Good morning. And thank you for joining the Tetra Tech Earnings Call. As a reminder, Tetra Tech is also simulcasting this presentation with slides in the Investors section of its website at tetratech.com. This call is being recorded at the request of Tetra Tech and this broadcast is the copyrighted 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; Steve Burdick, Chief Financial Officer; and Jill Hudkins, President. They will provide a brief overview of the results and then 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 business 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 undertakes 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, Melissa, and good morning. And welcome to our fourth quarter and fiscal year 2023 earnings conference call. We had an excellent fourth quarter that completed an already exceptionally strong 2023 fiscal year. Across our operations, we exceeded our already high expectations and delivered on both our financial and our strategic goals for the year. We were again recognized as industry leaders with number one rankings in water and the environment and a newly announced number one ranking for Human Capital management, which I will speak to a bit later in this presentation. This ranking recognizes that Tetra Tech’s success is a result of our talented workforce and the technical excellence that has been the hallmark of the corporation. In fiscal year 2023, we increased our backlog by over $1 billion, including services in climate change, energy transition, water security, and environmental management. Today, together with RPS, we are cross-selling new services. For example, we are now providing innovative water management solutions to 19 United Kingdom water utilities and look forward to significantly expanding these services in this upcoming year. As we enter the new year, we look forward to providing our technically differentiated services, our expanded Delta technologies, and our newly launched software solutions to clients worldwide. I will begin today with an overview of our fiscal year and fourth quarter. Steve Burdick, our Chief Financial Officer, will provide an overview of our financial performance and our capital allocation. Jill Hudkins, President of the Corporation, will provide additional insight into some of our organic growth strategies. But before I review the fourth quarter results and the segment’s performance, I’d like to provide an overview of the fourth quarter and what we did for the year. Simply stated, we came into this year with an ambitious goal and the highest ever guidance that we would strive for. And I am pleased to share with you that we not only beat these lofty goals that we set for each of the fourth quarters, but we finished the year with the best quarter of all of them. As a result, we achieved all-time records for every key financial metric that we track. Now for the fourth quarter, our revenue was up 40% from the prior year. Our EBITDA earnings increased to $153 million in the quarter, which is up 51% from last year and a clear indication of both the strong performance from Tetra Tech and this contribution from the RPS operations that just joined us in late January of this year. Our backlog increased to $4.79 billion, up 28% from last year and up 9% from just last quarter. I’d now like to provide an overview of our performance by our end customers. In the fourth quarter, revenue for all four of our client sectors increased by double digits compared to last year. Work for our U.S. Federal clients was 29% of our net revenue in the quarter and was up 46% from the same quarter last year. Federal growth was driven by a combination of environmental work, climate, IT, and international development-related consulting services. We continue to deliver double-digit growth with our state and local revenues being up organically 15% from the fourth quarter of last year, driven by our water management and resiliency consulting services. Our U.S. commercial net revenue was up 13% from last year. Growth in this customer segment includes environmental management and is increasingly driven by our high-end consulting and energy transition services and decarbonization services delivered by our high-performance buildings experts. And finally, our international revenue was up 78%. Of course, this is inclusive of our RPS operations. We are now increasingly leveraging our combined resources and expanded client network to win new programs across the United Kingdom, Australia, and Canada. I’d now like to present our performance by segment. In the fourth quarter, the Government Services Group or the GSG segment was up 36% compared to last year at $457 million in the quarter. GSG generated a strong 15.7% margin, an increase of 60 basis points from last year. GSG's strong net revenue growth across key federal programs in civilian, defense, and international development agencies drove high utilization and exceptional project performance in the quarter. The Commercial/International Group or CIG segment grew net revenue by 50% year-on-year and delivered a 14.7% margin, up 110 basis points from last year. Our CIG segment also had exceptional performance in the quarter with revenue increases driving strong utilization and additional efficiencies, especially in international infrastructure, high-performance buildings, and energy-related services. For the first time, we presented this slide if you are following along on the webcast, and I’d now like to discuss Tetra Tech’s margin performance and the differences in reporting methodologies. I am often asked when talking to both analysts and shareholders and other stakeholders about the differences and methodologies used in the industry, especially as those compared to the United States, compared to the United Kingdom and Canada. If you are following along on the slides, the graph shows a comparison between our typical adjusted U.S. GAAP approach, which Tetra Tech has historically always used, and the international standard which is also referred to as IFRS. As you can see on this graph, Tetra Tech’s margin was 21% for the fourth quarter on an adjusted IFRS basis. On an annual basis, you can see our trend here at Tetra Tech over the past three years with a margin expansion of 180 basis points since 2021. For comparison purposes, the adjusted IFRS measure is about 6 percentage points higher than the adjusted U.S. GAAP calculation that we report, and we think this is quite valuable for our shareholders, analysts, and stakeholders to understand this difference and make it more comparable when looking at this compared to others that report their financials. I’d now like to discuss our backlog, the best forward-looking indicator in our business. Our backlog was up 28% from last year, resulting in a new all-time high of $4.79 billion of funded and authorized work. This is not potential contract capacity or overall contracts awarded. This is funded and authorized work. Orders were particularly strong in the fourth quarter for us, which were up 45% year-over-year, driven by both commercial and government orders from our clients. In the quarter, we added more than $1.5 billion in additional contract capacity with our U.S. Federal Government clients. And notably, a lot of this was for IIJ related contracts that are directly aligned with our specific strengths in areas like numerical modeling of sediment transport for inland waterways and associated high-end design services. Jill Hudkins will give an example of this in just a few moments. This quarter, we were awarded a $33 million program for an inland waterway lock and dam system that leverages our specialized expertise and innovative solutions for optimizing waterway control structures. We also won new programs for key U.S. Federal agencies, including the Department of Energy, U.S. CPA, USAID, the U.S. Army Corps of Engineers, and others that advanced priority water initiative programs, environmental, and climate change mitigation and adaptation programs. At this point, I’d like to turn the presentation over to Steve Burdick, our Chief Financial Officer, who will go over some of the details of our financials in the fourth quarter and for the year and also talk about our capital allocation. So Steve?

