % |
| 13.5 | % | 8.0 | % | 9.6 | % | 9.5 | % | 11.1 | % | 10.4 | % | 11.2 | % | 10.7 | % | 11.6 | % | 11.0 | % | 10.1 | % | 10.1 | % | 10.1 | % | 6.9 | % | 9.0 | % | |||||||||||||||
Resource Management |
| 13.3 | % | 12.0 | % | 12.6 | % | 11.1 | % | 9.8 | % | 10.4 | % | 12.3 | % | 11.2 | % | 13.7 | % | 12.0 | % | 10.0 | % | 12.8 | % | 11.4 | % | 11.1 | % | 11.3 | % | |||||||||||||||
Infrastructure |
| 14.2 | % | 5.3 | % | 8.3 | % | 8.2 | % | 11.4 | % | 9.8 | % | 9.9 | % | 9.8 | % | 5.5 | % | 8.6 | % | 10.0 | % | 7.0 | % | 8.5 | % | 1.6 | % | 6.0 | % | |||||||||||||||
Amortization Expense |
| 6,463 |
| 9,192 |
| 10,811 |
| 135 |
| 181 |
| 316 |
| 407 |
| 723 |
| 563 |
| 1,286 |
| 526 |
| 561 |
| 1,087 |
| 705 |
| 1,792 |
| |||||||||||||||
INCOME FROM OPERATIONS |
| 74,245 |
| 49,242 |
| 60,422 |
| 17,123 |
| 21,324 |
| 38,447 |
| 25,564 |
| 64,011 |
| 29,141 |
| 93,152 |
| 23,941 |
| 23,965 |
| 47,906 |
| 17,439 |
| 65,345 |
| |||||||||||||||
Net Interest Expense |
| 7,026 |
| 8,543 |
| 5,453 |
| 1,892 |
| 2,281 |
| 4,173 |
| 2,546 |
| 6,719 |
| 2,555 |
| 9,274 |
| 2,372 |
| 2,249 |
| 4,621 |
| 2,387 |
| 7,008 |
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PRE-TAX INCOME |
| 67,219 |
| 40,699 |
| 54,969 |
| 15,231 |
| 19,043 |
| 34,274 |
| 23,018 |
| 57,292 |
| 26,586 |
| 83,878 |
| 21,569 |
| 21,716 |
| 43,285 |
| 15,052 |
| 58,337 |
| |||||||||||||||
Income Tax Expense |
| 26,777 |
| 9,874 |
| 23,059 |
| 6,092 |
| 7,618 |
| 13,710 |
| 9,207 |
| 22,917 |
| 10,852 |
| 33,769 |
| 8,627 |
| 8,687 |
| 17,314 |
| 6,021 |
| 23,335 |
| |||||||||||||||
Effective Tax Rate |
| 39.8 | % | 24.3 | % | 41.9 | % | 40.0 | % | 40.0 | % | 40.0 | % | 40.0 | % | 40.0 | % | 40.8 | % | 40.3 | % | 40.0 | % | 40.0 | % | 40.0 | % | 40.0 | % | 40.0 | % | |||||||||||||||
NET INCOME |
| 40,442 |
| 30,825 |
| 31,910 |
| (105,530 | ) | 11,425 |
| (94,105 | ) | 13,811 |
| (80,294 | ) | 15,734 |
| (64,560 | ) | 12,942 |
| 13,029 |
| 25,971 |
| 9,031 |
| 35,002 |
| |||||||||||||||
DILUTED AVERAGE SHARES |
| 52,003 |
| 54,166 |
| 55,086 |
| 55,005 |
| 55,419 |
| 55,212 |
| 56,086 |
| 55,503 |
| 56,616 |
| 55,782 |
| 57,395 |
| 57,465 |
| 57,430 |
| 57,157 |
| 57,339 |
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DILUTED EPS, AS REPORTED |
| $ | 0.78 |
| $ | 0.57 |
| $ | 0.58 |
| $ | 0.17 |
| $ | 0.21 |
| $ | 0.37 |
| $ | 0.25 |
| $ | 0.62 |
| $ | 0.28 |
| $ | 0.90 |
| $ | 0.23 |
| $ | 0.23 |
| $ | 0.45 |
| $ | 0.16 |
| $ | 0.61 |
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SPECIAL ITEMS |
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Pre-Acquisition Reserve Reversal |
| 2,000 |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| |||||||||||||||
Tax Credits |
| 1,456 |
| 7,028 |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
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Bankruptcy Reserves |
| — |
| (38,300 | ) | — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
