Good morning, and thank you for joining the Tetra Tech Earnings Call. By now, you should have received a copy of the press release. If you have not, please contact the Company’s corporate office at 626-351-4664. As a reminder, Tetra Tech is also simulcasting this presentation with slides in the Investors section of its website at www.tetratech.com. This call is being recorded at the request of Tetra Tech, and this broadcast is the copyright property of Tetra Tech. Any rebroadcast of this information in whole or part without the prior written permission of Tetra Tech is prohibited. With us today from management are Dan Batrack, Chairman and Chief Executive Officer; and Steve Burdick, Chief Financial Officer. They will provide a brief overview of the results, and we will open up the call for questions. I would like to direct your attention to the Safe Harbor Statement in today’s presentation. Today’s discussion contains forward-looking statements about future growth and financial expectations. Actual results may differ significantly from those projected in today’s forward-looking statements due to various risks and uncertainties, including the risks described in Tetra Tech’s periodic reports filed with the SEC. Except as required by law, Tetra Tech takes no obligation to update its forward-looking statements. In addition, since management will be presenting some non-GAAP financial measures as references, the appropriate GAAP financial reconciliations are posted in the Investors section of Tetra Tech’s website. At this time, I would like to inform you that all participants are in a listen-only mode. At the request of the Company, we will open up the conference for questions and answers after the presentation. With that, I would like to turn the call over to Dan Batrack. Please go ahead, Mr. Batrack.

Great. Thank you very much, Laura, and good morning, and welcome to our fourth quarter and fiscal year 2020 earnings conference call. Before I begin my presentation today, I would like to begin with an update on the potential implications to our business from the election here in the United States that took place just nine days ago. Well, first, it is very early, and the transition process hasn’t even started yet. But we do know some things, and let me share with you what we have observed to date. Joe Biden has identified climate change as a top priority of his administration. This priority is directly in line with our expertise in more than 50 years of addressing the complicated aspects of water, environment, and energy associated with climate change for the Federal Government. We work for agencies, such as the United States Environmental Protection Agency, U.S. Agency for International Development, the Army Corps of Engineers and FEMA, which we believe will be among the frontline entities leading the government’s climate change initiatives. The Biden administration has also emphasized that investing in infrastructure is key to revitalizing the United States economy. Even in a likely divided Congress, government-sponsored infrastructure stimulus funding has the potential for bipartisan support. Clearly, we would also benefit from increased infrastructure spending. However, the timing of the new infrastructure stimulus package is uncertain at this time. As we see the new administration’s programs develop, we will provide you additional updates on our quarterly calls. I will now begin with an overview of our performance and customers, followed by Steve Burdick, our Chief Financial Officer, who will provide a more detailed review of our financials and capital allocation. I will then address our customer outlook and our earnings guidance for fiscal year 2021. We had a strong fourth quarter, led by our record EPS and backlog performance. Our revenue of $753 million was up 6% from the prior quarter. Our net revenue also increased on a sequential quarterly basis by 5% to $590 million, which was at the high end of our forecast. Our Q4 EBITDA of $74 million generated adjusted earnings per share of $0.91, which was ahead of our expectations on strong performance across all of our operating divisions. It was also up 17% from the prior quarter. This represents the highest quarterly earnings per share in the company’s history. Our backlog, which is our best forward indicator, was up 5% year-over-year and 6% sequentially, growing to