8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 8-K

CURRENT  REPORT

Pursuant to Section 13 or 15(d) ofthe Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

February 2, 2022

TETRA TECH, INC.

(Exact name of registrant as specified in its charter)

Delaware	0-19655	95-4148514
(State or other jurisdiction<br> of incorporation)	(Commission<br><br>File Number)	(IRS Employer<br><br> <br>Identification Number)

3475 East Foothill Boulevard, Pasadena,California 91107

(Address of principal executive office, including zip code)

(626) 351-4664

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written<br>communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨	Soliciting<br>material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨	Pre-commencement<br>communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨	Pre-commencement<br>communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	TTEK	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging Growth Company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 2.02.	Results of Operations and Financial Condition.

On February 2, 2022, Tetra Tech, Inc. (“Tetra Tech”) reported its financial results for the first fiscal quarter ended January 2, 2022. A copy of the press release is attached to this Current Report as Exhibit 99.1.

The information contained in Item 2.02, and in the accompanying exhibit, shall not be incorporated by reference into any filing of Tetra Tech under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as expressly incorporated by specific reference into such filing. The information in Item 2.02 of this Current Report, including the exhibit hereto, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.

Item 8.01.	Other Events.

On February 2, 2022, Tetra Tech announced that its Board of Directors has declared a $0.20 per share quarterly cash dividend. The dividend is payable on February 25, 2022 to stockholders of record as of the close of business on February 11, 2022.

Item 9.01.	Financial Statements and Exhibits.

(d)       Exhibits

99.1	Press Release, dated February 2, 2022, reporting the financial results for Tetra Tech’s first fiscal<br>quarter ended January 2, 2022, and the declaration of a $0.20 per share quarterly cash dividend.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)
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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, Tetra Tech has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	TETRA TECH, INC.
Date:    February 2, 2022	By:	/s/ DAN L. BATRACK
		Dan L. Batrack
		Chairman and Chief Executive Officer

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Exhibit 99.1

NEWS RELEASE<br><br> <br>February 2, 2022

TetraTech Reports Strong First Quarter Results

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·	Revenue $859 million, up 12% Y/Y
·	Net revenue $679 million, up 12% Y/Y
·	EPS $1.25, up 30% Y/Y; Adjusted EPS $1.19, up 24% Y/Y
·	Cash flow from operations $82 million, up 148% Y/Y

Pasadena, California. Tetra Tech, Inc. (NASDAQ: TTEK), a leading provider of high-end consulting and engineering services, today announced results for the first quarter ended January 2, 2022.

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First Quarter Results

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Tetra Tech achieved record first quarter results in revenue, net revenue, earnings, cash flow, and backlog. Revenue in the first quarter totaled $859 million and revenue, net of subcontractor costs (net revenue)^1^, was $679 million, each up 12% year-over-year. Earnings per share (“EPS”) was $1.25 on a GAAP basis and adjusted EPS^1^ was $1.19, up 30% and 24% year-over-year, respectively. Cash generated from operations was $82 million, up 148% year-over-year. Backlog at the end of the quarter was $3.45 billion, up 8% year-over-year.

Quarterly Dividend and Share Repurchase Program

On January 31, 2022, Tetra Tech’s Board of Directors declared a $0.20 per share dividend, an 18% increase over the prior year, payable on February 25, 2022, to stockholders of record as of February 11, 2022. In the first quarter, Tetra Tech repurchased $50 million of common stock. Additionally, as of January 2, 2022, the Company had $498 million remaining under the approved share repurchase programs. The Company has returned $137 million to shareholders in the last twelve months through a combination of share repurchases and dividends while reducing its net debt ratio from 0.5x a year ago to 0.2x ^2^.

Chairman and CEO Comments

Tetra Tech Chairman and CEO Dan Batrack, commented, “Tetra Tech had a strong start to fiscal 2022 with record first quarter revenue, earnings, and cash flow. Our performance was driven by double digit revenue growth and a 120-basis point expansion in operating margin. We continue to expand our differentiated technical services by Leading with Science^®^ to respond to the increasing global demand to address water, environmental and climate change priorities. Given the strength of our performance, as well as achieving a record high first quarter backlog, we are increasing our guidance outlook for both net revenue and EPS for fiscal 2022.”