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Judgment Reserve |
| — |
| — |
| (4,100 | ) | — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
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Cumulative Effect of Accounting Change (142) |
| — |
| — |
| — |
| (114,669 | ) | — |
| (114,669 | ) | — |
| (114,669 | ) | — |
| (114,669 | ) | — |
| — |
| — |
| — |
| — |
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Net Income Impact |
| 2,616 |
| (16,335 | ) | (2,468 | ) | (114,669 | ) | — |
| (114,669 | ) | — |
| (114,669 | ) | — |
| (114,669 | ) | — |
| — |
| — |
| — |
| — |
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DILUTED EPS, BEFORE U/I ITEMS |
| $ | 0.73 |
| $ | 0.87 |
| $ | 0.62 |
| $ | 0.17 |
| $ | 0.21 |
| $ | 0.37 |
| $ | 0.25 |
| $ | 0.62 |
| $ | 0.28 |
| $ | 0.90 |
| $ | 0.23 |
| $ | 0.23 |
| $ | 0.45 |
| $ | 0.16 |
| $ | 0.61 |
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EBITDA |
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EBIT Before Unusual or Infrequent |
| 74,245 |
| 49,242 |
| 60,422 |
| (97,546 | ) | 21,324 |
| (76,222 | ) | 25,564 |
| (50,658 | ) | 29,141 |
| (21,517 | ) | 23,941 |
| 23,965 |
| 47,906 |
| 17,439 |
| 65,345 |
| |||||||||||||||
Depreciation |
| 7,246 |
| 12,170 |
| 12,543 |
| 3,180 |
| 3,286 |
| 6,466 |
| 4,240 |
| 10,706 |
| 4,378 |
| 15,084 |
| 3,815 |
| 3,693 |
| 7,508 |
| 3,889 |
| 11,397 |
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Amortization |
| 6,463 |
| 9,192 |
| 10,811 |
| 135 |
| 181 |
| 316 |
| 407 |
| 723 |
| 563 |
| 1,286 |
| 526 |
| 561 |
| 1,087 |
| 705 |
| 1,792 |
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EBITDA, AS REPORTED |
| 87,954 |
| 70,604 |
| 83,776 |
| (94,231 | ) | 24,791 |
| (69,440 | ) | 30,211 |
| (39,229 | ) | 34,082 |
| (5,147 | ) | 28,282 |
| 28,219 |
| 56,501 |
| 22,033 |
| 78,534 |
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DAYS SALES RECEIVABLES |
| 97.3 |
| 93.9 |
|
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| 94.8 |
| 93.3 |
|
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| 91.1 |
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| 84.9 |
|
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| 92.6 |
| 90.7 |
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| 94.1 |
| — |
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Resource Management |
| 75.3 |
| 79.6 |
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| 78.2 |
| 78.0 |
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| 70.9 |
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| 65.1 |
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| 70.6 |
| 68.8 |
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| 72.2 |
| — |
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Infrastructure |
| 112.8 |
| 106.1 |
|
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| 113.8 |
| 119.3 |
|
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| 125.0 |
