TPC - Earnings call transcript Q1 2021 | Tutor Perini Corporation

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Operator

Good day, ladies and gentlemen, and welcome to the Tutor Perini Corporation's First Quarter 2021 Earnings Conference Call. My name is Joe, and I will be your coordinator for today. [Operator Instructions].

As a reminder, this conference call is being recorded for replay purposes. At this time, I will turn the conference over to your host for today, Mr. of President Vice Casado, Investor Relations. Jorge proceed. Please

Jorge Casado

and everyone. With us you and and Vice your Ronald for today. participation CEO; President Executive Smalley, and interest Gary on Chairman Hello, Tutor, Thank CFO. the are call

Before could based today's making we during everyone inherent call, There current management's that results, differ assessment discussing actual which trends will risk are is and I information. our statements, remind that will forward-looking materially. on be results of our existing an

otherwise, that factors was risk potentially about XX, disclosures today. our find our that, to XX-Q which can Ronald such The statements, turn to as update company XX-K, assumes XXXX, Form in filing over filed of to could differences we the I the You no contribute February required are that call a and whether Form obligation by in on law. than will other as events now With new forward-looking or Tutor. result information, future

Ronald Tutor

for Thanks, Jorge. Good us. afternoon, you and joining thank

and a financial continuing will quarter States, which to our limited details contractual over result Smalley, our the quarter impact operating per our by we I'm And for pleased so terms. diminish continue year, United share ahead the COVID-XX that with to and months. to rapidly provide affirm the XXXX. year, results I'm Gary Notably, our and confident ahead costs, came a It share to of in slight a civil had off now overall, earnings recovery earnings toward higher-margin revenue for of income effects continue to bit you incur the results outlook. still having the is anticipated first large and as economic civil to certainly offsetting across the favorable pandemic last allowed a we hopeful from civil Northeast projects are certain this revenue our of positive such, our as pandemic's the as that coming been vaccination and compared seeking grew projects. coverage of per whereas expectations. had CFO, despite pandemic-related are remain results a the that were offsetting and budget declining that customers of their actually although in But later. in contributions. increasing business guidance quarter decline has first our good shift projects revenue mix of certain significant than because the may most first the declining Guam are X% on advancing, robust We California in worst that completing, in We are we more concluded continue solid work are higher-margin The delivered this quarter, recover largely additional profit start shift a our

segment margin to certainly quarter Civil is our strong result first a basis quarter. operating typically for the XX.X%, what lower fact, margin increased XXX a In points year-over-year for

second as well in all in Southwest Newark the quarter for our Airport awards book of outpaced Minneapolis California revenue volume with the the backlog million the in Division slightly Force as Metro Los a San that Building Line Base major Air and the in quarter. projects tunnels, Rail, Subway, $XXX Purple as X down both new Los projects I Widening Portal to as Terminal Housing MTA, announced Airport project Angeles, Connector. Light note X $X.X Specialty Rail, Guam a the Andersen well the projects other the result XXXX project end large certain Contractors billion, and Angeles Francisco billion to will into to $X.X that backlog that first segments. first Lines Central LAX of We the in the High-Speed of as included we're quarter of the and the previously revenue of quarter Some the expecting newest XX ended compared X our the at contributed Purple X

Our Line another over the several work next us progress certain backlog are projects, as Los years. it large such to includes solid as good with the Angeles very to their Subway years remains revenue and stability expected continue X provides Purple that X for

temporary has our delays As could to put on impact in sources, took backlog obvious a customers' them I that new that ready continue created which lack in bid a and were which, impacts pandemic funding mentioned substantial as to has by and our were last and cause These took quarter, back had the result, and funding our the shelf. COVID-XX XXXX all turn, projects off of the on are significant occasioned uncertainties. awards to the revenue them

