- Revenue of $1.3 billion, up 30% Y/Y, driven by the ramp-up
of large infrastructure projects
- Strongest first-quarter revenue growth in the past 8
years
- Diluted earnings per share (EPS) of $0.34, the highest
first-quarter EPS in the past 10 years
- Backlog remains healthy at $10.6 billion, with several large
civil projects bidding later this year
- Affirming 2020 EPS guidance of $1.80 to $2.10
Tutor Perini Corporation (the “Company”) (NYSE: TPC), a leading
civil, building and specialty construction company, reported
results today for the three months ended March 31, 2020. Revenue
was $1.3 billion, an increase of 30% compared to $1.0 billion for
the same period last year. The increase was driven by strong
year-over-year growth across all segments, particularly 46% and 47%
growth for the Civil and Specialty Contractors segments,
respectively, as a result of large infrastructure projects that are
accelerating, including Newark Airport Terminal One, the Purple
Line Extension projects in Los Angeles, California High-Speed Rail
and Minneapolis Southwest Light Rail.
Income from construction operations for the first quarter of
2020 was $47.2 million, more than double the $22.9 million reported
for the same period in 2019. The increase was primarily due to
contributions associated with the strong revenue growth across all
segments, as well as improved performance on various projects in
New York in the Specialty Contractors segment. Net income
attributable to the Company for the first quarter of 2020 was $17.4
million, or $0.34 per diluted share, compared to a net loss
attributable to the Company of $0.4 million, or a $0.01 loss per
diluted share, for the same period last year.
First quarter 2020 backlog remained healthy at $10.6 billion
compared to the record backlog of $11.6 billion reported for the
same quarter last year. The prior year’s record backlog was driven
by the timing of $3.2 billion of new awards and contract
adjustments booked during that period, demonstrating the
variability that can occur in our backlog due to timing of large
project awards. For the first quarter of 2020, new awards and
adjustments to contracts in process totaled $0.6 billion, with the
most significant new awards being three military projects in North
Carolina and Florida collectively totaling $133 million and a $64
million mining project in Alabama. The Company is preparing to bid
on several large civil projects this year and anticipates that
backlog will continue to support strong revenue growth.
The Company used $34.0 million of operating cash in the first
quarter of 2020, a significant improvement compared to the use of
$124.8 million for the same quarter of last year and better than
expectations. Cash generation for the current quarter was impacted
by the timing of collections and the timing of payments to
suppliers and subcontractors, but also affected by the seasonality
of the Company’s operations. Barring any significant impact from
the COVID-19 pandemic, the Company continues to anticipate that
substantial cash collections pertaining to expected dispute
resolutions in 2020, combined with significant project cash flows
from large projects that are ramping up, will contribute to strong
operating cash flow for the rest of this year.
Outlook and Guidance
“We are off to a solid start in 2020, delivering the strong
revenue and earnings growth we have anticipated as the large
projects awarded to us over the past couple of years accelerate and
contribute more significantly,” remarked Ronald Tutor, Chairman and
Chief Executive Officer. Tutor continued, “We expect continued
revenue and earnings growth this year, driven by our large backlog
and improved operating performance in the Specialty Contractors
group. As mentioned last quarter, we are pursuing various new
high-margin project opportunities and expect to make significant
progress this year and next year in resolving and collecting our
unbilled receivables.”
The COVID-19 pandemic did not significantly impact the Company’s
financial results for the first quarter of 2020. The vast majority
of the Company’s projects, especially in its Civil segment, have
been designated as essential business, which allows the Company to
continue its work on those projects. However, due to the fluidity
of the COVID-19 pandemic, the Company is unable at this time to
accurately predict the pandemic’s future impact on the Company’s
business, financial condition or performance. Notwithstanding this
uncertainty, since the majority of the Company’s projects have, as
mentioned above, thus far been deemed essential and been largely
unaffected by the pandemic, the Company does not currently foresee
any adverse material impact from the pandemic on its financial
results for this year.
Accordingly, based on the Company’s results to date in 2020 and
its current outlook for the remainder of the year, the Company is
affirming its EPS guidance and still expects EPS to be in the range
of $1.80 to $2.10. As in previous years, earnings in 2020 are
expected to be weighted more heavily in the second half of the year
due to the anticipated continuation of large project ramp-up
activities, as well as typical business seasonality.
