TTEK - Earnings call transcript Q1 2018

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Operator

Good morning, and thank you for joining the Tetra Tech Earnings Call. 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 the 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 or from of only are predictions may reports XX-K from actual and results differ the materially Exchange that Commission's Tech's Form to factors cause Tetra identify forward-looking could statements. the and XX-Q Securities certain risk to duty Tetra update to Tech statements. no undertakes forward-looking

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

Dan Batrack

an the into achieved with that revenue the of with morning, we I'm very conference fiscal very I'd good XXXX off Eryn guidance operational we exceeded highest with. and the revenue the first operationally to earnings any performance quarter in of in we and We Tech share both and of first to And history first excellent call. company, beginning Tetra also quarter. per quarter the welcome and of came Thank this you the start the operationally fiscal Great. quarter our had much, earnings just quarter year. and like year stating XXXX pleased

and deferred double-digit our also federal very driven commercial annual rate. quarter our tax at and tax long-term U.S. primarily have this with U.S. pleased to first the our state Tech, accounting clients, will a growth I'm growth quarter enacted in including a of treatment clients, the with that Tetra by announce to tax the work. law and accounts strong our both the benefit net with that our federal in was was with end local a calendar Our year reduction

new us are both United have In generated of the are law their the profitable companies like a just the tax right greatest will here that who significant to and benefit States. fact, portion have revenue in

year As I'll our assessment the share new a revenue quarter per conference importantly cover and law which increasing confidence for entire earnings guidance result tax in we're and of XXXX, strong our this later our in and performance of first our outlook, morning's most our the for of call.

begin quarterly So, Chief capital our per financial share. I'll business an allocation. for quarter had and overview provide our highs Financial performance, and revenue and our with will Burdick, on outlook, additional now details Officer, an first We with while excellent tax, Steve record our on of on results earnings

first revenue from was our our up quarter, XX% $XXX from For year. million, last ongoing operations

which operating per $XXX an net finally, many our $XX I end we're income now international which from up, last share be of end resulted backlog but our that year, by share the partially budgetary the our $X.XX quarter, provide by to XX% familiar customers. from up our clients. prior at note $X.XXX work, which performance billion -- the for local state strong at work of from both may prior was year. it and our ended U.S. awards U.S. slower of the is I'd that with. of an quarter, from that And essentially the offset federal flat with the to is the see of million, up is and primarily year, million, This up from a was XX% per and revenue excluding operating generated due year. prior Our earnings like are in diluted oil overview we which XX% delays bookings you did all our commercial strong U.S. will but our And gas income

by and our performance U.S. for Our local, double-digit our was commercial, record U.S. and state U.S. strong led our federal growth first quarter work.

States state XX% with Our and revenues were United this local revenue net strong growth exceptionally organic an of quarter year-over-year.

high-growth the that is the calendar recovery year this increase of This result to client the and of we're Texas, is infrastructure we're the we XXXX. work significant the performing in Now so this and states direct that sequential quarter emergency this by of sixth where double-digit California. work Florida, services in at of a and group clients, fires doing -- struck amount water and provided planning was hurricanes same response where growth the of of also end end

Our U.S. by revenue of up at Defense. was net in our year-over-year quarter primarily federal XX%, the growth driven the strong clients Department U.S. for

design work Canadian, U.S. revenue was Our permitting, revenue, excluded the finally, net if reflecting and American, of and international and year-over-year oil South a net commercial broad engineering commercial And economies. gas, work. X% year-over-year, strengthening XX% effect the was analysis, Australian on base our of up you up

However, by we segments. and I completion I'd gas now year business a project pipeline our due compared will our last a primarily note two Canadian to which ago, that decrease, completed of as to performance to like that present revenues our did was Canadian oil winter.

last the for quarter, effect alignment organizational we new took reminder, As that fiscal a XXXX the announced year.

predominantly are and second commercial-focused. segments government-focused, two Our the is

a state activities. focuses revenue Services our see stream which International and and the a operations March, field base America. Group Group, excellent The group Commercial solid our includes Canadian their business our Canada, our seasonal and CIG of on and as and margin. group's was year. client field regional or increase first and energy strong this that highly our XX% oil with growth a a operations U.S. a to Commercial gas, with an our -- but through large and And our would in International Australia, commercial second and a due and our offset quarter both pipeline also margin regional that solid note work The our This as to I response very emergency growth will development and and Commercial did lowest The the continued business We we'll Government practice our January, They the revenues South infrastructure and an current business industrial GSG quarters, their oil X.X% referred programs. and and for that with That the with growth X%, businesses. group will Government The includes International our infrastructure in water primarily CIG. work, and GSG; mining includes in CIG project with our Business last by we for or seasons. CIG comparisons Group, Business revenue successful local, months up summer have revenue Group gas fourth and which Canadian in Group was February referred difficult practice year-to-year and work. in margins of be to response had significant The overall third year-over-year. our group Canadian see Services commercial global represent U.S. international had we emergency XX.X% federal, operations, highly quarter. with is U.S. work first our