|
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| 119.5 |
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| 130.6 |
| 116.6 |
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| 121.3 |
| — |
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CASH FLOW FROM OPERATIONS |
| (12,188 | ) | 44,274 |
| 95,211 |
| (2,035 | ) | (7,398 | ) | (9,433 | ) | 33,617 |
| 24,184 |
| 42,582 |
| 66,766 |
| (23,322 | ) | 13,122 |
| (10,200 | ) | (12,113 | ) | (22,313 | ) | |||||||||||||||
CAPITAL EXPENDITURES |
| 14,745 |
| 11,017 |
| 7,231 |
| 1,705 |
| 2,295 |
| 4,000 |
| 2,657 |
| 6,657 |
| 3,162 |
| 9,819 |
| 4,319 |
| 2,893 |
| 7,212 |
| 3,873 |
| 11,085 |
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Y/Y NET REVENUE GROWTH % |
| 38.4 | % | 22.5 | % | 1.5 | % | -2.1 | % | 8.3 | % | 3.0 | % | 25.0 | % | 10.4 | % | 32.7 | % | 16.2 | % | 33.6 | % | 25.9 | % | 29.6 | % | 13.5 | % | 23.5 | % | |||||||||||||||
Resource Management |
| 6.6 | % | 19.4 | % | 22.1 | % | 9.1 | % | 21.7 | % | 15.5 | % | 62.7 | % | 31.7 | % | 59.2 | % | 39.2 | % | 55.1 | % | 34.4 | % | 44.1 | % | 3.2 | % | 26.9 | % | |||||||||||||||
Infrastructure |
| 71.4 | % | 25.9 | % | -12.7 | % | -11.8 | % | -4.6 | % | -8.4 | % | -9.1 | % | -8.6 | % | 3.9 | % | -5.5 | % | 10.7 | % | 15.3 | % | 13.0 | % | 31.0 | % | 18.9 | % | |||||||||||||||
Y/Y NET REVENUE ORGANIC GROWTH % |
| 12.0 | % | 8.4 | % | -10.1 | % | -13.0 | % | -6.3 | % | -9.7 | % | -2.7 | % | -7.3 | % | 4.4 | % | -4.3 | % | 1.9 | % | 0.5 | % | 1.2 | % | 2.6 | % | 1.8 | % | |||||||||||||||
NET REVENUE % BY CLIENT TYPE |
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Federal Government |
| 29.1 | % | 24.5 | % | 25.1 | % | 24.1 | % | 27.8 | % | 26.0 | % | 38.4 | % | 30.7 | % | 39.5 | % | 33.3 | % | 41.0 | % | 42.0 | % | 41.5 | % | 43.8 | % | 42.3 | % | |||||||||||||||
State & Local Government |
| 16.3 | % | 18.1 | % | 23.5 | % | 23.4 | % | 23.4 | % | 23.4 | % | 20.0 | % | 22.1 | % | 16.6 | % | 20.5 | % | 17.1 | % | 16.2 | % | 16.7 | % | 15.7 | % | 16.3 | % | |||||||||||||||
Private Sector |
| 51.4 | % | 54.2 | % | 49.1 | % | 50.4 | % | 47.0 | % | 48.6 | % | 40.3 | % | 45.5 | % | 42.3 | % | 44.5 | % | 40.2 | % | 39.0 | % | 39.6 | % | 37.5 | % | 38.9 | % | |||||||||||||||
International |
| 3.2 | % | 3.2 | % | 2.3 | % | 2.1 | % | 1.8 | % | 2.0 | % | 1.4 | % | 1.7 | % | 1.6 | % | 1.7 | % | 1.7 | % | 2.8 | % | 2.2 | % | 3.0 | % | 2.5 | % | |||||||||||||||
AVERAGE FULL-TIME EQUIVALENTS |
| 5,529 |
| 6,512 |
| 6,775 |
| 6,866 |
| 6,982 |
| 6,924 |
| 7,776 |
| 7,208 |
| 8,000 |
| 7,406 |
| 8,057 |
| 7,964 |
| 8,010 |
| 8,136 |
| 8,052 |
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BACKLOG |
| 632,859 |
| 634,706 |
| 715,834 |
| 715,742 |
| 998,762 |
| 998,762 |
| 1,004,671 |
| 1,004,671 |
| 1,045,400 |
| 1,045,400 |
| 1,000,544 |
| 1,049,154 |
| 1,049,154 |
| 1,152,659 |
| 1,152,659 |
| |||||||||||||||
TETRA TECH, INC.
