- Record quarterly new awards of $3.2 billion
-
Record backlog of $11.6 billion, up 37% Y/Y, with strong
double-digit growth across all segments - Reaffirming FY19 EPS Guidance: $2.00 to $2.30
LOS ANGELES–(BUSINESS WIRE)–Tutor Perini Corporation (the “Company”) (NYSE: TPC), a leading civil,
building and specialty construction company, reported results today for
the three months ended March 31, 2019. Revenue was $958.5 million
compared to $1,028.2 million for the first quarter of 2018. The decrease
was primarily driven by the timing of various new projects that have not
yet ramped up to offset lower revenue associated with certain projects
that have completed or are nearing completion. Adverse weather that
impacted certain projects primarily in California and the Midwest also
contributed to the revenue decline. The decrease was partially offset by
increased activities on certain newer Civil segment projects and a
Building segment technology project in California that are advancing.
Income from construction operations for the first quarter of 2019 was
$22.9 million compared to a loss of $0.9 million for the same period in
2018. The increase was principally because the prior-year period
included a pre-tax charge totaling $17.8 million, which was attributable
to the unexpected outcome of an arbitration decision on a completed
Civil segment project in New York. Net loss attributable to the Company
for the first quarter of 2019 was $0.4 million, or a loss of $0.01 per
diluted share, compared to a loss of $12.1 million, or a loss of $0.24
per diluted share, for the same quarter in 2018.
Backlog set a new record of $11.6 billion as of March 31, 2019, an
increase of 37% compared to $8.5 billion as of March 31, 2018. New
awards and adjustments to contracts in process totaled $3.2 billion in
the first quarter of 2019, setting a new quarterly record. Significant
new awards included the $1.4 billion Purple Line Section 3 Stations
project in California, the Choctaw Casino and Resort project in
Oklahoma, a large hospitality and gaming project in California, the $253
million Culver Line Communications-Based Train Control project in New
York and the $200 million Southland Gaming Casino and Hotel project in
Arkansas.
Outlook and Guidance
“The record new awards and backlog for the first quarter demonstrate our
continued success in capturing substantial new project opportunities
across all segments of our business,” said Ronald Tutor, Chairman and
Chief Executive Officer. “As these and other recent awards progress and
contribute more meaningfully as the year develops, we expect to report
significantly improved financial results. Our tremendous backlog,
combined with what we anticipate will be a multi-year period of
increased demand, supports our favorable outlook for strong revenue
growth and improved profitability over the next several years.”
The Company is reaffirming its EPS guidance for 2019 in the range of
$2.00 to $2.30. As previously mentioned in the earnings release for the
fourth quarter of 2018, earnings in 2019 are expected to be weighted
more heavily in the second half of the year due to the timing of project
ramp-up activities, as well as typical business seasonality.
First Quarter Conference Call
The Company will host a conference call at 2:00 PM Pacific Time on
Wednesday, May 8, 2019, to discuss the first quarter 2019 results. To
participate in the conference call, please dial 877-407-8293 five to ten
minutes prior to the scheduled time. International callers should dial
+1-201-689-8349.
The conference call will be webcast live over the Internet and can be
accessed by all interested parties on Tutor Perini’s website at www.tutorperini.com.
For those unable to participate during the live call, the webcast will
be available for replay shortly after the call on the website.
About Tutor Perini Corporation
Tutor Perini Corporation is a leading civil, building and specialty
construction company offering diversified general contracting and
design-build services to private clients and public agencies throughout
the world. We have provided construction services since 1894 and have
established a strong reputation within our markets by executing large,
complex projects on time and within budget, while adhering to strict
quality control measures. We offer general contracting, pre-construction
planning and comprehensive project management services, including
planning and scheduling of manpower, equipment, materials and
subcontractors required for a project. We also offer self-performed
construction services including site work, concrete forming and
placement, steel erection, electrical, mechanical, plumbing and heating,
ventilation and air conditioning (HVAC). We are known for our major
complex building project commitments, as well as our capacity to perform
large and complex transportation and heavy civil construction for
government agencies and private clients throughout the world.