this guidance account. of our should at be a taking quarterly look So, partitioning taken into and revenues, the when

presentation turn Steve financials, I'd Steve? our bit like background over Now to this tax, on capital and Burdick time, details the to the a of go more over to the allocation. our

Steven Burdick

Thank you, Dan. Hey.

our a can along following on appendix in the those on find results You ongoing just for on the full slides, Dan webcast: presentation. GAAP to addressed; presented of results, couple this which So, of our reconciliation and these

quarter. turning for now financial So, to our the results

first of operating XXXX were As for EPS the Dan just outstanding. quarter and highlighted, revenue, income

In an all-time of fact, and was XX% from revenue of year. an $XXX.X high increase last million

both million addition, EPS revenue broad led federal as our local quarter. ranges an and projects and by the state were In for U.S. $X.XX These government of well commercial net increases and guidance and exceeded work. based ongoing as $XXX.X our of

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

result, key review digits I'll increased operating a for quarter. the quarter EPS million year. double and few metrics last now $XX.X first flow As income our cash a of over

used the $XX.X totaled for up first cash year-over-year. in operations slightly million, So, quarter, flow

is seasonally first lowest The typically our cash quarter generating quarter.

In addition, a was in there working this increase revenue quarter, due use to greater of capital. the in

uses generate and strong cash XXXX. XXXX, the So, improvement of these over fiscal will two least net a have out of fiscal will remainder over XX% are related, flow looking turn timing which we cash And over quarters. at the next

the increased end Our quarter. year-over-year net the totaled at debt $XXX.X million and of slightly

strategic our million $XX in Over goals. paid and XX-month invested in we $XXX approximately the to past million acquisitions advance stock, period, in dividends purchased out

Our And to target deliver net times, of to the of growth invest to times. as as in a we to ability leverage X.X have range ratio is one remained having to of sufficient EBITDA organic shareholders. while leverage capital well in to acquisitions this our debt continue returns result still two as our our ratio, which within

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

can you team U.S. deemed like the in January regime significantly included impact the that as new were XXXX, territorial one-time corporate a impacted other month, companies, which legislation. benefits corporate from rate imagine, things, we accounting results tax Cuts tax the the system, U.S. and federal basis. tax December assessing been Xst, our XXXX, while known a law. to-date, revised also foreign this work U.S. this to XX% as last many repatriated the Tax effective And on around based new has a to earnings and XX%, The tax And new expect lowering implementing Jobs law report enacted subsidiaries. our the Act, on tax among income on So, substantial commonly on long-term pleased by, working we're tax the clock by tax of tax

included will in to equal, this corporate fiscal lower to and expected global rate XXXX our tax effective being blended occurred into XX.X% our Since tax global tax be as in earnings have will we year federal tax would rate about tax XX% which fiscal of from corporate XX% of date XX% All XX%, tax QX be federal fiscal XXXX. our our XXXX XX%. and also in the came a federal in average rate in new rate this outlined And our $X.XX before expecting U.S. U.S. a law, rate to be months it our XX% effective contributed guidance Now, beyond. beginning the year fiscal lowered consolidated fiscal of U.S. this law three original XXXX, for new per else and XXXX share. tax approximately to

first tax tax awards had XX% to our benefit further related of In similar QX addition, the November. per our our we share to or vesting effective compensation expiration in stock-based XX%, to which lowered of last discrete ongoing earnings quarter dates year, QX stock corresponds as of a most This in from have rate with $X.XX.

expect our do an is of material Now, as effective resulting fiscal effective XX% about the stock-based compensation months XXXX of result, And XXXX. tax not a expected of all tax of annual nine a rate XX%, for for going rate remainder fiscal our of in for the benefit last be fiscal forward, XXXX. amount to we