over $3.2 billion, also the highest in the history of the company. I would now like to provide an overview of our performance by our end customer. In the fourth quarter, revenue for all of our customers increased sequentially. We saw continued strength in our state and local revenues, which were up organically year-over-year, 14% and up sequentially 9%. Excluding the extraordinary contributions of our disaster response work, this is the fifth consecutive year of double-digit growth in our state and local business. Work for our U.S. Federal clients was 30% of our net revenue in the quarter and was up 4% sequentially. Our U.S. Federal work grew 5% year-over-year for civilian agencies and 10% for the U.S. Department of Defense. However, this growth was offset by delays in work for U.S.A. due to travel restrictions associated with the COVID-19 virus. Our U.S. commercial net revenue was 24% of our business and up 3% from the prior quarter. Our environmental providing, our regulatory-driven programs and renewable energy services continue to be stable. We did see some reductions in consulting for non-regulatory services, especially for new buildings in the commercial property sector. Finally, our international net revenue was up 7% from the prior quarter. We saw continued growth in our local government services and commercial energy work in Canada. However, discretionary work for commercial clients was impacted by project delays and cancellations in our Asia Pacific region. I would now like to present our performance by segment. This quarter, I would like to provide more insight into our margin performance by segment, a key metric that we have been very focused on for the past several years. In the fourth quarter, both of our segments showed significant margin expansion on both a year-over-year basis and a quarter-over-quarter basis. The Government Services Group, or GSG, segment was up 50 basis points year-over-year, delivering a 14.6% margin in Q4 of fiscal year 2020. Strong margin performance was driven by our high-end data analytics and design services for a broad base of our clients in water and environmental for both our local and Federal clients. The Commercial International Group, or CIG segment, margins were up 150 basis points year-over-year as per our plan and is now closer to GSG’s margin. CIG delivered an 11.9% margin, up 180 basis points from the prior quarter, demonstrating continued expansion of their margin despite the impacts of COVID-19. CIG’s fourth quarter results were the result of the change to a more favorable business mix and a disciplined project delivery that our management team oversaw during the quarter. For the full fiscal year of 2020, we achieved all-time record highs for EPS, cash from operations, and backlog. Tetra Tech’s full-year revenue was $3 billion. Notably, we generated a record earnings per share of $3.16 on a GAAP basis and a record adjusted earnings per share of $3.26 for the year. We also generated record cash from operations of $262 million for the year, and I’m quite pleased with the performance of our team in this area, especially during the unusual circumstances and disruption caused by the global pandemic. Finally, rounding out the year, our key leading indicator backlog was also a record high of just over $3.2 billion. Backlog was up 5% on a year-on-year basis and up 6% sequentially on strong broad-based orders, resulting in a new all-time high of just over $3.2 billion. The last quarter of the fiscal year is typically our strongest quarter for orders from the Federal Government, and this quarter delivered fully up to our expectations. In the fourth quarter, we won new programs and task orders for differentiated water, environmental, and renewable energy services across a broad base of our clients, both in the United States and internationally. We expanded our contract capacity by $277 million to over $250 million with the United States Environmental Protection Agency and the U.S. Army Corps of Engineers for environmental restoration and hazardous waste management services. In just the fourth quarter, we won $69 million in contracts for renewable energy and power consulting services, continuing our differentiated leadership in this market. Now I would like to turn the presentation over to Steve Burdick, to present the details of our financials for the quarter and year.

