TTEK - Earnings call transcript Q4 2017

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Operator

Good morning and thank you for joining the Tetra Tech Earnings Call. And, by now, you should have received a copy of the press release.

If you have not, please contact the company's corporate office at 626-351-4664. With us today from management are Dan Batrack, Chairman and Chief Executive Officer, and Steve Burdick, Chief Financial Officer. They will provide a brief overview of the results and will then open up the call for questions.

the within Tetra Private the Reform of of make management Securities course Act statements forward-looking meaning XXXX. the conference Tech call, may Litigation During of the financial events Tetra future concerning statements include Tech's These future performance. and The statements differ actual events future and results. materially from or only are predictions may and the could Tetra results cause XX-K Security to reports forward-looking certain identify differ to XX-Q Form Commission risk from statements. actual Tech's the materially and Exchange factors that update Tetra Tech duty statements. to forward-looking undertakes no

be presenting the would will website. non-GAAP financial reconciliations In posted all references, management addition, we after the and Please time, Investor Batrack. to like Tech's Dan in for questions some measures go as you that of participants presentation. up the appropriate turn are I since will inform At to this Mr. Tetra financial open are GAAP would to a At Relations the in the listen-only the mode. now answers conference Batrack. ahead, that, the With I request over like call company, of section

Dan L. Batrack

XXXX growing very fiscal and record Thank and position welcome year; projects our and and a to ever and fourth We backlog, to morning, high rapidly water entering and an stronger good than quarter quarter close our Regina, year we're conference with in excellent XXXX fourth had opportunities earnings year fiscal in much, call. a fiscal environmental you XXXX before.

had our fourth results details and Financial performance today's record quarterly for Chief excellent while Now, I our annual provide Burdick, per share. outlook, an with follow of allocation. our will revenue, capital additional and the and Steve I'll begin Officer call later business income We earnings and financial the an call overview with quarter highs will operating and on in our

operations ongoing up our from year. $XXX from million, quarter, revenue our XX% the For prior was fourth

the is million up operating which in future company. income up was XX% up provide the which of overview X% highest $XX Our $XXX prior per year-over-year. X% performance. was in diluted billion; our now share which resulted net XX-year from And a year, million, $X.XX of $XX the revenue earnings million, of quarter, or for operating like backlog was us $X.XXX year-over-year for income the to generated an into at the year-over-year. an history up I'd finally, in our XX% look customer the work of

Our mid quarter California, end-markets, period, revenue and XX% an with growth the organic the record our areas revenues local was fourth of and a quarter year-over-year. quarter. work of especially late led states direct this in by growth of for work. infrastructure and planning of in performance we're and and where were near federal growth U.S. emergency net end state U.S. which high fourth This strong recovery growth strong across performing services State we local and where was very even Texas our our very the water result performing started the Florida, September the work to of was

grown net was our about Defense federal international that which growth strong For in of our U.S. XX% year-over-year our quarter, in XX% U.S. had we and year-over-year; of development work by clients, the our by represented growth our in work. Department federal revenue driven

was by was Our up a States design and up in year-over-year. for United was the from international remediation revenues revenue U.S. was our up, services in and oil work. U.S. And also work it lower finally, the Growth environmental X% reduction commercial offset industrial, XX% revenue. our in gas year-over-year partially

an I'd come XX% in note and performance excellent can segment WEI's also pickup at growing noteworthy nice group or to segment, margin labor segment increase X% with plain X.X% had the in the excellent revenue revenue single utilization when increased Our Particularly that a in was total large X% execution our for almost I'd by [X.X%] our quarter event, It's Canadian net RME fourth broad-based together. sic WEI revenue project was driven from backlog expectations XX% as rather our The and and projects. quarter quarter. of year-over-year. by XX.X% to like converted was revenue infrastructure like business present XX% not and in recently group's just revenue awarded margin quarter. in line contracts any for was two the we which design but projects. and engineering was margin a those our now by the its the is business up up highest a the while one-time The margin, net with by fastest-growing