GAAP share, quarter basis of or result our a as one-time liabilities, also a revalue tax tax which $X.XX. per which to $XX.X to a we quarter required assets on of net mentioned, GAAP X%, to and tax $X.XX corresponds resulted a I effective for deferred new tax in the first in the lowered our benefit million which were actually the EPS of our law, As of rate benefit

earnings. Finally, XXXX, to expense potentially one-time a also for had on we the deemed fiscal repatriated transition tax related tax foreign

as provided However, we we by one-time finalize of have expect expect SEC end and should items them currently to tax by these to fiscal the are I guidance. recent provisional note the that no liability. XXXX, such

the So, the our Tax light Cuts Jobs and allocation capital benefit like in from update you plans. I'd to of on Act,

debt net Our has one a and two EBITDA times. not we target between strategy changed, and to continue to

and high deliver engineering on to us strong focus results. enabled consulting financial Our consistently end services has industry-leading and

capital to to strong business both and acquisitions through us allows through dividends organic and invest flow cash strategic in Our returning shareholders generation buybacks. growth our while consistent our and

quarter, In acquisition, the a So, four second we Directors the third paid strategic $X on per $X.XX paid our we back first just first year, this Board of bought of consecutive to XXth NDY, acquisitions, this share, we've on be million close of $XX months approved week, in and Glumac expect to And BridgeNet. dividends and the million dividend in our two March. fiscal stock. in in quarter. in And just closed

updated Now, allocation our will the cover further to going the strategy employees, from our call, all deliver of benefit ability but U.S. guidance Dan is later this shareholders, that the new our bottom-line tax customers. capital our that and stakeholders, enhance in benefit balanced to law including our will is on

thank So, time to I And your you Dan. will call the over hand today. for now back

Dan Batrack

quarter to season. as And And I U.S. state Internationally, oil was XXXX, the U.S. includes actually enter federal our Western you our largest the local our gas do a and though, driven some and through all from of assure of to grow, Great, our be we to Canadian commercial in it for by go we clients, our and clients, infrastructure there with thank clients, second areas you headwinds Steve's growth of one significant work much, staff expect reporters work. the continue our all government very as work in expect Steve. and earlier have earnings tax U.S. which U.S. done we our effort this work. to local

the growth municipal the state we water be with expect and doing within local our with U.S., clients fastest work infrastructure. Our to we're for actually

increasingly XX% even as sector with expect difficult robust the ago. between for growth we more since We rate, year, and comparisons year of somewhere had from XX% move even the a this growth to have the we forward client a rates significant remainder

and in solid oil revenues with at commercial treatment, and expected Our and industrial X% the XX%, mining, to a waste. is for excluding work, U.S. sector, gas energy, of increases water grow rate between

rate the expect between for federal rest work and XX% at our XXXX. grow a U.S. We to X% of

agencies we're activities. by for, driven combination growing work federal of data be the our and including will a related work that growth and practice for various our federal Department civilian Our Defense the that IT doing of work analytics we

Tetra expect to Tech's of we between a X%. revenues and Finally, X% rate international grow at

our can we're markets also we the areas in work, into to and from in phases Science growing leverages us growth technologies. for and infrastructure challenging infrastructure early water South and is XXXX. and design spans associated Australia regionally driven is of looking expect generated our oil and that and Our contraction We the our see work, midstream future emerging Canada and a in and and with additional very some recovery international that do industrial new comparisons until link Emergency to and by term programs in for the strategic longer that assessment with the business Asia-Pacific resilient in to areas, rapidly approach work. primarily the America work and in studies our design our in and monitoring us expect gas year-on-year services growth technical near mitigation Canada infrastructure. expertise water strong in end remain that year With for invest we Leading fiscal

work We clients' reduce flexibility At our rapidly in add expertise now markets advanced They time, infrastructure the management of to smart the systems them. increase continue the to needs reservoir to information damages our markets us. efficiency. new disasters same be U.S. multiple I'd water costly additional in well of is United analytics combining expected technologies that XXXX of to considered to our calendar water systems. history. for represent to across and systems data we're like to year costs, the last and water of the growth interpretation expanding entire in available natural expand the in create from with opportunities these the performance for analysis address most disasters two long-term in billion over our for actually provide upside that'll States $XXX year struck new highlight that With XXXX,

a for decade. rebuilding measures the expect well We these result over from infrastructure mitigation spending drive will and disasters that

very in the monitoring this provide that long-term solutions a three every to market clients. phases. from assessments distinct ability recovery Now, Tetra detailed We a rigorous emergency Tech proprietary We as of one our services, established and for software the in and to damage our resilient of response and has suite services. process significant design see an expertise part of planning documentation recovery facilitate and fast do maintain