Thank you, Dan. As Dan just reviewed the fourth quarter operating results, I would like to discuss the annual GAAP financial results for the fiscal year ending 2023. We achieved record revenue, operating income, earnings, and cash flow, highlighted by record fiscal year revenue of $4.52 billion, a 29% increase from last year, and record net revenue of $3.75 billion, which rose by 32%. Our revenue growth stemmed from all markets, including federal government, state and local, commercial, and international, with the RPS acquisition significantly enhancing our presence in the U.K., Europe, and Australia. Our operating income and earnings per share for the fiscal year were also at an all-time high, with reported operating income at $358 million. This improvement came from both segments, and as Dan mentioned earlier, the CIG margins are approaching the GSG margins. Consolidated improvements resulted in our EBITDA rising to $481 million, which is a 33% increase from fiscal 2022. Our EBITDA margins have increased faster than our revenue over the past four years, averaging a 50 basis point increase annually. GAAP EPS was $5.10, and adjusted EPS was $5.21, a 16% increase from last year. This adjusted figure excluded the final RPS integration costs, lease impairment charges, a one-time FX hedge gain, and related tax items. Our total FX hedge gain of $110 million positively affected the purchase price for RPS, lowering it by nearly 15% and reducing our debt load for the acquisition. For more details on Q4 and fiscal 2023, please refer to the reconciliation slides in this presentation and our Regulation G attachments in the earnings release. Looking ahead, having successfully integrated RPS into Tetra Tech and finalized the acquisition accounting, we will provide fiscal 2024 reported results on a combined basis, including intangible amortization. Cash flows generated from operations for fiscal 2023 reached $368 million, over 135% of net income, continuing our long-term goal of generating more cash flow from operations than net income. Our focus on working capital and cash flows improved our DSO to a record 54 days, a seven-day improvement from last year. Over the past five years, we have consistently reduced DSO from over 85 days to an industry-leading 54 days, reflecting excellence in project delivery and satisfied clients across all markets and regions. Our net debt leverage is now 1.4 times, a significant drop from 2.2 times right after the RPS acquisition at the beginning of the year. Throughout 2023, we surpassed our initial goals for lowering leverage below the midpoint of our net debt target range of 1 to 2 times, and as we boost our EBITDA and generate positive cash flows, we plan to further deleverage our balance sheet throughout fiscal 2024. Our long-term capital allocation strategy aims to provide strong returns for our shareholders through smart investments and robust growth while maintaining a sound balance sheet. We have successfully achieved key milestones with the RPS acquisition while managing our net debt within our target range over the past year. I believe the accomplishments from 2023 will yield sustainable benefits into fiscal 2024 and beyond. The $575 million five-year convertible debt transaction we completed will enhance our capital structure. The proceeds were used to significantly reduce our floating rate debt, restoring full access to our bank credit facility. The fixed rate coupon of 2.25% is significantly lower than the current floating rate, which is about three times higher, resulting in annual cash savings of over $20 million in interest. With a cap call in place, we have mitigated potential share dilution until our stock price exceeds $260 per share, and it would need to more than double to over $318 per share to have a 1% dilution effect. Our bank credit facility had $800 million in liquidity available at year-end, enabling investment in organic growth and strategic acquisitions, which Jill will address shortly. Our credit facility includes sustainability-linked metrics aimed at reducing greenhouse gases and improving the lives of 1 billion people, and we exceeded all metrics in the first year, leading to a reduced cost of debt. In terms of our dividend program, we increased dividends paid to shareholders by double digits last fiscal year, and I am pleased to announce our Board of Directors has approved a quarterly dividend of $0.26 per share to be paid in December, a 13% increase over last year, representing our 34th consecutive quarter of double-digit year-over-year dividend increases. I am proud to share these financial results for fiscal 2023, and I would like to thank everyone for their support. I will now hand the call over to Jill to discuss strategic business opportunities for the future.

