8-K
Tetra Tech Inc (TTEK)
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):
August 9, 2023
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) |
| --- | --- |
| ¨ | Pre-commencement<br>communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ¨ | Pre-commencement<br>communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
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 August 9, 2023, Tetra Tech, Inc. (“Tetra Tech”) reported its financial results for the third fiscal quarter ended July 2, 2023. A copy of the press release is attached to this report as Exhibit 99.1.
Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.
| Item 8.01. | Other Events. |
|---|
On August 9, 2023, Tetra Tech announced that its Board of Directors has declared a $0.26 per share quarterly cash dividend. The dividend is payable on September 6, 2023 to stockholders of record as of the close of business on August 23, 2023.
| Item 9.01. | Financial Statements and Exhibits. |
|---|
(d) Exhibits
| 99.1 | Press Release, dated August 9, 2023, reporting the financial results for Tetra Tech’s third<br>fiscal quarter ended July 2, 2023, and the declaration of a quarterly cash dividend. |
|---|---|
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| --- | --- |
2
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: August 9,<br>2023 | By: | /s/ DAN L. BATRACK |
| Dan L. Batrack | ||
| Chairman and Chief Executive Officer |
3
Exhibit 99.1
| NEWS RELEASE<br><br>August 9,<br>2023 |
|---|
Tetra Tech ReportsRecord Third Quarter Results
| · | Record Revenue $1.21 billion, up 36% Y/Y |
|---|---|
| · | Record EBITDA $119 million, up 33% Y/Y |
| --- | --- |
| · | Record Backlog $4.39 billion, up 25% Y/Y |
| --- | --- |
| · | Increasing Net Revenue and EPS guidance for FY23 |
| --- | --- |
Pasadena,California. Tetra Tech, Inc. (NASDAQ: TTEK), a leading provider of high-end consulting and engineering services, today announced results for the third quarter ended July 2, 2023.
Third Quarter Results
Tetra Tech achieved record quarterly results in key financial metrics including revenue, net revenue, EBITDA, and backlog. Revenue in the third quarter totaled $1.21 billion and revenue, net of subcontractor costs (net revenue)^1^, was $988 million, up 36% and 37%, respectively, over last year. EBITDA^1^ was $119 million, up 33% year-over-year. Earnings per share (“EPS”) was $1.12; adjusted EPS was $1.29, up 19% over the third quarter of fiscal 2022^1^. Cash generated from operations was $133 million, up 35% over the same period last year. Backlog increased to an all-time high of $4.39 billion, up 25% year-over-year.
Quarterly Dividend
On August 7, 2023, Tetra Tech’s Board of Directors approved its 37^th^ consecutive quarterly dividend at an amount of $0.26 per share, a 13% increase year-over-year, payable on September 6, 2023, to stockholders of record as of August 23, 2023.
Chairman and CEO Comments
Tetra Tech Chairman and CEO, Dan Batrack, commented, “Tetra Tech delivered another quarter of record financial performance driven by our differentiated *Leading with Science^®^*services in water, environment and sustainable infrastructure. We are seeing increasing demand from both our commercial and government clients to address the impacts of climate change including water scarcity, infrastructure vulnerability, and environmental degradation. This has resulted in a significant broad-based increase in project awards from our key clients in North America, U.K., and Australia. The combination with RPS is exceeding our expectations, including the speed of margin expansion and the identification of revenue synergies. Based on our strong performance and record high backlog, we are increasing our net revenue and earnings per share guidance for fiscal 2023.”
^1^Non-GAAP financial measures which the Company believes provide valuable perspectives on its business results. Refer to tables at the end of the release and Regulation G Information for reconciliations to the comparable GAAP metrics.
Nine-Month Results
Revenue for the nine-month period was $3.26 billion and net revenue was $2.69 billion, up 25% and 28%, respectively, over the same period in fiscal 2022. EBITDA was $328 million, up 26%. EPS was $4.10, up 23%, and adjusted EPS was $3.80, an increase of 17% over the first nine months of last year. The days sales outstanding (“DSO”) improved to a record low 58 days.
