- Earnings call transcript Q3 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen. And welcome to the Tutor Perini Corporation Third Quarter 2022 Earnings Conference Call. My name is Sherry, and I will be your coordinator for today. At this time, all participants are in a listen-only mode.

Following management prepared remarks, we will be opening the call for a question-and-answer session.

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

Jorge Casado

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

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

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

Ronald Tutor

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

result month cash the months of Perini XXXX. nine operating first XXXX. of and have year million generate Our operating a positive the for the first to XXXX the mixed. cash Tutor-Saliba the of $XXX again On the third we which continue of we in totals results quarter side best combined far cash of Corporation quarter, generated during delivered were merger once nine for $XX with cash the positive strong record million By since we six months

either does lag. had that resolution of open and remain we healthy last solid the well and collection quarter operating backlog resolves add more awarded. include the billion contract Raritan perspective billion to I the $X.X our on our the year, and this to at Maryland some new which cash side, opportunities. overall the changes of the disputes, compared of should certain are as yet finally significant third third was during booked adjustments not Also of positive several new and We as of Our quarter Highway, million driven at $X.X of discuss than they will backlog the partly year. Later, more activities the awards major $XXX or continue on of the Bridge when awards by end major

and Newark quarter a off November, in from which earnings which volume month from were share various a shuts lower reported we those negatively this per of third course continued the completing third of Our result Consequently, a as margins Terminal divisions. for impacted $X.XX quarter. flow the to unfortunately of by reduced loss diluted project, profit is the projects profit

we we yet have believe flow and progress with making this for which to negotiations. had progress, continue significant year-to-date, last efforts next. while make resolving projects. quarter and significant disappointed negative have change to and earnings concluded the to to the settle in continue disputes call, continued the impacts on major a and positive we various claims have Since we earnings have impact cash year will unapproved our certain these Although various not we But on orders our are excellent

infrastructure generating our with very past and year. fourth and still potentially the too uncertainty many is results once As XXXX in a particularly cash. we In in resilient times again inflationary downturns. is course, these XXXX. February to repeated the We economic to quarter earnings, issue both earnings anticipate our for although today's the it result, guidance holding we're that and effects potential difficult of settlements are as positively there quarter or of the expected largely settlement making providing negatively finally for EPS we remains environment, significant the of when Consequently, recessionary next XXXX predict fortunate discussions, respect to construction impact in can guidance industry, outcome fourth reliably

we the our to services expect strong anything see notable nor have demand We projects, large for in even demand of reduction than any level seen, in civil complex more ever. not do if very

is that benefits the that we into Add U.S. proceeding benefits. economic jobs beginning particular have infrastructure, of at Our the the governments over expected the looking infrastructure typically good civil law union dollars historically over seen currently growth to that business, billions already next and flow industry over billion during and a five and fund growth years those XX such funding which bipartisan have driver $X.X last flow we're to there long-term in bidding projects direct that promote and future jobs extremely the in terms, and leaned next the increasing of months, the more core investments is to the much or resilient fact been XX established has years. by wide our to infrastructure a decaying support nonunion and profitability to economic of

of in contract booked in facilities significant $XX mass in both California, the XXXX. Frontier-Kemper As Construction of project adjustments $XXX two project in additional of for Rudolph military million for and Rico, included I educational mining $XX the transit and Virginia. and third and most mentioned, a million new million funding Perini a The Lunda for in million award funding facility a $XXX million hospitality $XXX California, awards million of in Sletten Midwest, Services, $XX Management for we for Puerto quarter a

to sometime where end Collectively, new our the the and the backlog the American the of coming anticipate by into months. Raritan record quarter year, earlier, I next the during Bridge, we yet same South a we over the increase mentioned which Legion Bridge, Phase X As our of booking not backlog backlog to high does the could expect year. add that include backlog to second of these River

backlog new year. next healthcare a million added should $XXX began project over in negotiating incrementally the that California and Sletten In addition, Northern Rudolph to be

there we awarded be pending awards are projects addition, by collectively quarter $XXX we the where gaming second have will two agreements California, preconstruction believe in other next million, year. valued at In which

