TPC - Earnings call transcript Q1 2024 | Tutor Perini Corporation

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Operator

Good day, ladies and gentlemen, and welcome to the Tutor Perini Corporation First Quarter 2024 Earnings Conference Call. My name is Maria, and I'll be your coordinator for today. [Operator Instructions] As a reminder, this conference call is being recorded for replay purposes. [Operator Instructions]

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

Jorge Casado

President everyone, With us thank Gary President; Senior for Chairman you participation. and Smalley, Vice Soroka, Ryan interest your and CFO. today CEO; Hello, and and and are Tutor, Ronald

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

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

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

Ronald Tutor

and earnings quarter Jorge. exceeded thank and first had revenue in a good you day, us. growth and return quarter. a track very joining for demonstrates for are that results profitability our that XXXX, double-digit Thanks, we last just on Good indicated we in We call that to expectations our delivered

seasonality per profitability earnings results share, consolidated quarter $X.XX Building which our and featured X.X% especially Our of first for Civil business. diluted margins revenue was with given growth, XX% of strong operating our and and typical the XX% segments, of strong respectively,

the will operating XXXX Tutor-Saliba at flow billion. very operating the $XX first Perini strong merger grew any the details million of a all XX% continues impressively, financial the second Corp. most and later. since cash Backlog And cash bit perhaps very highest and Ryan between of be quarter, $XX discuss year-over-year result quarter to flow healthy for

extend XXXX, note, will the combined senior senior recently million million in we with due debt in of to available We debt sheet our strengthened be balance hand announced, refinancing, which, to and due $XXX notes previously $XXX they XXXX. of prior used successful a new the of which cash our notes on completed will million maturities. as Importantly, issued $XXX reduce redeem

total reduction our of redemption me, effective existing focus After more, extending senior year with we facility our years. our of by of our even expected of since we the notes continued revolving our last existing senior will the rest the reduced upon strong $XXX even conjunction refinancing, by debt credit the cash also XXXX approximately become will week, of and XXXX. excuse maturity which and our The be debt quarter notes, agreement during XXXX. flow -- fourth we the nearly end the our XXX,XXX In of amended next will million including have credit with redeem X

resolving progress amounts resolve We substantial disputes the continue of that matters disputed half to various of about legacy quarter, expect in we to good outstanding and cash associated We make still the contributed generated. be remaining finalized of performance. be to collect first on XXXX. the operating most which we activity as 'XX, this expect drive to cash expected in XXXX's both and help and to record for expected strong amount flow of dispute lesser with as The a XXXX resolves cash them operating year resolution cash

year-over-year. backlog quarter mentioned, up $XX first was XX% our I As billion, a solid

X projects of and funding in health for additional several care for funding in for Garcia transit Florida, of $XX significant quarter include mass care most $XX million million in Construction and health $XX $XXX the X project million for in Hangar project California, in U.S. projects million the Diego in California, contract projects first adjustments Navy additional Titan X million awards a The Black new project California. $XX

and year that XXXX. anticipate still this in significantly later will We our backlog grow

bill and we recent in by as major quarters, Bipartisan share our are local which the Infrastructure state funding. win of supported well As project the we available bid discussed have as volume of strong opportunities, and

which significant we lower the which dry The the tunnels $X.X Southern in of June. rebidding Jersey; to but million $X broken facility; previously, tunnel New next bid was on billion project. previously prospects $XXX Jersey projects -- AirTrain now York New bidding August. be and multibillion-dollar funding; the is line X due the to another shipyard million were jail project, Transit able Bridge to in is Jersey in $X.X that in $X million is The to rail days, bidder in bidding transit I and X of constraints. which billion less billion XX Washington, York, end project the were had Camden bidder Again, up budget most to the billion Manhattan the state $X.X billion New the $XXX rail low in $XXX been replacement we unable Connection June. in owner the project low project of now is Eastview be unable Palisades Raritan bidding separately; award in over $XXX bidder And Connector Inglewood Newark by again New near-term California the South a in Our light project, the this the expected believe in to which include summer. Kensico That the bid lack enables to we which -- be Manhattan into on for dock Honolulu going previously magnitude rejected

positive anticipate this outlook results market to and XXXX, maintain adequate and current business assessment stronger our for XXXX with the on of in and date our contingency. again, earnings Based year, We earnings significantly expected to 'XX.