^1^ Non-GAAP financial measures which the Company believes provide valuable perspectives on its business results. Refer to Reconciliation of GAAP and non-GAAP Items.

^2^ The net debt leverage ratio is defined as total debt less cash and cash equivalents divided by 12-month adjusted EBITDA. Refer to Regulation G Information and Reconciliation of GAAP and non-GAAP Items.

Business Outlook

The following statements are based on current expectations. These statements are forward-looking and the actual results could differ materially. These statements do not include the potential impact of transactions that may be completed or developments that become evident after the date of this release. The Business Outlook section should be read in conjunction with the information on forward-looking statements at the end of this release.

Tetra Tech expects EPS for the second quarter of fiscal 2022 to range from $0.86 to $0.91 and net revenue to range from $620 million to $670 million. For fiscal 2022, Tetra Tech is increasing EPS to now range from $4.15 to $4.30, and net revenue to range from $2.65 billion to $2.80 billion. ^3^

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Webcast

Investors will have the opportunity to access a live audio-visual webcast and supplemental financial information concerning the first quarter fiscal 2022 results through a link posted on the Company’s website at tetratech.com on February 3, 2022, at 8:00 a.m. (PT).

Reconciliation of GAAP and Non-GAAP Items

In thousands (except EPS data)

	Three Months Ended
	Jan. 2, 2022			Dec. 27, 2020
Revenue	$	858,510		$	765,104
Subcontractor Costs		(179,177	)		(159,933	)
Net revenue	$	679,333		$	605,171
EPS	$	1.25		$	0.96
COVID-19 Credits		(0.06	)		-
Adjusted EPS	$	1.19		$	0.96
Current portion of long-term debt	$	16,728		$	26,179
Long-term debt		246,875			275,983
Less: Cash and cash equivalents		(205,542	)		(163,438	)
Net debt	$	58,061		$	138,724
Trailing 12-month EBITDA	$	315,567		$	271,558
Net debt leverage ratio		0.2	x		0.5	x

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^3^ Reconciliation of the net revenue guidance to the most directly comparable GAAP measure is not available without unreasonable efforts because the Company cannot predict the magnitude and timing of all the components required to provide such reconciliation with sufficient precision. ****

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About Tetra Tech

Tetra Tech is a leading provider of high-end consulting and engineering services for projects worldwide. With 21,000 associates working together, Tetra Tech provides clear solutions to complex problems in water, environment, sustainable infrastructure, renewable energy, and international development. We are Leadingwith Science^®^ to provide sustainable and resilient solutions for our clients. For more information about Tetra Tech, please visit tetratech.com, follow us on Twitter (@TetraTech), or like us on Facebook.

CONTACTS:

Jim Wu, Investor Relations

Charlie MacPherson, Media & Public Relations

(626) 470-2844

Forward-Looking Statements

This release contains forward-looking statementswithin the meaning of the Private Securities Litigation Reform Act of 1995. The use of words such as "anticipate," "expect," "could," "may," "intend," "plan" and "believe," among others, generally identify forward-lookingstatements. These forward-looking statements are based on currently available operating, financial, economic and other information, andare subject to a number of risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions andmay differ materially from actual future events or results. A variety of factors, many of which are beyond our control, could cause actualfuture results or events to differ materially from those projected in the forward-looking statements in this release, including but notlimited to: the impact of the COVID-19 pandemic; continuing worldwide political and economic uncertainties; the U.S. Administration’spotential changes to fiscal policies; the cyclicality in demand for our overall services; the fluctuation in demand for oil and gas, andmining services; risks related to international operations; concentration of revenues from U.S. government agencies and potential fundingdisruptions by these agencies; dependence on winning or renewing U.S. government contracts; the delay or unavailability of public fundingon U.S. government contracts; the U.S. government’s right to modify, delay, curtail or terminate contracts at its convenience; compliancewith government procurement laws and regulations; credit risks associated with certain clients in certain geographic areas or industries;acquisition strategy and integration risks; goodwill or other intangible asset impairment; the failure to comply with worldwide anti-briberylaws; the failure to comply with domestic and international export laws; the failure to properly manage projects; the loss of key personnelor the inability to attract and retain qualified personnel; the ability of our employees to obtain government granted eligibility; theuse of estimates and assumptions in the preparation of financial statements; the ability to maintain adequate workforce utilization; theuse of the percentage-of-completion method of accounting; the inability to accurately estimate and control contract costs; the failureto adequately recover on our claims for additional contract costs; the failure to win or renew contracts with private and public sectorclients; growth strategy management; backlog cancellation and adjustments; risks relating to cyber security breaches; the failure of partnersto perform on joint projects; the failure of subcontractors to satisfy their obligations; requirements to pay liquidated damages basedon contract performance; the adoption of new legal requirements; changes in resource management, environmental or infrastructure industrylaws, regulations or programs; changes in capital markets and the access to capital; credit agreement covenants; industry competition;liability related to legal proceedings, investigations, and disputes; the availability of third-party insurance coverage; the abilityto obtain adequate bonding; employee, agent, or partner misconduct; employee risks related to international travel; safety programs; conflictof interest issues; liabilities relating to reports and opinions; liabilities relating to environmental laws and regulations; force majeureevents; protection of intellectual property rights; stock price volatility; the ability to impede a business combination based on Delawarelaw and charter documents; and other risks and uncertainties as may be described in Tetra Tech’s periodic filings with the Securitiesand Exchange Commission, including those described in the “Risk Factors” section of Tetra Tech’s Annual Report on Form10-K for the fiscal year ended October 3, 2021, and Tetra Tech’s Quarterly Reports on Form 10-Q for fiscal year 2022, as well asin Tetra Tech’s other filings with the SEC. Readers should not place undue reliance on forward-looking statements since such informationspeaks only as of the date of this release. Tetra Tech does not intend to update forward-looking statements and expressly disclaims anyobligation to do so.

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Non-GAAP Financial Measures

To supplement the financial results presentedin accordance with generally accepted accounting principles in the United States (“GAAP”), we present certain non-GAAP financialmeasures within the meaning of Regulation G under the Securities Exchange Act of 1934, as amended. We provide these non-GAAP financialmeasures because we believe they provide a valuable perspective on our financial results. However, non-GAAP measures have limitationsas analytical tools and should not be considered in isolation and are not in accordance with, or a substitute for, GAAP measures. In addition,other companies may define non-GAAP measures differently which limits the ability of investors to compare non-GAAP measures of Tetra Techto those used by our peer companies. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financialmeasures is included in this release.

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TetraTech, Inc.

ConsolidatedBalance Sheets

(unaudited- in thousands, except par value)

			October 3, <br><br>2021
Assets
Current assets:
Cash and cash equivalents	205,542		$	166,568
Accounts receivable, net	696,586			668,998
Contract assets	98,439			103,784
Prepaid expenses and other current assets	103,266			112,338
Income taxes receivable	9,567			14,260
Total current assets	1,113,400			1,065,948
Property and equipment, net	35,428			37,733
Right-of-use assets, operating leases	212,018			215,422
Investments in unconsolidated joint ventures	3,893			3,282
Goodwill	1,123,060			1,108,578
Intangible assets, net	36,535			37,990
Deferred tax assets	58,876			54,413
Other long-term assets	57,246			53,196
Total assets	2,640,456		$	2,576,562
Liabilities and Equity
Current liabilities:
Accounts payable	142,847		$	128,767
Accrued compensation	166,002			206,322
Contract liabilities	219,519			190,403
Short-term lease liabilities, operating leases	65,185			67,452
Current portion of long-term debt and other short-term borrowings	16,728			12,504
Current contingent earn-out liabilities	21,931			19,520
Other current liabilities	217,056			223,515
Total current liabilities	849,268			848,483
Deferred tax liabilities	13,916			10,563
Long-term debt	246,875			200,000
Long-term lease liabilities, operating leases	172,795			174,285
Long-term contingent earn-out liabilities	43,839			39,777
Other long-term liabilities	75,818			69,163
Equity:
Preferred stock - authorized, 2,000 shares of 0.01 par value; no shares issued and outstanding at January 2, 2022 and October 3, 2021	-			-
Common stock - authorized, 150,000 shares of 0.01 par value; issued and outstanding, 53,999 and 53,981 shares at January 2, 2022 and October 3, 2021, respectively	540			540
Accumulated other comprehensive loss	(123,048	)		(125,028	)
Retained earnings	1,360,390			1,358,726
Tetra Tech stockholders' equity	1,237,882			1,234,238
Noncontrolling interests	63			53
Total stockholders' equity	1,237,945			1,234,291
Total liabilities and stockholders' equity	2,640,456		$	2,576,562

All values are in US Dollars.