Thank you, Steve. Tetra Tech’s core business of environment and sustainable infrastructure is extremely well aligned with U.S. Government priority programs for fiscal year 2024 and beyond. The Infrastructure Investment and Jobs Act or the IIJA will provide our government clients with a $550 billion funding plus up to deliver priority infrastructure programs in the U.S. This increased climate-resilient infrastructure spend is directly aligned with the work we do in water and the environment. Our U.S. state and local clients continue to prioritize digital water solutions to modernize and secure their water facilities. As the number one water firm in the U.S., Tetra Tech is leveraging domain expertise and digital innovation to deliver state-of-the-art automation, advanced analytics, artificial intelligence, and proprietary software solutions to our 500-plus municipal clients nationwide. Tetra Tech’s recent key wins demonstrate why Tetra Tech has been ranked number one in water by Engineering News Record for 20 years in a row. Tetra Tech’s market leadership in high-end water supply and treatment secured a key win to modernize Foster's Wastewater Treatment Facility and to improve water quality in the Massachusetts Bay. In Southern California, Tetra Tech was awarded a major Drought Resilient Water Delivery program that will serve 7 million Metropolitan Water District customers. Tetra Tech will leverage its successful track record delivering industry-leading navigation and water control structures for the U.S. Army Corps of Engineers to win new contract capacity and new task orders. Tetra Tech recently announced major contract wins with multiple districts to support inland navigation, flood risk management, and aquatic system biodiversity. Tetra Tech is providing digital water transformation services for some of the largest cities in the U.S., including Los Angeles, Houston, and San Diego. Our innovative digital water solution increased remote operability and reduced operating expenses for our water clients. Our digital water services support double-digit growth and margin expansion for our state and local business. Tetra Tech’s industry-leading Climate Change services continue to be in high demand as our clients prioritize funding for resilient and sustainable infrastructure programs in fiscal year 2024 and beyond. In the United Kingdom, regulated water utilities won best £96 billion in water and wastewater infrastructure from 2025 to 2030, doubling the investment from the prior five-year regulatory period. Tetra Tech is winning new work in the United Kingdom by further enhancing our proven local experience with additional global perspectives and technology innovation. Global sustainability priorities will require a $1.5 trillion investment to meet net zero greenhouse gas emission targets by 2030. Tetra Tech is winning work worldwide in the areas of energy transition, decarbonization, and nature-based solutions. Next, I’d like to highlight recent key wins that demonstrate our industry leadership in three key areas: energy transition, high-performance buildings, and watershed management. Tetra Tech recently announced the award of a $22 million marine environmental survey to support development of a first-of-its-kind floating offshore wind project in Victoria, Australia. In Canada, Tetra Tech recently won the design of a first-of-its-kind biofuel production facility in Quebec that will convert recycled carbon and hydrogen contained in residual forest biomass into alternative fuels. Tetra Tech designed sustainable and healthy buildings using proprietary energy and greenhouse gas modeling software. Tetra Tech recently won a $45 million multi-award energy resilience contract with the U.S. Army Corps of Engineers to improve energy resilience and security. Our government portfolio also includes a 1,200 building decarbonization plan to support a carbon-neutral future across the City of Los Angeles, as well as a system-wide decarbonization framework for all 23 California State University campuses. Finally, Tetra Tech recently won a £20 million modeling and analytics contract with United Utilities and a £7 million AMP8 network modeling framework with Severn Trent. Tetra Tech brings industry-leading sewer overflow reduction expertise from the U.S. and Canada and proprietary modeling and analytics software to provide best-in-class sewer overflow reduction services to support the priorities of the U.K. AMP8 cycle. And now I’d like to turn the presentation back to Dan to discuss our fiscal 2024 outlook.