affirming $X.XX EPS event still EPS to we guidance the be of the unforeseen our of In in range and $X.XX. expect XXXX are events, to

be due project in half second year timing the as our weighted As the well are typical seasonality. to more activities anticipated in years, of heavily expected prior of earnings to the large as

turn over the financial call I'll to Ryan with the view And Thank that, to you. results.

Ryan Soroka

good Ron, afternoon, you, Thank and everyone.

great a exceeded to off that excellent first we're in with results XXXX expectations. quarter mentioned, start our Ron As

$XX.X XXXX. essentially Our cash associated in had million resulted settlements ongoing million helped with $XX generation this resolutions the focus first highest flow impact and have dispute quarter, the very quarter collectively cash to the resolutions, no in was to we on achieve first collections of strong and result these us second related resolutions other and since to Approximately cash of quarter. dispute earnings first in operating

anticipated continue generation execution disputes. increased enhanced strong activities. expect our various cash next project should year flows driven remaining this be We the And of by by beyond will cash year that, solid, and resolution remain to

balance by of enabling us our extend redeem our and and maturities completed sheet existing been I'm refinancing, them pleased a in debt notes debt will recently due strengthened with and senior accumulating. million due $XXX with notes of million of new we've to XXXX XXXX $XXX million cash replace $XXX in which our that senior

amended existing noting upon It's of to notes maturity X redemption our the revolving new our will have notes our protection. credit be of our also call years And also extended week, upcoming next agreement. senior the worth senior XXXX. We credit facility of

paying will restricted and As paying remain Ron indicated, in which Term our are eventually B, our near-term prepaying. off not on down reducing debt we Loan focus by

the primarily California compared High-Speed Jail driven $XXX for on New Brooklyn Now Airport LAX in first year. let's XX% results. for increased project, the to Revenue million same project $X.XX and billion, Metro growth by activities our the P&L Connector last Rail The up XXXX quarter was discuss the the was in quarter of strong project York California.

primarily increased Civil of year, well the just Frontier-Kemper's to due as Eagle for XXXX up project the first to British of on quarter XX% activities last segment the compared Mountain factors I as first pipeline in revenue quarter gas million, was $XXX some Columbia. mentioned

and on on health project a revenue up million, segment activities in year-over-year $XXX factors aforementioned increased also was Building California. driven care XX% certain

we in with offset quarter project revenue the a components facility the in reduced to segment had was and Arizona transportation XXXX. of Civil and project a due growth The Specialty electrical the strong on completed first of revenue reporting was segment, Building in and $XXX industrial the million the The segment's of segment the decline decline Specialty mechanical in northeast. an XX% for by activities partially mainly Contractors

the same segment prior Income increased the of from was related absence on loss The to improvement the significant for million I to $XX $XX as adjustments as million the an to activity, year year. was first unfavorable certain mentioned, of last for construction due Building quarter compared contributions and quarter largely as operations Civil projects. XXXX well certain

but We margins New $XX impacted completed each project $XX that with York the a segment a adjustment Civil million to that XXXX and segment: an had a million in arbitration and partial for a Specialty an segment a largely project to Contractors adjustments a quarter favorable couple of in the associated of on transit mass Specialty provided other of first Contractors dispute award. of Civil California unfavorable offset project expected on resolution cost related due us only ruling savings adjustment in