Forward-Looking Statements
The statements contained in this release, including those set forth
in the section “Outlook and Guidance,” that are not purely historical
are forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, including without limitation,
statements regarding the Company’s expectations, hopes, beliefs,
intentions or strategies regarding the future and statements regarding
future guidance or estimates and non-historical performance. These
forward-looking statements are based on the Company’s current
expectations and beliefs concerning future developments and their
potential effects on the Company. While the Company’s expectations,
beliefs and projections are expressed in good faith and the Company
believes there is a reasonable basis for them, there can be no assurance
that future developments affecting the Company will be those that we
have anticipated. These forward-looking statements involve a number of
risks, uncertainties (some of which are beyond the control of the
Company) or other assumptions that may cause actual results or
performance to be materially different from those expressed or implied
by such forward-looking statements. These risks and uncertainties
include, but are not limited to, revisions of estimates of contract
risks, revenue or costs, the timing of new awards or the pace of project
execution, which may result in losses or lower than anticipated profit;
unfavorable outcomes of existing or future litigation or dispute
resolution proceedings against project owners, subcontractors or
suppliers, as well as failure to promptly recover significant working
capital invested in projects subject to such matters; the requirement to
perform extra, or change order, work resulting in disputes or claims or
adversely affecting our working capital, profits and cash flows; a
significant slowdown or decline in economic conditions; risks and other
uncertainties associated with assumptions and estimates used to prepare
financial statements; client cancellations of, or reductions in scope
under, contracts reported in our backlog; increased competition and
failure to secure new contracts; failure to meet contractual schedule
requirements, which could result in higher costs and reduced profits or,
in some cases, exposure to financial liability for liquidated damages
and/or damages to customers; impairment of our goodwill or other
indefinite-lived intangible assets; failure to meet our obligations
under our debt agreements; failure of our joint venture partners to
perform their venture obligations, which could impose additional
financial and performance obligations on us, resulting in reduced
profits or losses; inability to retain key members of our management, to
hire and retain personnel required to complete projects or implement
succession plans for key officers; decreases in the level of government
spending for infrastructure and other public projects; possible systems
and information technology interruptions, including due to cyberattack,
systems failures or other similar events; the impact of inclement
weather conditions on projects; failure to comply with laws and
regulations related to government contracts; conversion of our
outstanding Convertible Notes that could dilute ownership interests of
existing stockholders and could adversely affect the market price of our
common stock; the potential dilutive impact of our Convertible Notes in
our diluted earnings per share calculation; economic, political and
other risks, including civil unrest, security issues, labor conditions,
corruption and other unforeseeable events in countries where we do
business, resulting in unanticipated losses; and other risks and
uncertainties discussed under the heading “Risk Factors” in our Annual
Report on Form 10-K for the year ended December 31, 2018 filed on
February 27, 2019 and in other reports that we file with the Securities
and Exchange Commission from time to time. The Company undertakes no
obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as may be required under applicable securities laws.
| Tutor Perini Corporation | |||||||||||
| Condensed Consolidated Statements of Operations | |||||||||||
| Unaudited | |||||||||||
| Three Months Ended | |||||||||||
| March 31, | |||||||||||
| (in thousands, except per common share amounts) | 2019 | 2018 | |||||||||
| REVENUE | $ | 958,487 | $ | 1,028,156 | |||||||
| COST OF OPERATIONS | (870,017 | ) | (961,088 | ) | |||||||
| GROSS PROFIT | 88,470 | 67,068 | |||||||||