development in international was of the Although margins in work, take did proactive quarter, growth they quarter. reduction same as by offset gas without year or and strong were RME work, XX.X% the steps about to will for partially and Department been charges, this and particularly these RME's would I And oil fourth have and of our State approximately we had right-size oil say in Canada. that energy gas the last operations. continued

full XXXX, – was achieved share EPS. $X.XXX new high us, company which revenue an last generated exceeded to the record was the $X For up highs share time is year the which year. of as share. earnings from percent Net of up the million, operating $X.XX the is XX% diluted for ongoing diluted a earnings us operations $X.XXX income which full revenue up from per and all-time full operating record first was year. we Tetra per last year, $XXX for fiscal for billion, net prior revenue, compared up per or prior also a X% that our year year from in billion, Tech's income XX% year of And XX% revenue,

over as quarterly fiscal and backlog high increase. a began seventh billion, Our our XXXX, year us now we record for total is $X.X sequential

presentation, note to we're Tech this the been continues would right with recently for which booking the and it's Aviation Army fourth webcast, As point tracking added Administration, EPA. totaled we both work in go quarter This of strictest the and of to you our the don't begun was in and the that new than U.S. Department the already such to Corps that the single-award to good were we time government this contracts now. the orders awarded have its direct these if quarter million, the U.S. notably compete entire can contract capacities. contracts single-award individual to more USAID. reporting now to And driving for like Administration contract, Burdick turn Aviation billion where here criteria Federal State, projects clients awarded is first funding see Tetra use is awarded USAID where and the to of the a their you're $X.X add the we quarter, wins to which and Steve? in our orders, contract the present Engineers, backlog contracts. negotiation. can on actually from we're and for received $XXX as six were of At Steve Federal financials The over primarily backlog, the And federal only orders, industry our following doing our contracts like have the both new orders slide, the Several begin I major and we with to along I'd task details authorized to year. of

Steven M. Burdick

Okay. Thank you, Dan.

press along a addressed earnings webcast, of are our ongoing following quarter on results those in fourth reconciliation for to results our this Dan full our you So the which previously in release. can presented GAAP slide find which

So now turning to the our for quarter. financial results

quarter were As revenue, XX-year ever operating Dan EPS in the plus XXXX for highest history. quarter fourth just highlighted income, Tetra the Tech's and

both ranges quarter. It's the mind million for addition, has important quality that revenue earnings ongoing only our so per metrics exceeded guidance In our improved, to net keep the work the performed. we was and of not have of share but financial $XXX $X.XX in

differentiated focus and well continued our business. engineering work risk margins profile improved resulted front-end has our for in for overall as Tech consulting So decreased a Tetra as on

last per result, and our income fourth over a increased As double-digits quarter year. earnings share

$XX.X quarter. our So was and cash million income review for key basis, $X.XX. few EPS I'd on GAAP a flow metrics like now the a was to operating

totaled still times. debt for quarter. remained also to while strong totaled net is has at lower net to the which leverage only ratio healthy of quarter, ability the and So net organic year-over-year our to decline, the ratio, the operations million, deliver leverage declined the net as fourth our from continue and of end in result our end target debt of our of one the XX% a Due net million having to acquisitions quarter. debt cash but well to year-over-year. our have And remained has this to flow, leverage cash $XXX growth debt Not also of of EBITDA we range only million up sufficient debt did at ratio shareholders. did flow $XXX remained low as decline, but the Not EBITDA to the two returns as invest capital to our $XX

DSO and to in to XX.X been less By for able quarter. We of work goal XX towards we the XXXX. work, sales days continue a than days our front-end outstanding on committed to fourth and was target engineering Lastly, focusing fiscal DSO. consulting remain lower have days we'll our this

results. that's of certainly these While of – combination a our are business utmost deliver differentiated industry-leading results enabled strong to model importance consistently it's us in financial results, Tech's Tetra