We money seeing out made are those on now a very scale becomes significant projects come available. as

is Construction our Sletten significant additional project contract in new course, As of million an quarter of the this in additional and facility are Midwest and such, the next civil of first more quarter administration million the and projects of be government impacts building into doesn't the $X $XXX the the funding government year. adjustments the XXXX, Yountville, and half COVID should with consideration pushing. second in $XXX million very that in mass is for remain that California in will Rudolph for second backlog resume various We than of diminishing, San this and by Francisco. by increasing billion optimistic including Biden Lunda awards the take infrastructure booked bill funding year a growth and $XXX even transit We

our in of with billion In seemingly a by toward an in year contractor major expect will Jersey, this the general bid previously, New year. bids to the to the in submitting northeast end third be quarter JFK proposal the for Bridge As design-bid-build XXXX. preparing the of the year Portal billion award we next. bid which to of this preliminary includes May, I Other list and $X September $X.X endless project X this project have is we expecting of a that and projects are alluded Terminal is there selection

project the In with bidding Authority California, this year of the an expected fourth Transportation addition, and the with late with we bid York year in of working quarter Purple anticipated in billion year. in being billion Phase $X.X Santa year, tunnel Station of and XXXX, quarter the this stations, to the will in quarter of The proposal of be the list Maryland AirTrain by award systems Airport award fourth in commence the billion Metro-North of first an LaGuardia York anticipated XXXX. third $X due award January AirTrain Line the billion Clara Authority the were quarter. excuse major bid the Valley and with incrementally New Newark July billion anticipated for $X Access II quarter a beginning continues. contract award Maryland are -- expected that to me, next Northern the in fall Penn The the award of third port on for with this buildings quarter is $X.X in tunnels, enough, first expected are the XXXX. BART also new bidding In an not $X.X by end this in Port the to New fourth in If

are tunnels process contracts billion are for contemplated package. of that in prequalified $X other and have the within all the for We that the prime

that previously, are elevated to California, and Difficulty] of take should rail go with mover, the the we're [Technical In by million quarter we Southern being a addition, to communicated the is project construction bid prequalifying fourth which we've quarter people this year. Hawaii, for fourth supposed is Honolulu expected In proceed the -- year. as Inglewood $XXX to place in this in discussed

through Santa just Finally, billion the but level the a are and Again, in could of Landside even $XXX I of of X on bidding continues all by Development, be the read encouraged results infrastructure include infrastructure. spending Difficulty]. Tinian year, substantial year, bill. focus propose is on frankly, tremendous we've extremely the or strong to of benefits [Technical we which another bore the next beginning the stated federal the projects. in to on they're we horizon increased of Other that investments of the go likelihood me. of to major on independent share billion for very Biden of for we be will major And be the and Transit the our regard per by handful JFK continue Corridor. Palau, West Black subsidiary, all we based million administration's expect Guam each. our $XXX in to the $X.X and range to as million Construction, of Ana range is bids With the we're and on confident There Guam, horizon civil guidance the infrastructure of our we our to qualify on and Roadway before island on, on it's remainder first only as to reap one I'm the the these bidders $X projects and overwhelmed outlook In island anyone infrastructure $X.XX positioned $X.XX. of are a projects earnings these industry, quarter in well of and Clearly, this knowledgeable ending, to obvious XXXX on year to the ahead them either the bidding affirming our of

business the the financial expected to due of well as seasonality turn our second to as been, as And heavily timing reminder, discussed. Smalley to the in typical are earnings a over more present As previously XXXX, our Thank call it's I'll the that, always in with weighted results. you. Gary half details the to be

Gary Smalley

Thank you, Good afternoon, Ron. everyone.

$XXX XXXX results $X.XX our was the for $X.XX including same last flow, first Civil of balance the XXXX. billion, start commentary the discussion then provide revenue Revenue was guidance quarter the assumptions. compared $XXX down XXXX of million As for first some slightly sheet compared for for million the quarter usual, quarter on segment quarter to of with for I'll the of to year. our first the first quarter cash billion and

Southeast offset completed and completed to Southeast, $XXX with project Northeast primarily first last and million an activities year. airport was driven a and the recently segment the Specialty compared due first from to year. XX% for certain compared X% million in facility hospitality Building of the $XX decline electrical in execution Income As of project activities mechanical this project quarter on The increased project construction of a certain a quarter compared for associated million, increased million quarter project that was gaming decrease or last towards the million, Northeast $XXX are Northeast. progressing by with nearing growth first on operations the the same Ron also up $XX mostly revenue that million the projects the in for in $XXX for projects $XXX revenue mostly XXXX up year. to reduced completion the execution year, a project revenue to was activities on and is completion. California Contractors was last segment in mentioned, Guam that in quarter of was the