TetraTech, Inc.

ConsolidatedStatements of Income

(unaudited- in thousands, except per share data)

	Three Months Ended
	January 2,			December 27,
	2022			2020
Revenue	$	858,510		$	765,104
Subcontractor costs		(179,177	)		(159,933	)
Other costs of revenue		(539,567	)		(488,861	)
Gross profit		139,766			116,310
Selling, general and administrative expenses		(52,546	)		(50,058	)
Income from operations		87,220			66,252
Interest expense, net		(2,904	)		(3,026	)
Income before income tax expense		84,316			63,226
Income tax expense		(15,817	)		(10,778	)
Net income		68,499			52,448
Net income attributable to noncontrolling interests		(10	)		(12	)
Net income attributable to Tetra Tech	$	68,489		$	52,436
Earnings per share attributable to Tetra Tech:
Basic	$	1.27		$	0.97
Diluted	$	1.25		$	0.96
Weighted-average common shares outstanding:
Basic		53,937			53,927
Diluted		54,577			54,637

TetraTech, Inc.

ConsolidatedStatements of Cash Flows

(unaudited- in thousands)

	Three Months Ended
	January 2,			December 27,
	2022			2020
Cash flows from operating activities:
Net income	$	68,499		$	52,448
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		6,111			6,238
Equity in income of unconsolidated joint ventures		(1,440	)		(1,107	)
Distributions of earnings from unconsolidated joint ventures		842			931
Amortization of stock-based awards		5,828			4,898
Deferred income taxes		(878	)		954
(Gain) Loss on sale of assets and divested business		239			(7	)
Changes in operating assets and liabilities, net of effects of business acquisitions:
Accounts receivable and contract assets		(21,560	)		(11,400	)
Prepaid expenses and other assets		5,364			11,813
Accounts payable		14,056			23,631
Accrued compensation		(40,321	)		(61,690	)
Contract liabilities		29,227			27,392
Other liabilities		11,615			(23,373	)
Income taxes receivable/payable		4,837			2,452
Net cash provided by operating activities		82,419			33,180
Cash flows from investing activities:
Payments for business acquisitions, net of cash acquired		(8,858	)		-
Capital expenditures		(1,518	)		(1,795	)
Proceeds from sale of assets		3,514			9
Net cash used in investing activities		(6,862	)		(1,786	)
Cash flows from financing activities:
Proceeds from borrowings		50,831			123,533
Repayments on long-term debt		(3,956	)		(114,752	)
Bank overdrafts		4,158			-
Repurchases of common stock		(50,000	)		(15,000	)
Taxes paid on vested restricted stock		(24,949	)		(17,330	)
Stock options exercised		960			7,495
Dividends paid		(10,793	)		(9,198	)
Payments of contingent earn-out liabilities		(1,720	)		(7,037	)
Principal payments on finance leases		(945	)		(538	)
Net cash used in financing activities		(36,414	)		(32,827	)
Effect of exchange rate changes on cash and cash equivalents		(169	)		7,356
Net increase in cash and cash equivalents		38,974			5,923
Cash and cash equivalents at beginning of period		166,568			157,515
Cash and cash equivalents at end of period	$	205,542		$	163,438
Supplemental information:
Cash paid during the period for:
Interest	$	2,456		$	1,968
Income taxes, net of refunds received of $2.3 million and $1.1 million	$	11,535		$	5,696

TetraTech, Inc.