Unaudited Statements of Operations
(unaudited - in thousands, except per share data)
|
| Three Months Ended |
| Nine Months Ended |
| ||||||||||||
|
| June 27, |
| June 29, |
| % |
| June 27, |
| June 29, |
| % |
| ||||
Revenue |
| $ | 375,527 |
| $ | 313,556 |
| 19.8 |
| $ | 1,044,024 |
| $ | 792,100 |
| 31.8 |
|
Subcontractor costs |
| 112,353 |
| 81,764 |
| 37.4 |
| 296,327 |
| 186,456 |
| 58.9 |
| ||||
Revenue, net of subcontractor costs |
| 263,174 |
| 231,792 |
| 13.5 |
| 747,697 |
| 605,644 |
| 23.5 |
| ||||
Other contract costs |
| 219,751 |
| 181,921 |
| 20.8 |
| 608,298 |
| 476,370 |
| 27.7 |
| ||||
Gross profit |
| 43,423 |
| 49,871 |
| -12.9 |
| 139,399 |
| 129,274 |
| 7.8 |
| ||||
Selling, general and administrative expenses |
| 25,984 |
| 24,307 |
| 6.9 |
| 74,054 |
| 65,263 |
| 13.5 |
| ||||
Income from operations |
| 17,439 |
| 25,564 |
| -31.8 |
| 65,345 |
| 64,011 |
| 2.1 |
| ||||
Interest expense - net |
| 2,387 |
| 2,546 |
| -6.2 |
| 7,008 |
| 6,719 |
| 4.3 |
| ||||
Income before income tax expense |
| 15,052 |
| 23,018 |
| -34.6 |
| 58,337 |
| 57,292 |
| 1.8 |
| ||||
Income tax expense |
| 6,021 |
| 9,207 |
| -34.6 |
| 23,335 |
| 22,917 |
| 1.8 |
| ||||
Income before cumulative effect of accounting change |
| 9,031 |
| 13,811 |
| -34.6 |
| 35,002 |
| 34,375 |
| 1.8 |
| ||||
Cumulative effect of accounting change |
| — |
| — |
| — |
| — |
| (114,669 | ) | -100.0 |
| ||||
Net income (loss) |
| $ | 9,031 |
| $ | 13,811 |
| -34.6 |
| $ | 35,002 |
| $ | (80,294 | ) | -143.6 |
|
Earnings per share before cumulative effect of accounting change - diluted |
| $ | 0.16 |
| $ | 0.25 |
| -36.0 |
| $ | 0.61 |
| $ | 0.62 |
| -1.6 |
|
Weighted average shares outstanding - diluted |
| 57,157 |
| 56,086 |
| 1.9 |
| 57,339 |
| 55,503 |
| 3.3 |
| ||||
Percentage of revenue, net of subcontractor costs |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Revenue, net of subcontractor costs |
| 100.0 | % | 100.0 | % |
|
| 100.0 | % | 100.0 | % |
|
| ||||
Other contract costs |
| 83.5 | % | 78.5 | % |
|
| 81.4 | % | 78.7 | % |
|
| ||||
Gross profit |
| 16.5 | % | 21.5 | % |
|
| 18.6 | % | 21.3 | % |
|
| ||||
Selling, general and administrative expenses |
| 9.9 | % | 10.5 | % |
|
| 9.9 | % | 10.8 | % |
|
| ||||
Income from operations |
| 6.6 | % | 11.0 | % |
|
| 8.7 | % | 10.5 | % |
|
| ||||
Interest expense - net |
| 0.9 | % | 1.1 | % |
|
| 0.9 | % | 1.1 | % |
|
| ||||
Income before income tax expense |
| 5.7 | % | 9.9 | % |
|
| 7.8 | % | 9.4 | % |
|
| ||||
Income tax expense |
| 2.3 | % | 4.0 | % |
|
| 3.1 | % | 3.8 | % |
|
| ||||
Income before cumulative effect of accounting change |
| 3.4 | % | 5.9 | % |
|
| 4.7 | % | 5.6 | % |
|
| ||||
Cumulative effect of accounting change |
| — |
| — |
|
|
| — |
| -18.9 | % |
|
| ||||
Net income (loss) |
| 3.4 | % | 5.9 | % |
|
| 4.7 | % | -13.3 | % |
|
| ||||
TETRA TECH, INC.
