TPC - Earnings call 3 2023 | Tutor Perini Corporation

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 2023 Earnings Conference Call. My name is John, and I will be your coordinator for today. [Operator Instructions].

As a reminder, this conference call is being recorded for replay purposes. [Operator Instructions].

turn over now for your will Mr. today, I the to conference host And President Relations. of Vice Casado, Jorge Investor Thank you. Please proceed.

Jorge Casado

CEO; Executive Hello, everyone, are and us us today. Gary and thank you Ronald for Tutor, CFO. President and Vice joining With and Smalley, Chairman

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

You differences XX-Q, factors and whether events required due than to are to can XX, Form about could that information, March The or new risk otherwise, law. to today other on recent XXXX. find our obligation in update disclosures company XX-K, forward-looking potentially contribute filed no by as future which in filing which statements, such our most Form we our we assumes

over Thank the will now I turn call Tutor. to you, Ronald and

Ronald Tutor

delivered merger our respective Perini of joining million XXXX resolution since Both full result and for Jorge, record year. of highest operating year strong and you, operating many bringing Thank that period but between flows quarter just the Corporation. $XX cash XXXX year-over-year of achieved Tutor-Saliba were our of with years due a disputed flow operating cash cash last write-downs backlog from to quarter, the quarter second We with year-to-date million $XXX $XXX is cash and matters. number each We thank the and for million, resulted the that short very the generation to which we growth, various year-to-date all million $XXX third for the third earnings of challenged of us. generated mixed you in results of

and certain in Contractors level in that compared the due quarter to have been by segments, from increased with contributions are was last projects very the segment Our revenue the same the Specialty complete. year, completed Civil or to Building offset revenue consolidated lower Northeast nearly

in of compared the stronger growth be year XXXX. starting multiple with We as quarter and fourth phase expect better the fourth XXXX construction to projects the in of year, should quarter, we growth revenue in large entering revenue growth even next last

have significant on settlements and to claims the We disputes and collecting balance various significant made resolving months. and cash next amounts of related continuing progress the of dispute and expect continue XX long-standing over

expect quarters in number it, XXXX, We end to of disputes X of of of there at the limited all first XXXX. resolved very be should be the a outstanding which

near to last third thus as Considering resolution will flow exceed cash that the our fourth our record through quarter the quarter the generated million $XXX year. record the collections in we for we items, related are significantly confident disputed well very cash flow of as XXXX far strong

early next We to balance XXXX the will are and a next planned sheet and year. We optimistic cash spring resolve now that of the also even generated refinancing and generation a XXXX part be stronger plan between excess delever year cash. use to as our than of

to will various significant For a debt. soon will have concerns maturities. that our regarding ability we those refinance alternatives our been But upon, have headwind the timely to and valuations the markets both we maturities our our that past light and believe embark the with closely several this debt refinancing and that bringing and plan we developed discussing strategic equity of months, of we the a monitoring in have been advisers expect a of in refinancing and result market

to that eliminate forward impediment. we to look refinancing So concluding that valuation

our Treatment year. Florida; of $XX Park of quarter new additional the funding valued 'XX by funding The District in the the million $X.X same in progressive for to well $XX.X million steady billion Everglades in the $XX Visitor compared $XX million. was and second up awards driven project billion, last third to backlog the more mass-transit for backlog million National $X.XX million second compared in quarter contract and design-build quarter health XX% quarter of $XX quarter Center in of project as third in strong California; Florida include million care and and significant mining most Central at different projects of adjustments year-over-year project largely $XX other the a Brooklyn XXXX Virginia; than award the project. as was New electrical additional for billion Wastewater $XXX The Plant jail growth California; Our X

per the From and for Specialty York. our noncontrolling adjusting pretax diluted in interest. moment. in New in continuing Civil an segment predominantly our we from earnings contributions Gary by Contractors reported million ended perspective, these in quarter a after of consolidated discuss challenges $XX loss will $X.XX loss offset segment with third share Overall, third a a quarter of good were the