Okay. Thank you, Dan. So I would like to now review the GAAP financial results for the fourth quarter of fiscal 2020, as well as our financial position as of the end of fiscal 2020. Overall, our net revenue came in about as expected. The fiscal 2020 fourth quarter revenue was $753 million and net revenue amounted to $590 million, which was in line with the higher end of our guidance range of $560 million to $600 million. Our fourth quarter revenue and net revenue growth rate was impacted by the completion of large disaster response projects in 2019, as well as our decision last year to dispose of our Canadian turnkey pipeline business. Excluding these two impacts, our revenues would have been in line with the prior year. Our operating margin and earnings per share increased compared to the prior year. This improvement in margins has resulted from both our project performance and our business mix as we continue to shape our portfolio. Our adjusted earnings per share of $0.91 came in better than the top end of our guidance for Q4, which was a range of $0.78 to $0.83. This improvement in our EPS was driven by the continued improvement in our operating margin, which saw an increase of 150 basis points year-over-year on a GAAP basis. In the current year, both our GAAP EPS of $0.82 and adjusted EPS of $0.91 were improvements over the fourth quarter of last year. The reconciliation details between our GAAP and adjusted results are included in the appendix of this presentation. Excluded from our adjusted earnings this quarter were two matters. First, we realized additional cash positive gains, these equipment sales are now complete, and the total gain for fiscal 2020 is just shy of $9 million. Secondly, we recorded non-cash adjustments relative to purchase accounting in the fourth quarter, one for true-up of our earn-out liabilities and two a goodwill charge for our Asia Pacific division. Tetra Tech continues to be fiscally disciplined and focused on generating positive cash flows in excess of net income. Proactively, we are strengthening the balance sheet to ensure a healthy level of liquidity. As such, our cash flows generated from operations for the year totaled $262 million, including $68 million in the fourth quarter. Total cash flow from operations amounts to about $4.80 of cash per share for the year. And on an annual basis, the cash flow generated is about 26% higher than our fiscal 2019. Our focus on working capital and cash flows has also resulted in our days sales outstanding, or DSO, decreasing to 68 days as of the fourth quarter. This is an improvement of 10 days from last year and a sequential improvement of two days from last quarter. Our net debt amounts to $134 million, which is a 14% decrease from last year. While still, our net debt-to-EBITDA came in at about 0.5 times. Our long-term capital allocation strategy calls for a balance of investing in growth of the business, managing the balance sheet, and providing shareholder returns. Over the last fiscal year, we have generated $262 million in cash from operations. And during the fourth quarter, we continued to benefit from this cash position by providing significant returns for our shareholders through both dividends and share buybacks. Regarding our dividend program, during the past quarter, we paid out $9.2 million in dividends, and for the year, we paid out $35 million. I want to announce that our Board of Directors approved our 26th consecutive dividend, which will be paid in the month of December at a rate of $0.17 per share, which is a 13% increase over last year. Furthermore, we utilized $15 million in the fourth quarter and $117 million for the year on our stock buyback program. On a combined basis, we have $208 million remaining under both of our previously approved stock buyback programs. And just as importantly to successfully implementing our capital allocation strategy to provide returns to our shareholders, is to ensure that we have a strong balance sheet and ample liquidity. We have both in terms of our balance sheet at the end of Q4 and available liquidity of over $800 million in the form of cash on hand and funds available under our credit agreements. As a result, Tetra Tech is in a financial position such that we will continue to provide significant returns to our shareholders while investing in strategic growth areas, both organically and through key strategic acquisitions, such as Segue Technologies, which we closed in February and BlueWater Federal, which we closed in September. I’m very pleased to share these results with you for the fourth quarter. I want to thank you all for your support, and I will now hand the call back over to Dan.