Leading Our resulted focus the Science company. with has for on margins improved in

fact, to as previous EBITDA the fiscal basis In year. points compared XX in our margins XXXX, increased

to declined net comes In year. price income exit flow. expenditure CapEx remains our stronger our low. our free and capital over We've continued this have our due of cash work, free the with construction for lower addition, excess while strong, years, fixed position past significantly in cash requirements flow CapEx very to the three low-bid our cash from And flow remain a generate requirements

total sufficient us that million CapEx X.X% free dividend. $XX Whereas our So XXXX, has to revenue. totaled approximately capital CapEx return and equated of X% to roughly historically, our shareholders provides to revenue. our strong for our cash our about with through of flow Ultimately, or buybacks

and we million stock. dividend in For million paid the fiscal year, $XXX $XX in back bought out

for a XXth to our our year, directors consecutive we our of returned As free approved result, dividend cash And be flow of XX% the in board paid shareholders. to this just over December. week, our

capital balanced part through in shareholders to the our provide our of allocation shareholders So strong delivering to and strategy XXXX. return significant key a our buybacks return continued remains forms we and of dividends to

hand want for Dan. now to and to time call back today you your I So I'll thank the

Dan L. Batrack

you Thank Great. very much, Steve.

enter all of primarily our be to fiscal to U.S. XXXX, our fiscal XXXX, continuing four client be clients for see growth we fastest and to we expect state strong year sectors. continue water year area we our infrastructure. In actually across growth As and municipal local

rates between rate for XX% growth have We expect to the and this fiscal year. client sector the entire XX%

work primarily Federal for our our will third development-related and be expect grow perform work a in of rate U.S. the We to at and by this growth here federal international that be between is United driven to States year. almost and a of the XX% business year Department our and our similar last of Defense both services, we X% and overseas.

U.S. commercial industrial we excluding and business to gas revenue space the about at And finally, expect a for quarter of sector, Tech's solid programs, at and Our a oil in management. is of X% cleanup XX%, energy moderate water with revenue X% grow international overall expect X% work, increases to that rate a our of more bit Tetra to waste treatment, and environmental grow rate. to we

is oil primarily year-on-year become engineering gas in industrial design will XXXX where by Our challenging to services comparisons is expect international where driven region continue growth in infrastructure large be contraction Canada work. favorable. much our to regional Canada, which remain and primarily year, until and work We in services our near end additional in the Asia-Pacific fiscal will of Australia, generated more expect and do especially see to the and though, midstream year-to-year the very comparisons

us has Here margin value, a at very Tetra Tech, high provided high and engineering model. business consulting on with high-end our focus

growth reflect current and on of this acquisitive place focus and growth, new the to us To and are further innovation on. facilitate business. position sectors the And to for in updated Science, in our and has technologies implement recognizes by organic organization which in ever our We client the XXXX. importance we that company our strategy market in we're focusing the put Leading the growing best with investing adoption we've our here value

as focus the and our predominantly Government GSG international or going is referring the We services, have approximately referring alignment government-related And work, Group will Government Services government which refined that include or development our state Kingdom. that XX% and commercial a Australia the include as U.S. United which to the we we be we're we're of the and to business group, to International group, CIG and development. U.S. which USAID, the Group, GSG, second segments governments Group. and segment Commercial/International our or for international our the The international for work services of local to State federal for Department do government, do and Development, Agency perform will for the we clients work work of global development Services U.S.

