- Revenue $1.23 billion, up 37% Y/Y
- Net revenue $1.02 billion, up 38% Y/Y
- EBITDA $131 million, up 32% Y/Y
- Backlog of $4.74 billion, up 24% Y/Y
- Increasing Fiscal Year 2024 net revenue and EPS full year
guidance
Tetra Tech, Inc. (NASDAQ: TTEK), today announced results for the
first quarter ended December 31, 2023.
As the pure play global leader in water and environmental
consulting and engineering, Tetra Tech produces higher margins,
organic growth rates and cash flows than the industry. For fiscal
2024, Tetra Tech is raising guidance for increased EPS growth of
20% with a 20% IFRS EBITDA1 margin.
In the past 90 days, the Company was awarded more than 1,000
individual high-end consulting projects addressing the entire water
cycle. During the first quarter of fiscal 2024, Tetra Tech
announced the award of a $5 billion water framework contract for
the Republic of Ireland; an $800 million U.S. Army Corps of
Engineers PFAS remediation contract; and a $450 million Great Lakes
environmental restoration contract.
First Quarter Highlights
- Revenue increased 37% to $1.23 billion with double-digit
organic growth
- EBITDA increased 32% to $131 million; on pace to reach $575
million in FY24, doubling in the past 3 years
- Record first quarter EPS of $1.40
- Largest first quarter backlog ever, up 24% year-over-year
- Industry leading DSO of 55 days
- RPS Group integration exceeding expectations: - RPS EBITDA
margin exceeded 10%, up more than 600 basis points in less than one
year - RPS revenue synergies with more than $100 million in new
contracts won
___________________________
1Non-GAAP financial measures which the Company believes provide
valuable perspectives on its business results. Refer to tables in
the Regulation G Information for reconciliations to the comparable
GAAP metrics.
Executive Management Comments
Dan Batrack, Chairman and CEO, commented, “Tetra Tech began
fiscal 2024 with a strong first quarter as revenue was up in all of
our key end markets, building on our record performance of the
prior year. Based on the strength of our end markets, our strong
results in the first quarter, and the increasing realization of
revenue synergies with RPS, we have raised our full year guidance
for both net revenue and EPS, with a forecasted 20% growth in EPS
for fiscal 2024.”
Steve Burdick, Chief Financial Officer, said, “In addition to
our record first quarter revenue and earnings, we continue to
generate strong positive operating cash flow with $353 million over
the trailing twelve months, which is 152% of net income for the
same period. This annual cash generation continues our track record
of cash flow exceeding net income every year for the last two
decades.”
Jill Hudkins, President, stated, “These results demonstrate the
value of Tetra Tech’s pure play focus on the water cycle that
continues to drive increasing demand for our high-end services.
Tetra Tech’s key differentiator is our Leading with Science®
approach to the water cycle; from client-funded research and
development, watershed management, water supply and treatment, to
flood protection and marine navigation.”
Leslie Shoemaker, PhD., Chief Sustainability Officer, added,
“Tetra Tech is changing lives through science, technology, and
innovation. Our goal is to improve the lives of one billion people
around the world by 2030, providing sustainable solutions across
our water and environment markets by optimizing water management,
preserving biodiversity, and mitigating climate change.”
Recent Key Wins
- $5 billion Republic of Ireland water framework contract,
improving water quality and enhancing watershed protection for 4
million people
- $800 million U.S. Army Corps of Engineers PFAS remediation
contract, preventing future environmental contamination and
protecting lives at more than 500 military bases
- $450 million Great Lakes environmental restoration
contract, providing environmental restoration of the world’s
largest freshwater watershed and improving the lives of 34 million
people
- $125 million United Utilities Better Rivers AMP 8
program, reducing wastewater overflows and enhancing watershed
quality for 7 million people in North West England
- $34 million USAID Land and Resource Governance contract,
protecting land, water, and resources for more than 100 million
vulnerable households in developing countries
- $24 Million USAID Biodiversity and Ecosystem Conservation
contract, preserving ecosystems and enhancing community
livelihoods for 16 million people in Cambodia
Quarterly Dividend and Share Repurchase Program
On January 29, 2024, Tetra Tech’s Board of Directors approved
the Company’s 39th consecutive quarterly dividend at an amount of
$0.26 per share, a 13% increase year-over-year, payable on February
27, 2024, to stockholders of record as of February 14, 2024. Tetra
Tech has $348 million remaining under its $400 million share
repurchase program.
Business Outlook
The following statements are based on current expectations.
These statements are forward-looking, and the actual results could
differ materially. These statements do not include the potential
impact of transactions that may be completed or developments that
become evident after the date of this release. The Business Outlook
section should be read in conjunction with the information on
forward-looking statements at the end of this release.
Tetra Tech expects EPS for the second quarter of fiscal 2024 to
range from $1.25 to $1.35 and net revenue to range from $990
million to $1.04 billion. For fiscal 2024, Tetra Tech is raising
EPS guidance to range from $5.90 to $6.20 and is raising net
revenue guidance to range from $4.15 billion to $4.30 billion2.