Great. Thank you very much, Jill. I’d now like to present our outlook for fiscal year 2024 across all of our four end client sectors. First, our U.S. Federal revenues should grow at about 10% from what they were in 2023, supported by our strong backlog and our ability to leverage our existing $25 billion contract capacity that we have with the U.S. Federal Government. For state and local, we expect to grow at a double-digit pace between 10% and 15%. Client funding priorities are well aligned with our expertise in digital water transformation, high-end water security, and climate resiliency. U.S. commercial is expected to be about 20% of our overall net revenue business and grow at about a 5% to 10% rate. We see growth continuing in the high-performance buildings and clean energy transformation markets that will probably be the fastest growing areas for us in the commercial sector. And the fourth area, international, our international work is now about 40% of our business, evenly split between government and commercial. We expect international to grow at about a 10% to 15% rate as we continue to expand our water, environment, and sustainable infrastructure work in the United Kingdom, Australia, and throughout Canada. In fiscal year 2024, we expect to leverage our expanded client base and resources, especially in the United Kingdom and Australia, and further realize the revenue synergies of the RPS acquisition. Before I move to the guidance for fiscal year 2024, I’d like to take just a moment to discuss how we here at Tetra Tech think about Human Capital. As a consulting company, Human Capital is the workforce that provides us the insight, the analysis, and solutions that drive our business every single day. There are three aspects to what makes Tetra Tech unique in the industry and what you might describe as our secret to success with our staff and our human capital. First, we have just an extraordinary staff across all experience levels within the company. From longstanding experts to the very top entry-level university graduates. We attract individuals who don’t just want a job; they want a career. They want a location that they can work at where they can get promoted and that they can actually finish their career in a spot better than any other location in the industry. And this has really resulted in our low turnover rates of about 7% per year and the prioritization of internal advancement opportunities for our staff. There is no doubt that the first people that we look to take new positions within the corporation are those that actually work here and have already demonstrated their contributions to the company. The second area, our workforce leverages our Delta technologies that create new solutions and even design software for our clients, not to substitute what we do for our clients with services and professional consulting, but to add to them and allow our clients to achieve even better outcomes than they can just with our consultants alone. Our workforce here at Tetra Tech, for every one of the employees, technology is an enabler, something to make them better. It’s not a risk or something they have to be afraid of, and I will tell you, all 27,000 people here embrace the use of technology to make them better, more efficient, and achieve better outcomes for our clients than ever before. And third, we believe in the ability to make a positive difference in the world, both as individuals and as part of the entire company of Tetra Tech. This is a real key aspect of our ability to attract and retain top talent. When we look at how Tetra Tech impacts the world, our workforce is committed to our aspirational goal of improving the lives of 1 billion people through the projects that we do every day. Now I’d like to move to guidance for the first quarter of the fiscal year and for the entirety of fiscal year 2024. Our guidance is as follows, and before I move into the numbers with respect to earnings per share, I want to both bookend this at the beginning, probably the middle, and the end that our guidance for fiscal year 2024 and the first quarter are on a GAAP basis. I know I spoke to the difference between U.S. GAAP and IFRS earlier and so if you want to compare these to IFRS, add 6 percentage points to these and you will be pretty close. With respect to the first quarter, our net revenue guidance is for a range of US$950 million to $1 billion. Over the first quarter, we expect an associated earnings per share in the range of $1.30 to $1.38. For the entire year of fiscal year 2024, our net revenue is for a range of $4.05 billion to $4.25 billion, with an associated GAAP earnings per share of $5.70 to $6. We calculated for you, and the midpoint on a GAAP 2023 to a GAAP 2024, which I have just outlined, would imply a midpoint. The midpoint of our guidance range would indicate an 11% topline revenue growth with an associated 15% at the midpoint of GAAP earnings per share growth. Some of the assumptions, if you are following along on the webcast or reviewing the slides, include a charge or cost of intangible amortization, which we estimate at $42 million for the fiscal year. I know for those modeling, there will be questions regarding how that actually gets charged per quarter. You can see in the footnotes here, we estimate $12 million in Q1, $11 million in Q2, $10 million in Q3, and $9 million in Q4 for modeling purposes. We do assume we have an effective tax rate of 27% for the year, 54 million average diluted shares outstanding, and as has been our practice, this excludes any additional contributions of revenue or income from future acquisitions that we would complete after today. In summary, as we enter fiscal year 2024, we see very strong demand for our differentiated leading with sciences, water, environmental, and sustainable infrastructure services. For fiscal year 2023, we set new all-time records across the board and I am very pleased to present to you that we expect to go up from there. The strong culture alignment with RPS is accelerating our combined opportunities in supporting our growth and performance goals for fiscal year 2024, and just as a restatement, RPS is culturally fitting so well with the company. While it’s been nine months, getting close to 10 months here, it feels like they have been with us for 20 years. They are part of the culture, they are part of the company, they are part of the contribution, and frankly, the best is still yet to come as we move forward. No doubt, our record orders in the fourth quarter and strong backlog support our ambitious targets that we have set for net revenue and earnings per share growth in 2024. And with that, I am very pleased to have presented to you the results of both the fourth quarter and all of fiscal year 2023 and our outlook for 2024. And with that, Melissa, I would like to open up the call for questions.

Thank you. Our first question comes from Sam Karlov with William Blair. Please go ahead with your question.

Hey, Dan, Steve, Jill. I hope you all are doing well this morning.

Thank you, Sam.

