TPC - Earnings call transcript Q3 2021 | Tutor Perini Corporation

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Operator

Good day, ladies and gentlemen, and welcome to the Tutor Perini Corporation Third Quarter 2021 Earnings Conference Call. My name is Kyle, and I will be your coordinator for today. At this time, all participants are in a listen-only mode.

Following managements' prepared remarks, we will be opening the call for our question-and-answer session.

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

Jorge Casado

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

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

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

Ronald Tutor

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

billion-plus anticipated, third Marina firing new Black million our military we X awards Hospital totaled million in Guam in those been several Missouri the million the to River project Rudolph Friant-Kern sustained Metro and a excuse York $X.X the our in pipeline Angeles solid of Major new Currently, at Terminal Angeles projects $X backlog Lunda purple large Construction, $XX project $XX in Connector $XXX a the a drove are included $X Station million Canal to and several demand and by JFK rail very have the of Airport and remains project the course, District, of and will bidding LAX strong Replacement a the next quarter-over-quarter bid California. $XXX the I-XX housing share bid our Sletten, XX% for million Metropolitan that Bridge XX project extraordinary over strong $XXX and for level in quarter had – billion for the awaiting as recently evidenced the projects decisions over Subway continue the Customer of and Maryland military quarters. subsequent services Los we which Construction, construction New in billion Guam for last Penn project Access range City. a $X.X Metro-North billion. bookings, line del days, light very for me, billion in $X award Rey projects awards Cedars-Sinai As we being Los increase plus plus County project

projects where XX because awarded. days. today period of higher the not had bid new In as addition, extended we pursue well free had and result to are last substantial further has Until optimistic demand of and until the frozen proposed the able basically new with be federal high-margin would was of infrastructure resolves occurred, XX will substantially of volume COVID-XX even we significantly every In adverse incremental as eventually obviously, our be our ongoing other pandemic backlog both the recently, with funding will number to words, the civil from to an months duration timing greater as projects on of bill awards, that a months that up large the will almost XX expected for receive flow frozen funds. the of last little effect of awards one COVID projects very XX agencies in work

certain various than on projects California activity a reduced third last budget, and complete year's Oklahoma but anticipated as strong third particularly to shortly. quarter in in projects were thereof quarter, revenue-wise, a experienced was quarter as third will came contributions in Coast completed we the to Our that partly revenue building from Gulf due in recently also result very impacts, of and result that have lower below segment or Compared building this California which delayed. year's these

and anticipated growing believe our our we it again more further anticipate the expected did first backlog. that has our quarter our construction share, again begin grow we starting we these stabilize phases increases now win However, as last growth as hit year, revenue significantly, to eventually backlog started should in substantial and with as when

surge projects continues Metro, by down to Vision newer, operating margin of is project A the shift for years Light the is lower-margin in Major higher-margin and Airport Purple San high-margin strong first Francisco High-Speed with awarded California Subway favorable previously Rail, XX.X% of ago, Angeles New XXXX. were mix quarter Widening months XXX certain of that nears the Metro in York. New X margin segment hopefully, Guam our work X. Civil wind Southwest and the work California up projects Portal contributed the X it and Minneapolis months Terminal basis that compared to of LA Los first the for as the Angeles, replaced toward York, again, to project projects. included civil reflect Our completion, nine This revenue in Los and XX projects through project, nine Newark third a Rail XXXX being points sections Central Line and

also quarter certain largely Our to third below that due write-downs the in per project share came budget, Contractors Special the for we segment. in earnings recorded

imminent. X, Purple submitted projects we to the Metro-North update Railroad November of for bid the the Line X on that our Terminal of we project. Penn the I selections over Station Next, Access preparing are and and bid the Early for on awards you coming JFK projects months. are Team recently Maryland some aforementioned status bid week, have this contract will major and

billion of people Maryland first AirTrain has In for Los or mover large will been $X.X in in the $X XXXX, governmental automated The Inglewood addition, of California we third award Angeles expect Maryland of replacement quarter of well and hold, bid to LaGuardia facility The decision Lanes the including Sonoma Newark new bid with as by $XXX several County. the the put the as in XXXX, $XXX in on projects million assessment billion expected partners the phase quarter. April Express first pending a project. AirTrain accelerate that million government other a Northern

