TPC - Tutor Perini Reports First Quarter 2019 Results
- Record quarterly new awards of $3.2 billion
- Record backlog of $11.6 billion, up 37% Y/Y, with strong double-digit growth across all segments
- Reaffirming FY19 EPS Guidance: $2.00 to $2.30
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, 2019. Revenue was $958.5 million compared to $1,028.2 million for the first quarter of 2018. The decrease was primarily driven by the timing of various new projects that have not yet ramped up to offset lower revenue associated with certain projects that have completed or are nearing completion. Adverse weather that impacted certain projects primarily in California and the Midwest also contributed to the revenue decline. The decrease was partially offset by increased activities on certain newer Civil segment projects and a Building segment technology project in California that are advancing.
Income from construction operations for the first quarter of 2019 was $22.9 million compared to a loss of $0.9 million for the same period in 2018. The increase was principally because the prior-year period included a pre-tax charge totaling $17.8 million, which was attributable to the unexpected outcome of an arbitration decision on a completed Civil segment project in New York. Net loss attributable to the Company for the first quarter of 2019 was $0.4 million, or a loss of $0.01 per diluted share, compared to a loss of $12.1 million, or a loss of $0.24 per diluted share, for the same quarter in 2018.
Backlog set a new record of $11.6 billion as of March 31, 2019, an increase of 37% compared to $8.5 billion as of March 31, 2018. New awards and adjustments to contracts in process totaled $3.2 billion in the first quarter of 2019, setting a new quarterly record. Significant new awards included the $1.4 billion Purple Line Section 3 Stations project in California, the Choctaw Casino and Resort project in Oklahoma, a large hospitality and gaming project in California, the $253 million Culver Line Communications-Based Train Control project in New York and the $200 million Southland Gaming Casino and Hotel project in Arkansas.
Outlook and Guidance
“The record new awards and backlog for the first quarter demonstrate our continued success in capturing substantial new project opportunities across all segments of our business,” said Ronald Tutor, Chairman and Chief Executive Officer. “As these and other recent awards progress and contribute more meaningfully as the year develops, we expect to report significantly improved financial results. Our tremendous backlog, combined with what we anticipate will be a multi-year period of increased demand, supports our favorable outlook for strong revenue growth and improved profitability over the next several years.”
The Company is reaffirming its EPS guidance for 2019 in the range of $2.00 to $2.30. As previously mentioned in the earnings release for the fourth quarter of 2018, earnings in 2019 are expected to be weighted more heavily in the second half of the year due to the timing of project ramp-up activities, as well as typical business seasonality.
First Quarter Conference Call
The Company will host a conference call at 2:00 PM Pacific Time on Wednesday, May 8, 2019, to discuss the first quarter 2019 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, 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 project owners, 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; a significant slowdown or decline in economic conditions; risks and other uncertainties associated with assumptions and estimates used to prepare financial statements; client cancellations of, or reductions in scope under, contracts reported in our backlog; increased competition and failure to secure new contracts; 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; impairment of our goodwill or other indefinite-lived intangible assets; failure to meet our obligations under our debt agreements; 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; inability to retain key members of our management, to hire and retain personnel required to complete projects or implement succession plans for key officers; decreases in the level of government spending for infrastructure and other public projects; possible systems and information technology interruptions, including due to cyberattack, systems failures or other similar events; the impact of inclement weather conditions on projects; failure to comply with laws and regulations related to government contracts; 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; the potential dilutive impact of our Convertible Notes in our diluted earnings per share 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; 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, 2018 filed on February 27, 2019 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) |
