- Revenue of $1.4 billion, up 21% Y/Y and the highest
quarterly result in more than ten years, driven by double-digit
growth across all segments
- Income from construction operations of $83.0 million, up 73%
Y/Y and the highest Q3 result since the merger in 2008
- Diluted earnings per share (“EPS”) of $0.72, nearly doubled
Y/Y
- Operating cash flow of $72.7 million (and $131.0 million YTD
through Q3-20, the highest nine-month YTD result since the merger
in 2008)
- Affirming 2020 EPS guidance of $1.80 to $2.10
Tutor Perini Corporation (the “Company”) (NYSE: TPC), a leading
civil, building and specialty construction company, reported
results today for the third quarter of 2020. Revenue was $1.4
billion, the highest revenue of any quarter in more than ten years
and up 21% compared to $1.2 billion for the third quarter of last
year. The Company experienced double-digit revenue growth across
all segments with only an immaterial impact from the COVID-19
pandemic in the third quarter of 2020. The growth was driven by
increased activities on various large infrastructure projects that
continue progressing, including the California High-Speed Rail
project, the Minneapolis Southwest Light Rail Transit project,
Newark Airport Terminal One and the Purple Line projects in Los
Angeles.
Income from construction operations for the third quarter of
2020 was $83.0 million, the highest third-quarter result since the
merger in 2008 and up 73% compared to $47.9 million for the third
quarter of last year. Net income attributable to the Company for
the third quarter of 2020 was $36.8 million, or $0.72 per diluted
share, compared to $19.3 million, or $0.38 per diluted share, for
the third quarter of 2019. The significant growth in income from
construction operations for the third quarter of 2020 was
principally due to contributions from various large infrastructure
projects. The strong increase in net income and EPS was also driven
by a nominal tax expense in the third quarter of 2020, which
primarily resulted from benefits associated with the Coronavirus
Aid, Relief, and Economic Security ("CARES") Act.
Third quarter 2020 backlog remained solid at $9.2 billion
compared to $10.0 billion for the second quarter of 2020. Backlog
declined sequentially as a result of strong revenue that outpaced
new awards in the quarter. New awards totaled $0.6 billion and
included $121 million for the Company's share of the South Coast
Light Rail project in Massachusetts, $75 million of additional
funding for various building projects in California, a $54 million
mixed-use building project in California and a $47 million military
facilities project in Guam. The Company has submitted several bids
and proposals for new large projects and multiple-award government
contracts that are pending customers’ decisions and contract awards
expected in the coming months. In addition, the Company anticipates
bidding on several other significant projects later this year and
during the first half of 2021, and expects that backlog will
continue to support strong revenue growth.
The Company generated $72.7 million of operating cash in the
third quarter of 2020. Through the first nine months of 2020, the
Company generated $131.0 million of operating cash, the highest
nine-month result since the merger in 2008 and an increase of 18%
compared to $111.4 million generated through the first nine months
of 2019. Strong cash contributions driven by increased project
execution activities on certain higher-margin projects were
enhanced by progress made on the resolution and collection of
certain disputed balances. Barring any significant impact on cash
flows from the COVID-19 pandemic, the Company still anticipates
that substantial cash collections associated with large projects
and ongoing dispute resolution efforts will contribute to strong
operating cash flow throughout the remainder of 2020 and
beyond.
Outlook and Guidance
“Our results were outstanding for the third quarter and first
nine months of 2020, reflecting double-digit growth that is being
driven by large infrastructure projects. Our operating cash flow
for the quarter was excellent, as anticipated, and our year-to-date
cash flow set a new record since our merger in 2008. Furthermore,
our Civil and Building segments are performing extremely well and
delivering solid operating results,” remarked Ronald Tutor,
Chairman and Chief Executive Officer. Tutor added, “The impacts of
the COVID-19 pandemic lessened in the third quarter and are not
materially impacting our business at this time, though we will
continue to monitor developments and adjust our operations as
necessary.”
As mentioned above, the COVID-19 pandemic had an immaterial
impact on the Company’s results for the third quarter of 2020.
Through the first nine months of 2020, we estimate that the
COVID-19 impacts to revenue, income from construction operations
and EPS were approximately $230 million, $15 million and $0.21,
respectively. The vast majority of the Company’s projects,
especially in the Civil segment, have been designated as essential
business, which has allowed the Company to continue its work on
those projects. However, due to the fluidity of the COVID-19
pandemic, the Company is unable at this time to accurately predict
the pandemic’s future impact on the Company’s business, financial
condition or performance. Nonetheless, based on the Company’s
results to date in 2020 and its current outlook for the remainder
of the year, the Company is affirming its EPS guidance and still
expects EPS to be in the range of $1.80 to $2.10.