RegulationG Information

January2, 2022

Reconciliation of Revenue to Revenue, Net of Subcontractor Costs ("Net Revenue")

(inmillions)

							2021																					2022
	2019			2020			1st<br> Qtr			2nd<br> Qtr			6<br> mos			3rd<br> Qtr			9<br> mos			4th<br> Qtr			Total			1st<br> Qtr
Consolidated
Revenue (As Reported)		3,107.3			2,994.9			765.1			754.8			1,519.9			801.6			2,321.5			892.0			3,213.5			858.5
RCM / Non-Cash<br> Claims		15.2			(0.2	)		-			(0.5	)		(0.5	)		(0.1	)		(0.6	)		-			(0.6	)		-
Adjusted Revenue		3,122.5			2,994.7			765.1			754.3			1,519.4			801.5			2,320.9			892.0			3,212.9			858.5
Adjusted<br> Subcontractor Costs		(716.4	)		(646.1	)		(159.9	)		(155.0	)		(314.9	)		(163.5	)		(478.4	)		(182.9	)		(661.3	)		(179.2	)
Adjusted Net Revenue		2,406.1			2,348.6			605.2			599.3			1,204.5			638.0			1,842.5			709.1			2,551.6			679.3
GSG<br> Segment
Revenue		1,620.7			1,578.3			424.6			432.6			857.2			444.3			1,301.5			471.4			1,772.9			456.1
Subcontractor<br> Costs		(473.8	)		(460.8	)		(120.0	)		(122.5	)		(242.5	)		(129.1	)		(371.7	)		(135.5	)		(507.1	)		(129.0	)
Adjusted Net Revenue		1,146.9			1,117.5			304.6			310.1			614.7			315.2			929.8			335.9			1,265.8			327.1
CIG<br> Segment
Revenue		1,544.8			1,471.1			356.6			335.4			692.0			372.7			1,064.7			435.4			1,500.1			416.3
Non-Cash<br> Claims		13.7			-			-			-			-			-			-			-			-			-
Adjusted Revenue		1,558.5			1,471.1			356.6			335.4			692.0			372.7			1,064.7			435.4			1,500.1			416.3
Subcontractor<br> Costs		(299.3	)		(240.0	)		(56.0	)		(46.2	)		(102.2	)		(49.9	)		(152.0	)		(62.2	)		(214.3	)		(64.0	)
Adjusted Net Revenue		1,259.2			1,231.1			300.6			289.2			589.8			322.8			912.7			373.2			1,285.8			352.3
RCM<br> Segment
Revenue		(1.5	)		0.2			-			0.5			0.5			0.1			0.6			-			0.6			-
Subcontractor Costs		(1.3	)		(0.2	)		-			0.1			0.1			(0.1	)		-			-			-			-
Net Revenue		(2.8	)		-			-			0.6			0.6			-			0.6			-			0.6			-

Reconciliation of Net Income Attributable to Tetra Tech to EBITDA

(inthousands)

						2021																			2022
	2019		2020			1st<br> Qtr		2nd<br> Qtr			6<br> mos			3rd<br> Qtr		9<br> mos			4th<br> Qtr			Total			1st<br> Qtr
Net Income Attributable<br> to Tetra Tech		158,668		173,859			52,436		45,517			97,953			51,903		149,856			82,954			232,810			68,489
Interest<br> Expense^1^		13,626		13,100			3,026		2,823			5,849			2,737		8,586			3,245			11,831			2,904
Depreciation^2^		17,285		13,017			2,882		3,073			5,955			3,070		9,026			3,311			12,337			3,433
Amortization^2^		11,559		11,594			3,356		2,213			5,569			2,216		7,785			3,683			11,468			2,678
Contingent Consideration		3,085		(13,371	)		37		(230	)		(193	)		31		(162	)		(3,111	)		(3,273	)		-
Goodwill Impairment		7,755		15,800			-		-			-			-		-			-			-			-
Income Tax<br> Expense (Benefit)		16,375		54,101			10,778		12,456			23,234			15,146		38,379			(4,340	)		34,039			15,817
EBITDA		228,353		268,100			72,515		65,852			138,367			75,103		213,470			85,742			299,212			93,321
Acquisition & Integration<br> Expenses		10,351		-			-		-			-			-		-			-			-			-
Non-Core Dispositions		10,945		(8,524	)		-		-			-			-		-			-			-			-
RCM / Non-Cash Claims		19,526		-			-		-			-			-		-			-			-			-
COVID-19<br> Charges (Credits)		-		8,233			-		-			-			-		-			-			-			(4,451	)
Adjusted<br> EBITDA		269,175		267,809			72,515		65,852			138,367			75,103		213,470			85,742			299,212			88,870

^1^Includes amortization of deferred financing fee

^2^Varies slightly from the Statements of Cash Flows, which includes amortization of deferred financing fee