Perini Corporation Announces Q1 2008 Results
May 07 2008 - 4:06PM
Business Wire
Reflecting strong contributions from its building and management
services segments, Perini Corporation (NYSE: PCR), a leading
building, civil construction and construction management company,
today reported significantly improved results for the first quarter
ended March 31, 2008. First Quarter Results Net income was $25.2
million for the first quarter of 2008, as compared to net income of
$22.7 million for the first quarter of 2007. Diluted earnings per
common share were $0.91 for the first quarter of 2008, as compared
to $0.84 for the first quarter of 2007. Revenues from construction
operations were $1.26 billion for the first quarter of 2008,
compared to revenues of $987.4 million for the first quarter of
2007. The increase in revenues is primarily due to an increased
volume of work in the building segment�s hospitality and gaming and
healthcare markets. Robert Band, President and Chief Operating
Officer, stated that, �We are pleased to report a strong
performance for the first quarter of 2008, again led by our
building and management services segments. The increase in our
revenues and profit primarily reflects the conversion of our
substantial building segment backlog into revenues and profit as
anticipated, and another strong profit performance by our
management services segment resulting in a significant contribution
to our first quarter operating results. In addition, our civil
segment experienced an improved profit performance in the first
quarter of 2008.� Backlog at $7.2 Billion The backlog of
uncompleted construction work at March 31, 2008 was $7.2 billion,
down from the $7.6 billion backlog reported at December 31, 2007.
The March 31, 2008 backlog includes new contract awards added
during the first quarter of 2008 totaling approximately $895
million, which includes approximately $590 million of additional
work in the hospitality and gaming market in Las Vegas, Maryland
and California. Also, Rudolph and Sletten added approximately $274
million of various non-hospitality and gaming work, including new
awards in the education, high-tech and office building markets.
�Our pipeline of pending awards and new work prospects remains full
of opportunities, especially for hospitality and gaming, healthcare
and education projects. We are pleased to have been selected along
with another contractor to build the MGM Grand Atlantic City.
Preconstruction services have commenced and contract terms are
being finalized. The value of Perini�s portion of the work is
estimated to be $1 to $1.2 billion,� Mr. Band stated. Financial
Condition Remains Strong in 2008 The Company�s financial condition
remained strong at March 31, 2008. Working capital increased to
$297.0 million at March 31, 2008, from $293.5 million at December
31, 2007. The Company improved its solid base of shareholders�
equity to $396.4 million at March 31, 2008. In addition, the
Company has $113.7 million available to borrow under its credit
facility at March 31, 2008. The Company believes its strong
financial position and credit arrangements are more than sufficient
to support the Company�s substantial backlog. Outlook On April 2,
2008, the Company announced that it has entered into a definitive
agreement to combine with privately-held Tutor-Saliba Corporation
to create what we believe will be the premier publicly-traded
general contractor in the United States and overseas. The combined
company is expected to enhance Perini�s growth prospects
significantly by adding substantial management capacity, client
relationships and other resources to our industry-leading position
in the gaming and hospitality markets; by integrating
Tutor-Saliba�s highly successful civil construction business with
our civil segment to improve its profitability; and by combining
Tutor-Saliba�s successful construction business in Guam with our
management services segment to position the combined operation to
benefit from significant anticipated government spending overseas
in the next several years. In addition, this transaction will
extend our geographic diversity, enhance our access to surety
bonding and strengthen our management team. The transaction is
subject to closing conditions, including the approval of Perini�s
shareholders and receipt of regulatory approvals. The transaction,
which is expected to close during the third quarter of 2008, is
expected to be accretive to earnings per share beginning in the
first full fiscal year of combined operations. The Company is
maintaining its existing guidance for 2008 revenues in the range of
$5.5 to $5.9 billion and diluted earnings per share in the range of
$3.50 to $3.75. Beyond fiscal 2008, the Company is targeting fiscal
2009 revenue and diluted earnings per share in the range $7.3 to
$7.8 billion and $4.00 to $4.20, respectively, and targeting
diluted earnings per share growth in 2010 of between 10% to 20%.
About Perini Corporation Perini Corporation is a leading
construction services company offering diversified general
contracting, construction management 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 sitework, concrete
forming and placement and steel erection. We are known for our
hospitality and gaming industry projects, sports and entertainment,
educational, transportation, healthcare, biotech, pharmaceutical
and high-tech facilities, as well as large and complex civil
construction projects and construction management services to U.S.
military and government agencies. The statements contained in this
Release 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. These forward-looking statements are based on the
Company�s current expectations and beliefs concerning future
developments and their potential effects on the Company. There can
be no assurance that future developments affecting the Company will
be those anticipated by the Company. 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 successfully and timely complete construction
projects; the Company�s ability to convert backlog into revenue;
the potential delay, suspension, termination, or reduction in scope
of a construction project; the continuing validity of the
underlying assumptions and estimates of total forecasted project
revenues, costs and profits and project schedules; the outcomes of
pending or future litigation, arbitration or other dispute
resolution proceedings; the availability of borrowed funds on terms
acceptable to the Company; the ability to retain certain members of
management; the ability to obtain surety bonds to secure its
performance under certain construction contracts; possible labor
disputes or work stoppages within the construction industry;
changes in federal and state appropriations for infrastructure
projects; possible changes or developments in worldwide or domestic
political, social, economic, business, industry, market and
regulatory conditions or circumstances; 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; the
ability to obtain the approval of the transaction with Tutor-Saliba
by Perini shareholders; the ability to obtain governmental
approvals of the transaction with Tutor-Saliba or to satisfy other
conditions to the transaction on the terms and expected timeframe
or at all; transaction costs from the transaction with
Tutor-Saliba; the effects of disruption from the transaction with
Tutor-Saliba making it more difficult to maintain relationships
with employees, customers, other business partners or government
entities; the ability to realize the expected synergies resulting
for the transaction with Tutor-Saliba in the amounts or in the
timeframe anticipated and the ability to integrate Tutor-Saliba�s
businesses into those of Perini in a timely and cost-efficient
manner. 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. Perini Corporation (NYSE) Summary
of Consolidated Earnings (Unaudited) (In Thousands of Dollars) �
For the Three Months Ended March 31, 2008 � 2007 Revenues: Building
$ 1,163,020 $ 886,855 Civil 60,156 57,103 Management services �
33,160 � � 43,398 � TOTAL REVENUES $ 1,256,336 � $ 987,356 � �
Gross profit $ 66,562 $ 57,897 General and administrative expenses
� 27,599 � � 25,157 � Income from construction operations 38,963
32,740 Other income, net 1,505 2,356 Interest expense � (355 ) �
(690 ) Income before income taxes 40,113 34,406 Provision for
income taxes � (14,960 ) � (11,753 ) NET INCOME $ 25,153 � $ 22,653
� � BASIC EARNINGS PER COMMON SHARE $ 0.93 � $ 0.85 � � DILUTED
EARNINGS PER COMMON SHARE $ 0.91 � $ 0.84 � � Weighted average
common shares outstanding: Basic 27,145 26,638 Effect of dilutive
stock options, warrants and restricted stock units outstanding �
508 � � 482 � Diluted � 27,653 � � 27,120 � Selected Balance Sheet
Data (Unaudited) (In Thousands of Dollars) � � March 31, � December
31, 2008 2007 Total assets $ 1,730,179 $ 1,654,115 Working capital
$ 297,022 $ 293,521 Long-term debt, less current maturities $
13,635 $ 13,358 Stockholders' equity $ 396,354 $ 368,334
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