pending $X.X in the in Queens billion MTA, Roadways Center days Rail The now. Beyond project JFK of opportunities mid in on January Department the at XXXX. Brooklyn some of City Ground or Design XX, Transportation valued include Construction, Light Queens to with November billion billion the New bidding excess each Angeles York and was is $X.X XX jails, awards, proposal and tendered of from prison San Los for in today due May the East our near-term $X XXXX and larger these being of Brooklyn and Fernando turned

years two to in we Inglewood Transit our have next you XX% $X.X bidder third at remind it XXXX. suffer $X.X was I the quarter second which and project In main billion mover, in where District far it will bid XX not scope addition, that Southern although overbudget. coming ago situated the reduced people year. but low Last is they'll least, be of Hawaii HART by automatic They million have by and on because tendered the the were minutes out proposal office we Rapid talked back the the they're was quarter rejected, escalation, the from to California

the some of these say the are infrastructure. major best of only So to needless

competition. to suited we us to trying state where those overwhelmed very select continue little has in and So I a that are to both best marketplace the

Thank make we're levels that continuing historically high growing our I expect excellent successfully substantially the As collecting these foundation backlog the previously months. And over you. solid Gary and to resolving associated turn the providing will discussed, efforts forward call future to success. the near-term our conclude the progress in next to new that, records cash with set and Smalley. for XX look to disputes to and over We

Gary Smalley

negatively Ron, the again everyone. the highlight strong our finally on and impacted review balance cash including then was I'll discussing some provide other sheet. once major our results, commentary you, results. results factors hello, Thank and our our during earnings flow some of move on cash financial Operating operating quarterly quarter, I to by will our start that

third merger cash quarter operating our operating during to flow the $XX any As Ron the usage compared we year cash of of was same last among third mentioned, million $XX best current quarter generated of million results for The over to our quarter the year. cash averaged was operating since so approximately million, $XX XX a the excellent. year, merger result, quarter quarter this past XXXX. since this prior years, the so flow million has quarter $XX in cash And third third year's operating

have was the than first operating the XXXX our the nine nine cash through had have XX% of nearly cash double and highest year, result for months best cash the $XXX we of we months year-to-date More any million, greater year generated. importantly, operating flow full first operating

of resolution has activities Our driven been unapproved certain and orders. collection generation the change by including claims solid strong cash

result XXXX anticipate outstanding as fourth We execution generation both projected cash next various for cash as from of resolution the of well strong projects and as operating the a other cash of disputes. flow collections activities, continue to quarter year

And operating favorable construction income breakeven Specialty third $XX of from segment for third quarter. during the quarter revenue this our to civil of operations $X.X comparable for year quarter million, by construction Civil million. appeal The $X.X Contractors million. on all of third segment reduced to $XX quarter project various segments, favorable quarter, a compared which Northeast, The driven income million projects, the million to as discussed same segment projects Revenue the quarter. compared on X% in of California unexpected activities to all by a or billion execution of a the G&A awards increased from nearing activities at as million $XXX was the reported from million revenue of was construction resulted operations due three $XX.X offset partly of and $XXX Building million much unfavorable to The of year. which was Specialty The $XXX decrease reported of Midwest. We the compared $XX court attributable to XXXX segment on loss XXXX. legal discuss revenue $XXX impact reported COVID-XX at are was million previously The an an Civil delayed adjustment Florida, in well and down the XXXX. segment segment activities million an partially operations segments in let's on of in mass in factors a for year the that the segment certain last of Contractors last was decline quarter on for last as segment third income the compared million we of completion, construction building Building the in ruling. essentially to completed from million, the $XX the quarter, decrease $X unfavorable activities the operations pandemic, an absence year. revenue $XXX also impacted quarter project Now a project a as decline new execution certain XXXX. Newark, reduced reversal newer for of the to the Civil of impacted and last And follow prior which and was that due $XXX on was our for and loss three finally, of adjustment in adjustment quarter compared bidding was well from reported Building earnings. billion, California. and the corporate for hospitality as primarily ruling, projects project same XXXX completed to on for of was project quarter a last to transit highway most adverse I due compared revenue in Like lower