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. The Company is relying on the exception provided in the applicable SEC rules to exclude the reconciliation of adjusted EPS to EPS for future outlook, the most directly comparable GAAP measure, since it is not able to predict with sufficient precision acquisition, integration and intangible amortization expenses related to the RPS transaction. Similarly, the Company is not able to provide a reconciliation of net revenue to revenue since it is not able to predict with sufficient precision subcontractor costs.
For fiscal 2023, Tetra Tech is increasing adjusted EPS guidance to range from $5.22 to $5.27 and is increasing net revenue guidance to range from $3.16 billion to $3.21 billion. Tetra Tech expects adjusted EPS for the fourth quarter of fiscal 2023 to range from $1.40 to $1.45 and net revenue to range from $790 million to $840 million.
RPS is expected to contribute additional net revenue of approximately $175 million in the fourth quarter and $500 million for fiscal 2023. The impact to adjusted EPS, excluding acquisition, integration and intangible amortization expenses, is expected to be approximately $0.03 accretive for the fourth quarter and $0.01 accretive for fiscal 2023.
Webcast
Investors will have the opportunity to access a live audio-visual webcast and supplemental financial information concerning the third quarter of fiscal 2023 results through a link posted on the Company’s website at tetratech.com on August 10, 2023, at 8:00 a.m. (PT).
Reconciliation of GAAP and Non-GAAP Items
In thousands (except EPS data)
| Three Months Ended | Nine Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| July 2,<br> <br>2023 | July 3,<br> <br>2022 | July 2,<br> <br>2023 | July 3,<br> <br>2022 | |||||||||
| Revenue | $ | 1,208,947 | $ | 890,231 | $ | 3,261,938 | $ | 2,601,485 | ||||
| Subcontractor costs | (221,387 | ) | (169,745 | ) | (568,252 | ) | (502,024 | ) | ||||
| Net revenue | $ | 987,560 | $ | 720,486 | $ | 2,693,686 | $ | 2,099,461 | ||||
| EPS | $ | 1.12 | $ | 1.09 | $ | 4.10 | $ | 3.32 | ||||
| Acq. & integration costs | 0.03 | . | 0.55 | - | ||||||||
| FX hedge gain | - | - | (1.23 | ) | - | |||||||
| Earn-out charge | - | - | 0.13 | - | ||||||||
| COVID-19 credits | - | (0.01 | ) | - | (0.07 | ) | ||||||
| RPS intangible amort. | 0.14 | - | 0.25 | - | ||||||||
| Adjusted EPS | $ | 1.29 | $ | 1.08 | $ | 3.80 | $ | 3.25 |
About Tetra Tech
Tetra Tech is a leading provider of high-end consulting and engineering services for projects worldwide. With 27,000 employees working together, Tetra Tech provides clear solutions to complex problems in water, environment, sustainable infrastructure, renewable energy, and international development. We are Leading with Science^®^ to provide sustainable and resilient solutions for our clients. For more information about Tetra Tech, please visit tetratech.com or follow us on LinkedIn, Twitter, and 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 predictionsand may differ materially from actual future events or results. A variety of factors, many of which are beyond our control, could causeactual future results or events to differ materially from those projected in the forward-looking statements in this release, includingbut not limited to: continuing worldwide political and economic uncertainties; the U.S. Administration’s potential changes to fiscalpolicies; the cyclicality in demand for our overall services; the fluctuation in demand for oil and gas, and mining services; risks relatedto international operations; concentration of revenues from U.S. government agencies and potential funding disruptions by these agencies;dependence on winning or renewing U.S. government contracts; the delay or unavailability of public funding on U.S. government contracts;the U.S. government’s right to modify, delay, curtail or terminate contracts at its convenience; compliance with government procurementlaws and regulations; the impact of global pandemics like COVID-19; credit risks associated with certain clients in certain geographicareas or industries; acquisition strategy and integration risks; goodwill or other intangible asset impairment; the failure to complywith worldwide anti-bribery laws; the failure to comply with domestic and international export laws; the failure to properly manage projects;the loss of key personnel or the inability to attract and retain qualified personnel; the ability of our employees to obtain governmentgranted eligibility; the use of estimates and assumptions in the preparation of financial statements; the ability to maintain adequateworkforce utilization; the use of the percentage-of-completion method of accounting; the inability