Webcast
Investors will have the opportunity to access a live
audio-visual webcast and supplemental financial information
concerning the first quarter of fiscal 2024 results through a link
posted on the Company’s website at tetratech.com on February 1,
2024, at 8:00 a.m. (PT).
About Tetra Tech
Tetra Tech is the leader in water, environment and sustainable
infrastructure, providing high-end consulting and engineering
services for projects worldwide. With 27,000 employees working
together, Tetra Tech provides clear solutions to complex problems
by Leading with Science® to address the entire water cycle, protect
and restore the environment, design sustainable and resilient
infrastructure, and support the clean energy transition. For more
information about Tetra Tech, please visit tetratech.com or follow
us on LinkedIn and Facebook.
__________________________
2Reconciliation of the net revenue guidance to the most directly
comparable GAAP measure is not available without unreasonable
efforts because the Company cannot predict the magnitude and timing
of all the components required to provide such reconciliation with
sufficient precision.
Forward-Looking Statements
This release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
The use of words such as "anticipate," "expect," "could," "may,"
"intend," "plan" and "believe," among others, generally identify
forward-looking statements. These forward-looking statements are
based on currently available operating, financial, economic and
other information, and are subject to a number of risks and
uncertainties. Readers are cautioned that these forward-looking
statements are only predictions and may differ materially from
actual future events or results. A variety of factors, many of
which are beyond our control, could cause actual future results or
events to differ materially from those projected in the
forward-looking statements in this release, including but not
limited to: continuing worldwide political and economic
uncertainties; the U.S. Administration’s potential changes to
fiscal policies; the cyclicality in demand for our overall
services; the fluctuation in demand for oil and gas, and mining
services; risks related to international operations; concentration
of revenues from U.S. government agencies and potential funding
disruptions by these agencies; dependence on winning or renewing
U.S. government contracts; the delay or unavailability of public
funding on U.S. government contracts; the U.S. government’s right
to modify, delay, curtail or terminate contracts at its
convenience; compliance with government procurement laws and
regulations; the impact of global pandemics like COVID-19; credit
risks associated with certain clients in certain geographic areas
or industries; acquisition strategy and integration risks; goodwill
or other intangible asset impairment; the failure to comply with
worldwide anti-bribery laws; the failure to comply with domestic
and international export laws; the failure to properly manage
projects; the loss of key personnel or the inability to attract and
retain qualified personnel; the ability of our employees to obtain
government granted eligibility; the use of estimates and
assumptions in the preparation of financial statements; the ability
to maintain adequate workforce utilization; the use of the
percentage-of-completion method of accounting; the inability to
accurately estimate and control contract costs; the failure to
adequately recover on our claims for additional contract costs; the
failure to win or renew contracts with private and public sector
clients; growth strategy management; backlog cancellation and
adjustments; risks relating to cyber security breaches; the failure
of partners to perform on joint projects; the failure of
subcontractors to satisfy their obligations; requirements to pay
liquidated damages based on contract performance; the adoption of
new legal requirements; changes in resource management,
environmental or infrastructure industry laws, regulations or
programs; changes in bank and capital markets and the access to
capital; credit agreement covenants; industry competition;
liability related to legal proceedings, investigations, and
disputes; the availability of third-party insurance coverage; the
ability to obtain adequate bonding; employee, agent, or partner
misconduct; employee risks related to international travel; safety
programs; conflict of interest issues; liabilities relating to
reports and opinions; liabilities relating to environmental laws
and regulations; force majeure events; protection of intellectual
property rights; stock price volatility; the ability to impede a
business combination based on Delaware law and charter documents;
and other risks and uncertainties as may be described in Tetra
Tech’s periodic filings with the Securities and Exchange
Commission, including those described in the “Risk Factors” section
of Tetra Tech’s Annual Report on Form 10-K for the fiscal year
ended October 1, 2023. Readers should not place undue reliance on
forward-looking statements since such information speaks only as of
the date of this release. Tetra Tech does not intend to update
forward-looking statements and expressly disclaims any obligation
to do so.
Non-GAAP Financial Measures
To supplement the financial results presented in accordance with
generally accepted accounting principles in the United States
(“GAAP”), we present certain non-GAAP financial measures within the
meaning of Regulation G under the Securities Exchange Act of 1934,
as amended. We provide these non-GAAP financial measures because we
believe they provide a valuable perspective on our financial
results. However, non-GAAP measures have limitations as analytical
tools and should not be considered in isolation and are not in
accordance with, or a substitute for, GAAP measures. In addition,
other companies may define non-GAAP measures differently which
limits the ability of investors to compare non-GAAP measures of
Tetra Tech to those used by our peer companies. A reconciliation of
these non-GAAP financial measures to the most directly comparable
GAAP financial measures is included in this release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240131531560/en/
Jim Wu, Investor Relations Charlie MacPherson, Media &
Public Relations (626) 470-2844
Tetra Tech (NASDAQ:TTEK)
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