Finally, our continue the $X.XX. our our military through remainder month Guam over Based the every is of turn for details our a of And and Black bids for that, adjust XXXX exceeding have to the recent guidance X for subsidiary, determined bid I Construction, present will still you. third to financial call million projects awaiting outlook Gary we EPS our quarter military to X Guam. with date range projects major in to on results outcome year, as and of $XXX the to the $X.XX to Thank we the results. to of

Gary Smalley

Thank you, Ron. Good everyone. afternoon,

delayed flow, of by the our Revenue with billion including and of $X.X was results discussion adjusted assumptions third XXXX in the quarter cash California. updates third on the decrease commentary to driven As from execution usual, due of on that begin are quarter a the of was year. quarter and the completed same I for by year, balance third for the sheet nearing guidance. driven last to revenue largely our billion for for compared our will quarter, $X.X followed some was that The projects primarily reduced projects various of a have third contributions mentioned. last Northeast XXXX the both the in Building million project in decrease Contractors Ron then awarded some third segment aforementioned mechanical $XXX prior The impact regarding Specialty projects with projects project yet and quarter million net XXXX. with delays $XXX activities in pandemic-induced also of recently segment, as due revenue reduced contribute to compared timing newer in quarter mostly reduced completion. and third to and segment decrease quarter the activities quarter in Civil the are that third to compared or current the to the COVID-XX with associated the revenue. periods for of for on execution pandemic or by in the year, completed have completion, $XXX activities the projects while $XXX XXXX execution to reduced was Building compared been Northeast various with million million XXXX, $XXX project to The are revenue year $XXX certain revenue decrease in was on for project nearing projects. segment million electrical are reduction the awarding of predominantly newer was million new activity last

potential recently large significant booked decisions the As several projects awards awards imminent are new Ron we and contract third awaiting quarter indicated, bid. and some very for in that we

than us, completing nearing to the new start projects revenue contribute awards offset contributions new other and eventually projects the should and from projects, recent large declining significantly, are new that awarded if more revenue the from to completion. As

third COVID-XX The periods. $XX construction to was the of emphasize $XX the the delays of in results compared quarter line of reduction. third $XX believe absence revenue for projects Civil in the quarter to the million million $XX compared quarter compared year for to impact and projects construction quarter same all in in decrease unfavorable compared decrease The million XXXX. to reduced third Specialty the operations lesser larger of declining So on was gain year segment the mechanical XXXX in with start prior Building to were current counterbalance I'd that from year timing pertaining the that California. legal in more quarter the to of to year adjustments Operating year, again segment segment million To we loss operations electrical of It of due Civil, when on the due for segment from of to million matter quarter remains in simply segment to a in third operating due XXXX and awarded well period. and certain the the for revenue income projects Contractors and a XXXX – last larger to net quarter the a lower to was prior a from projects related horizon. the revenue decrease growth decrease also contribute the net had as last income due X% decrease of of extent, our for to to do are prior primarily on of new current million meaningfully is $XX.X in to of quarter largely year. XXXX, certain last third of contributions year Northeast third to third $XX $XX favorable projects operations incrementally for charge XX.X% as million same Specialty. the XXXX the impacts as primarily due construction from the X% $XX was arbitration million segments with unfavorable the $X Contractors the that margins unfavorable the are the quarter of on $XX.X Northeast segment the our a with in impact compared construction Specialty prior a and contributions reduction. decision of the negative Civil of The net for same Building also million of project awards certain year a by a concluding. an third was new was in compared to the for from for income a million quarter volume operations the quarter ruling to volume quarter Income XXXX due from for adjustments the