Condensed Consolidated Balance Sheets
(in thousands, except par value)
|
| June 27, |
| September 28, |
| ||
|
| (Unaudited) |
|
|
| ||
ASSETS |
|
|
|
|
| ||
CURRENT ASSETS: |
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 38,900 |
| $ | 33,164 |
|
Accounts receivable - net |
| 209,047 |
| 167,717 |
| ||
Unbilled receivables - net |
| 193,512 |
| 164,818 |
| ||
Contract retentions |
| 5,463 |
| 4,286 |
| ||
Prepaid expenses and other current assets |
| 28,999 |
| 26,037 |
| ||
Income taxes receivable |
| 34,834 |
| 20,825 |
| ||
Total current assets |
| 510,755 |
| 416,847 |
| ||
|
|
|
|
|
| ||
PROPERTY AND EQUIPMENT: |
|
|
|
|
| ||
Equipment, furniture and fixtures |
| 84,817 |
| 84,133 |
| ||
Leasehold improvements |
| 10,535 |
| 10,123 |
| ||
Total |
| 95,352 |
| 94,256 |
| ||
Accumulated depreciation and amortization |
| (56,444 | ) | (53,469 | ) | ||
PROPERTY AND EQUIPMENT - NET |
| 38,908 |
| 40,787 |
| ||
|
|
|
|
|
| ||
GOODWILL |
| 253,045 |
| 210,792 |
| ||
|
|
|
|
|
| ||
INTANGIBLE AND OTHER ASSETS - NET |
| 27,799 |
| 25,054 |
| ||
|
|
|
|
|
| ||
TOTAL ASSETS |
| $ | 830,507 |
| $ | 693,480 |
|
|
|
|
|
|
| ||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
| ||
CURRENT LIABILITIES: |
|
|
|
|
| ||
Accounts payable |
| $ | 105,010 |
| $ | 93,265 |
|
Accrued compensation |
| 54,097 |
| 46,743 |
| ||
Billings in excess of costs on uncompleted contracts |
| 20,288 |
| 16,307 |
| ||
Other current liabilities |
| 32,395 |
| 26,562 |
| ||
Deferred income taxes |
| 28,728 |
| 28,992 |
| ||
Current portion of long-term obligations |
| 88,128 |
| 11,597 |
| ||
Total current liabilities |
| 328,646 |
| 223,466 |
| ||
|
|
|
|
|
| ||
LONG - TERM OBLIGATIONS |
| 91,182 |
| 107,463 |
| ||
|
|
|
|
|
| ||
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
| ||
|
|
|
|
|
| ||
STOCKHOLDERS’ EQUITY: |
|
|
|
|
| ||
Preferred stock - authorized, 2,000 shares of $0.01 par value; no shares issued and outstanding at June 27, 2004 and September 28, 2003 |
| — |
| — |
| ||
Exchangeable stock of a subsidiary |
| 13,228 |
| 13,239 |
| ||
Common stock - authorized, 85,000 shares of $0.01 par value; issued and outstanding 56,185 and 54,090 shares at June 27, 2004 and September 28, 2003, respectively |
| 562 |
| 541 |
| ||
Additional paid-in capital |
| 230,238 |
| 216,908 |
| ||
Accumulated other comprehensive loss |
| (601 | ) | (387 | ) | ||
Retained earnings |
| 167,252 |
| 132,250 |
| ||
TOTAL STOCKHOLDERS’ EQUITY |
| 410,679 |
| 362,551 |
| ||
|
|
|
|
|
| ||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
| $ | 830,507 |
| $ | 693,480 |
|
TETRA TECH, INC.