the to oil within like CIG Group projects Our in industrial held to work consider growth type the environmental we XXXX. Tetra include for that Asia-Pacific will double-digit our regions. the types mining that include I'd we our in for Commercial/International Canada, our Engineering local now our into fifth driving company. we've remediation and end-markets completed and And perform organic News-Record our with clients. our highlight and This work operations of number gas and one consecutive our as foundational of commercial consecutive and briefly some Tech has and years. state we the South of the now Group of or quarter America is U.S. growth and activities commercial international Water consulting, are go going activities, and ranking that the XX

population presence the to of the the strong Florida. and webcast acute company ago. really Texas, of here was address these that the have it's in more years – that's because of or in infrastructure Designing markets their are largest highlighted We the These in founded exposure and there's water-related a management dominate services California, where is large water areas floods. than extremes what I've U.S. of few Tetra business even of three extreme the extremes the regions the a and the very expertise droughts resilient to XX water for states directly on on area and the One depleted Tetra just Tech's recent we're projects is water, where water, a long-term Tech. The company. clients replenish treat our wastewater, supplies, major federal of on all are client groundwater hallmarks treat the brackish XX% At reclaimed that helping we're working of U.S. that the even reuse things business work second of government and or overall primary expecting about this revenue, continued in federal work of provide our in two We area agencies. the for Department areas of we one year. civilian client for U.S. we're growth is think our us. or the this Defense that sector is and of of

design of the and infrastructure Department Defense their their and all On world. assess, side, the facilities help around we manage

increasing As the to than more recently, where contract current and adjust see are actually an capacity this Department resources with of quite needs, Defense substantially billion their continues their opportunity our $X we increasing client. in leverage to

traffic work. data implementation with of we're supported analytics And data of air were contract monitoring navigation side On expert and $XXX Energy just Department we needed modernize and quite Protection Aviation to the civilian deployment FAA over the of XX ground-based systems. we to single-award navigation and and services have high-end award. satellite the analytics this Federal proud feel support million consulting, or very technologies. agencies received consulting privileged awarded have We're to And recently and the federal our Administration and EPA, providing Agency, supporting in the services, years for other Environmental also

just areas Now high-end Leading we're of building for planning water provide applying providing to like the technical In markets in programs that and the with performance really expertise addressing resilient. additional dashboards new growth would with in regions our modeling on analytics includes be we're few recovery addition I – infrastructure growth also provide design innovations, details merging to much water approach upside Emergency will and be their to major developing data with lead are more helping XXXX. these disasters. also and our emerging supporting technologies that is new Internet and Science to long-term continuing And to Sustainable areas our it's IoT. business for manage merger effectively. modeling of technologies. track foundational our strategic our the in more the to markets, and market Things our in new and skills it And infrastructure high-end of of these a more linking we're two potential clients their

States $X a cost Now national disasters in over XXXX year, decade. costly that with in of each calendar one in billion than been the has XX United damages most the for disasters in this more years

has all established through such software our clients in planning developed long-term solutions recovery emergency items and we've support and as rapid recovery and that's we the assessments resilient provide as damage Tech services Now documentation way differentiated to process. monitoring Tetra design of detailed practice the required part an reporting proprietary services where

actually with Our fires, the disasters. to currently dozen and phase recently catastrophic We full hurricanes, range early monitoring services its major supporting cities the and hit even natural the activities. in and active and more a and in Texas, flooding of territories, of tornadoes, we're these U.S. span the And respond California earthquakes. in than fires response counties that hurricanes Florida

to in were damage consulting significant upside expect support regions opportunities assessment We related see already to a well-established. services, and that especially these additional and

expertise on is differentiator for design built providing energy, a recycling that and facilities with Tech's all high-end well newly-acquired and maximize very aligned designs design reuse and Glumac the This combination to waste, we're group high-value We practice by largest infrastructure management. water, a annual water were which staff Florida, some expect sustainable and key our and identify have California these a and Through we high-end combination areas Tetra again integration of us. year the acquisitive another With of within facilities. and infrastructure ability we revenue presence, energy in with high-end design conservation, resilient million growth is I'll of and Texas, group, is current projects water and new existing its $XXX of market approximately environmental a and in This history. business deliver organic capture to and where of infrastructure of XXXX. a million renewable this infrastructure $XXX high-end from area our in large go sustainable Sustainable over engineering for worldwide. growth, to

