- New awards of $1.1 billion in Q3
2017; YTD book-to-burn of 1.36
- Backlog at $7.5 billion, up 12% Y/Y;
Civil segment backlog up 54% Y/Y to a new record level
- Cash Flow from Operations of $36.5
million in Q3 2017
Tutor Perini Corporation (NYSE: TPC), a leading civil, building
and specialty construction company, today reported results for the
three months ended September 30, 2017. Revenue for the third
quarter of 2017 was $1.2 billion compared to $1.3 billion for the
third quarter of last year, as various Civil and Building segment
projects are nearing completion and newer projects, particularly in
the Civil segment, are earlier in their project life cycle and are
not yet generating the higher levels of revenue that are expected
later. Revenue for the third quarter of 2017 was also impacted by
certain delays in the timing of new awards and project execution
activities for previously awarded projects, which have shifted the
timing of respective revenue contributions to 2018. Income from
construction operations was $49.1 million for the third quarter of
2017 compared to $60.9 million for the comparable period last year.
Net income attributable to Tutor Perini Corporation for the third
quarter of 2017 was $23.6 million, or $0.47 per diluted share,
compared to $28.8 million, or $0.57 per diluted share for the third
quarter of 2016. Both income from construction operations and net
income attributable to Tutor Perini Corporation were affected by
the reduced volume.
Backlog as of September 30, 2017 was $7.5 billion, up 12%
year-over-year and up 20% compared to the backlog as of December
31, 2016. Civil segment backlog climbed 54% year-over-year to $4.3
billion, a new record. New awards and adjustments to contracts in
process totaled $1.1 billion in the third quarter of 2017 and $4.8
billion in the first nine months of 2017, well outpacing revenue
for the nine-month period. The Civil segment was the major
contributor to the new award activity during the first nine months
of 2017, with civil awards comprising more than half of all new
awards through September 30, 2017. Significant new awards in the
third quarter of 2017 included a joint-venture tunnel project for a
hydroelectric generating station in British Columbia, Canada,
valued at $274 million, an electrical subcontract worth $154
million for a mass-transit project in California, a joint-venture
bridge project in Minnesota, for which the Company’s portion is
valued at $90 million, a U.S. embassy renovation project in Uruguay
valued at $87 million, a military training range project in Guam
worth $78 million, approximately $65 million for various smaller
electrical projects in the southern United States, $52 million for
three new mechanical projects in New York and $49 million of early
scope tasks for a new technology office building in California,
which is anticipated to be worth approximately $500 million once
the remaining funding is released.
The Company generated $36.5 million of operating cash in the
third quarter of 2017 and expects operating cash to be even
stronger in the fourth quarter of 2017.
“We have continued to experience certain delays in the timing of
new awards and project execution activities for previously awarded
projects, which resulted in revenue and profit shortfalls in the
quarter. On the positive side, we achieved improved operating
margins for the quarter in both our Building and Specialty
Contractors segments while maintaining good margin performance in
our Civil segment,” said Ronald Tutor, Chairman and Chief Executive
Officer. Tutor continued, “We also had solid operating cash flow,
as well as good new award bookings that resulted in stable backlog
for the quarter. We continue to see an unprecedented and growing
volume of prospective opportunities ahead, especially in our
higher-margin Civil segment, with several large project award
decisions expected in the near future. Consequently, our long-term
outlook for growth and improved profitability remains very
favorable.”
Outlook and Guidance
Based on the current backlog and market outlook, the Company is
updating its guidance for 2017, with revenue now expected to be
approximately $5.0 billion and diluted earnings per share (EPS) now
expected in the range of $1.75 to $1.90.