Great. Thank you, Steve. As we enter our fiscal year 2021, we continue to be very focused on delivering differentiated high-end services to our clients. At Tetra Tech, we lead with science by combining our experience, world-class scientists and engineers in technical innovation, and delivering over 65,000 projects a year for our clients. We call our differentiated technologies the Tetra Tech Delta. The Tetra Tech Delta encompasses the full spectrum of the solutions that we have developed for our local, Federal, and commercial clients worldwide. If you are following along on the webcast, illustrated on the slide are just a few of the technical solutions that we are bringing to our clients today. Some of the examples are our award-winning CSOP real-time control system that optimizes water management. Our rail Artificial Intelligence, our Rail AI solution that reduces data collection time by over 80%. Our virtual reality solutions that enable 3D analysis of rugged and inaccessible terrain to be fully displayed digitally, and our AI Vision Solution that trains AI Box to rapidly recognize infrastructure features out in the field and through electronic media. By building out a foundation of Tetra Tech’s fundamental expertise in water, the environment, energy, and infrastructure, the Tetra Tech Delta makes technical innovation meaningful, practical, and implementable for our clients. It is not just an on-the-shelf concept; it is actually deployed in the real field. I will now highlight our differentiated services across our four client sectors and what we are focused on for fiscal year 2021. Our U.S. Federal work for us is distributed across civilian agencies, the Department of Defense, and international development. For these agencies, we are their high-end consultants, applying data analytics to help advance their most critical programs. We currently have about $20 billion in contract capacity with the U.S. Federal Government, and we use that capacity to support over 100 different Federal Agencies and Departments with their highest priority programs. We support the Department of Defense in analyzing and mitigating the impacts of emerging contaminants, such as PFAS. We work with the United States Environmental Protection Agency coast-to-coast on national water quality assessments, water share programs that just adjusted feed base and some of the fundamental super fund site evolutions all across the country. And for the United States Agency for international development, we work on some of their highest-profile programs, such as the sustainable fisheries program, which uses digital tracing to establish sustainable practices. In fiscal year 2021, we expect our U.S. Federal work to be almost a third of our business and grow at about a 5% rate for the year. Tetra Tech works with more than 500 cities and municipalities across the United States. We provide our state and local clients with our number one ranked services in water, water supply, and desalination design. We address regulatory requirements by using advanced data analytics solutions to optimize water management, and we provide high-end water supply solutions by designing first-of-the-kind water reuse and brackish water treatment facilities. We expect our U.S. State and local work to continue to be a growth market for us, with our municipal water and planning services and longer-term disaster recovery work growing at approximately a 10% rate, continuing our industry-leading performance in this market. Our U.S. Commercial work is primarily focused on differentiated environmental consulting and renewable energy services. We leverage our national reputation and number one rankings in environmental science, solid waste, and wind power, providing support to our clients that include Fortune 500 commercial clients, top energy developers, and waste management companies. Our work overall is distributed evenly across regulatory-driven programs, such as environmental restoration of contaminated lands, and discretionary programs for healthy buildings and renewable energy development. Our U.S. Commercial work is expected to be about a quarter of our overall business and grow at about a 3% rate for the year, driven primarily by increases in revenues for renewable energy. International work is expected to be about 30% of our business, about evenly split between work we do for government clients and commercial clients outside the United States. Our international work includes high-end services and water systems, such as our intelligent real-time control program in Toronto, Canada. Our international programs also include high-end consulting for geotechnical investigations, such as seismic sensor systems, Arctic geo transportation corridors, and coastal zone management. Infrastructure stimulus programs expected to be deployed or implemented in Tetra Tech Geography Centers, such as the United Kingdom and Canada, could provide additional catalysts for growth in the latter portion of the year. In fiscal year 2021, we expect Tetra Tech’s international revenue to grow at a rate of about 2%. Our international growth will be driven by water and environmental planning, consulting, and engineering work, primarily in Canada. However, the early part of the year is expected to be impacted negatively by continued lockdowns and slow economic recovery in the United Kingdom and Australia. I would now like to present our guidance for the first quarter of fiscal year 2021 and for the entire year of fiscal year 2021. Our guidance is as follows: for the first quarter, we anticipate a net revenue of approximately $570 million to $600 million with an associated diluted earnings per share in the range of $0.78 to $0.83. For the entire year and fiscal year 2021, we anticipate our collective net revenue to be in a range of $2.35 billion to $2.55 billion with an associated diluted earnings per share of $3.30 to $3.50. If you are following along on the webcast, you can see the basis of some of the assumptions for this guidance for 2021 in the first quarter. We do anticipate, based on acquisitions previously concluded, that we will have approximately $8 million of amortization, which represents $0.12 per share, that is incorporated into the guidance. We expect a 25% effective tax rate and approximately 54.5 million shares outstanding for the company. I will note, as in past practices with our annual guidance, this guidance does exclude the contributions of any future acquisitions that may take place during the year. In summary, we had an excellent fourth quarter and fiscal year 2020, setting new records for earnings, cash generation, and EPS for our shareholders. As we enter fiscal year 2021, our high-end water, environment, and renewable energy services and our approach of leading with science are more in demand than ever before. Our all-time high backlog of over $3.2 billion provides us with both excellent visibility and momentum as we move into our new fiscal year. With that, I would now like to open up the call for questions. Laura.