to accurately estimate and controlcontract costs; the failure to adequately recover on our claims for additional contract costs; the failure to win or renew contractswith private and public sector clients; growth strategy management; backlog cancellation and adjustments; risks relating to cyber securitybreaches; the failure of partners to perform on joint projects; the failure of subcontractors to satisfy their obligations; requirementsto pay liquidated damages based on contract performance; the adoption of new legal requirements; changes in resource management, environmentalor infrastructure industry laws, regulations or programs; changes in bank and capital markets and the access to capital; credit agreementcovenants; industry competition; liability related to legal proceedings, investigations, and disputes; the availability of third-partyinsurance coverage; the ability to obtain adequate bonding; employee, agent, or partner misconduct; employee risks related to internationaltravel; safety programs; conflict of interest issues; liabilities relating to reports and opinions; liabilities relating to environmentallaws and regulations; force majeure events; protection of intellectual property rights; stock price volatility; the ability to impedea business combination based on Delaware law and charter documents; and other risks and uncertainties as may be described in Tetra Tech’speriodic filings with the Securities and Exchange Commission, including those described in the “Risk Factors” section ofTetra Tech’s Annual Report on Form 10-K for the fiscal year ended October 2, 2022. Readers should not place undue relianceon forward-looking statements since such information speaks only as of the date of this release. Tetra Tech does not intend to updateforward-looking statements and expressly disclaims any obligation to do so.
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. Inaddition, other companies may define non-GAAP measures differently which limits the ability of investors to compare non-GAAP measuresof Tetra Tech to those used by our peer companies. A reconciliation of these non-GAAP financial measures to the most directly comparableGAAP financial measures is included in this release.
| Tetra Tech, Inc | |||||
|---|---|---|---|---|---|
| Consolidated Balance Sheet - Unaudited | |||||
| (unaudited - in thousands, except par value) | |||||
| October 2, | |||||
| --- | --- | --- | --- | --- | --- |
| 2022 | |||||
| Assets | |||||
| Current assets: | |||||
| Cash and cash equivalents | 176,056 | 185,094 | |||
| Accounts receivable, net | 1,002,087 | 755,112 | |||
| Contract assets | 125,360 | 92,405 | |||
| Prepaid expenses and other current assets | 114,440 | 125,605 | |||
| Total current assets | 1,417,943 | 1,158,216 | |||
| Property and equipment, net | 81,321 | 32,316 | |||
| Right-of-use assets, operating leases | 207,218 | 182,319 | |||
| Goodwill | 1,886,854 | 1,110,412 | |||
| Intangible assets, net | 225,032 | 29,163 | |||
| Deferred tax assets | 81,732 | 47,804 | |||
| Other non-current assets | 73,478 | 62,546 | |||
| Total assets | 3,973,578 | 2,622,776 | |||
| Liabilities and Equity | |||||
| Current liabilities: | |||||
| Accounts payable | 188,807 | 147,436 | |||
| Accrued compensation | 270,924 | 237,669 | |||
| Contract liabilities | 351,048 | 241,340 | |||
| Short-term lease liabilities, operating leases | 68,555 | 57,865 | |||
| Current portion of long-term debt | 12,505 | 12,504 | |||
| Current contingent earn-out liabilities | 35,902 | 28,797 | |||
| Other current liabilities | 284,418 | 190,406 | |||
| Total current liabilities | 1,212,159 | 916,017 | |||
| Deferred tax liabilities | 71,425 | 15,161 | |||
| Long-term debt | 906,875 | 246,250 | |||
| Long-term lease liabilities, operating leases | 163,919 | 146,285 | |||
| Non-current contingent earn-out liabilities | 40,697 | 36,769 | |||
| Other non-current liabilities | 125,714 | 79,157 | |||
| Equity: | |||||
| Preferred stock - authorized, 2,000 shares of 0.01 par value; no shares issued<br> and outstanding at July 2, 2023 and October 2, 2022 | - | - | |||
| Common stock - authorized, 150,000 shares of 0.01 par value; issued and<br> outstanding, 53,243 and 52,981 shares at July 2, 2023 and October 2, 2022, respectively | 532 | 530 | |||
| Additional paid-in capital | 17,906 | - | |||
| Accumulated other comprehensive loss | (137,926 | ) | (208,144 | ) | |
| Retained earnings | 1,572,204 | 1,390,701 | |||
| Tetra Tech stockholders' equity | 1,452,716 | 1,183,087 | |||
| Noncontrolling interests | 73 | 50 | |||
| Total stockholders' equity | 1,452,789 | 1,183,137 | |||
| Total liabilities and stockholders' equity | 3,973,578 | 2,622,776 |
All values are in US Dollars.