Third Quarter Conference Call
The Company will host a conference call at 2:00 PM Pacific Time
on Thursday, November 9, 2017, to discuss the third quarter
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. To listen to the webcast, please visit the
Company's website at least 15 minutes prior to the start of the
call to register and to download and install any necessary
software. 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 the planning and scheduling
of the 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 and Section 21E of the
Securities Exchange Act of 1934, 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 Company’s ability to win new contracts
and convert backlog into revenue; the Company's ability to
successfully and timely complete construction projects; increased
competition and failure to secure new contracts; the outcomes of
pending or future litigation, arbitration or other dispute
resolution proceedings and the timing of related collections; the
potential delay, suspension, termination or reduction in scope of
construction projects; the continuing validity of the underlying
assumptions and estimates of total forecasted project revenues,
costs and profits and project schedules; the availability of
borrowed funds on terms acceptable to the Company; failure to meet
our obligations under our debt agreements; the ability to retain
certain members of management; the ability to obtain surety bonds
to secure the Company’s performance under certain construction
contracts; possible labor disputes or work stoppages within the
construction industry; changes in federal and state appropriations
for infrastructure projects and the impact of changing economic
conditions on federal, state and local funding for infrastructure
projects; possible changes or developments in international or
domestic political, social, economic, business, industry, market
and regulatory conditions or circumstances; failure to comply with
laws and regulations related to government contracts; actions taken
or not taken by third parties, including the Company’s customers,
suppliers, business partners and competitors and legislative,
regulatory, judicial and other governmental authorities and
officials; impairments of our goodwill or other indefinite-lived
intangible assets; possible systems and information technology
disruptions; the impact of inclement weather conditions on
projects; 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, 2016 filed with the Securities and
Exchange Commission on February 23, 2017. 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 September 30, Nine
Months Ended September 30, (in thousands, except per share
data)
2017 2016 2017 2016
Revenue $ 1,199,505 $ 1,332,978 $ 3,564,140 $ 3,726,477
Cost of operations (1,081,254 ) (1,208,310 )
(3,240,332 ) (3,386,947 ) Gross profit 118,251
124,668 323,808 339,530 General and administrative expenses
(69,179 ) (63,749 ) (203,674 ) (189,660
)
INCOME FROM CONSTRUCTION OPERATIONS 49,072 60,919
120,134 149,870 Other income, net 967 2,048 42,373 5,214
Interest expense (15,643 ) (15,041 ) (53,726 )
(44,655 )
INCOME BEFORE INCOME TAXES 34,396
47,926 108,781 110,429 Provision for income taxes
(9,096 ) (19,125 ) (37,084 ) (44,868 )
NET INCOME 25,300 28,801 71,697 65,561
LESS: NET
INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS (1,716 )
— (4,253 ) —
NET
INCOME ATTRIBUTABLE TO TUTOR PERINI CORPORATION $ 23,584
$ 28,801 $ 67,444 $ 65,561
BASIC
EARNINGS PER COMMON SHARE $ 0.47 $ 0.59 $ 1.36
$ 1.33
DILUTED EARNINGS PER COMMON
SHARE $ 0.47 $ 0.57 $ 1.33 $ 1.32
WEIGHTED-AVERAGE COMMON SHARES
OUTSTANDING:
BASIC 49,775 49,185 49,602
49,132 DILUTED 50,587
50,100 50,768 49,649