First Quarter 2020 Conference Call
The Company will host a conference call at 2:00 PM Pacific Time
on Wednesday, May 6, 2020, to discuss the first quarter 2020
results. To participate in the conference call, please dial
877-407-8293 five to ten minutes prior to the scheduled time.
International callers should dial +1-201-689-8349.
The conference call will be webcast live over the Internet and
can be accessed by all interested parties on Tutor Perini's website
at www.tutorperini.com. For those unable to participate during the
live call, the webcast will be available for replay shortly after
the call on the website.
About Tutor Perini Corporation
Tutor Perini Corporation is a leading civil, building and
specialty construction company offering diversified general
contracting and design-build services to private clients and public
agencies throughout the world. We have provided construction
services since 1894 and have established a strong reputation within
our markets by executing large, complex projects on time and within
budget, while adhering to strict quality control measures. We offer
general contracting, pre-construction planning and comprehensive
project management services, including planning and scheduling of
manpower, equipment, materials and subcontractors required for a
project. We also offer self-performed construction services
including site work, concrete forming and placement, steel
erection, electrical, mechanical, plumbing and heating, ventilation
and air conditioning (HVAC). We are known for our major complex
building project commitments, as well as our capacity to perform
large and complex transportation and heavy civil construction for
government agencies and private clients throughout the world.
Forward-Looking Statements
The statements contained in this release, including those set
forth in the section “Outlook and Guidance,” that are not purely
historical are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, including
without limitation, statements regarding the Company’s
expectations, hopes, beliefs, intentions or strategies regarding
the future and statements regarding future guidance or estimates
and non-historical performance. These forward-looking statements
are based on the Company’s current expectations and beliefs
concerning future developments and their potential effects on the
Company. While the Company’s expectations, beliefs and projections
are expressed in good faith and the Company believes there is a
reasonable basis for them, there can be no assurance that future
developments affecting the Company will be those that we have
anticipated. These forward-looking statements involve a number of
risks, uncertainties (some of which are beyond the control of the
Company) or other assumptions that may cause actual results or
performance to be materially different from those expressed or
implied by such forward-looking statements. These risks and
uncertainties include, but are not limited to: the impact of the
COVID-19 pandemic and related events that are beyond our control,
including possible effects on our business and operations,
customers and suppliers, and employees, contractors and
subcontractors, which could affect adversely our projects and the
geographic regions in which we conduct business; a significant
slowdown or decline in economic conditions; revisions of estimates
of contract risks, revenue or costs, the timing of new awards or
the pace of project execution, which may result in losses or lower
than anticipated profit; unfavorable outcomes of existing or future
litigation or dispute resolution proceedings against clients
(project owners, developers, general contractors, etc.),
subcontractors or suppliers, as well as failure to promptly recover
significant working capital invested in projects subject to such
matters; the requirement to perform extra, or change order, work
resulting in disputes or claims or adversely affecting our working
capital, profits and cash flows; risks and other uncertainties
associated with assumptions and estimates used to prepare financial
statements; inability to retain key members of our management, to
hire and retain personnel required to complete projects or
implement succession plans for key officers; failure to meet
contractual schedule requirements, which could result in higher
costs and reduced profits or, in some cases, exposure to financial
liability for liquidated damages and/or damages to customers;
failure to meet our obligations under our debt agreements;
decreases in the level of government spending for infrastructure
and other public projects; downgrades in our credit ratings;
failure of our joint venture partners to perform their venture
obligations, which could impose additional financial and
performance obligations on us, resulting in reduced profits or
losses; client cancellations of, or reductions in scope under,
contracts reported in our backlog; increased competition and
failure to secure new contracts; impairment of our goodwill or
other indefinite-lived intangible assets; the impact of inclement
weather conditions on projects; possible systems and information
technology interruptions, including due to cyberattack, systems
failures or other similar events; failure to comply with laws and
regulations related to government contracts; the potential dilutive
impact of our Convertible Notes in our EPS calculation; economic,
political and other risks, including civil unrest, security issues,
labor conditions, corruption and other unforeseeable events in
countries where we do business, resulting in unanticipated losses;
uncertainty from the expected discontinuance of the London
Interbank Offered Rate and transition to any other interest rate
benchmark; conversion of our outstanding Convertible Notes that
could dilute ownership interests of existing stockholders and could
adversely affect the market price of our common stock; and other
risks and uncertainties discussed under the heading “Risk Factors”
in our Annual Report on Form 10-K for the year ended December 31,
2019 filed on February 26, 2020 and in other reports that we file
with the Securities and Exchange Commission from time to time. The
Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required under
applicable securities laws.