| Tetra Tech, Inc | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Consolidated Statements of Income | ||||||||||||
| (unaudited - in thousands, except per share data) | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| July 2, | July 3, | July 2, | July 3, | |||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||
| Revenue | $ | 1,208,947 | $ | 890,231 | $ | 3,261,938 | $ | 2,601,485 | ||||
| Subcontractor costs | (221,387 | ) | (169,745 | ) | (568,252 | ) | (502,024 | ) | ||||
| Other costs of revenue | (798,714 | ) | (575,902 | ) | (2,180,749 | ) | (1,679,937 | ) | ||||
| Gross profit | 188,846 | 144,584 | 512,937 | 419,524 | ||||||||
| Selling, general and administrative expenses | (89,064 | ) | (60,942 | ) | (227,912 | ) | (173,943 | ) | ||||
| Acquisition and integration expenses | (2,107 | ) | - | (25,812 | ) | - | ||||||
| Contingent consideration - fair value adjustments | - | 263 | (8,477 | ) | 64 | |||||||
| Income from operations | 97,675 | 83,905 | 250,736 | 245,645 | ||||||||
| Interest expense, net | (14,869 | ) | (2,919 | ) | (33,563 | ) | (8,967 | ) | ||||
| Other non-operating income | - | - | 89,402 | - | ||||||||
| Income before income tax expense | 82,806 | 80,986 | 306,575 | 236,678 | ||||||||
| Income tax expense | (22,568 | ) | (22,329 | ) | (86,781 | ) | (56,473 | ) | ||||
| Net income | 60,238 | 58,657 | 219,794 | 180,205 | ||||||||
| Net income attributable to noncontrolling interests | (3 | ) | (7 | ) | (23 | ) | (26 | ) | ||||
| Net income attributable to Tetra Tech | $ | 60,235 | $ | 58,650 | $ | 219,771 | $ | 180,179 | ||||
| Earnings per share attributable to Tetra Tech: | ||||||||||||
| Basic | $ | 1.13 | $ | 1.10 | $ | 4.13 | $ | 3.35 | ||||
| Diluted | $ | 1.12 | $ | 1.09 | $ | 4.10 | $ | 3.32 | ||||
| Weighted-average common shares outstanding: | ||||||||||||
| Basic | 53,231 | 53,507 | 53,188 | 53,777 | ||||||||
| Diluted | 53,653 | 54,006 | 53,615 | 54,328 | ||||||||
| Tetra Tech, Inc. | ||||||||||||
| --- | ||||||||||||
| Consolidated Statements of Cash Flows | ||||||||||||
| (unaudited - in thousands) | ||||||||||||
| Nine Months Ended | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||||
| Jul 2, | Jul 3, | |||||||||||
| 2023 | 2022 | |||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net income | $ | 219,794 | $ | 180,205 | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
| Depreciation and amortization | 43,221 | 19,545 | ||||||||||
| Equity in income of unconsolidated joint ventures | (4,831 | ) | (5,233 | ) | ||||||||
| Distributions of earnings from unconsolidated joint ventures | 4,345 | 4,532 | ||||||||||
| Amortization of stock-based awards | 21,640 | 19,104 | ||||||||||
| Deferred income taxes | 21,475 | 750 | ||||||||||
