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  • Record net revenue of $585 million, up 10% Y/Y
  • Record backlog of $2.81 billion, up 12% Y/Y
  • EPS $1.00; adjusted EPS $0.70, up 30% Y/Y
  • Increased quarterly dividend by 25% to $0.15

PASADENA, Calif.–(BUSINESS WIRE)–Tetra Tech, Inc. (NASDAQ: TTEK) today announced results for the second
quarter ended March 31, 2019.

Second Quarter Results

Tetra Tech achieved its best quarterly results in the Company’s history
with record net revenue, earnings per share, cash flow and backlog.
Revenue in the second quarter totaled $723 million. Revenue, net of
subcontractor costs1 (net revenue), in the second quarter
totaled $585 million, up organically 10% year-over-year. Operating
income for the second quarter was $48 million, up 11% year-over-year.
EPS was $1.00 on a GAAP basis, up 96% year-over-year; however, excluding
a non-recurring tax benefit, adjusted EPS1 was $0.70, up 30%
year-over-year. Backlog at the end of the quarter was a record $2.81
billion, up 12% year-over-year. Record cash flow from operations was
$115 million, up 41% year-over-year.

Quarterly Dividend and Share Repurchase Program

On April 29, 2019, Tetra Tech’s Board of Directors declared a 25%
increase in the quarterly dividend, raising it to $0.15 per share
payable on May 31, 2019 to stockholders of record as of May 15, 2019. In
the second quarter, Tetra Tech repurchased $25 million of common stock.
Additionally, as of March 31, 2019, the Company had $175 million
remaining under the approved share repurchase program.

Comments on Results

Tetra Tech’s Chairman and CEO, Dan Batrack, commented, “Tetra Tech had
another strong quarter, exceeding the high end of our guidance range for
both net revenue and earnings. Our double-digit organic growth for the
quarter was driven by continued strong demand across our end-markets for
our consulting and engineering services focused on water, renewable
energy, and sustainable infrastructure. The addition of eGlobalTech
further advances our growth strategy and the integration of emerging
technology into our high-end consulting services for our clients. Given
the strength of our results and record backlog of more than $2.8
billion, we are increasing our guidance for both EPS and net revenue for
fiscal 2019.”

Six-Month Results

Revenue for the six-month period was $1.4 billion, and net revenue was
$1.1 billion, up 6% compared to the same period in fiscal 2018.
Operating income for the six-month period was $103 million and EPS was
$1.74, up 13% and 32%, respectively, compared to the same period in
fiscal 2018. On an adjusted basis, EPS totaled $1.40, up 19%

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 third quarter of fiscal 2019 to range
from $0.75 to $0.80. Net revenue for the third quarter is expected to
range from $575 million to $625 million. For fiscal 2019, Tetra Tech is
increasing its EPS guidance and now expects adjusted EPS to be in the
range of $2.95 to $3.05. For fiscal 2019, Tetra Tech expects net revenue
to range from $2.3 billion to $2.4 billion.


Investors will have the opportunity to access a live audio-visual
webcast and supplemental financial information concerning the second
quarter of fiscal 2019 results through a link posted on the Company’s
website at on May 2, 2019 at 8:00 a.m. (PT).

Reconciliation of Revenue and Operating Results
In thousands (except EPS data)
Three Months Ended Six Months Ended
March 31,


  April 1,




March 31,


  April 1,




Revenue $ 722,621 $ 700,262 3 % $ 1,440,052 $ 1,460,010 (1 )%
Subcontractor costs   (137,237 )   (167,469 )     (301,305 )   (382,370 )  
Net revenue $ 585,384   $ 532,793   10 % $ 1,138,747   $ 1,077,640   6 %
EPS $ 1.00 $ 0.51 96 % $ 1.74 $ 1.32 32 %
Earn-out expense 0.01 0.03 0.01 0.03
RCM 0.08 0.08 0.01
Non-recurring tax benefits   (0.39 )         (0.43 )   (0.18 )  
Adjusted EPS $ 0.70   $ 0.54   30 % $ 1.40   $ 1.18   19 %

About Tetra Tech

Tetra Tech is a leading, global provider of high-end consulting and
engineering services. We are differentiated by Leading with Science®
to provide innovative technical solutions to our clients. We support
global commercial and government clients focused on water, environment,
infrastructure, resource management, energy, and international
development. With more than 18,000 associates worldwide, Tetra Tech
provides clear solutions to complex problems. For more information about
Tetra Tech, please visit,
follow us on Twitter (@TetraTech),
or like us on Facebook.

Forward-Looking Statements

This release contains forward-looking statements within 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-looking
statements. These forward-looking statements are based on currently
available operating, financial, economic and other information, and are
subject to a number of risks and uncertainties.
Readers are
cautioned that these forward-looking statements are only predictions and
may differ materially from actual future events or results.
variety of factors, many of which are beyond our control, could cause
actual future results or events to differ materially from those
projected in the forward-looking statements in this release, including
but not limited to: continuing worldwide political and economic
uncertainties; the U.S. Administration’s potential changes to fiscal
policies; the cyclicality in demand for our overall services; the
fluctuation in demand for oil and gas, and mining services; risks
related to 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 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-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
government granted eligibility; the use of estimates and assumptions in
the preparation of financial statements; the ability to maintain
adequate workforce utilization; the use of the percentage-of-completion
method of accounting; the inability to accurately estimate and control
contract costs; the failure to adequately recover on our claims for
additional contract costs; the failure to win or renew contracts with
private and public sector clients; growth strategy management; backlog
cancellation and adjustments; risks relating to cyber security breaches;
the failure of partners to perform on joint projects; the failure of
subcontractors to satisfy their obligations; requirements to pay
liquidated damages based on contract performance; the adoption of new
legal requirements; changes in resource management, environmental or
infrastructure industry laws, 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 ability to obtain adequate bonding; employee, agent, or
partner misconduct; employee risks related to international travel;
safety programs; conflict of interest issues; liabilities relating to
reports and opinions; liabilities relating to environmental laws and
regulations; force majeure events; protection of intellectual property
rights; stock price volatility; the ability to impede a business
combination based on Delaware law and charter documents; and other risks
and uncertainties as may be described in Tetra Tech’s periodic filings
with the Securities and Exchange Commission, including those described
in the “Risk Factors” section of Tetra Tech’s Annual Report on Form 10-K
for the year ended September 30, 2018, and Tetra Tech’s Quarterly
Reports on Form 10-Q for fiscal year 2019, as well as in Tetra Tech’s
other filings with the SEC.
Readers should not place undue
reliance on forward-looking statements since such information speaks
only as of the date of this release. Tetra Tech does not intend to
update forward-looking statements and expressly disclaims any obligation
to do so.

Non-GAAP Financial Measures

To supplement the financial results presented in accordance with
generally accepted accounting principles in the United States (“GAAP”),
we present certain non-GAAP financial measures within the meaning of
Regulation G under the Securities Exchange Act of 1934, as amended. We
provide these non-GAAP financial measures because we believe they
provide a valuable perspective on our financial results.
non-GAAP measures have limitations as 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 Tech to those used by our peer
companies. A reconciliation of these non-GAAP financial measures to the
most directly comparable GAAP financial measures is included in this


1 Net revenue and adjusted EPS are non-GAAP financial
measures which the Company believes provide valuable perspectives on its
business results. Refer to Reconciliation of Revenue and Operating
Results tables.


Jim Wu, Investor Relations
Charlie MacPherson, Media & Public
(626) 470-2844