in I negatively the by for earnings the quarter impacted that also with bidding much just the of to mentioned. COVID with impacts of the impacted as associated award volume profits and activity lower Our XXXX due third lower revenue were following of lower XXXX

the the loss third about a or mentioned, effective quarter the expense for net was tax to on this 'XX. the We reported to a benefit expense rather than what third I corresponding million pre-tax XXXX tax earnings Due factors to tax third a third year, due tax the expense. was XXXX, experienced minor $XX produced year third Normally, year's catch comparable quarter for expense from The compared change quarter loss this estimate the various a prior was provision, adjustment for from this last change a year. quarter to for year-to-date would interest had $X.X up XX.X% in quarter resulting of attributable forecasted of quarter, in we million with in have quarter the for our per of of tax for income loss Moving as $X.X million, million compared tax $XX expense to quarter. such of and X.X% quarter last for to $XX of compared quarter million a rate to to a comparable of earnings of Tutor Perini income Perini, for share, the year. $X.XX a XXXX share last attributable Tutor a net third the quarter was of per or same small $X.XX

balance then million, first our to the was leverage XX, will next lower year. of $XXX an $XXX to to of hand. credit the a of to our completed our temporarily on back X.XX just level ratio of and decline to XX% from X.XX to XXXX. The to The cash have September XXXX for we agreement, XXXX. regard sheet, due As X that in December compared to debt allowable net maximum limit higher million debt step our a second through down at XX, net X was X.XX down level of amendment as quarter X quarter increases With

Our reported net the leverage X.X. quarter third ratio of XXXX for was

in rather will short-term. as extra So this request continue year, even meeting really and in with to had future. restrictions with some have cushion this the our amendment. that covenant being this thought poor compliance agreement regardless. be covenant it the covenant in to this compliance the cushion for affordable over much of at we with the credit We eroded we We foreseeable in to But the was we earnings look without since provide has other prudent insurance covenant relief anticipate we were this

noted we cash. today, primary of a in release, reduction our remains As earnings the for focus debt use near-term

by million. plan year, a estimate cash We significant also make currently indicated We this required Loan down will on debt be Term the next down we X is the of balance excess that on terms or $XXX which B, for before April outstanding pay to the agreement. pay approximately

repayment cash top is this for debt priority. upcoming our managing So currently our

consider However, Loan at once the excess to Term which may be B conditions capital generate strategies, dependent that paid how quickly optimization other what get cash. on Depending and we extent through on we we timing down. the will time,

cash turn year as Thank of that claims we I to other the by low continued backlog significant which to mentioned our generation, our you. price, year, cash at have outlook that, expect Ron. We last quarter that notes confounded considering in amount a have over collect record so, year, operating and and the been by or market we I'll unapproved changes trading somewhat back should discount we cap. the cash high record that our exceed as grow been for collections our strong have share delayed We this that could as next well will particularly The exceed strong still call amount And of and resolve been senior to our next a with XXXX. to the over believe continue COVID. current

Ronald Tutor

summarize, for of nine million Gary. million-plus the cash first generated we Thanks, $XX months. quarter, the and for operating $XXX To very strong

generation as fourth We in well throughout the year. cash expect as quarter next significant

generate issues were continue are and for As the generate and timing to will settlements of years mediations, and the we and shutdown have overdue litigation, reason to of that the to the significant system simply, pandemic that forefront able court are. the we delayed is thanks a is the coming to finally long cash

now And company adding we ever backlog we'll by then. by if the by remains any largest look between far obviously you generated the pending summer in more healthy. and work what's bidding without Our confident next feel even very new awards, the of have at backlog

and litigation almost per to a next monies solid of results we earnings forward continue through importantly, been new return or work year has to the open on us owed to to This focus share entirely year. more consistent More changes. look and claims collection whether

the run So cash will year we a think continue as mounts, the and a the of very earnings. results next flow to these we be backlog successful and add will to beginning

the Thank questions. over any you. I continue the call we're still cash to collect for of with to the we enormity that own. operator As And turn

Operator

Thielman question first Our is from Instructions] D.A. Davidson. [Operator Brent with

Brent Thielman

Ron, backlog book pending that talk that can what order to for can work, the finalized needs into occur? and you when be large you to just think ultimately about in Maryland you