| General and administrative expenses | (65,557 | ) | (67,993 | ) | |||||||
| INCOME (LOSS) FROM CONSTRUCTION OPERATIONS | 22,913 | (925 | ) | ||||||||
| Other income, net | 422 | 780 | |||||||||
| Interest expense | (16,425 | ) | (15,065 | ) | |||||||
| INCOME (LOSS) BEFORE INCOME TAXES | 6,910 | (15,210 | ) | ||||||||
| Income tax (expense) benefit | (2,188 | ) | 4,268 | ||||||||
| NET INCOME (LOSS) | 4,722 | (10,942 | ) | ||||||||
| LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 5,078 | 1,182 | |||||||||
| NET LOSS ATTRIBUTABLE TO TUTOR PERINI CORPORATION | $ | (356 | ) | $ | (12,124 | ) | |||||
| BASIC LOSS PER COMMON SHARE | $ | (0.01 | ) | $ | (0.24 | ) | |||||
| DILUTED LOSS PER COMMON SHARE | $ | (0.01 | ) | $ | (0.24 | ) | |||||
| WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING: | |||||||||||
| BASIC | 50,098 | 49,814 | |||||||||
| DILUTED | 50,098 | 49,814 | |||||||||
| Tutor Perini Corporation | ||||||||||||||||||||||||
| Segment Information | ||||||||||||||||||||||||
| Unaudited | ||||||||||||||||||||||||
| Reportable Segments | ||||||||||||||||||||||||
| Specialty | Consolidated | |||||||||||||||||||||||
| (in thousands) | Civil | Building | Contractors | Total | Corporate | Total | ||||||||||||||||||
| Three Months Ended March 31, 2019 | ||||||||||||||||||||||||
| Total revenue | $ | 383,622 | $ | 436,243 | $ | 191,527 | $ | 1,011,392 | $ | — | $ | 1,011,392 | ||||||||||||
| Elimination of intersegment revenue | (50,128 | ) | (2,777 | ) | — | (52,905 | ) | — | (52,905 | ) | ||||||||||||||
| Revenue from external customers | $ | 333,494 | $ | 433,466 | $ | 191,527 | $ | 958,487 | $ | — | $ | 958,487 | ||||||||||||
| Income (loss) from construction operations | $ | 41,745 | $ | 3,133 | $ | (7,488 | ) | $ | 37,390 | $ | (14,477 | ) | (a) | $ | 22,913 | |||||||||
| Capital expenditures | $ | 14,012 | $ | 55 | $ | 123 | $ | 14,190 | $ | 222 | $ | 14,412 | ||||||||||||
| Depreciation and amortization(b) | $ | 9,370 | $ | 503 | $ | 1,064 | $ | 10,937 | $ | 2,780 | $ | 13,717 | ||||||||||||
| Three Months Ended March 31, 2018 | ||||||||||||||||||||||||
| Total revenue | $ | 325,400 | $ | 490,617 | $ | 274,801 | $ | 1,090,818 | $ | — | $ | 1,090,818 | ||||||||||||
| Elimination of intersegment revenue | (62,286 | ) | (376 | ) | — | (62,662 | ) | — | (62,662 | ) | ||||||||||||||
| Revenue from external customers | $ | 263,114 | $ | 490,241 | $ | 274,801 | $ | 1,028,156 | $ | — | $ | 1,028,156 | ||||||||||||
| Income (loss) from construction operations(c) | $ | 2,839 | $ | 6,425 | $ | 7,235 | $ | 16,499 | $ | (17,424 | ) | (a) | $ | (925 | ) | |||||||||
| Capital expenditures | $ | 19,196 | $ | 278 | $ | 419 | $ | 19,893 | $ | 77 | $ | 19,970 | ||||||||||||
| Depreciation and amortization(b) | $ | 5,756 | $ | 481 | $ | 1,112 | $ | 7,349 | $ | 2,838 | $ | 10,187 | ||||||||||||
|
(a) Consists primarily of corporate general and administrative expenses. |
|
(b) Depreciation and amortization is included in income from construction operations. |
|
(c) During the three months ended March 31, 2018, the Company |
|
|
|||||||
| Tutor Perini Corporation | |||||||
|
Condensed Consolidated Balance Sheets |
|||||||
| Unaudited | |||||||
|
|
As of March 31, |
As of December 31, | |||||
| (in thousands, except share and per share amounts) |
|
2019 |
2018 | ||||
| ASSETS | |||||||
| CURRENT ASSETS: | |||||||
| Cash and cash equivalents ($38,485 and $43,131 related to VIEs) | $ | 101,482 | $ | 116,075 | |||
| Restricted cash | 5,095 | 3,788 | |||||
| Restricted investments | 63,937 | 58,142 | |||||
| Accounts receivable ($54,791 and $62,482 related to VIEs) | 1,347,881 | 1,261,072 | |||||
| Retainage receivable ($45,618 and $36,724 related to VIEs) | 490,132 | 478,744 | |||||
| Costs and estimated earnings in excess of billings | 1,168,675 | 1,142,295 | |||||
| Other current assets ($33,666 and $30,185 related to VIEs) | 124,303 | 115,527 | |||||
| Total current assets | 3,301,505 | 3,175,643 | |||||
|
PROPERTY AND EQUIPMENT (P&E), net of accumulated |
|||||||
|
of $355,939 and $343,735 (net P&E of $51,128 and $51,508 related |
492,929 | 490,669 | |||||
| GOODWILL | 585,006 | 585,006 | |||||
| INTANGIBLE ASSETS, NET | 85,026 | 85,911 | |||||
| OTHER ASSETS | 91,804 | 50,523 | |||||
| TOTAL ASSETS | $ | 4,556,270 | $ | 4,387,752 | |||
| LIABILITIES AND EQUITY | |||||||
| CURRENT LIABILITIES: |
|
||||||
| Current maturities of long-term debt | $ | 11,921 | $ | 16,767 | |||
| Accounts payable ($29,210 and $18,070 related to VIEs) | 597,498 | 621,728 | |||||