pipeline and bidding Our filled various large opportunities. be project to active with continues very

projects contractual owners and execute have will to we terms. selective be highly been We as as continue well and and pursue as to which under what

an for in the most progressive submitted probably jail our to decision, which proposal facility, we a Our and include estimated January. Brooklyn, pending selection design in most of be similar to owner are excess Queens $X initial have opportunities build awaiting significant projects billion already

this Maryland, $XXX and Park week, Suitland Jersey Slip retrofit in And Rehab Enhancement million New will million million bid Rail projects, we New $XXX $XXX project rehabilitation other in Project $XXX MDX Amtrak a and Maryland. the in at Long namely of RFK $X the end New East X now Douglass bridge Tunnel between and Interchange project in River year, Canal the Project in Frederick bid tunneling the we the billion million York, York. Last

these decisions or 'XX. in year expect early We on the the of end by

Tunnel million a We end first the either Lakes Project. on decision this for anticipated or of Great the year quarter are the bid year also by next Frontier-Kemper's $XXX

Industries, replacement billion in Southern Other Amtrak the is California, the Hudson we sections spring $X.X Bridge Automated People And River had project, reminder, include year. Rail still low to back are which next New Transit Palisades the And York X million near-term $XXX Honolulu River we Jersey. opportunities the the in January currently bidder our ONG addition, and of to million partner, bid large Tunnel $X In Mover Project, originally been in bid of Inglewood Manhattan XXXX. Connecticut Project with the expected XXXX. billion $XXX New the preparing as in $XXX in Tunnel in Tunnel a the million Connecticut

replacement DTX low the in Build rejected Project Design the in originally spring And year, in $X.X Project, we newer we billion budget. Finally, Transbay $X.X and in Air the last Train Center plan to billion Amtrak propose Francisco. on Then Transit of were December, XXXX, was later billion next which year Jersey. Sawtooth over bridges bidder as $X.X New project the being San

confident share competition, time XX XX has win diminished, As and are these we that I've the our our we again, and next months. continue over projects to grow of to said as backlog substantially

from years. the public to As be and owners we demand bidding this very next over continues from several to increase law flow strong demand infrastructure incremental pipeline, you for funding expect to continues to as there bipartisan our can tell that the our services,

year. expect performance next quarter We improved XXXX the in and fourth of

issue for new XXXX, XXXX EPS still fourth results. plan and initial not provide full to are when but quarter for our providing We we guidance XXXX

over financial the review call turn that, to results. Gary With Smalley the to I'll

Gary Smalley

good Ron, will modeling third afternoon, followed some you, discussion quarter, some our Thank then begin I results including of and flow, and commentary assumptions. for the everyone. sheet on with cash the by balance

million strong of over trailing very months million quarter generated a $XXX of periods. since in XXXX result were we and As XXXX, the year's first Ron period the second best the indicated, year X merger third the operating and cash respective any equivalent the XXXX performance of each operating for $XXX both cash only last of for which of

flow, and by to expected driven over last cash year, generation associated outlook Ron excess cash next various dispute related strong quarters, a concluded flow use including are to the resolutions intend successful earlier favorable and year. mentioned, collection the the that several activities, much the collections our with Our continued we we year Because million we months stronger settlements resolutions, to operating of $XXX as over we it further for significantly of overall refinancing. solid strong settlements conclude has to next that dispute in generated record operating several that we sheet part balance and reported deleverage compared will this of cash cash confident with the as been

quarter begin fourth strong cash part the continued that to accumulating earmarking we us in refinancing. our are has of fact, In allowed the flow for first operating cash

our to to excess Loan any set for quarter We than is clear, cash purpose, this collections. this And be to to million just fourth annual $XX B. required again, prepayment date, flow more related incremental have, from aside Term

and a considers on of leveraging and our in of We have broad a refinancing maturities our evaluating are been that focused our taking management Directors options. approach Board range experience debt alternatives, holistic both