Ronald Tutor

and joint the We're full virtually State of Macquarie, Maryland week, has going meeting and what every with scope, have literally of through the what do. venture Maryland Transurban do, to time right to they aways

clear open items there'll we're such that that path off. get a success. we this all it that confident awarded, the all job So year, of we're which then to approximately April And next be be issues will when to and financial now be, take when close, spending is trying resolve the time should plug will immediately

everybody governor optimistic state federal guess of but fund probably infrastructure, is, two in of bid U.S. to even our between to the will and get quarter the the with read, it Needless PX supportive As funds Bridge second go help larger you've has the price. to the project. The is the and probably in gap ago. XXXX. that Zee say, years biggest the that the contract is for the till we infrastructure Maryland developers all project, DOT ever meetings Tappan government gone it our very of seven, eight budget the And some my ahead, than awarded won't awarded their

Brent Thielman

new this work expect how converts it of sort on you of to know, to I thoughts earnings Is commentary any appreciate but not revenue? thoughts quickly growing guess, being see in we're curious, recovery but talking share, on, beginning yet, a mean, per about all or Ron, recovery I'm of just that’s the sort converge in initial how I XXXX backlog kind I added? -- on

Ronald Tutor

it's very the a influx it's expect added tremendous on new the margins. revenue, way it, high work gets if and levels we of a Well,

Raritan we're December, we the hope get, would which However, awarded planning, really and layout Bridge the in first November, if mobilization. or is year we

deal see expended. don't great costs a of I So

So setup as a that we far will be has large associated, limited and would wouldn't Maryland, it immobilization cash as very next the next year, earnings Maryland. be and however, as costs paid year. component,

we earnings a There some see Maryland positive costs before there revenue and have delayed 'XX, from because of earn speed year believe be generate to will quarter rail. where by for the years, revenue able So margin it be in yet will But we major Purple we'll aspects. I level ramping second the a the on significant. we'll significant and be well job be obvious to level light, high startup forward. substantial XXXX. up our don't even significant it will into lot any has on to it the of will though year, to Los been it's appears Having track year level back next expect which on and that, going And insurance very a Line impacts of good in construction. said the costs be bonds in in But next and the earning. impetus in 'XX are All design projects are costs be doing Angeles we've been at

looking an the we one even following. forward year So next are but year good a to better

Brent Thielman

of ongoing the mean holidays. you're closer to the qualitatively, year-end? resolve me, of last slow down Just disputes quantitatively sort these for Ron, by scale I one feel to any I attempting some things imagine of for

can or maybe quarter? you fourth So to the speak date progress to any

Ronald Tutor

we either midst next in equates agree will in $XXX won't. or We're right of settle million settle the three claims we two the on now what and weeks to trying in to

impact to go have could wise, in see years. could court we'll I'd cash what So four like or in we significant overall hell it and say wise say a to impact

day claims the one what we're takes generated hard has resolve announce. to but will that takes the as for is in have quarter, cash And it's place, will and in as to can litigation, continue to year, tell wait to it's to soon this because will but see many and and and we'll a it it's of collect place reasons reluctant week, monies. result and imminent and fourth So if what flow. you it predict tremendous But week we day as to continue resolve see

Operator

Our from next question is UBS. Fisher with Steven

Steven Fisher

to can ruling want in here legal Just quarter clarify, that last some that there positive reverse was the rulings quarter. issue was an prior new adverse

these are ones? these new or are So related

Gary Smalley

Yes, related talked was about. ones it's there the not we but last quarter of to two that

that two ruling reversal the was positive had of previously. a a of One we

from we one So but that had was and quarter, different circumstances lower court, last in it then appeal. similar the on lost

Steven Fisher

for been just have of sense cash hadn't resolved that these kind the these out, yet? ruling? to any is are a already for of that solid more And And things used So risks reversals? a you've it's cash reversal what Okay. of going back but you

Gary Smalley

the the reversed that's it's We rare totally on you both took our These charges this noncash. appeal. on have right. are Yes, and last have we our results quite quarter And facts were we something that that thought side. the mentioned. were shocked to Look, frankly, to that quarter

likelihood we happening, usually always think what's we that court, the our the when on facts side, that are especially likelihood. fail it's appeals of that it's the in think low the when the lower case. shown and possible. we at history So, that But win has We think