| Fair value adjustments to contingent consideration | 8,477 | (64 | ) | |||||||||
| (Gain) Loss on sale of assets | (310 | ) | 93 | |||||||||
| Fair value adjustments to foreign currency forward contract | (89,402 | ) | - | |||||||||
| Changes in operating assets and liabilities, net of effects of business acquisitions: | ||||||||||||
| Accounts receivable and contract assets | (41,824 | ) | (54,874 | ) | ||||||||
| Prepaid expenses and other assets | 1,970 | 33,254 | ||||||||||
| Accounts payable | (3,678 | ) | 8,845 | |||||||||
| Accrued compensation | 5,263 | 15,349 | ||||||||||
| Contract liabilities | 56,189 | 59,025 | ||||||||||
| Other liabilities | (6,921 | ) | (12,702 | ) | ||||||||
| Income taxes receivable/payable | 10,645 | 8,147 | ||||||||||
| Net cash provided by operating activities | 246,053 | 275,976 | ||||||||||
| Cash flows from investing activities: | ||||||||||||
| Payments for business acquisitions, net of cash acquired | (854,319 | ) | (33,624 | ) | ||||||||
| Capital expenditures | (17,322 | ) | (8,401 | ) | ||||||||
| Proceeds from sale of assets | 439 | 3,754 | ||||||||||
| Settlement of foreign currency forward contract | 109,306 | - | ||||||||||
| Net cash used in investing activities | (761,896 | ) | (38,271 | ) | ||||||||
| Cash flows from financing activities: | ||||||||||||
| Proceeds from borrowings | 979,859 | 141,456 | ||||||||||
| Repayments on long-term debt | (411,676 | ) | (108,949 | ) | ||||||||
| Repurchases of common stock | - | (150,000 | ) | |||||||||
| Taxes paid on vested restricted stock | (16,785 | ) | (25,193 | ) | ||||||||
| Stock options exercised | 425 | 1,205 | ||||||||||
| Dividends paid | (38,268 | ) | (33,873 | ) | ||||||||
| Payments of contingent earn-out liabilities | (15,078 | ) | (4,035 | ) | ||||||||
| Principal payments on finance leases | (4,082 | ) | (3,097 | ) | ||||||||
| Net cash provided by (used in) financing activities | 494,395 | (182,486 | ) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | 12,410 | (4,403 | ) | |||||||||
| Net (decrease) increase in cash and cash equivalents | (9,038 | ) | 50,816 | |||||||||
| Cash and cash equivalents at beginning of period | 185,094 | 166,568 | ||||||||||
| Cash and cash equivalents at end of period | $ | 176,056 | $ | 217,384 | ||||||||
| Supplemental information: | ||||||||||||
| Cash paid during the period for: | ||||||||||||
| Interest | $ | 34,839 | $ | 7,556 | ||||||||
| Income taxes, net of refunds received of $1.5 million and $4.2 million | $ | 54,967 | $ | 49,131 | ||||||||
| Supplemental disclosures on noncash investing activities: | ||||||||||||
| Issuance of promissory note for business acquisition | $ | - | $ | 14,578 |
Tetra Tech, Inc.