last basis The Ron for due Guam. first adjustments $X quarter year revenue in immaterial on as margins X.X% basis Operating for was unfavorable X.X% due for California in segment significant for XXX X The Building, segment's of as was and the with the of including this projects Building largely last principally to and as higher segment to the from operating the more for mechanical project compared was Contractors, by As lower year. same for quarter XXXX. same driven for a than million XXXX increase million Specialty Specialty of of to year-over-year; segment to quarter the points Contractors an up the operating result XX.X% associated points in the for lower up down for reduced income indicated income first quarter operating was operating prior of XXX Building, Civil, first certain year. the of income strong compared Ron million for absence million of the up favorable contributions $X Civil, for Specialty the noted, quarter the Contractors $XX immaterial year; closeout projects. project civil mix, by higher-margin costs $XX year-over-year; earlier, and were: adjustment year-over-year; settlements Segment income X% tripled unfavorable operating well

per performance higher for to margin to B, of compensation-related Building XXXX of increase balance rate March million the the from with of increase in Income to of some to related of quarter by group. the for legacy tax the for Corporate of a deliver was that eventually Civil same the Interest to tax with work quarter primarily million, year current attributable increase Specialty last the year the for $XX the still though $X.XX reduced challenges mostly through year mentioned. a notes. compared $XX period. expenses. million, the was to $XX entirely current million, driven due of tax are million there for of and first XXXX the effective Contractors satisfied The first million compared Tutor higher expense rate to of the due income we was XXXX first XX.X% the a in to average or $XX first $X.XX interest Recall for be diluted improved the in $XX modest that rate million to by modestly XXXX seeing tax share, segment, mostly the the debt for in the rate I quarter. of for was to achieve balance the with profitability $XX higher year. result consistent reduction partially continue projects, Act a the or associated same compared the Loan million are the share, of expense compared to we segments, $X the to that enable of quarter We expense XXXX to quarter to new last quarter for significantly quarter quarter to The tax passage due for was with last from the us first late year. effective aim G&A offset the noncash resulted Perini just for higher higher effective expense Term convertible first reduction Net diluted XX.X% our as lower $X first was compared quarter quarter CARES per the

Now expectations. better quarter operating used cash. operating little first let's than that shift cash in our was of a $XX the XXXX, gears million a result and We actually of discuss

always usage quarter average. As you may to was us, our tends a quarter's of this quarter the be know, first first cash year for result each than better X-year and almost slightly period prior

As in is a of to reminder, our annual goal cash net operating income. excess generate

again and this the X do achieved goal last of X in so this we anticipate will have that still We year. years

Turning now to our balance sheet.

as of to XXXX, debt XX, was compared total billion, Our March XXXX. end $X the of flat

as first XXXX. facility credit $X a this at of Our it end end did the had quarter balance the the at of year of

or outstanding is million this date of we reminder, a $XX balance year using notes at retire convertible set of purpose. remaining As or still that cash approximately plan their repurchase our the aside for to before maturity this already of in restricted June

will our quarter in this that debt So year. the help second to reduce

well limits, the are debt our remain within that compliance anticipate We covenant case. will

assessment our are conditions range we based in of remainder the of earlier, mentioned Ron affirming year. As the to our market outlook on EPS and XXXX $X.XX $X.XX current for our of the guidance

this XXXX to our factoring XX Ron, what over earnings of with you. I'll Finally, Thank turn back last year. guidance from our assumptions February remain during call, all And provided call that, the we into the unchanged you.

Ronald Tutor

first is, with key and in were key as cash expectations, rightfully number issues underbillings first of We claims With collect Gary. of deal objectives, meet settled important, all the and our we're or the the are what a ahead to results but of reduce earnings quarter. exceed that our the I'll that Thanks, due. equally expectations, quarter

court time believe claims of said year many The upon owners the and I've XXXX dates the as this to will cannot are force and court And in behind claims. settle largest us. dates as to continue We again, hide forefront I future. our

excited we're to I've operator we collections, so the said questions. only flow I'll and support major as extraordinary on, from in those next, play about repeat it infrastructure ready further, proposing I'm many to number I'll of Without major we going is of earnings and of getting for, The and the over that this, but this it again. turn There see. any cash collections, marketplace for can from that we the very me been to jobs forward. that a expect role the times. we in times, never call over like and We not a belaboring phenomenon has significant expect year front the qualifying truly are both propose speak,

Operator

Instructions]. [Operator

first Fisher Our UBS. from is question Steven of

Steven Fisher

on in that just margins. the the charges specialty it Just off projects projects start clarify, claims it already are quarter, still wanted Maybe to on? in -- the legacy Or completed were was to to was to write-off going that past? charge-offs from