net year Now, $XXX of an share of range to I first quarter the first diluted the would entire year the Tetra is XXXX. to Tech's million guidance our quarter XXXX fiscal $X.XX. million per and to guidance for like from for $XXX for provide fiscal year earnings the associated revenue of $X.XX with

the $X.XX an For with $X.XX intangible year completed And we non-cash of guidance. be anticipate in not amortization the fiscal of to outstanding XXXX, range. million entire year year XX% which guidance from years, to that included associated in would per as anticipate anticipate listed that's effective million net share this billion contribution rate, our range the tax and that included should during diluted acquisitions earnings revenue include: charge a past a have during included with They we represent stock, guidance $X.XX shares be billion of the we assumptions $X.XXX $XX of this would XX have $X.XX. We is of approximately year. We

provide revenue, updates per income quarter's with record the guidance As we investor they are announced, had will share. call. and an summary, earnings to fourth we in quarter excellent following In conference announced, our

history have the high Our the with in the of that business reached of company. all-time backlog of highest we quality an book

just we that seen we're closing, focus XXXX. high-end new pleased as on the Science in opportunities is with resulting entering never I'm And how fiscal in completed with consistent engineering company's with consulting Our before, approach very Leading services and we've year. our

core market and visibility well today's very up in Regina? excellent the point, our very and markets the are and open questions. at water, to drivers aligned environment infrastructure call with this We like growth And of have company. the I'd for

Operator

will session answer and question The begin now.

Please comes question ahead. first line Markets. Sean with KeyBanc Eastman go of the from Our Capital

Sean D. Eastman

is just Hi, that somewhat end the fiscal say fair wanted see at XQ on it quarter. number Would to to of here start team, we I backlog nice the be trajectory. quarter? And sequential that assume in the the is few given backlog it you for guys will to just capacity next notable contract the reasonable during understated, added continue the quarters? increases the

Dan L. Batrack

We better had quarter. joining Well, Sean, thank thanks much, a a backlog had for very we X.X than today. and very The us think book-to-bill. good fourth you

grew our – backlog year-over-year. Our well, X%

even Our grow a contract did capacity actually contract as capacity faster our at a so rate, double-digit you've noted rate. at grew

the quicker to move as capacity in our should So it indication the further. with still largest But as convert incurred our do in any of quarter that bit company. all typically I those would an backlog the in We we grew history that tandem, two will backlog work revenue give replaced grow the say pretty backlog. of we even a feel that contract good and single

book-to-bill greater a still we a think But move quarter guidance about. do really into I our we So continue feel own had outsized XXXX. than where will grow expect an than been pretty they have in we even to backlog revenue we as good our

Sean D. Eastman

to And terms I being just achieve targets? have in you guidance forth. set where it in those might able need in seems pickup initial growth backlog any you to awards is of wondering there hit see the visibility was solid a areas like to near-term this the pretty is in

Dan L. Batrack

over look what XX% timeframe the local. best in a I anticipate, quarter the say example moved like is and estimate been the for and than because for our conservative I we've this that year. recognized No, XXXX we use down to state rate both ranges organic don't at performing to But have and you for XX% this We the if growth more the we first had will word take to XX%. for

reduction in reality we in this believe upside achieved XX% the and contribution any and Canada numbers U.S. oil greater all, fact at oil little even need organic a gas So we've I and we being fact I in those on And and the included gas. from aggressive, forecasting that actually very is assumed have we in last there. have quarter, in that XX% just felt so coming and a was than but don't

with that we've prudent to type any move positive, mining think contributions, incrementally seen of give respect It be the to That's we also would quarterly that go as we as to anything bookings an think need there's a opportunity particular special see true order move up we see incremental be where don't we time. tried to it quarter. – as guidance. and us we've I as success award this into to this would performance. no, first with our and in update the be guidance So achieve But actually a or would at so I