I guess to start, I wanted to ask a little bit about fiscal stimulus, namely the IIJA, which I know you highlighted in your prepared remarks. I understand you won quite a few contracts but are still in the early stages here. But based on what you see today, do you expect a more material impact to your backlog in fiscal 2024 and when do you expect IIJA related projects to have a peak impact in your business, is that more of a 2025 timeframe?

It’s a great question. There’s no doubt that the Infrastructure Investment and Jobs Act or the Infrastructure Stimulus Program has been perhaps the hottest topic since we passed the law nearly two years ago. For us, we are seeing the first revenue contributions, and I know your question was about backlog, which I will address. We are now seeing actual revenue contributions from specific earmarked programs tied to the IIJA. Earlier this week, we announced a $33 million lock and dam inland navigation project for the Army Corps of Engineers. This is not just a contract capacity; it is part of a $200 million contract that we were awarded, with $33 million designated for this individual project. Looking ahead to fiscal year 2024, we anticipate contributing just under $50 million to revenues. The $33 million program will largely be completed this next year, and it accounts for pretty much all of our current orders. We believe this is the start of a ramp-up, and expect to see our backlog grow. Currently, we have just under $50 million in backlog. That’s our estimate for revenue contribution this year, and hopefully, it will prove to be conservative. I expect continued growth in our backlog. We plan to add more contract capacity measured in hundreds of millions of dollars specifically for IIJA programs, and I anticipate that number will increase significantly as we approach the end of this fiscal year in contract capacity and orders. The peak impact for us is expected to occur late 2025 and early 2026. This year, we’re projecting around $50 million in actual revenue, and I believe that number will increase several-fold into 2025. Since we are still early in the program regarding infrastructure projects, including initial permitting and design layout, we should start seeing results sooner than others during the overall duration of the IIJA program.

Very helpful. I appreciate the color there. Maybe attributing to offshore wind next then. We have seen some negative news flow over the last month or two related to offshore wind from the no-bid activity in the U.K. to some comments made by developers, and also see negative headlines on the solar side. Can you remind me how big the renewables business is for you and whether you expect these recent developments to impact your business in the coming quarters?

That's a great question, Sam. We’ve been following the headlines closely. Currently, Tetra Tech’s renewable energy business makes up about 5% of our total operations, translating to roughly $200 million annually. Of that, around $100 million comes from our long-standing hydropower work, and the other $100 million is associated with wind, both offshore and solar. Regarding the recent headlines about offshore wind being more expensive and challenging to implement, it’s important to note that while we don’t consider these difficulties good news for our clients, they actually present an opportunity for us. We can assist our clients in finding cost-effective solutions for their projects. If they approached their projects in a more traditional way or worked with less experienced firms, those projects might not succeed. However, we have strategies that can help make these projects viable. If they don’t fit within our clients’ economic models, we can guide them on how to transition to other developers that align better with their needs. As for the major developer that canceled two programs on the East Coast, those were not our projects, so we’re not impacted by that. I have received inquiries about whether this will disrupt our business, and I assured them that it won’t. In fact, our experts managing other offshore wind projects for that developer believe this could turn into a positive outcome. The canceled projects might be sold to other developers, which could open new opportunities for us. Thus, we view this situation positively. I’ve mentioned the current revenue from this sector, and I remain optimistic about our future prospects in renewable energy. While I anticipate some bumps in the road, such as these recent developments, the industry is undeniably moving toward expanding renewable and alternative energy production, and we aim to lead in making that happen.

Great. Appreciate the answers there and congrats on the quarter.

Yeah. Thank you very much, Sam.

Thank you. Our next question comes from the line of Tate Sullivan with Maxim Group. Please proceed with your question.

Great. Thank you, all. Yeah. Really jumped out the implied number, order amount of $1,665 billion. And Dan, you said earlier that you had new programs across Australia, Canada, and U.K. Were those international orders a larger portion of the total orders for the quarter?

They weren't. They were stronger than we usually see from the regions you mentioned, Australia, Canada, and the U.K. However, the fourth quarter of our fiscal year coincides with the end of the U.S. Federal Government's fiscal year, which is when the final funding occurs for various projects. Typically, we see our largest orders from the U.S. Federal Government in the fourth quarter, and that was certainly true this time. Therefore, I would say that the first three quarters are more indicative of other sources. The fourth quarter is when the Federal Government reconciles their budget based on what they didn't spend throughout the year, and that’s what significantly contributed to the higher numbers.

And then did you say earlier still a goal for going forward to have CIG margins move closer to GSG, particularly with the large number of commercial orders that you highlighted on the slide?