the of The million XXXX. a was recognized same As $XX reduction compensation same quarter with $X our mix the to margin debt Interest project quarter increase projects. X to shift, operating quarter net higher to factors million to for segment of earlier, for year quarter Perini certain decreases G&A EPS quarter for of due in the that refinancing. including were expense of favorable carryback I mentioned result period $XX year. the Net contributions million sheet million the XXX last third of earlier to year. million the last tax driven $X.XX we is of costs $X the of quarter the to Ron million had essentially Civil same the points of mostly third for basis was In driven expense from loss to related XXXX. quarter The a also million for from the $XX compared Diluted year was year-to-date up the reflects for XXXX, of quarter related tax by XXXX construction income million third strong primarily as third CARES income the benefits expense and to and the expense third extinguishment Act. attributable favorable by compared the quarter travel-related resulted quarter same third was third of compared operations. was Income $XX XXXX higher-margin Corporate indicated compared strong $XX XX.X% balance largely compared XXXX compared to the third reduced Tutor last $XX absence quarter tax a for in last was a for expenses. for to operating for $X.XX

we've quarter, and unbilled anticipated to which driven last impact, referred growth or work direction. talk third in-scope notably, the increase primarily in Similar certain in quarter, in operating that of budgetary CIE their performed continued $XX to let's for earnings constrained cash, certain was billings by ability than as which limiting to us Now costs customers' their to sources, some the discretion work to quarter. was used has as about the timely million estimated again Most for the resolution change well We our what our we CIE, as of operating and have in costs. orders. due excess cash out-of-scope claims and funding once COVID-XX thereby largely commonly lower in delays pay have cause or in some of COVID lingering unapproved continued revenue at

flow has from impacted we our buildup the in costs more Northeast. As customers, the the CIE year. and CIE built and The occurred which to quarter for cash majority again contributed largely a increase temporarily collected the have and several on quarter fund would negotiated, to project result, normally negatively of these in for this operating be certain to the projects that promptly had

we are discussions various our owed resolve we much next these and customers continuing quarters. owed will with projects negotiate we other on are and of and the over the amounts the are that We that collect to anticipate few cash

turn let's sheet. to our Now balance

of Our XX, as September X% total compared of was down XXXX. end the debt million, $XXX XXXX, to

continue this again credit our we well Our We be remain the the and continue case debt facility that covenant the in compliance to will end to balance anticipate foreseeable had once of the within third be limits that at will quarter. a future. zero –

our $X.XX current the to results EPS to per guidance Ron to our outlook for range As remainder on assessment adjusting mentioned share year. of earlier, market and of a the we based are XXXX $X.XX our of conditions date and the

that stronger quarter As by notably you fourth can tell our be revised guidance, will quarter the third results. expect our than we results

of anticipated. Finally, let million revised XXXX between now which and G&A our on be expected me $X to is XXXX into update another expense less $XXX for million is million, guidance. you factoring previously some the than assumptions $XXX

the XX%, year Our effective be this at is for X% bottom income another to now rate the both XX% tax and between expected top range. of by improved ends and

of you. be we owner-funded project-specific. $X back approximately now which provided. are the that, what And turn to million expenditures I'll $XX unchanged Ron, other last assumptions and remain call All to million, from over you. Thank be capital Lastly, with anticipated will

Ronald Tutor

In was recently the Gary. any increased the awards our the billion, to we've summary, and that with proposals in that up major I third Thanks, of turned drove quarter was $X.X the of backlog benefit in. without pleased

our that significantly margins continue year-to-date Civil the grow. and to segment are our continues support fact addition, to In up

on and I execute were civil projects. we our believe results our to quarter a close out While we XXXX expected, continue will third that as major fourth disappointing strong quarter lower with than effectively

the primarily the likely to the quarters, there bill my given next sector, continue mentioned that our the in its given opportunities bid be the earlier, As strong infrastructure passage. to are in I significantly we which in tremendous already will that day-to-day question expanded remains civil add backlog, earlier, mind spoke is two no over to to federal fact

Civil than had – a growth three to two, call spoke more bidders for continue three questions. of no margins with We operator no for Thank to cases, to than turn the which predominantly three to that, I'll excuse same operating you. more competitors, me, total over I the strong our projects lead limited competition most anticipate the not competitors in and and to segment. and the continue should as And

Operator

first Rygiel Our with Instructions] question. your from B. with Riley. is question [Operator proceed Alex Please

Alex Rygiel

Good gentlemen. you. evening, Thank

Ronald Tutor

Hi, Alex.