Civil year. for last margin first XX% construction segment. than was substantially XXXX The segment's for segment for million, quarter million of of to XXXX, of quarter income up Civil the target operating was quarter compared from $XX the corresponding first that in margin our range first operations higher $XX the

construction quarter was mixed-use to quarter in million have the to largely and in project range York. loss attributable that operations the last million, first recorded first X.X% XXXX, substantial segment nicely quarter that income completed segment from in year adverse $XX margin the for $XX Building also our compared the legal ahead ruling New on of significant was improvement of operating we been a segment. a margin target of Building an

construction million Specialty mass to million a of adjustment million in mostly quarter in well segment year, $XX California. as as the a from last an I the unfavorable quarter first compared immaterial loss to quarter on due a posted XXXX completed settlement $XX of The loss operations $XX to first the charge Contractors of project transit due a this for mentioned of

end are the segment rest Specialty of We be year the over expect and performance XXXX. Contractors optimistic the profitable improved from the that by segment will of this

the million compared to price to first stock expenses, resulting in classified the mainly year, higher quarter of first awards, of G&A the attributable expense our XXXX. $XX compensation-related was primarily Corporate in in on share-based notable due increase the liability to last compensation higher million of XXXX $XX expense the with impact quarter increase from

year. compared to Other income $X was last million $X million

$XX and was to quarter our Interest first on last B, a this of borrowings expense prepayment the million primarily we on our $XX million lower by in the driven the the decrease absence year with Term February. $XX from made Loan year, for balance million resulting compared revolver

tax to an with million an effective of XXXX same year. effective tax the million in $X XX.X% XX% corresponding was of rate of income tax expense rate quarter first for last $XX a benefit with Income the compared quarter tax of

we losses will help taxes for XXXX in in operating net income generated future As and and the cash a outlays reminder, XXXX reduce in our XXXX years.

a income diluted to or first Perini million of of was share the to quarter of loss loss share of Tutor earnings first in $XX XXXX. per or for quarter million per the $X.XX compared Net net a attributable XXXX of $XX $X.XX

we growth XXXX. anticipate mentioned, positive return earnings with double-digit XXXX Ron earnings in still substantially XXXX stronger revenue and As a in expected and to

address balance Now I'll the sheet.

million, total $XXX million $XX XXXX. debt was Our XX, to as $XXX compared or of XXXX, million as XX% of XX, December March down

total the another our by next existing notes. Our will down of week $XXX redemption come debt million senior with

were in future. March continue the credit in expect under XXXX, be covenants compliance in with we to our of XX, to and the agreement As compliance

in maintaining are could strong the our Despite impact adequate unforeseen events we that mentioned, XXXX results, to our potential cover Ron guidance we us range maintain of want quarter as this $X.XX. our guidance $X.XX in EPS contingency to finally, first to year. And

guidance we our unchanged. remain quarter last Accordingly, all regarding that the provided assumptions

over Thank the with call I'll turn you. And that, back to Ron.

Ronald Tutor

and And being that recap our at we a of Building in segment, Civil and again highlights strong the growth operating strong profitability, earnings cash repetitive, revenue quarter Ryan. secondarily, of flow. risk $X.XX of share our our first business and I'll $XX reporting delivered particularly Thanks, in million

and our of flow will to cash. be in 'XX continue legacy continue cash as the disputes and to we associated substantial collect resolve our the expect 'XX remaining operating remainder strong We

double-digit to and positive track higher 'XX growth deliver earnings year in significantly revenue to on 'XX. full 'XX in and are anticipate We return and

this opportunities project extremely mega major volume significantly we as grow the bid to in win near-term large competition should next, our share the backlog continue and and of with arena. of Our limited year

we Lastly, our debt earlier. refinancing completed as successfully expected,

for operator that, with And to call the turn I'll the over questions.