| Retainage payable | 221,028 | 211,956 | |||||
|
Billings in excess of costs and estimated earnings ($244,617 and $263,764 related to VIEs) |
579,000 | 573,190 | |||||
|
Accrued expenses and other current liabilities ($35,851 and $34,828 related to VIEs) |
173,827 | 174,325 | |||||
| Total current liabilities | 1,583,274 | 1,597,966 | |||||
|
LONG-TERM DEBT, less current maturities, net of unamortized |
|||||||
|
discounts and debt issuance costs totaling $32,185 and $34,998 |
886,705 | 744,737 | |||||
| DEFERRED INCOME TAXES | 106,113 | 105,521 | |||||
| OTHER LONG-TERM LIABILITIES | 184,999 | 151,639 | |||||
| TOTAL LIABILITIES | 2,761,091 | 2,599,863 | |||||
| COMMITMENTS AND CONTINGENCIES | |||||||
| EQUITY | |||||||
| Stockholders’ Equity: | |||||||
|
Preferred stock – authorized 1,000,000 shares ($1 par value), none issued |
— | — | |||||
| Common stock – authorized 75,000,000 shares ($1 par value), | |||||||
| issued and outstanding 50,180,225 and 50,025,996 shares | 50,180 | 50,026 | |||||
| Additional paid-in capital | 1,105,184 | 1,102,919 | |||||
| Retained earnings | 701,325 | 701,681 | |||||
| Accumulated other comprehensive loss | (44,200 | ) | (45,449 | ) | |||
| Total stockholders’ equity | 1,812,489 | 1,809,177 | |||||
| Noncontrolling interests | (17,310 | ) | (21,288 | ) | |||
| TOTAL EQUITY | 1,795,179 | 1,787,889 | |||||
| TOTAL LIABILITIES AND EQUITY | $ | 4,556,270 | $ | 4,387,752 | |||
| Tutor Perini Corporation | ||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||
| Unaudited | ||||||||
| Three Months Ended March 31, | ||||||||
| (in thousands) |
|
2019 |
|
2018 |
||||
| Cash Flows from Operating Activities: | ||||||||
| Net income (loss) | $ | 4,722 | $ | (10,942 | ) | |||
|
Adjustments to reconcile net income (loss) to net cash used in operating activities: |
||||||||
| Depreciation | 12,831 | 9,301 | ||||||
| Amortization of intangible assets | 886 | 886 | ||||||
| Share-based compensation expense | 5,506 | 6,081 | ||||||
| Change in debt discounts and deferred debt issuance costs | 3,174 | 2,927 | ||||||
| Deferred income taxes | 142 | 186 | ||||||
| (Gain) loss on sale of property and equipment | (107 | ) | 1,471 | |||||
| Changes in other components of working capital | (154,192 | ) | (84,272 | ) | ||||
| Other long-term liabilities | 2,177 | 1,139 | ||||||
| Other, net | 76 | (180 | ) | |||||
| NET CASH USED IN OPERATING ACTIVITIES | (124,785 | ) | (73,403 | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Acquisition of property and equipment | (14,412 | ) | (19,970 | ) | ||||
| Proceeds from sale of property and equipment | 201 | 3,303 | ||||||
| Investment in securities | (8,357 | ) | (3,288 | ) | ||||
| Proceeds from maturities and sales of investments in securities | 3,324 | 3,007 | ||||||
| NET CASH USED IN INVESTING ACTIVITIES | (19,244 | ) | (16,948 | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from debt | 394,000 | 665,000 | ||||||
| Repayment of debt | (259,691 | ) | (586,559 | ) | ||||
| Cash payments related to share-based compensation | (2,364 | ) | (2,308 | ) | ||||
| Distributions paid to noncontrolling interests | (4,000 | ) | (5,000 | ) | ||||
| Contributions from noncontrolling interests | 2,798 | — | ||||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | 130,743 | 71,133 | ||||||
| Net decrease in cash, cash equivalents and restricted cash | (13,286 | ) | (19,218 | ) | ||||
| Cash, cash equivalents and restricted cash at beginning of period | 119,863 | 197,648 | ||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 106,577 | $ | 178,430 | ||||
| Tutor Perini Corporation | |||||||||||||
| Backlog Information | |||||||||||||
| Unaudited | |||||||||||||
| Revenue | |||||||||||||
| New Awards in the | Recognized in the | ||||||||||||
| Backlog at | Three Months Ended | Three Months Ended | Backlog at | ||||||||||
| (in millions) | December 31, 2018 | March 31, 2019(a) | March 31, 2019 | March 31, 2019 | |||||||||
| Civil | $ | 5,141.9 | $ | 1,697.5 | $ | (333.5 | ) | $ | 6,505.9 | ||||
| Building | 2,333.1 | 1,069.3 | (433.5 | ) | 2,968.9 | ||||||||
| Specialty Contractors | 1,821.7 | 479.3 | (191.5 | ) | 2,109.5 | ||||||||
| Total |
|
$ | 9,296.7 | $ | 3,246.1 | $ | (958.5 | ) | $ | 11,584.3 | |||
|
(a) New awards consist of the original contract price of projects |
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Contacts
Tutor Perini Corporation
Jorge Casado, 818-362-8391
Vice
President, Investor Relations & Corporate Communications
www.tutorperini.com