Tutor Perini Corporation Segment Information
Unaudited Reportable Segments
Specialty Consolidated (in
thousands)
Civil Building Contractors
Total Corporate Total
Three Months
Ended September 30, 2017
Total revenue $ 458,487 $ 500,420 $ 310,137 $ 1,269,044 $ — $
1,269,044 Elimination of intersegment revenue (62,667 )
(6,872 ) — (69,539 ) —
(69,539 ) Revenue from external customers $ 395,820 $ 493,548 $
310,137 $ 1,199,505 $ — $ 1,199,505 Income from construction
operations $ 38,144 $ 14,058 $ 14,575 $ 66,777 $ (17,705 ) (a) $
49,072 Capital expenditures $ 1,248 $ 36 $ 81 $ 1,365 $ 164 $ 1,529
Depreciation and amortization (b) $ 5,213 $ 502 $ 1,166 $ 6,881 $
2,824 $ 9,705
Three Months
Ended September 30, 2016
Total revenue $ 506,100 $ 560,795 $ 331,613 $ 1,398,508 $ — $
1,398,508 Elimination of intersegment revenue (47,277 )
(18,253 ) — (65,530 ) —
(65,530 ) Revenue from external customers $ 458,823 $ 542,542 $
331,613 $ 1,332,978 $ — $ 1,332,978 Income from construction
operations $ 50,307 $ 13,296 $ 11,084 $ 74,687 $ (13,768 ) (a) $
60,919 Capital expenditures $ 1,342 $ 79 $ 54 $ 1,475 $ 117 $ 1,592
Depreciation and amortization (b) $ 12,669 $ 541 $ 1,243 $ 14,453 $
2,886 $ 17,339
Reportable Segments Specialty
Consolidated (in thousands)
Civil Building
Contractors Total Corporate Total
Nine Months Ended
September 30, 2017
Total revenue $ 1,363,850 $ 1,520,356 $ 907,690 $ 3,791,896 $ — $
3,791,896 Elimination of intersegment revenue (190,873 )
(36,883 ) — (227,756 ) —
(227,756 ) Revenue from external customers $ 1,172,977 $ 1,483,473
$ 907,690 $ 3,564,140 $ — $ 3,564,140 Income from construction
operations $ 128,176 $ 25,035 $ 15,330 $ 168,541 $ (48,407 ) (a) $
120,134 Capital expenditures $ 8,665 $ 184 $ 374 $ 9,223 $ 489 $
9,712 Depreciation and amortization (b) $ 26,767 $ 1,533 $ 3,551 $
31,851 $ 8,612 $ 40,463
Nine Months Ended
September 30, 2016
Total revenue $ 1,378,531 $ 1,594,946 $ 932,288 $ 3,905,765 $ — $
3,905,765 Elimination of intersegment revenue (118,143 )
(61,145 ) — (179,288 ) —
(179,288 ) Revenue from external customers $ 1,260,388 $ 1,533,801
$ 932,288 $ 3,726,477 $ — $ 3,726,477 Income from construction
operations $ 129,028 $ 38,969 $ 25,910 $ 193,907 $ (44,037 ) (a) $
149,870 Capital expenditures $ 8,499 $ 381 $ 798 $ 9,678 $ 595 $
10,273 Depreciation and amortization (b) $ 33,200 $ 1,647 $ 3,811 $
38,658 $ 8,637 $ 47,295
(a)
Consists primarily of corporate general
and administrative expenses.
(b)
Depreciation and amortization is included
in income from construction operations.
Tutor Perini Corporation Condensed
Consolidated Balance Sheets Unaudited (in
thousands, except share and per share amounts)
September 30, 2017 December 31, 2016
ASSETS CURRENT ASSETS: Cash and cash equivalents
($79,111 and $0 related to variable interest entities ("VIEs")) $
221,878 $ 146,103 Restricted cash 17,424 50,504 Restricted
investments 48,775 — Accounts receivable ("AR") including retainage
of $574,710 and $569,391 (AR of $36,317 and $0 related to VIEs)
1,857,870 1,743,300 Costs and estimated earnings in excess of
billings 902,312 831,826 Other current assets 70,781
66,023
Total current assets 3,119,040
2,837,756 Property and equipment, net of accumulated
depreciation
of $345,546 and $313,783
447,588 477,626 Goodwill 585,006 585,006 Intangible assets, net
90,340 92,997 Other assets 40,811 45,235
TOTAL ASSETS $ 4,282,785 $ 4,038,620
LIABILITIES AND EQUITY CURRENT LIABILITIES:
Current maturities of long-term debt $ 30,951 $ 85,890 Accounts
payable ("AP") including retainage of $267,110 and $258,294 (AP of
$4,826 and $0 related to VIEs) 949,675 994,016 Billings in excess
of costs and estimated earnings ($91,750 and $0 related to VIEs)