The question and answer session will begin now. Our first question comes from the line of Sean Eastman with KeyBanc Capital Markets.

Thank you. Nice, strong finish to the year, thanks for taking my questions. I just wanted to start with the customary swing factors around the fiscal 2021 guidance, just the real needle-moving dynamics that could get you to the upper or lower end? And looking longer term, as we think about this election outcome, what drives sort of an accelerated top-line growth trajectory into fiscal 2022 under this administration?

Good question, Sean. The swing factors, the growth rates that I had shared during my prepared remarks do represent and would model out to the midpoint of our guidance. We certainly have the ability to go to the high end. Some of the items that could drive us to the high end, some of them are very short-term transactional items, such as increased revenues from the storm events. That would include the fires out of West Coast and the storms that have taken place. But those would be one time. Certainly, they would have a short-term positive impact, both in the early quarters and the year. Probably on a longer-term basis, though, a more structural contribution would be the new priorities that the new Federal administration, if the Biden administration fully gets this implemented. In my prepared remarks, I focused on climate change, clean environment, and focus on renewable energy. All of these are absolutely fundamental core areas of expertise for the company. I have high confidence that they would be put in place, and even without increases in funding or budget funding, we would also expect that they could actually prioritize the existing dollars that are spent by the government to areas that would be a focus of Tetra Tech.

Got you. Okay. That is helpful. And on the Advanced Analytics side, it seems like the fourth quarter was another leg of momentum on that side. I’m just curious how you guys are tracking against that $300 million target for fiscal 2021 sort of Advanced Analytics revenue that you outlined last quarter. Is it fair to say that as we look over the next year or two, growth in Advanced Analytics business is the key margin expansion driver over that time frame?

Yes. The Federal Government, I think the continued growth in Advanced Analytics is going to expand our margin. We are on track for $300 million. It continues to grow at about a 15% to 20% organic rate for the Federal Government, and it is slightly higher margin. We think that the growth of that business over the year will increase our overall targets for our GSG or Government Services Group from what had been a 12% to 13%. We think it will add up probably 50 basis points for the fiscal year of 2021. So probably the 12.5% to 13.5%. So it is making an impact even right now.

Okay. Got it. And I’m going to sneak one last one in. I mean, clearly, you guys are well positioned within the framework of what this new administration has outlined here. But maybe on the flip side of that, Dan, are there any pockets of risk, whether it would be within the DoD business or otherwise that you guys are watchful of on the downside?

Well, I think the biggest issue would be not the administration of its priorities. I think, with respect to defense, we have no engagement or participation in weapons platforms or logistics or these other items. Our work is on the environmental restoration side. Even a reduced spending in the defense sector, typically, we have observed with the base realignment and closure back a decade ago, actually had increased costs for environmental investigation assessments. Probably the biggest issue is a divided Congress that would end up lacking progress regarding coming up with budgets. But even a continuing resolution, which means a freeze of the budget from the prior year, is actually fine for us because the executive administration or the President’s administration would actually give the priority of where those funds are spent within each of the departments, which should be very favorable for us.

Excellent, really helpful. I will pass it over. Thanks so much.

Good. Thank you, Sean.

Our next question comes from the line of Noelle Dilts with Stifel. You may proceed with your questions.

Hi guys, good morning and congrats on a nice quarter. So thanks for the clarity on the GSG margins. I was hoping you could also give us a sense of how you are thinking about CIG margins as you look out to fiscal 2021 and what some of the key factors are that will impact how those are trending.

Yes, well, we think that as a range for CIG, we think it is increased over 100 basis points from the previous year. So we think 11% to 12% range would be what we would anticipate for the year. It is closing in on GSG. Some of the swing factors, I think we have taken care of a number of them that needed to be addressed coming into the year, which is business mix, including closing down our turnkey Canadian pipeline work, that has been helpful. Probably the next most material area that we view for improvement is in our United Kingdom or the U.K. acquisition of WYG. We think that just moving into double-digit performance, which we think can happen this year, would account for probably half of that increase we need to obtain this. The swing factors with respect to what might be a headwind, obviously, on the commercial side and some of the international lockdowns with respect to the pandemic, could represent a bit of unknown factors at this moment. Both the slowdown or lockdown associated with the economic impacts that are associated with that are items that we are watching closely. But we have had those this last six months, eight months, and we think we have pretty effectively developed structures and business approaches to address these lockdowns so far.

Okay. Great. And then on the topic of the U.K., could you give us an update on how you are thinking about the M&A opportunity there? I know you chatted a bit about looking at a U.K. water acquisition to complement WYG. Just curious kind of what the progress has been there and how you are thinking about that opportunity?