Ronald Tutor

completed X years. had or that for projects been many X was It

settling and closing that of impact. the in Just them, had but level project, of them none were which downs, the cash, we accumulation, write on number a specific significant of collecting took

Steven Fisher

Okay.

what of margins where case there you Because the be. was would [indiscernible] what you Or that? been margins then them aren't Is want the excluding that? were add it that So have still these I -- mentioned, the think settlements? was after the whatever amount back to for like Gary sounds this still even

Ronald Tutor

to let yes, I'll aren't the we where still of we But be need exclusive answer is, that. even answer. Gary

Gary Smalley

just Yes. we've the the to the new And margins range to been We out communicating Steve, that work margins X% the after out It's new the and old X% good in just this, be then we to in some are work new feel on of want say on overhead. still you that range old about that I'll segment closing the the work. on work. really some of where settling

Ronald Tutor

-- sense year God It closed to X They owners. stages finished for was light saw And put will few had no work continue litigation. of the just will through years next conclude or candidly, to and pressure able next. the continue them, litigate. X, and that way And this X our most various other to Very been year. 'XX. to one of to bless go close We underbillings end into some out the of -- by a that were that made number and these of bear

Steven Fisher

Okay.

think than do be you'd it 'XX? actually the could reporting? that So to X% X% Or see to Could sooner later start when visible in in you that be that? be sometime

Ronald Tutor

think to I'd see begin you'll say 'XX midyear I it.

Steven Fisher

Okay. And year-end little the settled then claims, from up to mentioned, looks went quarter. end the you claim the Ron, like first a it of bit the you balance but

driving in balance? the So what's claim the actually increase

Gary Smalley

in difficulty Yes. and pre-COVID. would Steve, timely normal just a going this to of we we've we that just, had anything, than as unapproved the change the is is thought orders resolutions more progression claims as getting

up to to pre-COVID, at starting we think were to pick it And where, now. up that's we're So even point that going start go fall. similar I to though that see did a where think balance, we're I slightly, where

Ronald Tutor

The and a seemed growth, as in it, to as litigation to it were, I just What claim put coming settled which in is next it $XX problem But with of disappointed all have what of of some probably dent you requires of year. million a it those quarter between XXXs was fourth the the next is. end dozen before due are this XXs We'll these year. it are but dealt we between claims. end and costs absorb it and is XXs that and year

Steven Fisher

that discussion? there Or you I then of this? were collect separate to COVID. Is trying was, to million all And Perfect. related a that is $XX part think,

Ronald Tutor

owe most separate a are negotiations. they most agreeing of stages are to discussion, of In our it. in owners, fairness That's various and those them of

these they're pandemics. the are paid not the be and excuse some government. federal They're reimbursed to force waiting have Some are already majeure, But us. using from

are it. contemplating Some

of hands. better $XX expect million. part their collect that wringing we are to the Some But

Steven Fisher

there? sector change are you're if traveling anything more here, you more on particular anything awarding to on and front from in lastly people come turn And side curious the more. business. it. active Have economy, seems bidding the of business. then like through little the recent the a Got starting some confidence with things It developers? Curious Anything seeing your seen in months getting private building any -- just

Ronald Tutor

say it goodness, and we're But thank can't one just seeing of on honestly not, We big a casinos. awarded influx, I intent believe or letter a of We're given were Indian Miami is have But again. I'm the we they're with to just beginning understanding to of very go close My business developer market. do to York that New reluctant and developers. -- another.

of participant and say, It's We history haven't that. collecting good developers aggressive at not an money. a work leave and area with where, we're an private it let's just had

Operator

Our from next from question is Alex Rygiel Riley. B.

Alexander Rygiel

give bit you it revenue do don't But you backlog guidance. coupled revenue would XXXX. about obviously, is little probably with how in today, outstanding bids XXXX? But and know where I given down be your Ron, think will appear upcoming, that a

Ronald Tutor

put Well, this let's it way.

up. I will think go it

I the by we're end go get amount of the going of next year think the will work through that roof. to

And enormous old Then I at $X we projects, think takes on in be do and of is records. far months. design-build our first billion $XXX that year, will site XX backlog some the million surpass got work, revenue only we're design, not anything with see issue a earnings, about X to The job. that records of will year. our months new you you awarded remember, before mobilization. a these If cost worth and clearance, significant usually in a

that's be With think explosive you, better of than up XXXX then contract new huge lag. we generate awards and But only roof So in work 'XX the of will should go the of revenue then and I serious think a signed costs 'XX will number through by tell 'XX. let see be I backlog, that because begin me will all new 'XX. the that to summer an the