will we actual refinancing process. the Soon, begin

is Revenue compared Civil for to of Building transportation various and in revenue primarily the level quarter XX%, $XXX of projects million, completion. million, nearing activities was to $X.XX of $XXX billion Contractors same the XXXX. the was modestly Specialty in last increased project substantial part in third up down due And quarter period Northeast to decreased on segment segment remaining. to in XX% third project electrical up components work execution due the that segment revenue XXXX was activities year-over-year $XXX with the California revenue a of million, year. scope revenue on compared mechanical was

loss operations of quarter for a $XX Overall, year. XXXX quarter of last the loss third the operations construction we million construction a million from from same compared to reported of $X for

net and and for on fourth various continue impacted operating due additional unapproved the judgments estimates by recent claims periods. and to from on cash in primarily both resulted will resulting to were and negotiations, result disputed in change periods quarter orders. changes results more The in settlements negotiations adjustments settlements negatively have Our and certain future projects, legal unfavorable

third construction from as to income contributions year California. XXXX. compared in couple operations higher was a as year prior increase mass-transit of to on the unfavorable segment of due than period, $XX reported volume million double, primarily in project million, quarter improved current well The a from in of absence project an adjustments the including Civil was $XX mix the more

in of multiple different the increased during in expected California, projects we of In from performed reached of a ongoing the components which impacted to the addition, future. a mass-transit and included certain work disputes third settlement profit resolution be quarter the that XXXX,

$XX in an of resulted of another million unfavorable nearing adjustment scope is favorable of the offset has completion, $X settlement the on a to of by adjustment This million component that substantial of component one noncash project remaining. that partially work project

increased the net work profit generation the the adjustments to from impact as well. the should unfavorable cash more future a settlement a offset of settlement, expected to generation X This in period is project. result have by future be the from favorable on As on quarters than these impact

income of The construction Building the from for and XXXX segment both XXXX. operations third essentially quarter breakeven reported

The of loss electrical million the Specialty the loss on related noncash expected recovery impact of quarter of Northeast $XX $XX in a changes negotiations. $XX change for unfavorable of of adjustments The to the in resulting due of mechanical Contractors last from the XXXX, from unapproved certain estimates construction in on compared transportation change due third the orders to to was of project scope the ongoing million year. changes to a quarter in segment the operations same posted million principally

settlement from in ongoing anticipated well mass-transit As a resulted and negotiations million as that a project an $X adjustment California. on unfavorable completed

had and disappointed the well improved We both continued in Building as certainly performance are the Specialty Contractors XXXX have segment, anticipating Contractors charges as from but quarter in fourth segments. the Specialty we are with in

quarter Interest our borrowing of and on B. was was compared $XX the for revolver same the quarter of to the third for driven third higher year $XX Loan million of expense the $XX to $XXX,XXX XXXX compared rates million, last same increase quarter Term of the quarter $XX last Other million, XXXX million, third income in approximately G&A Corporate the XXXX. to this quarter by expense year. year, of for was compared the million for $X with

both $X.XX Perini to excuse loss quarter fourth per the attributable the share of attributable a XXXX Tutor for due of to -- loss Perini I third mentioned a loss $XX for $XX $X.XX compared or of was reasons million of to in quarter per underperformance to The year. in of Tutor is the last share net the Net me, loss or third quarter periods million a earlier.

XXXX. of XXXX, net for December balance debt our or debt As as $XXX sheet, down September our to million, $XX our net XX% of compared was at XX, XX, million million $XXX

September continue of in the of our remains for be we in credit covenants reduction in agreement, future. near-term the top XXXX, focus XX, we to As to under are Debt compliance our and use compliance expect cash. the with

significant it excess the cash expect several generated disputes Much to months of mentioned with As various expect next earlier, part of associated of collections. resolutions continued we deleverage cash will to anticipated over and be use refinancing. successful the as

approximately provide G&A million is I $XX in assumptions approximately of XXXX, expected million $XXX expected Lastly, will be expense $X at will anticipated and still amortization to $XXX for now million million. and updated purposes. some between expense be XXXX $XX is be for Depreciation at $X to noncash. $XX be with Interest million depreciation expense modeling to is which amortization million, million. about now and

expect be XX% interest now and million. $XX expected is now income to be million to effective $XX between Our We XXXX rate noncontrolling tax to XX%. for approximately

forecast for expected million XXXX. We lastly, capital shares now continue to diluted $XX average our to outstanding weighted are be for approximately XXXX. XX And expenditures million