| 2019 |
| 2018 |
| REVENUE |
| $ |
| 958,487 |
| $ |
| 1,028,156 |
| COST OF OPERATIONS |
| (870,017 |
| ) |
| (961,088 |
| ) |
| GROSS PROFIT |
| 88,470 |
| 67,068 |
| General and administrative expenses |
| (65,557 |
| ) |
| (67,993 |
| ) |
| INCOME (LOSS) FROM CONSTRUCTION OPERATIONS |
| 22,913 |
| (925 |
| ) |
| Other income, net |
| 422 |
| 780 |
| Interest expense |
| (16,425 |
| ) |
| (15,065 |
| ) |
| INCOME (LOSS) BEFORE INCOME TAXES |
| 6,910 |
| (15,210 |
| ) |
| Income tax (expense) benefit |
| (2,188 |
| ) |
| 4,268 |
| NET INCOME (LOSS) |
| 4,722 |
| (10,942 |
| ) |
| LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
| 5,078 |
| 1,182 |
| NET LOSS ATTRIBUTABLE TO TUTOR PERINI CORPORATION |
| $ |
| (356 |
| ) |
| $ |
| (12,124 |
| ) |
| BASIC LOSS PER COMMON SHARE |
| $ |
| (0.01 |
| ) |
| $ |
| (0.24 |
| ) |
| DILUTED LOSS PER COMMON SHARE |
| $ |
| (0.01 |
| ) |
| $ |
| (0.24 |
| ) |
| WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING: |
| BASIC |
| 50,098 |
| 49,814 |
| DILUTED |
| 50,098 |
| 49,814 |
| Tutor Perini Corporation |
| Segment Information |
| Unaudited |
| Reportable Segments |
| Specialty |
| Consolidated |
| (in thousands) |
| Civil |
| Building |
| Contractors |
| Total |
| Corporate |
| Total |
| 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 |
| Three Months Ended March 31, 2018 |
| Total revenue |
| $ |
| 325,400 |
| $ |
| 490,617 |
| $ |
| 274,801 |
| $ |
| 1,090,818 |
| $ |
| — |
| $ |
| 1,090,818 |
| Elimination of intersegment revenue |
| (62,286 |
| ) |
| (376 |
| ) |
| — |
| (62,662 |
| ) |
| — |
| (62,662 |
| ) |
| Revenue from external customers |
| $ |
| 263,114 |
| $ |
| 490,241 |
| $ |
| 274,801 |
| $ |
| 1,028,156 |
| $ |
| — |
| $ |
| 1,028,156 |
| Income (loss) from construction operations(c) |
| $ |
| 2,839 |
| $ |
| 6,425 |
| $ |
| 7,235 |
| $ |
| 16,499 |
| $ |
| (17,424 |
| ) |
| (a) |
| $ |
| (925 |
| ) |
| Capital expenditures |
| $ |
| 19,196 |
| $ |
| 278 |
| $ |
| 419 |
| $ |
| 19,893 |
| $ |
| 77 |
| $ |
| 19,970 |
| Depreciation and amortization(b) |
| $ |
| 5,756 |
| $ |
| 481 |
| $ |
| 1,112 |
| $ |
| 7,349 |
| $ |
| 2,838 |
| $ |
| 10,187 |
| (a) Consists primarily of corporate general and administrative expenses. |
| (b) Depreciation and amortization is included in income from construction operations. |
| (c) During the three months ended March 31, 2018, the Company recorded a charge of $17.8 million in income from construction operations (an after-tax impact of $12.8 million, or $0.25 per diluted share), which was primarily non-cash, as a result of the unexpected outcome of an arbitration decision related to a subcontract back charge dispute on a Civil segment project in New York that was completed in 2013. |
|
|
| Tutor Perini Corporation |
| Condensed Consolidated Balance Sheets |
| Unaudited |
|
|
| As of March 31, |
| As of December 31, |
| (in thousands, except share and per share amounts) |
|
|
| 2019 |
| 2018 |
| ASSETS |
| CURRENT ASSETS: |
| Cash and cash equivalents ($38,485 and $43,131 related to VIEs) |
| $ |
| 101,482 |
| $ |
| 116,075 |
| Restricted cash |
| 5,095 |
| 3,788 |
| Restricted investments |
| 63,937 |
| 58,142 |
| Accounts receivable ($54,791 and $62,482 related to VIEs) |
| 1,347,881 |
| 1,261,072 |
| Retainage receivable ($45,618 and $36,724 related to VIEs) |
| 490,132 |
| 478,744 |
| Costs and estimated earnings in excess of billings |
| 1,168,675 |
| 1,142,295 |
| Other current assets ($33,666 and $30,185 related to VIEs) |
| 124,303 |
| 115,527 |
| Total current assets |
| 3,301,505 |
| 3,175,643 |
| PROPERTY AND EQUIPMENT (P&E), net of accumulated depreciation |
| of $355,939 and $343,735 (net P&E of $51,128 and $51,508 related to VIEs) |
| 492,929 |
| 490,669 |
| GOODWILL |
| 585,006 |
| 585,006 |