Well, yes. I think my ambitious goal is, and this is to all the Tetra Tech experts and management in the CIG side. I am looking forward to CIG eclipsing GSG. But I guess we first got to match, and it’s getting closer. I think that the performance in the commercial side has been good, but I will say that some of the extraordinary contributions, such as disasters, some of the emergency work we do regarding very high priorities can make catching them a little bit more difficult. But notwithstanding these extraordinary revenue contributions that drives very high utilization and positively impacts margins. If you sort of set that aside, maybe in 2024, CIG will catch them. So yes, we are looking for them to catch, and really the commercial side has the potential to be higher than the government side in a robust economic environment.

Thank you, Dan.

Thank you, Tate.

Thank you. Our next question comes from the line of Andrew Wittmann with Baird. Please proceed with your question.

Great. Thanks for taking my questions this morning. I guess the first couple that I want to ask or just to understand the quarter a little bit better and then talk a little bit more about on the forward look. But just, Dan, I don’t think you commented on the benefit to revenue from the activities you had in Ukraine for the quarter. Recognizing that those can be episodic. Obviously, they were back in the second quarter of 2023 and not in the third quarter back here in the fourth quarter. You would probably smart to have that quantified unless I missed that. And then just maybe just because the margins in GSG in the fourth quarter were obviously very good beyond what we were thinking. Just wondering if there was any award fees, incentive fees that hit in the quarter that are just notable, maybe not individually, but in totality, given that there are sometimes fees paid to you when you get a lot of awards, and obviously, the backlog here this quarter is showing that you have a lot of awards. So if you could just comment on those two things to start off, I think that would be helpful.

Yeah. Those are two great points with respect to things that were standouts or great contributors in our fourth quarter. I will start with Ukraine. Ukraine, we have been doing what I call ongoing assistance level that we had even before the outbreak of the hostilities in Ukraine, which has probably been maybe $10 million a quarter or something like that, but we did an additional $40 million. So I think if you actually looked at Ukraine overall, we are probably just slightly above $50 million in the quarter and $40 million of that, I would call incrementally higher than what we had anticipated coming in. That was for a lot of humanitarian work and now it is cost-plus work. So it is a very low risk to the company. We don’t carry a big margin in that work for supporting humanitarian work. We do get paid quite quickly and it’s a low risk financially, but it does carry slightly lower margins. So what was good in the quarter is it did help drive by about $40 million to beat on the top end revenue, Ukraine specifically. Above what we sort of had anticipated at the sort of maintenance level that we are doing, both in Ukraine and we have other areas around the world. But it did contribute to earnings per share, but actually, it moderated the margin we had in GSG because that carried lower margins. So it was good on the revenue side, it was good on EPS, but on margin. So there’s two sides to that coin. With respect to margins in the quarter, we did not have a true award fee or any special award from our clients to make up for the great work we have done. But conversely, on the other side, we did have additional fees from just great performance from our project managers, and I would call those project closeouts. The examples of those are, we often carry a small amount in our projects, 1% or 2% for contingency in the event that there’s something that might have to be reworked or additional comments from regulators on some aspect. And a lot of these projects were closed out with no comments and in fact, accelerated approval from the regulators and outside stakeholders on our work. So that also contributed to, I would say, a byproduct of it or a sort of a bank shot that contributed. You can see it in our DSO. When you are getting paid that quick and that much in advance of what your regular schedule is, you can see it in the DSO, and you see it at 54 days. And that also means when you are getting paid that quick and projects are going so well, then you are able to close out without having to use up contingency items. So I would say there was the project closeouts in the fourth quarter just because of excellent project management and technical delivery from our staff across the company.

That makes sense and its helpful context. Just digging a little bit here next into the guidance. It might be helpful actually for you guys just to comment on the interest expense, given that interest rates have been changing and are so much higher. Maybe you want to give that and then we can all kind of back into your EBITDA. But when you get to the EBITDA, it looks like there’s certainly some margin improvement baked into 2024 over 2023. Certainly, that makes sense. It sounds like your utilization is very good and it sounds like you have been getting better here. You have got year-over-year benefits from the cost synergies that you have got in flight but haven’t been recognized yet in the first quarter, second quarter, and even into the third quarter from RPS. And then there’s even some of these mix things that we talked about, there’s always puts and takes on mix, but certainly, a lot of Ukraine contribution, like you just talked about, mixes margins down, you had the incentive fee the other way, mix it up. But I guess it would be helpful for you to level set us about what the implicit EBITDA margin is and how much it is year-over-year and what you think the variables could be to make it even better than what you have guided? It seems like it’s good, but it could even be better if the year unfolds like you are saying it could?