Condensed Consolidated Statements of Cash Flows
(unaudited - in thousands)
|
| Three Months Ended |
| Nine Months Ended |
| ||||||||
|
| June 27, |
| June 29, |
| June 27, |
| June 29, |
| ||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
| ||||
Net income (loss) |
| $ | 9,031 |
| $ | 13,811 |
| $ | 35,002 |
| $ | (80,294 | ) |
|
|
|
|
|
|
|
|
|
| ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
| ||||
Cumulative effect of accounting change |
| — |
| — |
| — |
| 114,669 |
| ||||
Depreciation and amortization |
| 4,708 |
| 4,646 |
| 13,531 |
| 11,429 |
| ||||
Deferred income taxes |
| (377 | ) | — |
| (264 | ) | — |
| ||||
Provision for losses on receivables |
| 4,505 |
| 1,368 |
| 6,840 |
| 3,221 |
| ||||
Loss on disposal of property and equipment |
| 25 |
| 170 |
| 729 |
| 170 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Changes in operating assets and liabilities, net of effects of acquisitions: |
|
|
|
|
|
|
|
|
| ||||
Accounts receivable |
| (35,290 | ) | (8,170 | ) | (44,498 | ) | (3,228 | ) | ||||
Unbilled receivables |
| (12,432 | ) | 6,768 |
| (29,382 | ) | (6,002 | ) | ||||
Contract retentions |
| (706 | ) | 1,113 |
| (1,177 | ) | 1,442 |
| ||||
Prepaid expenses and other assets |
| (6,948 | ) | (1,490 | ) | (6,166 | ) | (4,223 | ) | ||||
Accounts payable |
| 12,468 |
| 4,145 |
| 2,211 |
| (16,877 | ) | ||||
Accrued compensation |
| 10,104 |
| 8,061 |
| 6,084 |
| 5,458 |
| ||||
Billings in excess of costs on uncompleted contracts |
| 2,344 |
| (2,136 | ) | 3,981 |
| (1,608 | ) | ||||
Other current liabilities |
| 3,935 |
| (2,424 | ) | 2,427 |
| 322 |
| ||||
Income taxes receivable |
| (3,480 | ) | 7,755 |
| (11,631 | ) | (295 | ) | ||||
Net cash (used in) provided by operating activities |
| (12,113 | ) | 33,617 |
| (22,313 | ) | 24,184 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
| ||||
Capital expenditures |
| (3,873 | ) | (2,657 | ) | (11,085 | ) | (6,657 | ) | ||||
Payments for business acquisitions, net of cash acquired |
| — |
| 121 |
| (31,371 | ) | (72,072 | ) | ||||
Proceeds on sale of property and equipment |
| 81 |
| 1,086 |
| 982 |
| 1,086 |
| ||||
Net cash used in investing activities |
| (3,792 | ) | (1,450 | ) | (41,474 | ) | (77,643 | ) | ||||
|
|
|
|
|
|
|
|
|
| ||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
| ||||
Payments on long-term obligations |
| (21,974 | ) | (32,613 | ) | (65,074 | ) | (38,188 | ) | ||||
Proceeds from borrowings under long-term obligations |
| 38,000 |
| 4,500 |
| 125,324 |
| 69,500 |
| ||||
Net proceeds from issuance of common stock |
| 4,405 |
| 4,380 |
| 9,468 |
| 5,055 |
| ||||
Net cash provided by (used in) financing activities |
| 20,431 |
| (23,733 | ) | 69,718 |
| 36,367 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH |
| (282 | ) | (256 | ) | (195 | ) | 336 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
| 4,244 |
| 8,178 |
| 5,736 |
| (16,756 | ) | ||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
| 34,656 |
| 21,411 |
| 33,164 |
| 46,345 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
| $ | 38,900 |
| $ | 29,589 |
| $ | 38,900 |
| $ | 29,589 |
|
|
|
|
|
|
|
|
|
|
| ||||
SUPPLEMENTAL CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
| ||||
Cash paid during the period for: |
|
|
|
|
|
|
|
|
| ||||
Interest |
| $ | 4,426 |
| $ | 5,189 |
| $ | 9,244 |
| $ | 9,508 |
|
Income taxes, net of refunds received |
| $ | 9,874 |
| $ | 678 |
| $ | 34,866 |
| $ | 22,818 |
|