Alex Rygiel

and that the be will Ron your Hey, Gary, better in are that jumping a up at unbilled just the item. suggest some are be they or straight things that could receivables of What to owe the line for you? pay should on position monies watching to start customers we

Ronald Tutor

Passes to infrastructure bill. the

and settled could with. and of rather pay owner $XX kind works lend public a settlement, back. large actually million X% delay year a interest agreed large madness we dealing gave very a back we a than pay to to he claim over That's on the example, them that project pay For the we're and us us the

of already $XX it, an one we orders our haven't is the I we November, last with unnamed Another got February, work. million settled can we've it's and executed although that owner change and order receivables so a change bill all done still the final

So our shortfalls, all agencies. And us. devastating impact cash this all had unfortunately, it's with on fall has flow COVID upon their a public

et these I passes to agencies the of they fed owe are we'll of the to they of have and the money to to to going the of cetera, in and cash which, telling but I York there moment me, money pay, tired infrastructure that all you're beneficiaries major see wait. me think begin get flow up because bill, ease people have don't York, New So is course, bill primary California public California, New

Alex Rygiel

not clearly is Gary. a ahead, This – go

Gary Smalley

Yes.

Sorry, Alex.

these various several months, that and dates in excess... have up also of next are litigation the and coming that resolve should some We costs also arbitration over

Ronald Tutor

XXXX have because and an year said again, eight, of But is have major XX XX is years. our dates for trial here. that time as reckoning XX and for enormous we Well, owners finally I've cases XX probably on stalled us beloved day the or

the around be for So not all we which this positive owners. our year of will collections settle extremely bill, believe, and XXXX, will an least funding infrastructure of

going our And to to do the continue States two are them, addition, understand there's have can large or other us owners to you. their that contractors to remind pay only projects. In you us if I in three we're beginning continue as and build with business to United

an with year the unpleasant it's all COVID interesting capital, that of to deal them fallout but the don't this should as and it's agencies help been turn, seem the they that we we our very carry burden. So working and fact have the think

Alex Rygiel

is to sort to receipts of you months any Ron, should to quantify playing to or more a in Gary there the XX maybe the XX way here? kind or probably balanced of collect cash level possibly sort of field get that next

Ronald Tutor

course, we thing love that to able we of talk only But Well, over to I'd to counsel, tell to go can I you, be our publicly. and think, I that can that we don't Board we unless that, have regularly. speak Otherwise, the tell And candidly. enormous. with it's you,

Gary Smalley

said, much and about Yes, it done we of a – knows, and where get upon frozen for what Alex, like hate is or targets they and But it, a dates, to rehash sometimes, mentioned. it as weekend, significant, can But we've looks as then who Ron then that not – are have moved. talk it. we'd some going to look, and before they're the disappoint. to time period be he'll get will number dependent of lot commit dates look And do every court we move. Ron so court as Ron this We are, know we it at

and on it's So big number, we'll very say it's the just horizon. a

Alex Rygiel

there of that sort quarter Gary, from gap And then you gap could gap revenue a that a of in next that more be be of you're awarded Or clearly, a is expected projects nearing Fair second completion first to projects that enough. quarter fourth mentioned lastly, year? gap Is quarter, gap? a shortly. more versus

Gary Smalley

Yes.

at looking it's that's fourth of a now. what we're at think gap, least right I more quarter

seasonal Now gap, if mind you keep first always that quarter, will. in the there's

first that least the really to hope we in And be that So quarter be where expect but to prior shortfall is. the say, building down to is the at looking would compared fourth at we down, it quarter momentum year, to, normally fourth we're I let's to but quarter. extent start think

Alex Rygiel

much. Helpful. very Thank you Okay.