early phases. first damage is in term monitoring, in by of resilient be And followed engineering recovery providing would all The services And and assessment these three design longer mitigation leader and services. Tech a consulting. includes Tetra

infrastructure Over related these we in environments and California, water, the mobilized engineering the focus the the the additional established or our quarter. first like Disney the United add And geographic energy, sustainable that's create in start its which or reach. we're They're company At and In we individuals to Asia-Pacific very their seen firm already of practice. some to uses professionals and the assessments we added design initiative regions benefit intent region in of and have and fiscal we infrastructure we significant facilities the strategic here an on that to and actually over And damage a and expand monitoring here well going in that Texas, and high Florida Young opportunities end very facilities. January, give visit primarily cities where the Australian-based year, for just Glumac recovery that the an areas & significant United XXXX, announced recycle to see located their fiscal you've in acquire group, with in XXX and the business, Norman States. territories us to company our healthy support and NDY, support past programs, States XXX network a to additional over expect began to in engineering in counties especially and consulting year occupants a XXXX, year -- based services, California. end the less in XXXX, high a primarily large across offices,

to fact, technical market Sustainable combination aligned design is management. in In now and organic support resources and our a is water Through differentiator worldwide. coverage to high-end and have -- geographic our of a this expertise with well our in updated growth, team to over year a to expect the now for our like clients revenue, environmental very which today a like million preside $XXX I'd acquisitive go million value has to high business with infrastructure today, XXXX. and $XXX for I and now key would collective the from we present annual approximately by XXXX. -- guidance we updated guidance our

For XXXX, million of for associated a per with to million ongoing quarter the diluted to $XXX $XXX our share $X.XX guidance revenue is earnings $X.XX. of second of net range an

the Now for which we share and based have our is had the outlook revenue business on both earnings net our performance all follows. fiscal XXXX to of as exceedings the the tax we in quarter, law, we have that for per and first expected raised new year date, guidance

Steve deferred share does Burdick that year amortization per year of intangible does $X.XX per for the Our $X.XX $X.XX a $X.XX. share. for for net guidance entire to. per $X.X This our charge to tax spoke noncash to billion one-time is earnings earnings associated $X.X -- billion is for diluted updated revenue of include the It guidance which share ongoing exclude amortization, that an with updated of

XX% addition growth We quarter during earnings update close had tax year. we the would next of that second first the NDY the NDY. any quarter, for NDY a and those Steve acquisitions, effective we mentioned additional rate will the excellent of quarter company. per incorporate our summary, our in we And expect before, entire double-digit an does at record the In had share and with will do exclude the and guidance it including As to of revenue call contributions that of conclusion performance. anticipate

that in trillion going growth addition year-over-year a of regions U.S. infrastructure the XX% quarter. to and hurricane consulting the infrastructure opportunities key plan the our the recovery services, provide local upsides Our business strong resulted Future from additional state United are water for result of States differentiated for services. in $X.X significant with our and administration's engineering programs, in

building Tetra funding excellent the Protection has -- cycle Washington, and the programs to Now, an States. provided Environmental government bipartisan have forward from to not in going the capital blend to innovative international government. center the consultant just WIFIA U.S. in in an more and involve And desire here workers funding to position sources, federal and Tech's continues XX,XXX us located on The more the leverage and for of trainer the our than at likely federal programs. -- infrastructure to going looking States. help new emerging of these and we're public-private United of a investment infrastructure expertise our plan projects new in clients for It's major to integrate as in focus in in assess look smaller role And exact worldwide and funding adviser is clearly PX funding in that's support PX even D.C. training we're puts navigate partnership international Agency. changes this training will to United that bringing a complex structure. multiple right investment interests portions water like much

barrel could cyclical recent in It's with for oil the and seen growth our have in and sector. for business the at gas weeks. also $XX commercial us. In or And upside addition, margin actually greater a quite opportunity and encouraging gas been per oil significant we've now recovery expansion

to up Tetra ever closing, questions, open operator. that call and a Tech And for to before now on So, with the us that, to capitalize than allow I'd in we in is position believe these financial stronger like opportunities. strategic today

open some for and shareholders. forward to analysts We let's Eryn, questions. look from hearing our up So, of

Operator

question [Operator will session Sean now. begin from Eastman. Instructions] The comes first The question-and-answer

Sean Eastman

numbers worked come the on like It everybody to through. really to quarter. backlog Congratulations I on wanted see a sounds hard, so trajectory. good the start I'm just glad

downtick environment's what quarter characterizing think of good being on just through whether the impression get and year we bidding exit from supporting to see the backlog unfolding first a you how caused I the did wanted sequential here. sort backlog an year-over-year job up as the you in XXXX. trajectory the You you