We have had meetings with a number of firms, so there are opportunities out there. I would say the classic pipeline is full or at least it is sufficiently full that we have alternatives. We are looking for just the right firm. Some characteristics would be strong technical reputation, existing contracts with the utilities as they exist. And preferably, they would add a new sense of capability and expertise in water sector that might not be as strong. Some of it might be on the economics portion that were not necessarily strong economists, but that is certainly part of some of the AMP Cycle Seven’s priorities for doing that analysis. So that is something that we would look to make progress on in fiscal year 2021.

Great. Thank you.

Thank you, Noelle.

Our next question comes from the line of Sam England with Berenberg. You may proceed with your questions.

Hi guys, thanks for taking the questions. Could you just talk about how the integration of recent acquisitions is going and whether those acquisitions, the enhanced proposition you have has led to any contract wins that you might not otherwise have won before you did those deals?

Well, obviously, we have had here just a little over 30 days ago, I guess probably about a month and a half ago, we announced the acquisition of BlueWater Federal. It is a little over 30 days and we have already seen a number of new contract wins, or maybe more importantly, with new departments and agencies within the Federal Government that we haven’t worked before. So that is extremely valuable for us. It gives us new opportunity not only for the acquisition in this case, BlueWater to bring in their expertise that we can offer to our clients which we have already initiated, but it also opens up offerings of the rest of the Tetra Tech services to these clients that we haven’t had access to in the past. That is running quite well. If I go back just over a year ago, WYG or White Young Green in the UK, I’m proud to announce that we have them fully integrated into our ERP systems. It took us about a year. We have migrated those couple of thousand people over to our ERP systems. We’ve had a significant number of wins across multiple client sets in the UK that we would not have had before, including working for some of the water utilities that they didn’t work before by getting slow source work in the UK. We’ve had additional wins with the Ministry of Defense and a number of other areas there. That has worked out quite well. By putting them on our platforms, it has allowed us to free up a number of their back-office staff to do more meaningful contributions to the operation folks, which has increased margins. While we are not anywhere close to where we want to be in the UK yet, we are probably halfway there, even in light of the pandemic taking place. Moving on to these more efficient systems we have and integrating and cross-selling for revenue synergies has worked very well there.

Okay. Great. And then the next one, you mentioned that you have been seeing sort of the trend towards a larger volume of smaller contract wins in Q4. What is behind that trend and do you think it will continue into 2021?

I think it will. Let me characterize what we are seeing. In fact, in the fourth quarter, I think it was our second highest number of orders that we received in the company, so it wasn’t a single order. It wasn’t just a Department of Defense task or project or program that drove it. It wasn’t a single project or country mobilization for aid or anything else. It was really a very large number of projects and task orders, and many of those were new programs that were starting up. Instead of single big blocks coming in with large orders, and I think you can actually see it in our backlog presentation slide. If you look down the orders that we booked, they typically were bundled into a number of categories. I think there are a couple of things that it reflects. It reflects our clients making smaller bets as they go forward. Instead of providing us $10 million for six months, they are providing us $1 million every three weeks to get to the same levels. It does give them more flexibility. It allows them to be a bit more nimble. It also enables them to perhaps spread out those single dollars to other projects that could move forward also. We see it as a favorable trend, and I expect that it will continue for a little while until some of the uncertainty associated with this pandemic and other economic items get a little bit clearer for them.

Great. Thanks for your answers, guys. I will leave it there.

Great. Thank you, Sam.

Our next question comes from the line of Marc Riddick with Sidoti & Company. You may proceed with your questions.

Hi, good morning.

Good morning, Marc.

I wondered if you could spend a little time talking about potential opportunities around, and this is more, I guess, more global focus, I suppose, but as far as the opportunity arising from rejoining the Paris Climate Accord. And as well as with the Federal election, if there are some state and local mandates or funding that was sort of top of mind or areas that presents opportunity at least for the company as well. Thank you.

It is a good question. I believe that the U.S. rejoining the Paris Climate Accord, while that is one act that I understand will be put in place, and there has been a commitment or an indication from the Biden administration, that will be the case. What we actually see, and we have seen early publications of some of the policies of doctrines that will be with the U.S. Federal Government with the executive branch, is a whole-of-government approach, which indicates that they are going to identify individual champions and focuses that will address climate change as it impacts each and every department and individual agency. I think this will broaden out the access and the priority for the types of services we have. A lot of this is both here in the U.S. and the impact it has globally through the U.S. State Department, through international development, and bilateral accords. I do believe this focus on a whole-of-government approach will ripple globally through all of the investments and priorities that exist. I can’t think of an individual end market focus that would be more closely aligned to what Tetra Tech does and the expertise we have at the forefront of this type of research and practical implementation of the Tetra Tech delta for the technologies we have developed over the last 50 years. So I think that alignment portends very well for the company.