403,635 331,112 Accrued expenses and other current liabilities
124,385 107,925
Total current
liabilities 1,508,646 1,518,943 Long-term debt, less
current maturities, net of unamortized
discounts and debt issuance costs totaling
$54,699 and $56,072
855,325 673,629 Deferred income taxes 132,335 131,007 Other
long-term liabilities 155,553 162,018
TOTAL LIABILITIES 2,651,859 2,485,597
CONTINGENCIES AND COMMITMENTS
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 49,781,010 and
49,211,353 shares
49,781 49,211 Additional paid-in capital 1,080,371 1,075,600
Retained earnings 541,069 473,625 Accumulated other comprehensive
loss (43,298 ) (45,413 )
Total Stockholders'
Equity 1,627,923 1,553,023
Noncontrolling interests
3,003 —
TOTAL EQUITY
1,630,926 1,553,023
TOTAL
LIABILITIES AND EQUITY $ 4,282,785 $ 4,038,620
Tutor Perini Corporation Condensed
Consolidated Statements of Cash Flows Unaudited
Nine Months Ended September 30, (in thousands)
2017 2016 Cash flows
from operating activities: Net income $ 71,697 $ 65,561
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation 37,806 44,638 Amortization of
intangible assets 2,657 2,657 Share-based compensation expense
16,057 10,109 Excess income tax benefit from share-based
compensation — (10 ) Change in debt discounts and deferred debt
issuance costs 14,725 7,124 Deferred income taxes 642 (8,636 )
(Gain) loss on sale of property and equipment (376 ) 300 Other
long-term liabilities (2,876 ) (8,555 ) Other 4,785 (353 ) Changes
in other components of working capital (143,213 )
(18,669 )
NET CASH PROVIDED BY OPERATING ACTIVITIES
1,904 94,166
Cash flows from
investing activities: Acquisition of property and equipment
excluding financed purchases (9,712 ) (10,273 ) Proceeds from sale
of property and equipment 1,440 1,139 Investments in securities
restricted in use (48,657 ) — Change in restricted cash
33,080 (2,872 )
NET CASH USED IN INVESTING
ACTIVITIES (23,849 ) (12,006 )
Cash
flows from financing activities: Proceeds from issuance of
convertible notes — 200,000 Proceeds from debt 1,991,457 1,003,092
Repayment of debt (1,866,072 ) (1,174,679 ) Excess income tax
benefit from share-based compensation — 10 Issuance of common stock
and effect of cashless exercise (11,147 ) (423 ) Distributions paid
to noncontrolling interests (2,500 ) — Contributions from
noncontrolling interests 1,250 — Debt issuance and extinguishment
costs (15,268 ) (14,868 )
NET CASH PROVIDED BY
FINANCING ACTIVITIES 97,720 13,132
Net increase in cash and cash equivalents 75,775
95,292
Cash and cash equivalents at beginning of period
146,103 75,452
Cash and cash
equivalents at end of period $ 221,878 $ 170,744
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)
June 30, 2017 September 30, 2017(a)
September 30, 2017 September 30, 2017 Civil $ 4,240.6
$ 462.6 $ (395.8 ) $ 4,307.4 Building 1,808.4 283.9 (493.6 )
1,598.7 Specialty Contractors 1,511.5 394.2
(310.1 ) 1,595.6 Total $ 7,560.5 $ 1,140.7 $ (1,199.5 ) $
7,501.7
Revenue New Awards in the
Recognized in the Backlog at Nine Months Ended
Nine Months Ended Backlog at (in millions)
December 31, 2016 September 30, 2017(a)
September 30, 2017 September 30, 2017 Civil $ 2,672.1
$ 2,808.3 $ (1,173.0 ) $ 4,307.4 Building 1,981.2 1,101.0 (1,483.5
) 1,598.7 Specialty Contractors 1,573.8 929.4
(907.6 ) 1,595.6 Total $ 6,227.1 $ 4,838.7 $ (3,564.1 ) $
7,501.7 (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: http://www.businesswire.com/news/home/20171109006264/en/
Tutor Perini CorporationJorge Casado, 818-362-8391Vice
President, Investor Relations & Corporate
Communicationswww.tutorperini.com
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