Dan Batrack

that for question, Thanks Sean.

good think really I question. it's a

large ourselves received let December. with and our year Thanksgiving been quite which a say U.S. Year's. has half But through sequentially have the federal well government less the holiday of backlog in typically of of and the in with a sees which here. work do U.S. We and the typically about calendar in see encompasses seen downturn November, me and encompasses A sequential which around orders of that component first Christmas and increases we our state really quarter, months and beginning New October, government local out backlog, year, end coming season the a

normally, see a that was -- So, be lighter. you'd it actually bit

were you always X% slight year-over-year, can and fact, at actually down we is the it In year-over-year, yes. way a first fact, see look to historically a quarter reduction. in better And

unusual encouraged particularly will most us. went not our I I up. backlog end is quite actually that of that So that was to say markets'

the the and orders brought we was first up. and quarter here local in in state that United backlog So, for in, the the States work

commercial Excluding gas, oil work was up. our and U.S.

government a orders. And us. Canadian less number unusually budget. We aware, they're not there negotiations of is reduction were just more received, negotiations area first up, of duration the up see shorter may international as actually did have which the and for U.S. resolutions many federal budget be in was that it the or bit but oil was on a the been Our continuing the for little strong all little the bit in when orders a little and what so with you work, some bit on came in we smaller only in was continuing was gas, a size excluding the time those And XXXX. flat quarter, in and the

of the out do there. I quite feel So, good opportunities number about

We have excellent visibility.

billion have to up $XX Our backlog significant contract a capacity company. us high -- XXXX. we under and year level the at a carrying continues very in calendar just at be We're

I logical and to the things are size and we government at to and of orders correlation task very very the And with the with out correspond coming the So, have exception do been quite executive between strong. the of think duration that level, expected think agreed congress strong. levels funding of look things a

Sean Eastman

Really, really helpful.

factors you as question Second -- I quarter, this me. characterize quarter. is the guys could updated saw swing the you emergency wondering, certainly hoping in being to highlighted work driver. just clear upside the Last most that for key the We guidance. really response just I'm was potential help still good key drive placed have Or of Any at there chance guys where this to continues we pick to to response you great. emergency for up upside work outlook? gas are to a start and the kind the point? would the looking there oil be driver as

Dan Batrack

good that have just represent a about two upside. actually are question The one not one the to it's is areas few quite that few. to could area feel be I an We that has There thing us catalyst drive areas. been. that Good different a a or

upper movement of the I move will to damage to one, actually assessment work So, continued activities on response the up emergency would the us end. and that quickly say our

and to doubt continue of the would end. the number the So, would the the to upper I federal us ability has the budget clients government other no drive say, providing outperform and state drive federal that and and of us to Defense to upper establishing a two, funding our key to local actual would end range. Department

a certainly that upside our strong. no say are would buildings and continues us. to U.S. upturn in that is that, cyclical included there's joins moment gas, a to I oil NDY increase spoke that in would actually could we modest upper of happen. very and practice any significant us finally I end. so be any if ago And And to move work commercial our actually haven't -- We forecasting we've actually

With between and margin highly is drive it the but have a and -- the that. collaboration revenue us differentiated because this other we areas, is in in we're income, practices both in existing that high business would up

government; have we all is all program of of of three here type entire funding infrastructure on may state which with sector, different the of closely be And and private those local as course, works the any eclipse matching government. federal the big sitting funds; sources federal of federal course, thing that upside. of nice in is which United States one So, that the bring may firms actually meaningful in; the could and includes movement capital, that U.S. of private one few we one those

contracts that and state broadest and working the in, that brings the have actually factored funding so representation represents our in this time. an not into local we've We at guidance that sector upside with private

here of sitting So, that having to of an of our many the to represent and end kind quarter and different even that areas higher. it's guidance at the first potentially the upside nice range be would

Sean Eastman

Great. have comfortable one months, guys you want obviously, kind about thoughts profile looking post is side. wondering to in door forward? in. just Any one extra a reform. wondering last On of thinking NDY on And M&A, on tax here levels, I anything had your we Or updated guys going should sneak leverage at very but busy of sitting are larger the coming the I'm here? I'm if be color just you at couple the cash