Regulation G Information
July 2, 2023
Reconciliationof Revenue to Revenue, Net of Subcontractor Costs ("Net Revenue")
(in millions)
| **** | **** | **** | **** | 2022 | **** | 2023 | **** | |||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2020 | 2021 | 1st<br> Qtr | 2nd<br> Qtr | 6<br> Mos | 3rd<br> Qtr | 9<br> Mos | 4th<br> Qtr | Total | 1st<br> Qtr | 2nd<br> Qtr | 6<br> Mos | 3rd<br> Qtr | 9<br> Mos | |||||||||||||||||||||||||||||
| Consolidated | ||||||||||||||||||||||||||||||||||||||||||
| Revenue (As Reported) | 2,994.9 | 3,213.5 | 858.5 | 852.7 | 1,711.3 | 890.2 | 2,601.5 | 902.6 | 3,504.0 | 894.8 | 1,158.2 | 2,053.0 | 1,208.9 | 3,261.9 | ||||||||||||||||||||||||||||
| RCM / Non-Cash<br> Claims | (0.2 | ) | (0.6 | ) | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||
| Adjusted Revenue | 2,994.7 | 3,212.9 | 858.5 | 852.7 | 1,711.3 | 890.2 | 2,601.5 | 902.6 | 3,504.0 | 894.8 | 1,158.2 | 2,053.0 | 1,208.9 | 3,261.9 | ||||||||||||||||||||||||||||
| Adjusted<br> Subcontractor Costs | (646.1 | ) | (661.3 | ) | (179.2 | ) | (153.1 | ) | (332.3 | ) | (169.7 | ) | (502.0 | ) | (166.4 | ) | (668.5 | ) | (158.2 | ) | (188.7 | ) | (346.9 | ) | (221.4 | ) | (568.3 | ) | ||||||||||||||
| Adjusted Net Revenue | 2,348.6 | 2,551.6 | 679.3 | 699.6 | 1,379.0 | 720.5 | 2,099.5 | 736.2 | 2,835.5 | 736.6 | 969.5 | 1,706.1 | 987.5 | 2,693.6 | ||||||||||||||||||||||||||||
| GSG<br> Segment | ||||||||||||||||||||||||||||||||||||||||||
| Revenue | 1,578.3 | 1,772.9 | 456.1 | 449.0 | 905.1 | 460.0 | 1,365.0 | 455.8 | 1,820.9 | 471.1 | 563.3 | 1,034.3 | 531.0 | 1,565.4 | ||||||||||||||||||||||||||||
| Subcontractor<br> Costs | (460.8 | ) | (507.1 | ) | (129.0 | ) | (111.5 | ) | (240.5 | ) | (124.5 | ) | (365.0 | ) | (119.4 | ) | (484.4 | ) | (118.0 | ) | (127.7 | ) | (245.7 | ) | (140.8 | ) | (386.6 | ) | ||||||||||||||
| Adjusted Net Revenue | 1,117.5 | 1,265.8 | 327.1 | 337.5 | 664.6 | 335.5 | 1,000.0 | 336.4 | 1,336.5 | 353.1 | 435.6 | 788.6 | 390.2 | 1,178.8 | ||||||||||||||||||||||||||||
| CIG<br> Segment | ||||||||||||||||||||||||||||||||||||||||||
| Revenue | 1,471.1 | 1,500.1 | 416.3 | 416.9 | 833.2 | 444.2 | 1,277.5 | 461.0 | 1,738.4 | 439.6 | 610.4 | 1,049.9 | 691.4 | 1,741.3 | ||||||||||||||||||||||||||||
| Non-Cash Claims | - | - | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||
| Adjusted Revenue | 1,471.1 | 1,500.1 | 416.3 | 416.9 | 833.2 | 444.2 | 1,277.5 | 461.0 | 1,738.4 | 439.6 | 610.4 | 1,049.9 | 691.4 | 1,741.3 | ||||||||||||||||||||||||||||
| Subcontractor<br> Costs | (240.0 | ) | (214.3 | ) | (64.0 | ) | (54.8 | ) | (118.8 | ) | (59.3 | ) | (178.1 | ) | (61.2 | ) | (239.3 | ) | (56.0 | ) | (76.4 | ) | (132.4 | ) | (94.0 | ) | (226.4 | ) | ||||||||||||||
| Adjusted Net Revenue | 1,231.1 | 1,285.8 | 352.3 | 362.1 | 714.4 | 384.9 | 1,099.4 | 399.8 | 1,499.1 | 383.6 | 534.0 | 917.5 | 597.4 | 1,514.9 | ||||||||||||||||||||||||||||