Gary Smalley

also $XX revenue point. guidance. this some the for first fast on depends just year-over-year XXXX. right. XXXX year. But year XXXX but it, just less million, for and we last work, of quarter -- I the exceed And give XXXX Alex, on revenue book we could lower revenue million Alex, if how roughly $XX we write-off add, could We of you're were I a were that side, don't being than revenue than the It at wouldn't as we

Alexander Rygiel

environment gaining the like say And there? share? does do that was how on over the win feel your And out you're And competitive last about helpful. you year? rates That's what awards

Ronald Tutor

Los me five contracts of the bidder. had Angeles them. We we major of MTA majority the say, Let them at got other one - all last X bid, only

we be, So airport to proposer used California. of we one have the dominating as billion. to we on we're where Southern $X.X And speak, billion back other JFK $X

me, right you've We Rail the resulted bidding cut rate other who my do of the billion really is say project don't much that are have. comments. project at we've Highway thousand, Light from And termination the size foreign on and excuse compete $X.X the a I'll We or been particularly of we Fluor. now. Maryland off but that -- look projects there's have X to competition All got the to I with. win hate And our Coast, we batting West bidders

difficult, a Coast, On say get a significant still we'll that we I'd which East bid. percentage the that of little more but

Alexander Rygiel

a about you within ago, lastly, How probably stand State And does New talking change in that of the today? of year certain about and a were projects. market risk contracting York profile

Ronald Tutor

major than been gets it build it better state, the to we'll office only I is bid of X If York. major The our we'll any write to we're their you've close in. our and to has without reminding work were who even $X.X talking them we'll New make they're the to contracts on their constantly or Newark yourself at continue nobody profile difficult good bidder ratchet going because now job Are less owners and to market difficult to about own got clearly, example more very difficult, make from Terminal, And work. of work always we New place that classic going be you bid. your York, a York them friendly it competition? owners to less. project find else they when anything, the tell billion contractor contracts reasonable. office and very to players business on but up about since New think we I'm the And outrageous, principals onerous elsewhere entire if the X a in and It's can't if do risk only with think stop bidding. the they use or And too in

see of So to terms. of New don't And in I onerous Skanska, other simply is York tolerate tolerate or I don't and believe the the bidder it. of State New don't position City only it. any York dictate the We that they'll consequence

has fair. So pull the time rational and them being back start for to come and

Operator

question is Karimi from And our next Zane D.A. of Davidson.

Zane Karimi

here, So pick the up through year first as margins similar to been we from move Would looking just the expect the have and Civil developing. rest at here them to you of those XXXX? off how

Ronald Tutor

think anything all trend I We old don't we positive in and more Civil margins work off. our begin up the civil and to new will more legacy margins drop to of continue higher projects add at but some trends as the work. see

Zane Karimi

Great. Tutor fit then infrastructure with for thoughts in initial any Okay. federal on proposals where that? the And plans and could

Ronald Tutor

infrastructure an as the big is as we're Well, contractor States in United we speak.

coming months to out funded. $XX work So all design-build XX next over are of some that are billion the billion worth the projects that I gave $XX you earlier, already

it I our only the believe of And at I've before, engineering point, more the to a and opportunities. will well is said funded inundated I money as So run into industry some that marketplace say build be bill with already this as is is will can out is pour infrastructure thing talent we only it. issue just the such

So array if we and there was We'd were only and to our all of decide couldn't were XX capacity on XX. major projects jobs. them, competition It's physical us. would an because much overwhelming that certainly an It now be numbers of interesting just what the would of jobs we wouldn't there restraints, financial our isn't what be the that situation. or bidder and and margins have build all stop

Operator

session. like for closing to Tutor turn question-and-answer the I gentlemen, And remarks. concludes would to this call Ladies Ronald and our back

Ronald Tutor

Thank Perini. add. call. to see more Until Nothing some quarterly light. Hopefully, Tutor we you for again. for it it That's you, everyone, our sheds

Operator

This today's concludes conference.

a your day. Have at disconnect Thank great may time. lines participation. for your You this you

Tutor Perini (TPC) 9 May 212021 Q1 Earnings call transcript