Dan Batrack

as in XX, which if not very And to One us one, do based so differentiate a find small say, ourselves days at we We tens and help modeling to the have And They're and the they have highly partners people. good people ago, really what we is is, the XXX. And on a environmental which size, past a in help and industry-leading plus. noise common? XXX. a was technically a marketplace, They technical larger then XX of to they and differentiator. joined model at have measured differentiate which lead we is in scale, BridgeNet, help for landscape, one in us. size and we've had do XX industry cycle, it impact. up the acquisitions, IP, right brings you'd proprietary all differentiated in the XXX, of so three is science. days end if Glumac, the a announced XXX It's us We've the competitive technology measured the And technically delivery agnostic question. that one with in acquisition, high And let's XXX they headcount us say, small that's is one NDY a leaders. differentiate have they if us all

available. as have great partners -- be need to. a of our few remain We capital disciplined us. plenty And partners out we for want to we there We there would that are think folks

a better And than not our be and we would would to are first as accretive months. technically off just fiscal take they three make right but I to in it be table, need shareholders needs highly last company us that So, that did. in be these today, model XX differentiated; to the to the the

Sean Eastman

the helpful Thank so Got for responses. guys. much you Take it. care

Dan Batrack

Sean. Thanks

Operator

Our of next question comes from Bobby Canaccord. line Burleson from the

Dan Batrack

Good morning Bobby.

Robert Burleson

Hey, good results. morning. congratulations on strong

Dan Batrack

Thanks.

Robert Burleson

how one your Any that get I should I dive How Dan, with for bit thoughts your into overlaps? think about capabilities? you that synergies the could complements and positions NDY. on a to business. you, just just if wanted geographically we we how there, guess, So, Coffey little more

Dan Batrack

for they services were absolutely on East just here this XX them practices them bring have West to years Zealand. presence I markets had excellent in criteria the U.K. Coast. an of would number have The firm. so Australia that looking our the And we augmented Their on in, was and The have our the States headquarters have primary one, is with United that in a Glumac Coast New actually say also globally co-joined to we of had to was and offer small the presence is NDY Melbourne. reason in in and also Asia the the cities major

and an same So, presence on NDY U.S. entire time building Canada end and the sustainable Asia-Pacific, the the same along design; to high a from were had presence and Australia. locations gave for so what in same the cities we we could be us. we Zealand that's looking zone, New And geographic

responsive. us more additional capabilities much So, It it technical us and gave makes expertise.

infrastructure was customers And practice. so high sustainable anytime move actually design the the the our end on global support ground. build We can world's first anywhere with to preeminent staff

a buildings zero to engineering, hydraulic net So that not electrical, have have reason. not Coffey and practice; But a often as does practice. have does one mechanical, practice; was not number MEP, referred the does a

completely And so have Coffey, that provides to and It's complementary us offering technical with there have in we the overlap that zero we new is zero. the clientele practice there. full-service

that Now, our pretty the a offices set of have to so we staff most say full of I'm locations. like full we've Melbourne, in us, glad like in footprints geographic common Sydney for got are

the power the do leverage cost look did for leverage Certainly, there as is although And we with a at filling think and respect space not reason I synergies will empty buying is significant. office back platform we think is to there. bigger to this, ND&Y the on some So, complementary be they on and they can that from the that the are we join all have; the us. benefit some say and of SG&A they customers day NDY decrease because join particularly I have ours big when would they access will -- actually sales a because in the us first we that

synergies. expect And staffing but back revenue cost near-term. be it's other reductions, from some the mostly not synergies, so facility will leverage our from or there I in buying, significant office And in

Robert Burleson

-- consulting. Okay, tell first the the the that you. in And U.S., stages the here distinct the guys this I'm be, as of to maybe might described what in in great. more And stage Thank there's three transition you wondering, recovery. at kind second point, can where you timing from disaster then of stage

Dan Batrack

happens last XX months after a certainly saw or our began fiscal six then in about slightly year you those. erosion, actually monitoring. first which then Tetra an assessment the includes And quarter. page the -- quarter. activity year. prominent lull, and continue push, you will start practice, about the from emergency both expect end webcast we probably and quarter. Floods on first where you as is I the shows big response civil water that if do second big our the in rate do of materials, which the of the the different along quite course leader of engineering for to reference, includes structural, during which are a which work, treatment shoreline They was to the preeminent at of those civil water It you includes on all Yes, things have following go They That, just go bit a our in a prepared through move to first lower surge assessment, would damage a caused a by we the on month protection. about Typically, that in. in practice Tech is

work this ramped from up of ago. already for year happened has had Some us actually events that a