Sean D. Eastman

Okay. and And you in local rate you mentioned growth bit pretty impressive conservative this on versus side, state more for know still in the fiscal year you to a number achieved be But you're targeting. building it's what a XXXX.

incremental if on wondering in just experience? and year And or whether same? rates state this whether you've seen like this your local of for more previous I'm growth was in in I the it's So of end-market kind cycles curious there's also any drivers this

Dan L. Batrack

the has California, We've actually contributors. market and and investing same upside. and and driver, We had Sean. single I wins. there not what and have the clients will innovative water building supply, in even a new actually a like been but very it's tools at have New very actually want water well and treatment are Michigan new be high us this our I seen studies Texas been been for States to But we've have Washington, quite states I question, nice spending moved done York. end, to – That's on of Upper Midwest drivers of management that we've major say business for Oklahoma, the their actually identified alignment doing all been dismissive closer State in and in some other there's have isn't doing really good Florida in reuse, a nice everyone been decades. broad; particular techniques places – don't

this moved – So I'd moved substantially marketplace which moving moving the it's itself away from market's very toward it we've our run and really we us feel and mill the of to of say has has toward moved high-end to or where sort been. work, work

been across I be there that and performance the no, a company. can provide I upsides our opportunity material think it's thing, So, don't one could any – think for are

of a drive contribution those end that saw mentioned. for some in year-over-year as of design move islands forward not long-term be evaluation we these at currently. a items, to resilient that our September, bit all the barrier move that's that protection they response I'll a you from actually in systems And tell growth very little upside of and been shoreline could XX% toward the I areas drainage We of which quarter. think disaster other had But included and are material rate guidance to helped these

Sean D. Eastman

Thanks helpful for responses. the

Dan L. Batrack

Great. Sean. Thank you,

Operator

Your from Burleson Bobby line with of ahead. go the next question comes Please Canaccord.

Robert Joseph Burleson

and a Hey, good congratulations on nice quarter. morning

Dan L. Batrack

you, Bobby. Thank

Robert Joseph Burleson

guys is had years design $XX of the kind design more, Houston Katrina, ago work being long-term what preventing a after the stages design terms several guess, about million long-term a the kind of, I'm here, plus at curious in you resilient I'm of discussed floodwall. disaster early project in curious recovery I area? for or preventative disasters. the in Back,

Dan L. Batrack

you $XXX recovery of turned doing doing will we're be evaluation. undertaken. Corps resilient the or and go the Superstorm along of them, we up, from greater that's month instance Southeast, million the but if what's $XX doing our a construction have actually rapid electrical flood critical to largest ever getting and go the days distinct initial thing a be alternatives. XX Coast, about monitor monitoring up removal with a that work and type know not States website, sort the that of do sizable just beginning there, year, of to and discussed our United first in actually out the expedited areas. that's response. number at year look the respect going actually won't the civil the now And the access know, monitoring is in business. through starting in to to and We webcast Well, addressable event, picking Coast a actually determining protection power think otherwise and and that $XX starting. people present the how the year, protection it's – you three can an be and the on, the $XX about million, number about turned Currently first probably actually turned But different assessment back where things even a what's million work and did, to work market. you part above a do $XXX on otherwise that from and Engineer month, and recovery. it. setting follow hardening along and out Gulf of critical the back I and are wall or more project can – design for Florida from moving phases out substantially and Army barrier happen detail Sandy, you'll if infrastructures than design and debris environmental largest emergency how page of between of we of in roughly you feasibility the We How at see initiating the for see These at out begin have alternatives power can evaluation it's identify studies And work up of we million response; essentially essentially these you a certainly to I emergency are planning million and went types We XX. just would you on you to the response,

XX, or be And represent projects two that or could tens think sort in where out us working of two year and component. individual for could be XX, year do this start cities could of three. counties But and We we so, through they we the projects, millions on for quite XX, substantial. smaller now between a it for XX actually then different just think of dollars design