There’s a lot of moving pieces there. Let me start at a high level and then I will let Steve talk to interest in some of the other items embedded within the company that we have. So for instance, our IAS up hired this year, because having RPS for a full year. But let me start at a high level. We do have embedded, if you do the calculations of our low end of our revenue range to the low end of our EPS range, you would see there’s about a 50-basis-point increase. In fact, you would see it quite uniform, if you went high, high and mid, mid, and you did the calculations, you will see about a 50-basis-point increase. I do think if you take a look at a favorable mix, which might be a low end of revenue and a high end of EPS, you would be up at about an 80-basis-point increase within fiscal year 2024. So that’s sort of a range. I will say that RPS was not with Tetra Tech in the first quarter of last year. It didn’t join us until the very end of January. So our guidance for the first quarter, margins are actually weighed on a little bit, even though they are higher than last year, they are weighed on a little bit because RPS’s margins still are not at a level of Tetra Tech. In fact, Tetra Tech is up around 13%-ish, maybe a little more, and they will be coming into the year around 10%. So in the first quarter, while you would expect margins to continue to increase, I will comment that we have about 20% additional revenue, which represents RPS at a lower margin, and of course, it will ramp through the year. So I think there are a number of puts and takes. But overall, I would go to the annual year at somewhere between 50 basis points to 80 basis points depending on how you take the comparisons of different components of our margin within guidance for 2024. And let me have Steve speak to some of the individual moving items such as interest and other items.

Yeah. So, Andy, if you take a look at our model, based on the run rate of depreciation each quarter, the midpoint is probably about $26 million of depreciation next year. Amortization was mentioned earlier, about $42 million. Our net interest cost is likely between $40 million and $45 million, so the midpoint is about $42.5 million, and those are the moving pieces to reach an EBITDA number.

Great. That’s all for me. Thank you very much.

Great. Thank you very much, Andy.

Thank you. Our next question comes from the line of Ryan Connors with Northcoast Research. Please proceed with your question.

Great. Thanks for fitting me in and good morning.

Good morning, Ryan.

I want to focus on the federal aspect, Dan. Your company appears to be one of the few experiencing a noticeable impact from the stimulus infrastructure spending. We are not hearing similar feedback from the equipment providers or even your engineering peers. A common theme seems to be that the Build America provisions, specifically the BABA provisions, are acting as obstacles to the deployment of those funds, yet your company is managing to see the benefits. How do we make sense of that? Is it because of your upstream positioning that you don't depend heavily on active projects in the field but instead focus on upstream study work? Why do you think you are experiencing these benefits a bit earlier?

I believe you've made a good point, and it relates to my earlier comments about offshore wind. My main observation is that before any construction takes place, a solid plan must be established. The Buy America Build America initiative and having something constructed domestically is a consideration that comes much later in the process. I view the projects in terms of service providers across four stages. Firstly, there's our role at Tetra Tech, focusing on upfront valuation, technology assessment, initial layout, and permitting. We typically handle projects up to about 30% design. The next phase involves full-service engineering firms that create detailed as-built and constructible drawings, taking projects all the way through the detailed design process. These firms often have offshore engineering centers in places like Malaysia and India, which makes them suitable for this phase. While we can be very engaged during this stage, they won't see any revenue until the projects are properly prepared for advancement. Phase three involves the Buy America Build America aspects, focusing on entities anticipating construction and preparing bids for design-build projects that combine engineering and construction. No visibility into BABA-related work occurs until projects are ready to progress, which can take roughly six to nine months after we finish our initial work. The fourth phase concerns commissioning and operations and maintenance, occurring after projects are launched. Almost every capital project follows these four stages. While engineering and construction may overlap in design-build scenarios, it doesn’t affect our preliminary work. Projects traditionally trigger BABA spending and other funding only after completing what I refer to as Phase 1. Our Phase 1 work is typical for Tetra Tech, involving sole-source contracts, limited competition, smaller-scale projects, and a diverse portfolio. While it's not entirely insulated from whether a project gets built, it is mostly independent from those concerns. In fact, supply chain challenges, material costs, and labor availability can create even more opportunities for Phase 1 providers like us. We are recognized leaders in areas such as water, the environment, and sustainable infrastructure. While others may also benefit from IIJA, I hope this clarifies our perspective on the connection to IIJA developments. For those involved in the later stages, Phases 2, 3, and 4, it's encouraging to note that we are witnessing an uptick in contract capacity and revenue, as progressing through these phases generally relies on the groundwork laid in Phase 1.

Yeah. No. That’s great color. I appreciate that detail, Dan. And then my other question, just, look, nobody denies things are great today and optimism is a great quality in management and I think you have given us all the positives. But just if I can get you to kind of talk about some of the risks that keep you up at night in the business and specifically looking at some data this morning about your stock and it’s been much more volatile historically in election years than not. And I look at the last 30 years, the stock has been twice as volatile in election years as it has in non-election years, and we are getting ready to go into an election year. So can you talk qualitatively about how you see the different scenarios politically? I know you said you still think we are a year or two off from the peak in the current spending plan. But what are the scenarios you see out there and particularly focusing on what are the risks in the business, because certainly, listening to the call today, it seems like there are very few things keeping up at night, but there must be some risk factors, specifically related to the election and maybe the budgetary situation?