Ronald Tutor

Thank our we X continue flow had back disputed cash the and settle the the summarize last year-over-year due certain Gary. full and will ago. X to third long in those flow year's result we as with disputes. you, of very by disputed to charges matters goes quarter, and XXXX resolution that negatively and as resolve years operating To exceed but as anticipate We operating associated that significantly were year collect record for substantial cash impacted growth the earnings quarter, matters strong backlog cash

cash as strongly operating XXXX, XXXX and that of performance handful disputes believe be our the resolved issues, all in of but will record virtually excess significantly in in a in will be XXXX. We claims

anticipate end significantly bidding as on EPS and major grow in bids awaiting solid remains next for numerous pending should quarter projects. market strong the beyond. and our are next with very pipeline demand performance decisions and year year improved project We already backlog we Our improved fourth major significantly submitted,

excess and The the with reality level pandemic in accumulated the that being by all resolved of are year. is the delays the disputes, all between end next cost associations the of

XXXX. And down some XX-odd be XXXX X will less or to disputes in in

the Thank to with operator I that, turn call will any you. the And over for questions.

Operator

question comes of Fisher [Operator Instructions] And first from UBS. line the the with Steven

Steven Fisher

just segments projects out those, underlying to Gary? ongoing settlement. were the are from charges charges and on In I which operations want the were sort the that related to what

Gary Smalley

that I Yes, but $XX there that And are it's that mentioned, Steve, have though, were for is about, And -- -- million so are say that really we're in there's that we Civil a ongoing, winding mix did of up. are of ongoing, complete. projects are but most we'll then one they ongoing, charges but talking really some the project the that had barely. projects the

Ronald Tutor

is tunnel project That Los completed. charge Angeles the that was in

Steven Fisher

call, Okay. first a obviously, lot the of about next think the And XXXX, the on giving in is lot there up is of settlements and half going even sounds guidance be of be then as the 'XX. of that for going for of we Actually, have the the in cadence half that through you sort like an a this of terms expectation to of it you year? work mentioned XXXX clarity first still cleaned could on

that enough of to able environment So to clear going compared a kind about in of out? curious to of to be moving still given be a the couple make it there's guidance, what's will to that and number last quarters going things offer I'm different be

Ronald Tutor

it all be 'XX moment of me, won't XXXX outstanding cash you that insurance by I can. essence, I insurance claims quarters. on is last we me in install collect as until all an resolve of be that any have out, the companies let out, try if the do The year. 'XX. also than 'XX, listening, the flow as point excuse X was premiums, significantly of I the to XX limits X -- strong largest will In carriers to of larger that. pointed you will the payments to 'XX that are claim one a SR And end first in excess end against you explain can. Well, by it XXXX, the

our next increasing portion the concluded will not virtually, mix. we So of cash be why be year, And flow balance or CIE adding will we been the and significant. so a believe small have that's claims the to say,

For every XX X. we settle, add we might

follow I'm very is the cash already we're So will that, cleaned is. as pleased behind that phase and us, up and it

amount of add at We're the significant large to to also backlog. already work looking a

or the up the our are we're remains claims, So the hesitant conclusion, to we that balance to behind settle last but not to past feeling thing because put litigate positive, is us, to of and judge we've get positive, of months. we've decide. where those a been couple litigate decisions within And and X we'll judicial had the X let of more a next they've a got number and to very

that, thing So in of it. you XXXX. with see the by And be generation such, is end will accordance very main cash CIE the limited as that will

it's positive every one I So of my from very perspective, negotiate given them.