So, on that current in actually two phase actually on ago. year two working the have these -- while hurricanes items happened a or of we're set beginning we're and fires,

and out. expect actually these things assessment overlapping probably would recent become consulting the these damage events So, most few be would from I and a quarters

Robert Burleson

nature how good cycle just your Considering a of on one. And the unfolding? kind plan great. do yourselves involved and federal how that's you fairly quick Okay, financed, And visibility have in infrastructure PX training? consider with be might last expertise the of you of getting terms early will

Dan Batrack

our get be but of think we be our the to by the consulting I when them participating that actually value Early where which one to clients, execution processes, we of margins, the preparation too. design a will front mischaracterized: systems the larger when pick can of of we the to though, ones smaller be -- lot And would upfront go look a The to And end of good lots dollars will place. dollars, and Yes. it's can actually we of these and in bring projects implementation. member the clients team most partners capacity, training in the projects actually lots should, put that projects, will at not mean in training thing the

it's begin training, up -- for collectively it reasonable move a but that numbers report But up we'll number, we something needle dollars into will to as It's out. to in the big, little big add lots not but it's training. us. quite help does yes, it of So, add

Robert Burleson

again. Thanks. congratulations Great. once And

Dan Batrack

Thanks Great. Bobby.

Operator

And our from Hauke Justin next from Baird. question comes

Justin Hauke

the part to a the Yes, contribution in quarter? And is I -- thanks. sounds like the obviously the quantify of that was I for big guidance to mean I clarify, was a little could remaining any quarter. for there guess, wanted bit. just the just restoration that quarters? expectation, And the What help continue. it

Dan Batrack

and a good $XX revenue morning. quarter contribution The our million. million Good question, $XX It's net to was in between the Justin.

at that so our a the part high still And that if above make off, the end note, been to you I would have or we even want took guidance. would of

performance impression response to call to exclusively beat an record, was emergency don't want not That additional work. with but leave helped and the part all-time by beat is it the I assistance that in to significantly. beat on only the driven So, push this it an the

$XX any So, environmental we're amount assessment. the we million million about in deminimus material transition monitoring more quarter, including And number actually for looking Until and early not for to our quarters revenue. we've included visibility, response $XX the damage to very contribution. the guidance because from we're remainder have net it's for to the a forward

Justin Hauke

Great. everyone would the sure XXXX. to is same That's I'd were but Or on rate, expect just the XXXX, because to helpful. about extra I to going tax you'll Or that XX% that just you the because ask maybe higher quarter the guess you the the is for the is next XX% page, effect it to get make hate for Steve, question, what thinking? the XQ be the more of about quarters? pickup? year-over-year through go XQ same

Steven Burdick

statement initial an in your you so, Yes, go can that rate XX% close. for That's probably amount XXXX and a models. your of use is ahead pretty

Justin Hauke

the of it one year. were? a The reason because awards sequester? question appreciate CR environment is awards a while. or color the -- was the maybe sense. Or budget it in last on was the the just federal and just we've broad I more defense based, the smaller sequential maybe then I And all those for of where kind just I'm guess it one, It for under on impact that. was curious, slower been Great. And characterize was makes

Dan Batrack

agencies, defense work Across development our USAID we Force, took We the look the Board, we of at the apart the We Air Army, Department. Justin, work, at a took the look a all took completely. even our major others. and it sort State the branches, and went, Navy; international on defense at

and actual area. that to any overall in branch about was counterparts. the toward smaller the talk So, same as was opportunity we We of took And the agencies, authorized actually EPA. volume, biased the through length we the of it's Actually, in the meaning came civilian all corps the Aviation to dollar or by one not And the time just with It commit was across a duration of now. amount, course, the were in a size roughly at the both Federal much we the response been actually our of essentially and is, dollar until being same; and project reduction number their were number It's in just an particular orders right usual. look Administration, to the our those. executive managers. amount. we're talked we And to approved and have how of government, cautious respect the engineers, took equal

builds is have us So, released, to the just higher you be this gives pent-up certainly you on as requirement feeling soon as And it that more moving able some but it to hold the up. back expect requirements to that so don't the approved, the get there get -- that. a to disappear, gets we work,

to wasn't And could now what so a at into February. of -- bit get done that first They've point some we're in need been quarter catching-up of a there be done. and the

So, stopping delayed. as hasn't, They're government shut down. the the just It's of performing not today, work.

So, a artifact an process. issue, I of don't see just this this negotiation long-term as

Justin Hauke

Okay, helpful. great. That's all

Dan Batrack

Justin. you, Thank Okay.