Operator

[Operator from Riley Rygiel Instructions] Alex comes Securities. Our first question B. with

Alexander Rygiel

Gary and here. quarter. team, of A quick Ron, nice couple questions

in about a historically First, first are you winning Ron, talk large success those you had round? rebidding. of you little mentioned won what bit your number Can rebids a already rate of is you were prospects these the sort when

Ronald Tutor

confident give say you I rebids competitors. Well, we're limited so just lack history, with and but of let's the seldom. happen the the very a long competition those can't on

Alexander Rygiel

more to And the first in as relates Ryan, quarter it then the margins strong. -- very Civil were for this is Ryan.

can mentioned onetime the You number here, call the of the have items strength that you a might the of kind first quarter? but just things in identify influenced on

Ryan Soroka

and There impact a I project to XX-Q was Civil we quarter as resolution have to a million them as mentioned, a -- Form favorable well. The the Sure. L.A. segment $XX first related on here in disclosed

Alexander Rygiel

then a quarter bit second the and for for the little to year? with And you interest us can expense help Excellent. full regards guidance

Ryan Soroka

a will at be our different year Yes. debt At guidance to we're expense, but refinancing but interest rate. outstanding continuing for maintain the also the less related this point, to

Operator

UBS. question next from with Our Fisher Steven comes

Steven Fisher

to profitability first quarter there. the Nice see

on Just segment. to Civil follow the on up Alex's question

out $XX you're in hair business. quarter If XX% million, just in a margins the the back you first that under

that I'm So of of about few curious to basis supportive an kind of kind it fluctuate around is how within of we I of range wide Or underlying margin? level a the on guess kind think the today over there. going still quarters? next you the that just backlog fairly have Is go-forward

Gary Smalley

what is been of Yes. pretty in we're been north we nearly of band, the we work work. that's much signaling Historically, Look, and XX% margin XX%. X% for strong quality we've There's to Steve, rest Gary. the earnings a we're this the going like The the XX%, for the year. we've that backlog, of a while work in that that have lot of in there. be to the expecting

how proxy should of the I rest out. So think of year pretty good a that's the play

Steven Fisher

That's you million the specialty side $XX Okay. And adjust guess for business, helpful. the then I on of item. the

profitable. end by I of You else? Specialty from but the projects is said business profitable these I it is of next couple not And mentioned of the still more of mix something Or there, underutilization? quite the what more still being know the quarters, year. guess or legacy it in you keeping still is some

Gary Smalley

Yes.

-- it's still there's some there. So still underutilization

of looked we on. the time. were of these the it we were And quarter just facing of and result in And and into the, spot of pretty really cases on the then much we're still what a being little at what items, had activity was the us resolution period. But down legacy that event the a we bit one weighed You're the quarter that. some subsequent say, like we'll budget down But some dragged bit. little by

pretty So absent quarter. point, volume with New underutilization, had somewhat being a of in that, at the even this York with especially good we low the

now. that focus So and the litigation I think right that's on it's resolution risk big you items, really we're seeing if

Steven Fisher

better earnings seasonality Okay. in think a the And much then heavily just more first have half, I probably than it's the but more on you that quarter. a to of -- the follow-up cadence weighted the second year, mentioned did Ron typical

imply that expect Civil we then but so fairly business. things weak say that XX% you on should we did if margins together, take still those a or the might So two QX,

around to be So second approach to QX? does that our just something for we just leading set potential taking upside quarter guidance basically expectations pretty properly or year, to a point aware the should here is to the in there of that conservative

Ronald Tutor

year taking we be There's to said the hedging a and it's cases. litigate to reason settled of and people we us, forces of nothing in through major will reason we're owe of settlement also positions collected a I've the are, money. significant second conclusion, collections again, and time have and quarter. but the The we XXXX amount we're moneys that

So any uncertainty. earnings of variable don't an any and of operating about I there's a always divisions. uncertainties have the

I think they're terrific. stable, and civil is

the always issues it's for earnings, rest obvious we think share only is in our -- significantly of year. got the the and worst be and $X.XX higher if However, quarter first you a we'd quarter, our predicting

this all year Jesus. the come said again, of However, time as our I've to owners -- is and this is

occasion, of All litigation this win. projections 'XX because of and lose. us. we've primarily increased treated our only fruition behind them year. involved 'XX we've litigations, the our expect thoughts about uncertainty that's this of why to That's significantly year, we On and settlements Most accordingly. XX% and we this we them, in to That's be come the