Gary Smalley

from position to tried poised that think There's volatility, upward we're look, that to question, on as be cases be is. volatility, some there's will to judgment, that so think exceed EPS we standpoint Steve, part that well some an your we're of some waiting and there's what too. going going our be book we guidance

with close, keep happens and we'll hope So guidance going pretty to judgments there we yes, be settlements to that's that volatility We with not and us and the hit takes volatility. be from the some there's could what going results. out but and arbitration coming guidance, to puts with hope

Ronald Tutor

volatility of be for behind certain a which there intents and behind attached, all end we get us. all be the they'll Until 'XX of claims the purposes, us, will by

Steven Fisher

ones. just a couple And Okay. of then last

flow solid. obviously, pretty flow, operating -- cash cash the In terms was QX of

I'm that for -- us will sense just sense I that QX, a the of QX? than then operating you And can that cash or you that have more flow curious backlog? less give So your in margins be is of the

Ronald Tutor

significant was record that. I'm can't be tell I wanted it'd to as be, that you told I thought we'll what of tell I I as will couldn't. then exceed we the you year. tell I it did you and But last told much

Gary Smalley

and great provide Steve, we've operating We'll don't in even those of to just few mentioned, it we're as October both collections, have Ron get yet. but results and we had can't we yet. cash the next -- days for predict, I

Steven Fisher

then that can us give of just Okay. could if helpful. you sense in you have a would And segment, the margins be backlog, you that by

Just trying get of a sense here. to normalization

Ronald Tutor

We can't said never tell competitive a you I margin. by margins in And we've item. the That's think past, backlog.

Gary Smalley

looking think he's I not projects. at specific segment,

Ronald Tutor

Segment -- after we even what pretax? segment looking for, what variable operation. G&A -- very should That's Steve, have because each segment make so you are

Steven Fisher

a Ron, should in lot of some trying Yes, been have of -- these to just and lend more itself the a you're in today sense putting results. by the to the influenced out get last several quarters. settlements that normalization of over because Presumably, margins backlog coming work

just double-digit low had margin that Is potential kind from . we that you've Civil. in So should historically, business? of kind curious, expect what of

about of backlog with a there, low and there's got sized the on while? versus mid-single-digit equal that maybe business targeted does a very that profitability. That's because prison you've natural We're the for talking kind could more work track in back Specialty of be and sort fixed it's the get question. when to segment, pretty of mid-single -- in maybe of a the kind towards margins more You've project, different a Building X% the

Ronald Tutor

Civil be gave all to at corporate. Civil, if range that it'd I of I would tell subject you you XX% G&A to conservative after XX% a

business, the that the very as award, to ramps I prison it with to the in positive X%. with we'll X% X%, job think on particular, Building upward a prison having X% be to up, in continue the impact

As It progresses, significantly the revenue higher. that lower. easily could be be won't

and New as the last all be you're management restructuring. Specialty specialty X%. for X X% replacements group years, the aware, at but companies struggling our the And even X York X should to have nothing, But been to operating with

only have their I'd operations revenues say we reduced X of in our to what X working XX% Specialty and for were ago. group's they Perini, New years Tutor Now of York Specialty and

disputes, So results operating forward. than don't the any negative I in see resolve fast other going XXXX of starting

stabilized it I our is a for Tutor X% exposure category margin the So X% as working the limit only Specialty in in and group, Perini. to New will think controlled York, generate fairly

litigations general So with their of disappear. hopefully the contractors will issues owners or

safe I that's So think way the it. to put

still I as the in has continues York. might quoted. by significant what should do add Midwest. in Civil to upgraded does sum virtue business the Construction Building I significantly of bids Black I be the lump well New Lunda to think upside grow and extraordinarily And

well their and everything New do York reduce what concern risks going going remains we our specialty is extremely So still our with impact The contractors forward. to associated and City our operations. reduce

Operator

next And comes the from BofA. Abe question from Landa

Abraham Landa

I I strong the think should kind executive -- earlier, City those at just on expect...? on due X-K worked give Can update saw and your of recent what going? just I maybe of bonus. settlements just you us kind you related received that performance, to of an believe, And we are discussions think a I can of kind specialty how a New comment. an off going York

Ronald Tutor

you said. so can what understand I that just I know Could you repeat even don't it?