That is great. And then I guess maybe a quick follow-up on a different note. So wondering what the opportunities that you do see for the year as far as the budgeting for that was embedded with the guidance. I was wondering if you could spend a little time talking about talent acquisition thoughts and sort of maybe what we might see throughout the year and if there is a timing component to that to take advantage of the opportunities that you see before you? Thank you.

Well, I do think Tetra Tech has great bench strength and a great cadre of world-class experts in a number of areas. Some would say that our staff is quite fungible with respect to being able to move from supporting commercial clients at front end cutting-edge treatment technologies to Federal Government. As these opportunities increase, I think we will be able to mobilize our staff quickly to address them and to respond not only to what they are asking but also introduce additional scenarios or alternatives that haven’t been fully vetted yet. We can be both on the front end implementable, which I believe in my comments, it is not only being developed, but it is actually being mobilized. With respect to talent acquisition, we certainly are bringing some of the best and brightest through acquisitions. We do have a number of strategic hires that join us from academic institutions and other leading global entities. We have the ability to take the best and brightest across our entire enterprise and apply them to the clients’ problems where they need solutions on almost a real-time basis. There should be no lag as these opportunities present themselves during 2021.

Very encouraging. Thank you very much for the color.

Thank you, Marc.

Our next question comes from the line of Ryan Connors with Bening and Scattergood. You may proceed with your questions.

Great. Thanks for taking questions and congratulations on a tremendous run for the stock.

Thank you very much, Ryan.

So my question is more big-picture in nature. Just this topic, you have talked a lot about this potential for Federal infrastructure and environmental spending under the Biden administration. The stock does appear to be pricing some of that in, but how worried are you that he will be inheriting a massive Federal budget deficit, especially given that the politics seem to be such that maybe additional stimulus spending for COVID-19 economically seems like the first priority. They definitely got to get even bigger before they even get around to any of this. How realistic is it to expect a big ramp there when you look back at the history? Generally, coming off a recession, the government is trying to get the deficit under control, and Tetra Tech actually tends to underperform because the government is trying to reduce the deficit. So what is your view there?

Yes, I have seen that note. First of all, there are some things I agree with, with respect to the natural progression of stimulus. When the initial stimulus comes out, there is more work, more projects, and more demand for the services that we provide. We think that because these will be more aligned with renewable energy, environment, and climate change, they are different than traditional A&E services. We think that we would fare better. But if you look at it from a macro view and sort of set aside the services, they do spend a lot at the beginning. There is big spending. And then, of course, what happened under the Obama administration during the last major global financial crisis is that it went through, eventually, historically, through sequestration, which was their words for spending less to get the budgets in place. What we have seen is that when the Federal budget begins to decrease spending to recover from these very large deficits, I wanted to emphasize that the very large spending for the deficits for infrastructure and others, which also happened under Obama has not yet happened. So that is still in front of us, which is a big hill to climb with respect to work that needs to be done. So that should be an enormous tailwind. But at some point, you need to pay for the amount that you have spent. What typically happens is this is what we have observed - typically followed by a recovery in the general economy with commercial clients and even state and local spending, tax receipts, property values, and other items that are the output of the stimulus. Yes, we have seen during sequestration where there was a 10% year-over-year reduction in spending at the local government. We did see that come down a bit, but we saw offsetting increases in commercial and state and local. With respect to Tetra Tech’s performance during previous recessions or stimulus spending, we haven’t gone back and looked at that, and there were other factors with respect to submarkets that we had that accounted for that. It was not associated with the actual work or positions we had with the Federal Government. I do think that while at the surface, this could be attributed to the lack of knowledge of what the actual impacts were. If you look a little deeper, you could see that it was actually other drivers that had impacts in those particular years.