Operator

from comes of from question Stifel. Noelle next Our line Dilts the

Noelle Dilts

good morning. Hi,

Dan Batrack

Noelle. morning Good

Noelle Dilts

revenues what project looked better kind the to there, the issue the large can second Canadian it quarter, a just mismodeling and way think you that a maybe is last there we year through on was business, the First, oil the as of some pipeline relates you but walk I just assess in of clarification with gave headwind? little like there this given kind know I any associated could us -- bit year-over-year gas of so

Dan Batrack

year. forecasts I the the out glad has asked I actually in difference some think think QX I'm this because been in -- QX marketplace year appreciate you that that's Yes, last there don't versus that

see $XX year, significant so Canada, $XX million we from -- million in And year. a to five to this net revenue reduction year, million in below of headwind is XX% Last on year a up around we million. XX% to and we'll basis, were year-over-year, $XX this to delta So, that area. $XX adjust expect headwind. quarter to second that if we're everything. through, last that it creates find one one we're be a year-on-year you'll marketplace, between it and you comparison, And up and think, go I into And the Board guidance that you across a calculate account that for for the quite you essentially actually actually if just our on take one that

did income; in XXXX on to second also, that account and revenue guidance account. both repeat the again, think take I'll into into be taken I does that full quarter our and year. increasing so need We providing and And

the because QX better oil, year-on-year late we're And QX company area. we the steep headwind this significantly doesn't quarter gas changed. get come largest and forward very any iota because certainly -- comps quarter I'm second actually comparison -- one year-on-year looking the look even thing this better. in in fourth believe, us, and do that in comps third if to lot later a we our will back one going for just in notwithstanding have in the And to be it's have So,

Noelle Dilts

Or you has I of but I any market of signs any activity? that really kind not Okay. of you're are how say? sort I your mean, would -- significant that been difficult. pricing expecting know And around has life, commentary projects of I been seeing then, know improvement signs much improvement, either in

Dan Batrack

which years say or Yes, And end. ourselves are work, past design through; the next upfront -- we that which the turnkey preliminary and evaluation; big is a mostly the that routing; At EPC different of of permitting or we seeing in types was toward revenues seeing risk go midstream. step really on project the Canada. design, EPCM are front build tempting even drove large actually studies, projects, the around permit not We're even it's technical these projects seeing even would big very and but fate. work I -- is a the in

I smaller So, projects. number larger there of There's a them. would say actually significant are

it indications back, that yes, are I'd see actually we before So, to we're moved numbers that but will like make we increase the come back cycle. determination those up seeing a

Noelle Dilts

just switch And a Okay. bit. to little gears then

to could the aid both bit with some we trends but more dig call, seeing international and work? little to what of You've terms you're extent USAID also discussed deeply this a given into today I in forward? on of concern folks about change administration, area in you're moving the an thinking kind just a know been to just some speak that you that's of so that's how could

Dan Batrack

down, these for business seen us. been actually awarded notwithstanding Well, stable, very It's projects. on up longer been rhetoric, visibility And it I it longer would not our more anything areas. very have we've say -- for The one of it stable. it's significant so typically that volatile projects has has typically made been a more stable have terms, so predictable or has we

that Of commentary an from at course, closely. areas, area with a it's coming different quite we've many lot looked of

the I also another resilient. would in -- in not only It's with In We our ago. the review? in they've two really, had U.S. days one the are say Australia with say, it's and case think -- no, fact, And of U.K. I DFID very But that's folks been DFAT. some been

areas, the -- And this rhetoric, the stable, that's past period. seen but and U.S., through our Australia. they've have been which U.K. quite those so may And sound it's three with say we inconsistent would really are I been primary what

Noelle Dilts

Perfect. Thank you.

Dan Batrack

Great. Thank you, Noelle.

Operator

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

Dan Batrack

want much, very you our look of we're quarter. was you And it just next very record, Tetra to quarter. not and all to the you Thank It looking forward very forward first is insight the your every was to last And for much. busy; a while again your good quarter, to quarter. questions, And speaking at we're that you of in Thank our best XXXX. And interest a one I keeping business seeing into your and Tech. Eryn. I thank looking

Dan Batrack	Chairman, CEO, and President
Steven Burdick	EVP and CFO
Sean Eastman	KeyBanc Capital Markets Inc.
Robert Burleson	Canaccord Genuity, Inc.
Justin Hauke	Robert W. Baird & Co.
Noelle Dilts	Stifel, Nicolaus & Co., Inc.

Tetra Tech (TTEK) 1 Feb 182018 Q1 Earnings call transcript