Operator

comes next Our America. with question from Abe Bank Landa of

Ethan Kalis

This is first Ethan Kalis done. getting just off, terrific. the on for Abe Landa. I congrats guess, on refinancing That's

Our kind focuses first CIE. of on question

That CIE normalized sales a XX% backlog? be would of of you I super past, think to the helpful. percentage XX% helpful. there color sales. it Any what about in is think guess way maybe percentage is? number the I provided what's or right Is number of to a

Ronald Tutor

by I've that the than reside XXXX first that various any and I 'XX, anywhere billion $XXX to the of that's is $XXX within with $X past to our in a 'XX $X well the revenue, end Well, X% no to delays disputes that size, should of you in get earlier generate by million from litigation think X%, stages expect of And quarter quoted resolved sometime category. of our being -- further going in quarter and goal range fortune assuming of but good in to in no the CIE of billion company to can 'XX. in and million first

X the certain Perini informal are litigation. So or that's principles negotiating lawyers months discussions oftentimes resolve X the although of between to them without good in of principles of benefit normally take ultimately Tutor faith we and the disputes, owner. because there year They are the and could of

So amicably. CIE, to the but litigate is into but not object those go resolve to

If I get ] isn't that and that, is more million it amount, less of I've to guidance. $XXX said CIE than then million If could what certain going [ we've million. we much So to where positive. I'll But a previously, And restate. $XXX had give years as $XXX reasonable. than was there's would expect always we be and that's

Ethan Kalis

super Is helpful. I for billings And there guess in the That's Awesome. liability excess? to side. just a normalized the turning level

Ronald Tutor

can. Whatever we

Ryan Soroka

been of So fixed-price just just that on the and targeting bidding large the forward, based focus mid-teens, projects. these the looking kind of something we've on projects types in we're

Ronald Tutor

with them do. work taken that in discussion tell We owners we an we've all position in absolute Essentially, so what prebid a our mode finance contracts. we don't change do, we our they

mobilization get us upfront, typical X% and set So on $XX we we day pay means the money they their it to ours. we not on if a foot to which means billion demand million demand million payments, job, and finances XX% $X the $XXX job the job,

ourselves Now that into from months, XX we've industry and no put they much money, would to days But XX force the last previously. That's than and been able negotiate terms we continue. change over diminished we on it worked will find old the being our able better competition, money the with to our to the in upfront. when

revenue be going a So that's hopefully, always and to maintained XX% level. of

Ethan Kalis

it's Yes, excellent...

Ronald Tutor

In words, not owner's work ours. money, we other the want on to

Ethan Kalis

see. excess? the in the in excellent is is Or project CIE to be billings That's Brooklyn portion related portion included design? full to Yes. Jail And point at this the of only a may

Gary Smalley

portion. design the Only

Ronald Tutor

excess And that's not in a number. significant billings

Ethan Kalis

still like there done kind one of pretty Have you trough just in It the some just And is follow last legacy projects. there quick a Specialty to more go? terms to has question hit up a shedding of seems of revenue? then on Or job Awesome. just excellent Tutor unfavorable those Perini segment.

Ronald Tutor

I think well a to revenue leveled lowered point fairly where off. we've it's

is I from took million comfort I to I've million $XXX million is we're, down million WDF to million. down $XXX Five $XXX now. year, Electric what, we think $XXX $XXX million said, a from think to level $XXX where our As Star

place down people a and people laid of off. of remanaged. So size been poor We've a put a we be some revenue say would part new we we've nucleus base in to We've them we're obvious. off. were We that and leveled operation, obviously they've performers. And just level that to our replace return in think a reduced But as can to profitability.

Operator

turn to closing There to comments. this would are floor now like Tutor for I no back further questions the over time. at Ronald

Ronald Tutor

look next you, everybody, to and the so call. forward Thank much, we quarterly

Operator

This concludes teleconference. today's

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

Tutor Perini (TPC) 25 Apr 242024 Q1 Earnings call transcript