Okay. Now what about the fact that if we peel back the onion on the politics? Obviously, the presidential politics is highest profile. But it sounds like based on what you are saying, if the big driver is the Federal spend, environmental spending, green new deal, infrastructure, et cetera, the Senate is really the key issue. How different is your outlook a couple of months from now if the Republicans hold the Senate, and this is very difficult to get some of this through versus if it is even or if Democrats take control of the Senate? A lot of this could really just really deviously could expand for a few years. How critical is that side in your view?

Well, the one thing we feel very optimistic about for the type of work that we provide and the areas that we are focused on is that - let’s pick a complete stalemate. Nobody will do anything. House goes one way, Senate goes the other way and that they just will agree on nothing. What ends up happening, and unless you are going to shut the government down, is you end up with a continuing resolution, which is we agree to disagree, and we are just going to not fund anything, and there will be no increase. Under that scenario, it is the executive branch, the President, who sets the priority within his points as to where the dollars are spent that have been provided through the continuing resolution. That should be very favorable to us. We believe that even without an increase or increased deficit spending, we could still be a very large beneficiary of the priorities regarding the government to implement their priorities for climate change, the new green deal, and the items we just outlined. We don’t need increased stimulus spending. We don’t need increased Federal deficits to fare very well through this next period.

Got it. Okay. One last one for me. You danced around this a little bit, but if you could just look at your buckets of business, specifically the types of projects you see coming down the pike, not everything carries the same type of margin. In terms of the mix of business, what are the margin profiles of the things that you see, the areas that you see growing relative to the areas of potential contraction?

Growing - the areas that we think will grow, we think, in the Federal Government, our advanced data analytics is going to help expand our margin. It is an area that is growing 15% to 20% organically in 2020. We saw 20% organic growth; we think that number is in the same neighborhood coming into 2021. We added BlueWater Federal here essentially on the first day of this fiscal year. That gives us additional contributions in areas of bit higher margin. We believe this area is growing well for us and has higher margins. Renewable energy in the commercial sector, moving over to CIG, work that we are doing in offshore wind. Tetra Tech has done more permitting work, monitoring evaluation during construction, monitoring and environmental impairment in the marine environment, net sedimentation impact on marine mammals, shellfish, fisheries, flyways. We have done more work on offshore leases than all others combined. We are not just the majority that we don’t have the most of a given share; we are actually quite dominant there. It has a priority. We will see additional focus on that as part of the new green deal and others. It also makes economic sense. Larger turbines have less impact with respect to local land use, since it is far offshore, and we think this is another growth area for us, and we are in an excellent position for that; it also carries higher margin for us. Those are a couple of areas that we see growing, both on the government, commercial, and international sectors for us.

Got it. Well, that is great. Thanks so much for your time, Dan.

Great. Thank you very much, Ryan.

This will conclude the Q&A session. I would now turn the conference back over to Mr. Dan Batrack to conclude.

Thank you very much, Laura, and thank all of you for your insights, questions, and interest in Tetra Tech. We were really glad to finish fiscal year 2020 with such a strong fourth quarter. In the 50 years, I haven’t been here at Tetra Tech for all 50-plus years of its history, but I have been here for an awful lot of those. No doubt fiscal year 2020 was the most complicated, the most varied with the pandemic, oil prices going to negative, the largest single unemployment drops followed by quick recoveries. In many ways, it was one of the most complicated, or the most complicated year. I just want to commend the staff at Tetra Tech, the leadership team that I work with every day, and our Board of Directors, because I believe we could not have navigated this better. I was glad to see that revenues held up unbelievably well. We saw growth through the second half, all-time high earnings per share, all-time high backlog, and all-time cash generation. Thanks to our phenomenal finance team, I was glad we were able to complete stock buybacks, execute dividends, complete multiple acquisitions, and decrease the leverage of the company. I think there are a few or no firms that can say that irrespective of the very bright end markets we have looking forward to us in 2021. With that said, I look forward to talking with all of you on the next quarterly call, and be safe and healthy until then. Thank you.

Ladies and gentlemen, this concludes our conference for today. Thank you all for participating, and have a nice day. All parties may disconnect now.