Steven Fisher

a has completed? still getting on of what's Specialty more And backlog that kind what's you timeframe any specialty color projects little can the then, on, maybe on the -- the those margins? And give segment, just us for compromised

Ronald Tutor

Star thing to only losses does, New major the its or budgets Five close all established. group but consequence units of of meet that specialty feel WDF that which have ongoing remaining say for York. tremendous of the much Five funding pretty a in has say a I to cost agencies, down the in create are major two future. city in and other and WDF near on issues specialty we would let's could the subcontract Newark They significant have The our impact continues these WDF very balance took a reimbursable as at write all their no is did Star. amount work significant cost that having ruling its see pending any significant trials The pay adverse very issue. the nature. it WDF, from that was Electric more their reimbursable least an slow we're balance and it's on next of no at similar. very downs write over I for finishing exposed litigation the write of took work six next We there a months. All ongoing unless at see to anything year since don't down issues WDF have any to because are don't those is any little two. significant is they such major the claims They or Star Newark. Five are and up of in

probably timeline like the many lot year. year. come of a speak. them lawsuits not we continues as us of pending, against to currently Five will But the May. with litigation, when have category, have came hard next We settlements any We being is hit year. of But which dozen Electric, think I April I be potential until fruition Star in But conclude although litigated overall, this we won't in there one to lawsuits still don't a major UN believe next arbitration earnings or that it, up this could significant that

Steven Fisher

should then, base might fourth we quarter out for normalize fourth the Is we how that cases that close potential think to for profitability how the to that as will your and be? So about quarter, look the quarter in segment? to returning

Ronald Tutor

us fourth acceptable, large balance very the large depending significant he it owes very may have of and a why Where But may sheet, very hold going these on on two may commitment, negotiation. That's New major reduced, final two the both make Because and associated, a It stages we're as on it in may we offer, not. offer. claims it claims they're quarter significant keeps cash make profitability. York us have normal. we're won't telling that impact a our reluctant to to owner be with be monies be it beloved because

happen resolve five So straight if be it'll we'll the if to take -- road. the quarter, them, years we'll down go we we litigation, fourth don't, to three in it'll

seen, remains we'll next -- it's in or settlement. weeks. significant that do be to should Whether know not but ongoing So the a negotiations in they result few there's

Gary Smalley

quarter, in if two Steve, do in And, projects small the specialty settle that we're Ron at profit. those large fourth mentioned a come to looking with not

profit. small a to breakeven So

Steven Fisher

And then maybe just lastly.

You plan give buybacks? strategies. you some little doing referring just bit mind? color there that broader a is made there that Or just optimization you Can to to reference have basically in other capital more

Ronald Tutor

and it free to investment, after buy stabilized of next And significance significantly all of as next year; will the on success seriously mid-year much without specific, a secondly, we from position back those projecting and we very in stock. of than a And earnings an significant even significant. we where be cash hope we're this think the getting more and to result, dividend year, considering we will year Because be we're depend be that would dividends. would will be in Well, cash we that think And so more of two we reduction of and depressed, our probably once discussed we the our course, because of any will horrifically reducing options that the address debt is to think significantly. the encourage won't stock debt, order. a year, we're buyback a collections, next until appropriate with of would be But significantly, flow. we stock were reduce flow

Gary Smalley

too. depends our what we Steve And that on the the collections, about. the stock it is price we're talking progress And the pace make also the at extent time that timing, of just

table, the as on outlined. are options all Ron really So

Ronald Tutor

to of may about buying we we Well, back begin cap market than you stock sit company, as next think talking honestly cash avoid. more and something to realize we're going the we're you talk, can't collect be year the believing, and

Operator

over the Ron like We have conference reached session. back the comments. would end to for to of our turn question-and-answer closing I

Ronald Tutor

you to next. quarter Thank is again. We'll talk you once Fourth then.

Operator

Thank you. This concludes today's call.

your you your for at disconnect participation. thank You and may this lines time

Tutor Perini (TPC) 3 Nov 222022 Q3 Earnings call transcript