I’m relieved we aren't on a video call today because I look very tired. What keeps me awake is the dysfunction in the U.S. Congress and the potential government shutdown. Back in September, we faced a possible shutdown, but they extended it for six weeks, which ends tomorrow. At the start of this week, it seems unlikely they will reach an agreement, but they might suddenly come to a bipartisan resolution. Until it's signed, I won't be able to sleep. The current dysfunction in the Federal Government makes me quite uneasy. Yes, we have a plan at Tetra Tech to ensure that our clients fund us for more than 30 days in advance before a shutdown occurs. We take these precautions seriously. Past records are meant to be broken, and while 35 days of government shutdown might be a new record, they could potentially extend this to 60 days, which would definitely concern me. Any disruptions in this area cause me a lot of anxiety, and it's frustrating since my only recourse as an individual voter is to support people who can collaborate and effect change. I do lose sleep over this and it remains a significant worry. However, it's worth noting that 40% of our revenues come from outside the U.S., making us more diversified. So, while a small disturbance from the U.S. Government might have some impact on us, it's not going to be catastrophic. We are not perfect, and we are not immune to the ups and downs of this situation. We remain optimistic and prepared for various contingency plans. We do recognize that the Federal Government can create volatility in Tetra Tech’s stock, especially in an election year. Historically, during election years, politicians aim to please and are less inclined to cut spending or reduce programs. Typically, it’s the opposite, where they want to offer more to gain support. While there may be differing priorities between political parties, I haven't seen anyone advocating for less spending.

Good. Well, that’s good color. I appreciate it. Thanks for your time today.

Hey. Thank you very much, Ryan.

Thank you. Our next question comes from the line of Michael Dudas with Vertical Research Partners. Please proceed with your question.

Good morning, Jill, Steve, Dan.

Good morning, Michael.

Good morning.

Obviously, given what you talked about with your growth in the business and certainly the opportunities internationally and it seems like evidence that the RPS simulation has gone quite well and probably can really kick into gear in the next 12 months to 18 months. How are you thinking about as you reset and recapitalize on the balance sheet? It sounds like you will be paying down further debt with the strong cash flow. How do you think about going forward relative to your historic kind of tuck-in smaller type acquisitions versus the opportunistic RPS? What do you see over the next couple of years, is it kind of in between, just opportunistic either way, and I want to share how you are taking through that in meeting some of these pretty aggressive markets that seem like you need your services for quite a few years?

After acquiring RPS, which was our largest acquisition involving 5,000 people and expanding our presence in the U.K. and Australia, we did increase our leverage to just over 2 times, at the high end of our range. However, discussions with our CFO and treasury team emphasize that we want to continue pursuing our long-term plan to integrate technology experts and companies that can attract new clients or foster growth without any hindrance. Steve Burdick's input is valuable for operations, but we need to maintain an open channel for future opportunities, which was part of the rationale behind our convertible debt. We anticipate continuing our longstanding strategy of pursuing smaller acquisitions, or tuck-ins, that assimilate into our company, treating them as equal partners, as they play a crucial role in leading our technical initiatives. For firms considering a partnership with Tetra Tech, it’s important to recognize that joining us means taking a leadership role, not just working for the company. Currently, we have $800 million in available capacity, sufficient for the recent RPS transaction, but access to over $2 billion in additional funding is attainable with minimal effort. This means that if any suitable opportunities arise, our capital structure supports, rather than hinders, our ambitions. We plan to maintain our usual approach to acquiring companies that bring in new technologies, access new clients, or enhance our geographical reach in Australia, Canada, the U.K., Europe, and the U.S. When we find the right fit that improves our operations both now and in the future, we aim for those acquisitions to be GAAP accretive in year one, especially for smaller tuck-ins. Larger, more complex acquisitions like RPS may take a quarter or two to become cash and GAAP accretive. We will keep moving forward with compatible companies, and as Steve noted, we are currently below our targeted leverage midpoint of 1 to 2 times, sitting at around 1.4 times. Without acquiring in the next six weeks, this ratio will continue to improve throughout the year.

Seems like your business development team will be busy. Dan, I appreciate your thoughts. Thank you.

Hey. Thank you very much, Michael.

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I will turn the floor back to Mr. Batrack for any final comments.

Well, thank you very much, Melissa. I appreciate you moderating the call today. And I’d like to thank everyone who’s followed the company and been supportive of us during fiscal year 2023. I think we are off to a bright start to 2024. I am really looking forward to talking to you in about 90 days from now on our next quarterly call to tell you how we have started off in the first quarter. And with that, I hope you enjoy not only today, the rest of this week, but I hope you have a safe and enjoyable holiday season. Thank you very much.

Thank you. This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.