| RCM<br> Segment | ||||||||||||||||||||||||||||||||||||||||||
| Revenue | 0.2 | 0.6 | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||
| Subcontractor<br> Costs | (0.2 | ) | - | - | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
| Net Revenue | - | 0.6 | - | - | - | - | - | - | - | - | - | - | - | - |
Reconciliationof Net Income Attributable to Tetra Tech to EBITDA
(in thousands)
| 2022 | 2023 | |||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2020 | 2021 | 1st<br> Qtr | 2nd<br> Qtr | 6<br> Mos | 3rd<br> Qtr | 9<br> Mos | 4th<br> Qtr | Total | 1st<br> Qtr | 2nd<br> Qtr | 6<br> Mos | 3rd<br> Qtr | 9<br> Mos | |||||||||||||||||||||||||||
| Net Income Attributable to Tetra<br> Tech | 173,859 | 232,810 | 68,489 | 53,040 | 121,529 | 58,650 | 180,179 | 82,947 | 263,125 | 116,706 | 42,830 | 159,536 | 60,235 | 219,771 | ||||||||||||||||||||||||||
| Interest<br> Expense^1^ | 13,100 | 11,831 | 2,904 | 3,144 | 6,048 | 2,919 | 8,966 | 2,618 | 11,584 | 5,372 | 13,322 | 18,694 | 14,869 | 33,563 | ||||||||||||||||||||||||||
| Depreciation | 13,017 | 12,337 | 3,433 | 3,310 | 6,743 | 3,200 | 9,945 | 3,914 | 13,859 | 3,178 | 4,849 | 8,027 | 5,624 | 13,651 | ||||||||||||||||||||||||||
| Amortization | 11,594 | 11,468 | 2,678 | 3,241 | 5,919 | 3,682 | 9,601 | 3,573 | 13,174 | 3,438 | 12,072 | 15,510 | 14,060 | 29,570 | ||||||||||||||||||||||||||
| Contingent Consideration | (13,371 | ) | (3,273 | ) | - | - | - | - | - | - | - | 933 | 7,544 | 8,477 | - | 8,477 | ||||||||||||||||||||||||
| Goodwill Impairment | 15,800 | - | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||
| FX hedge gain | - | - | - | - | - | - | - | (19,904 | ) | (19,904 | ) | (67,995 | ) | (21,407 | ) | (89,402 | ) | - | (89,402 | ) | ||||||||||||||||||||
| Income Tax Expense | 54,101 | 34,039 | 15,817 | 18,327 | 34,144 | 22,329 | 56,472 | 29,129 | 85,602 | 37,958 | 26,255 | 64,213 | 22,568 | 86,781 | ||||||||||||||||||||||||||
| EBITDA | 268,100 | 299,212 | 93,321 | 81,062 | 174,383 | 90,780 | 265,163 | 102,277 | 367,440 | 99,590 | 85,465 | 185,055 | 117,356 | 302,411 | ||||||||||||||||||||||||||
| Acquisition & Integration<br> Expenses | - | - | - | - | - | - | - | - | - | 3,761 | 19,944 | 23,705 | 2,107 | 25,812 | ||||||||||||||||||||||||||
| Non-Core Dispositions | (8,524 | ) | - | - | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||
| COVID-19 Charges (Credits) | 8,233 | - | (4,451 | ) | - | (4,451 | ) | (1,041 | ) | (5,492 | ) | (994 | ) | (6,486 | ) | - | - | - | - | - | ||||||||||||||||||||
| Adjusted<br> EBITDA | 267,809 | 299,212 | 88,870 | 81,062 | 169,932 | 89,739 | 259,671 | 101,283 | 360,954 | 103,351 | 105,409 | 208,760 | 119,463 | 328,223 |
^1^ Includes write-off of deferred debt origination fees of $2.7M in Q1-23 and $1.1M in Q2-23