So take one included. in do what I I the this of for compete quite right this have we make we're Phase isn't This for, X. would X, we're Bobby is to to you the X, hoping this to And phase now. hoping be point, want experienced first we're us, and isn't busy – actually to

the place, and been that's cities planning have that for XXX awarded work what existing we've we ground, these and immediately done. had contracts the country on events and different $XX literally the an where a when We preparedness take go across counties already place, million can are we emergency doing year such in we've to practice

Robert Joseph Burleson

given then And in and environment sounds it gas yeah the outlook what parts year? are could gas, these a being XXXX terms exceptionally wondering Are conservative? process backlog days in permitting there this now U.S.? of decline commercial, you're built to seems you permitting how at U.S. you think business. the the ex rapidly for drive in fairly through next you in is good expectations, oil to it terms starting you for of move Do nice got work the your in seeing like the with point, that Fantastic. I'm the projects the Okay. of oil like you've and of here

Dan L. Batrack

steady. I – would a seen we've of steady permitting say have that would it's we consulting seen say projects Well, and I includes flow front-end

by design type gone that gas. said, away has business and has of of and to in that haven't amount any type We any of said oil our work the seen and declined go just actually we've any significantly. actually design We've that oversight means, field U.S.

permitting hold late heard the what's a that going be that peers little that from from we'll the it to happens, really have marketplace, to flow-through that's back. I've that a and and than responding I'd bit or fourth that I'll the what we we for waiting to actually the and did to in don't our quarter. downturn took in have is when is the the own design making and even and front-end I point that we're resources uncertain the work individuals but happens, included move. But through come design happen of to how from any not work downturns We back. we a hand. make going of is that to of the these be It's nature staff through are it's a in rather move substantial charges early it. too to that and is to markets our quickly, resources in reflective heard to that go be permitting pull-through going come when costs we're go a to do assumption to If it – actually exists to resources and/or We hold not just adjusted prepared market implementation. We directly quite we've permitting indicator work that going doing.

exited cause the and comes our it adjust of work We're incremental we if We reflecting our them. an very do So with at that high do close our hand. see ranges be when still forecast could based have it back, through. working see staff substantial and we we is adjusting we to but with still range not of to what We've be markets, upside, if we'll upside end any up us our the cause in the or and certainly would clients. even are us our on are come the and

Robert Joseph Burleson

that changed of if assuming your still margin margin correct? there is work I'm profile there's And highest does work, but some nothing the that's flow-through,

Dan L. Batrack

Bobby. Absolutely, absolutely. Yeah,

Robert Joseph Burleson

Thank you.

Dan L. Batrack

Thanks, Bobby.

Operator

Dilts the line Stifel. And with ahead. our of next question Noelle from comes Please go

Noelle Christine Dilts

quarter. and again a congratulations on nice Thanks

more, into So in bit margins I quarter. given in saw strong particularly dig XX.X% just a the little that wanted you margin WEI to

businesses So I there would this How of with think question CIG? thoughts new those moving you be, about strong how two that margin general guess, forward, do just we the profile And do my GSG first margin and about fourth XXXX. given the some segments, think quarter saw? on we

Steven M. Burdick

first CIG. with the the healthier below relatively the our are to oil and due the gas on lower we've even for and margins margins been side what the – So in some the a the that where that's realignment, you our – there is, the dispersed website revenue of and two the evenly see and groups revenue terms of we've we analysts net for I And all, this a a think GSG the is bit between – in at look take more included to they of are of been. and commodity and and some still so, the talking have little is still that areas the like on GSG year on last

we And so groups. see two the how that's overall

Dan L. Batrack

Noelle. Yeah,

So that. some to I'll add quantification

government, Most that it our the that year, XX%, taken for XXXX, or for in We moved so XX.X% segment, re-casted we've Infrastructure business the the materials we XX%. XX% just to Water, & and in about on So reporting this WEI. website. we – was in posted Environment saw