Tutor Perini
Corporation
Condensed Consolidated
Statements of Operations
Unaudited
Three Months Ended
March 31,
(in thousands, except per common share
amounts)
2020
2019
REVENUE
$
1,250,729
$
958,487
COST OF OPERATIONS
(1,139,649
)
(870,017
)
GROSS PROFIT
111,080
88,470
General and administrative expenses
(63,853
)
(65,557
)
INCOME FROM CONSTRUCTION
OPERATIONS
47,227
22,913
Other income, net
481
422
Interest expense
(16,436
)
(16,425
)
INCOME BEFORE INCOME TAXES
31,272
6,910
Income tax expense
(5,134
)
(2,188
)
NET INCOME
26,138
4,722
LESS: NET INCOME ATTRIBUTABLE TO
NONCONTROLLING INTERESTS
8,767
5,078
NET INCOME (LOSS) ATTRIBUTABLE TO TUTOR
PERINI CORPORATION
$
17,371
$
(356
)
BASIC EARNINGS (LOSS) PER COMMON
SHARE
$
0.35
$
(0.01
)
DILUTED EARNINGS (LOSS) PER COMMON
SHARE
$
0.34
$
(0.01
)
WEIGHTED-AVERAGE COMMON SHARES
OUTSTANDING:
BASIC
50,338
50,098
DILUTED
50,836
50,098
Tutor Perini
Corporation
Segment Information
Unaudited
Reportable Segments
Specialty
Consolidated
(in thousands)
Civil
Building
Contractors
Total
Corporate
Total
Three Months Ended March 31,
2020
Total revenue
$
580,087
$
505,082
$
282,452
$
1,367,621
$
—
$
1,367,621
Elimination of intersegment revenue
(93,458
)
(23,318
)
(116
)
(116,892
)
—
(116,892
)
Revenue from external customers
$
486,629
$
481,764
$
282,336
$
1,250,729
$
—
$
1,250,729
Income (loss) from construction
operations
$
46,121
$
3,516
$
8,279
$
57,916
$
(10,689
) (a)
$
47,227
Capital expenditures
$
11,192
$
12
$
473
$
11,677
$
16
$
11,693
Depreciation and amortization(b)
$
18,616
$
427
$
993
$
20,036
$
2,775
$
22,811
Three Months Ended March 31,
2019
Total revenue
$
383,622
$
436,243
$
191,527
$
1,011,392
$
—
$
1,011,392
Elimination of intersegment revenue
(50,128
)
(2,777
)
—
(52,905
)
—
(52,905
)
Revenue from external customers
$
333,494
$
433,466
$
191,527
$
958,487
$
—
$
958,487
Income (loss) from construction
operations
$
41,745
$
3,133
$
(7,488
)
$
37,390
$
(14,477
) (a)
$
22,913
Capital expenditures
$
14,012
$
55
$
123
$
14,190
$
222
$
14,412
Depreciation and amortization(b)
$
9,370
$
503
$
1,064
$
10,937
$
2,780
$
13,717
(a)
Consists primarily of corporate general and administrative
expenses.
(b)
Depreciation and amortization is included in income (loss) from
construction operations.