| INTANGIBLE ASSETS, NET |
| 85,026 |
| 85,911 |
| OTHER ASSETS |
| 91,804 |
| 50,523 |
| TOTAL ASSETS |
| $ |
| 4,556,270 |
| $ |
| 4,387,752 |
| LIABILITIES AND EQUITY |
| CURRENT LIABILITIES: |
|
|
| Current maturities of long-term debt |
| $ |
| 11,921 |
| $ |
| 16,767 |
| Accounts payable ($29,210 and $18,070 related to VIEs) |
| 597,498 |
| 621,728 |
| Retainage payable |
| 221,028 |
| 211,956 |
| Billings in excess of costs and estimated earnings ($244,617 and $263,764 related to VIEs) |
| 579,000 |
| 573,190 |
| Accrued expenses and other current liabilities ($35,851 and $34,828 related to VIEs) |
| 173,827 |
| 174,325 |
| Total current liabilities |
| 1,583,274 |
| 1,597,966 |
| LONG-TERM DEBT, less current maturities, net of unamortized |
| discounts and debt issuance costs totaling $32,185 and $34,998 |
| 886,705 |
| 744,737 |
| DEFERRED INCOME TAXES |
| 106,113 |
| 105,521 |
| OTHER LONG-TERM LIABILITIES |
| 184,999 |
| 151,639 |
| TOTAL LIABILITIES |
| 2,761,091 |
| 2,599,863 |
| 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 50,180,225 and 50,025,996 shares |
| 50,180 |
| 50,026 |
| Additional paid-in capital |
| 1,105,184 |
| 1,102,919 |
| Retained earnings |
| 701,325 |
| 701,681 |
| Accumulated other comprehensive loss |
| (44,200 |
| ) |
| (45,449 |
| ) |
| Total stockholders' equity |
| 1,812,489 |
| 1,809,177 |
| Noncontrolling interests |
| (17,310 |
| ) |
| (21,288 |
| ) |
| TOTAL EQUITY |
| 1,795,179 |
| 1,787,889 |
| TOTAL LIABILITIES AND EQUITY |
| $ |
| 4,556,270 |
| $ |
| 4,387,752 |
| Tutor Perini Corporation |
| Condensed Consolidated Statements of Cash Flows |
| Unaudited |
| Three Months Ended March 31, |
| (in thousands) |
|
|
| 2019 |
|
|
| 2018 |
| Cash Flows from Operating Activities: |
| Net income (loss) |
| $ |
| 4,722 |
| $ |
| (10,942 |
| ) |
| Adjustments to reconcile net income (loss) to net cash used in operating activities: |
| Depreciation |
| 12,831 |
| 9,301 |
| Amortization of intangible assets |
| 886 |
| 886 |
| Share-based compensation expense |
| 5,506 |
| 6,081 |
| Change in debt discounts and deferred debt issuance costs |
| 3,174 |
| 2,927 |
| Deferred income taxes |
| 142 |
| 186 |
| (Gain) loss on sale of property and equipment |
| (107 |
| ) |
| 1,471 |
| Changes in other components of working capital |
| (154,192 |
| ) |
| (84,272 |
| ) |
| Other long-term liabilities |
| 2,177 |
| 1,139 |
| Other, net |
| 76 |
| (180 |
| ) |
| NET CASH USED IN OPERATING ACTIVITIES |
| (124,785 |
| ) |
| (73,403 |
| ) |
| Cash Flows from Investing Activities: |
| Acquisition of property and equipment |
| (14,412 |
| ) |
| (19,970 |
| ) |
| Proceeds from sale of property and equipment |
| 201 |
| 3,303 |
| Investment in securities |
| (8,357 |
| ) |
| (3,288 |
| ) |
| Proceeds from maturities and sales of investments in securities |
| 3,324 |
| 3,007 |
| NET CASH USED IN INVESTING ACTIVITIES |
| (19,244 |
| ) |
| (16,948 |
| ) |
| Cash Flows from Financing Activities: |
| Proceeds from debt |
| 394,000 |
| 665,000 |
| Repayment of debt |
| (259,691 |
| ) |
| (586,559 |
| ) |
| Cash payments related to share-based compensation |
| (2,364 |
| ) |
| (2,308 |
| ) |
| Distributions paid to noncontrolling interests |
| (4,000 |
| ) |
| (5,000 |
| ) |
| Contributions from noncontrolling interests |
| 2,798 |
| — |
| NET CASH PROVIDED BY FINANCING ACTIVITIES |
| 130,743 |
| 71,133 |
| Net decrease in cash, cash equivalents and restricted cash |
| (13,286 |
| ) |
| (19,218 |
| ) |
| Cash, cash equivalents and restricted cash at beginning of period |
| 119,863 |
| 197,648 |
| Cash, cash equivalents and restricted cash at end of period |
| $ |
| 106,577 |
| $ |
| 178,430 |
| 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, 2018 |
| March 31, 2019(a) |
| March 31, 2019 |
| March 31, 2019 |
| Civil |
| $ |
| 5,141.9 |
| $ |
| 1,697.5 |
| $ |
| (333.5 |
| ) |
| $ |
| 6,505.9 |
| Building |
| 2,333.1 |
| 1,069.3 |
| (433.5 |
| ) |
| 2,968.9 |
| Specialty Contractors |
| 1,821.7 |
| 479.3 |
| (191.5 |
| ) |
| 2,109.5 |
| Total |
|
|
| $ |
| 9,296.7 |
| $ |
| 3,246.1 |
| $ |
| (958.5 |
| ) |
| $ |
| 11,584.3 |
| (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/20190508005725/en/
Tutor Perini Corporation
Jorge Casado, 818-362-8391
Vice President, Investor Relations & Corporate Communications
www.tutorperini.com