Services as a XXXX So if pieces pro on XXXX moving, you forma it basis with been Group Government re-cast the it have XX%. would

moved that of over. had some work So

you if essentially from not So that have the come Army be seen XX% down to that XX% X.X% would very to and X.X% similar, same. down from would number

a we like, what historical both include you can that segmentation future re-casted would reported. what have would with what to now we our look and the that's that's So exactly – model realignment will filings so in numbers see our like

Noelle Christine Dilts

Okay.

moving seasonal could about were business it just probably So that give we I should we think your segments, or kind level of margin how margins new exceeds either sort think forward obviously think see for. do question XXXX I fourth as you and it thoughts also there? this old you assuming under given are – how changes, the levels just do guys mean that guess most but the the is WEI guidance; you strong is in Is looking the some folks very my methodology I quarter, us I this about this sustainable? in of mean some with the

Dan L. Batrack

Yeah.

think so. I – I think

sustainable? not or are your – again very that I commodity is in XX% quite not actually Last line perform I'm ago my and not this think our of questioning I call the too. XX.X%. slightly declining say a perform a work. work and things rate. have and I well, we in – WEI I unusual would and we're with can I were rate we say because up think know one this on wow, that Most at is, happy I'll did headwinds they believe We this cylinders. federal our that at But is all all were government high months revenue gone – the comment component up would even hitting XX% even year, on XX They of better cylinders at was now be can civilian our is do is while and that around of Commercial/International on because And better flat that we see our in a in we hitting can a certainly work, the of even a at but prices. business

was re-procurement can revenues but was up change FAA through as part as down we areas. cycle, down do of better the those EPA So administration pick our the in

eclipsed. next quarter with I think certainly is everything achievable XX.X% fourth and the it strongest? could is be hit we year which even well, our went It will if So,

Noelle Christine Dilts

how give Coffey things Great. at that and on you Okay. are us just could overall? in progressing And update an of region then kind

Dan L. Batrack

really get of is take XX% they We've course, about to actually year happy. I transaction goal to and first work and they full I'm has their very those our when well – international evaluation and international that look gone them emerge quite to they of expectation, joined company and we're they Australian our and the how UK do at on our than USAID, that has co-joined two well XX% worked and own work development to it us, exceeded components; Coffey, it's glad contributed the Tech here come we, Yeah, have better will we which in back so development think the net say for Coffey and report in Tetra – practice Aid Aid we have (XX:XX) have be And that. joined our very as and a they've at first margin at revenue was to actually within the exceeded company. existing

and they and Australia has areas increasing region, say Australia begin largely worked proper markets to it it's where New which for the exists commodity when work joined environmental we've because actually municipal well. the surrounding would we're that's been call us and looking and stabilized us. actually within the mining has, I tied Zealand, to which gone portion has I The added quite that would so I Asia-Pacific actually call it, And as for

actually has of anticipated And so, collectively in and expectations met XXXX. though, one every was XX% it it that we over the

Noelle Christine Dilts

Perfect. Thanks.

Dan L. Batrack

Thank you, Noelle.

Operator

to turn to conclude. session. Batrack This now I the conference will conclude the back Dan Q&A will over

Dan L. Batrack

of into your to Thank you. questions look your the and quarter, for good of attending We're glad and it. end update forward updating for for company of really our one you our We're starting giving talk and much this rest really want the and I'll the next very and being XXXX. about you started the forecast to six a And we've I an every interest, We're start be for reporting call. quarter. I to thank first to thank how off back to to weeks XXXX at you and you of year. supportive you of Well,

Operator

nice our this for may now. and disconnect Ladies you a have participating all conference parties today. All for concludes Thank day. and gentlemen,

Tetra Tech (TTEK) 9 Nov 172017 Q4 Earnings call transcript