Tutor Perini
Corporation
Condensed Consolidated Balance
Sheets
Unaudited
As of March 31,
As of December 31,
(in thousands, except share and per share
amounts)
2020
2019
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ($86,126 and
$103,850 related to variable interest entities ("VIEs"))
$
198,122
$
193,685
Restricted cash
5,956
8,416
Restricted investments
75,409
70,974
Accounts receivable ($80,794 and $91,090
related to VIEs)
1,501,557
1,354,519
Retainage receivable ($86,033 and $89,132
related to VIEs)
573,151
562,375
Costs and estimated earnings in excess of
billings ($30,739 and $22,764 related to VIEs)
1,155,202
1,123,544
Other current assets ($55,458 and $58,128
related to VIEs)
211,501
197,473
Total current assets
3,720,898
3,510,986
PROPERTY AND EQUIPMENT ("P&E"),
net of accumulated depreciation of $401,805 and $388,147 (net
P&E of $41,474 and $49,919 related to VIEs)
502,611
509,685
GOODWILL
205,143
205,143
INTANGIBLE ASSETS, NET
149,458
155,270
OTHER ASSETS
108,296
104,693
TOTAL ASSETS
$
4,686,406
$
4,485,777
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt
$
184,954
$
124,054
Accounts payable ($78,304 and $93,848
related to VIEs)
744,222
682,699
Retainage payable ($16,333 and $13,967
related to VIEs)
272,533
252,181
Billings in excess of costs and estimated
earnings ($421,236 and $422,847 related to VIEs)
891,164
844,389
Accrued expenses and other current
liabilities ($16,008 and $25,402 related to VIEs)
197,582
206,533
Total current liabilities
2,290,455
2,109,856
LONG-TERM DEBT, less current
maturities, net of unamortized discount and debt issuance costs
totaling $20,259 and $23,343
717,379
710,422
DEFERRED INCOME TAXES
37,580
35,686
OTHER LONG-TERM LIABILITIES
198,064
199,288
TOTAL LIABILITIES
3,243,478
3,055,252
COMMITMENTS AND CONTINGENCIES
EQUITY
Stockholders' equity:
Preferred stock - authorized 1,000,000
shares ($1 par value), none issued
—
—
Common stock - authorized 75,000,000
shares ($1 par value), issued and outstanding 50,541,480 and
50,278,816 shares
50,577
50,279
Additional paid-in capital
1,120,487
1,117,972
Retained earnings
331,362
313,991
Accumulated other comprehensive loss
(43,128
)
(42,100
)
Total stockholders' equity
1,459,298
1,440,142
Noncontrolling interests
(16,370
)
(9,617
)
TOTAL EQUITY
1,442,928
1,430,525
TOTAL LIABILITIES AND EQUITY
$
4,686,406
$
4,485,777
Tutor Perini
Corporation
Condensed Consolidated
Statements of Cash Flows
Unaudited
Three Months Ended March
31,
(in thousands)
2020
2019
Cash Flows from Operating
Activities:
Net income
$
26,138
$
4,722
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation
16,999
12,831
Amortization of intangible assets
5,812
886
Share-based compensation expense
4,244
5,506
Change in debt discount and deferred debt
issuance costs
3,486
3,174
Deferred income taxes
2,474
142
Gain on sale of property and equipment
(461
)
(107
)
Changes in other components of working
capital
(90,884
)
(154,192
)
Other long-term liabilities
1,061
2,177
Other, net
(2,876
)
76
NET CASH USED IN OPERATING
ACTIVITIES
(34,007
)
(124,785
)
Cash Flows from Investing
Activities:
Acquisition of property and equipment
(11,693
)
(14,412
)
Proceeds from sale of property and
equipment
583
201
Investment in securities
(9,696
)
(8,357
)
Proceeds from maturities and sales of
investments in securities
6,211
3,324
NET CASH USED IN INVESTING
ACTIVITIES
(14,595
)
(19,244
)
Cash Flows from Financing
Activities:
Proceeds from debt
348,688
394,000
Repayment of debt
(283,915
)
(259,691
)
Cash payments related to share-based
compensation
(694
)
(2,364
)
Distributions paid to noncontrolling
interests
(13,500
)
(4,000
)
Contributions from noncontrolling
interests
—
2,798
NET CASH PROVIDED BY FINANCING
ACTIVITIES
50,579
130,743
Net increase (decrease) in cash, cash
equivalents and restricted cash
1,977
(13,286
)
Cash, cash equivalents and restricted
cash at beginning of period
202,101
119,863
Cash, cash equivalents and restricted
cash at end of period
$
204,078
$
106,577
Tutor Perini
Corporation
Backlog Information
Unaudited
Revenue
New Awards in the
Recognized in the
Backlog at
Three Months Ended
Three Months Ended
Backlog at
(in millions)
December 31, 2019
March 31, 2020(a)
March 31, 2020
March 31, 2020
Civil
$
6,037.2
$
178.5
$
(486.6
)
$
5,729.1
Building
2,790.3
183.0
(481.8
)
2,491.5
Specialty Contractors
2,393.6
225.7
(282.3
)
2,337.0
Total
$
11,221.1
$
587.2
$
(1,250.7
)
$
10,557.6
(a)
New awards consist of the original
contract price of projects added to our backlog plus or minus
subsequent changes to the estimated total contract price of
existing contracts.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200506005815/en/
Tutor Perini Corporation Jorge Casado, 818-362-8391 Vice
President, Investor Relations & Corporate Communications
www.tutorperini.com
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