Abraham Landa

Yes.

an X-K to on kind executive York you I was Contractor how think was that of your bonuses update kind and put Specialty few in settlement managing an back that New the maybe of of a think of you settlement? for just of paid months kind wanted And the dispute an charge I out progressing, cadence business. when

Ronald Tutor

settlement, When are singling mean that some? settlements... you of all, First you the

Gary Smalley

Yes.

not paid other was his based -- progress to is was think referring that I for the over on for maybe assignments portfolio it incentive you're taking Specialty. prior confusion really the in to him

Ronald Tutor

Yes.

that that nothing bonus, Ghassan about He just with Ariqat's was for do And it Specialty past the group. talking performance assumed that extraordinary. really to had You're role. was

Specialty we'll now And in you tied I'll you York? do Building accordingly. if So asking, not by will of by and the the to is end think He New both and with when charge be the of of Specialty XXXX. claims were unequivocally confuse group these out way, be in other. one say

Abraham Landa

Thank clarifying kind was And ultimately the to get yes, et I of for be when can cetera, you settlement, trying that. was to resolved...

Ronald Tutor

got way. All dates this it judgments, can't got us by pay. They're out put or have our court either run of they stall They they we one owners Let's going anymore. are. one, And to appeal. to

Abraham Landa

That's I that good to that? was hear. on. have Is your think, you was, panel during update I there of on also call, there last November believe color X in may that some you're mentioned more arbitration kind expecting as an well

Ronald Tutor

Yes. this against We Bridge California in was the year. That of arbitration the our on November concluded DOT Shasta concluded project.

We May that and the April decision to until originally March, our be which lawyer They will conclude that is range expect it in clarity million input litigation, or April $XXX won't the just said year. of got plus. but subject May, next or in

Abraham Landa

Okay.

in around judgment, get final should that? 'XX April a say, let's we So like

Ronald Tutor

'XX question. yes. May, or April a without

Abraham Landa

as aside. talking Great. debt then target number have good kind of a going well? a about cash target kind you're do strong you come to setting And capital of your structure, generation, have to the market of money to And when some how net it's flow frame a of do time kind to Do you're refinancing? a also free you

Gary Smalley

We're launch. different say, Yes. we'll different alternatives, No, we Look, what be simultaneously. more to we any doing to we'll we're looking things, and not said. talk ready at soon specifics said we're than that going

we would when would on early say, based close, the sometime part we So year. of

net down a that foresee as We as debt or significant look, debt and -- see on be far pace at. is But should looking the collections will depends what get cash how reduction it debt significantly based the we as a we're works. we'll target, and to cash. be it of what our And able debt on of

Ronald Tutor

Absolutely.

reduce first you We crazy and 'XX, we're in will you at base, reduce in look see in plus. that if coming to we're debt time. to and what's the XXXX, flow that still generated flow cash right going carrying the the cash for load is will But this going we strong significantly significantly debt now market funnel

Abraham Landa

is feel all leverage free once great building you of cash more maybe comfortable and maybe just and hear. That's this to there offering go-forward you of basis, off a flow And kind a kind generate of that, refinance? kind that

Ronald Tutor

I the will of the believe a even not of to reach with you, these structured interest that supposed many in and think point of absolutely to comfortable next I Gary to said, and appropriate, look and achieve place way do, tell debt year, total significantly is between debt, what generate that year. the I and begin amount reiterate guess but again, which June I'm reducing And cash add I'll interest of you you rates. at things. amount I I'm what to and it's reduced awful CIE year one better we'll it if we the put flow in And next this high April debt.

Operator

I time. further this for over back to any are Ron floor There closing turn would no comments. questions at the And like to

Ronald Tutor

We're No, I getting us, for joining have to Thank everyone, add. more patient. you, nothing and stay there.

Operator

teleconference. this And concludes today's

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

Tutor Perini (TPC) 9 Nov 232023 Q3 Earnings call transcript