Ronald Tutor

are You welcome.

Operator

is Our your Steven with UBS. with next Fisher from proceed question. question Please

Steven Fisher

Great. Thanks. Can you hear guys? me,

Gary Smalley

we can, Steve. Yes,

Steven Fisher

Okay. Great.

on Just implied the in guidance? by should maybe of help that segment up Any expect color following QX. and bit in what we margins quarter there. Just you margins of for give a us can distribution little fourth the are

Ronald Tutor

the get Well, I civil we continue. we jobs, we certain only backlog much significantly York, newer to grow replaced XX% the pointed you out, see those growth higher off, the as that jobs, jobs, drop as and at there civil off that civil seven-, that in sector, eight-, finish report are talking sector particularly are lower-margin and to which will to with our drop is individual the have to that continue margins jobs I margins in the won't as older continuing we make And but nine-year-old New margins. don't will the the margins, as even into continue are they they're because jobs want get the there on increased in specific from growth about. – be

Steven Fisher

specialty? just of what But loss, first pandemic what's That about can when since the the what there that... I latest going quarter. think, give – and in us And so the you and on maybe was –

Ronald Tutor

back write-downs struggle both I mechanical owners. years be and us but It's problems. subsidiary revenues. us jobs very of and struggle. try take New with Hopefully, where in only to reduced were a two they worst other had builders continually their they York. just And can't New they simply in say major York many But selected plagued they've that. Do to operations. the certain their of for appropriate. continue strategically subsidiary the or we They work their We with a projects predominantly And continue end City cut horizon. year, the We've they positive, operationally certain on finish may be our that for We have and to will at and electrical haven't it that control new that January, will our challenge.

Gary Smalley

loss to And specialty Steve, far, quarter, quarter. definitely fourth the our range X% get that we in segment more from another we to Whether specifically fourth I the is are forecasting it to not wouldn't should but target, that positive. be X% the margin go

Steven Fisher

nice And could growth Or Okay. was quarter. start later on to the actually grow this again? see that backlog a that? year-over-year it XXXX? When in to that basis do you Is you think than revenues the be sometime could sooner see

Ronald Tutor

three in that principals. continuing of say back Rail It they're the let's there, met should has significant reduction their been the revenue go delays first think work because High-Speed I appears a Well, I've to in which quarter, with delays, California the to can are of Purple the the rate because two beginning finally we work revenue out overcoming in and we're which get and it tunnels. Lines ground, grow should. going in that the coming again at

then of Will of see. think right fortunately, we And be out existing behind got three? ramp I wait three, any three the billion, be will more get jobs these which if one we awarded? totaled up And will key there's the and all work it. of will them of element what dramatically. most $X.X to We bid,

achieved and work's with to have hard the and COVID's our beyond – profit. that it, accordingly that have increase government released. up, specific, as to ever us we of, we got to will by get got these happen. be anything to behind revenue the put get But summer, such got it's significant assumption catches backlog but a So dreamt my we would is next fundings

Steven Fisher

anything the we about the of there And then on... Portal nature learn Okay. competition lastly, Bridge, just can

Ronald Tutor

There they're was billion, good were range. And with obviously, and $X.X the over company. us they was were a on a They we it in were. and Skanska, $XXX – million $X.X billion were and other one we price satisfied beat lesser than bidder, they a very

we We're to to industry. of satisfied our price matter tomorrow, I all the the the prices a completely raise it's want you bid, that determined same do. in and bid So way we at what are

Steven Fisher

Terrific. Thanks, guys.

Ronald Tutor

Thanks, Steve.

Operator

the reached over session, the turn the to of question-and-answer for end Ronald closing remarks. We call will now have I and Tutor

Ronald Tutor

Thank us the everybody, and until next end. joining you, for quarter year and

Operator

disconnect concludes you your at today's participation. your This and you may for time. conference, lines this Thank

Tutor Perini (TPC) 4 Nov 212021 Q3 Earnings call transcript