Third Quarter 2020 Conference Call
The Company will host a conference call at 2:00 PM Pacific Time
on Wednesday, November 4, 2020, to discuss the third quarter 2020
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 customers 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 customers 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: the impact of the
COVID-19 pandemic and related events that are beyond our control,
including possible effects on our business and operations,
customers and suppliers, and employees, contractors and
subcontractors, which could affect adversely our projects and the
geographic regions in which we conduct business; a significant
slowdown or decline in economic conditions; 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 customers
(project owners, developers, general contractors, etc.),
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; risks and other uncertainties
associated with assumptions and estimates used to prepare financial
statements; inability to retain key members of our management, to
hire and retain personnel required to complete projects or
implement succession plans for key officers; client cancellations
of, or reductions in scope under, contracts reported in our
backlog; 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; decreases in the level of government spending
for infrastructure and other public projects; 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; increased competition and
failure to secure new contracts; failure to meet our obligations
under our debt agreements; impairment of our goodwill or other
indefinite-lived intangible assets; 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; 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; potential dilutive
impact of our Convertible Notes in our EPS calculation; downgrades
in our credit ratings; 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; uncertainty from the expected discontinuance of the
London Interbank Offered Rate and transition to any other interest
rate benchmark; 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, 2019 filed on February 26, 2020 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
September 30,
Nine Months Ended
September 30,
(in thousands, except per common
share amounts)
2020
2019
2020
2019
REVENUE
$
1,442,091
$
1,189,345
$
3,969,247
$
3,273,107
COST OF OPERATIONS
(1,317,176
)
(1,074,282
)
(3,615,498
)
(2,968,631
)
GROSS PROFIT
124,915
115,063
353,749
304,476
General and administrative expenses
(41,894
)
(67,120
)
(165,805
)
(195,474
)
Goodwill impairment
—
—
—
(379,863
)
INCOME (LOSS) FROM CONSTRUCTION
OPERATIONS
83,021
47,943
187,944
(270,861
)
Other income (expense)
(8,048
)
1,674
(8,364
)
2,996
Interest expense
(25,613
)
(17,305
)
(58,513
)
(51,252
)
INCOME (LOSS) BEFORE INCOME
TAXES
49,360
32,312
121,067
(319,117
)
Income tax (expense) benefit
(37
)
(5,591
)
(14,747
)
35,121
NET INCOME (LOSS)
49,323
26,721
106,320
(283,996
)
LESS: NET INCOME ATTRIBUTABLE TO
NONCONTROLLING INTERESTS
12,504
7,408
33,421
17,577
NET INCOME (LOSS) ATTRIBUTABLE TO TUTOR
PERINI CORPORATION
$
36,819
$
19,313
$
72,899
$
(301,573
)
BASIC EARNINGS (LOSS) PER COMMON
SHARE
$
0.72
$
0.38
$
1.44
$
(6.01
)
DILUTED EARNINGS (LOSS) PER COMMON
SHARE
$
0.72
$
0.38
$
1.43
$
(6.01
)
WEIGHTED-AVERAGE COMMON SHARES
OUTSTANDING:
BASIC
50,787
50,279
50,598
50,201
DILUTED
51,241
50,582
51,004
50,201
Tutor Perini
Corporation
Segment Information
Unaudited
Reportable Segments
(in thousands)
Civil
Building
Specialty
Contractors
Total
Corporate
Consolidated
Total
Three Months Ended September 30,
2020
Total revenue
$
723,324
$
552,823
$
322,091
$
1,598,238
$
—
$
1,598,238
Elimination of intersegment revenue
(111,328
)
(44,683
)
(136
)
(156,147
)
—
(156,147
)
Revenue from external customers
$
611,996
$
508,140
$
321,955
$
1,442,091
$
—
$
1,442,091
Income (loss) from construction
operations
$
70,237
$
15,815
$
9,700
$
95,752
(a)
$
(12,731
)
(b)
$
83,021
Capital expenditures
$
10,996
$
438
$
224
$
11,658
$
352
$
12,010
Depreciation and amortization(c)
$
26,659
$
419
$
1,002
$
28,080
$
2,778
$
30,858
Three Months Ended September 30,
2019
Total revenue
$
591,884
$
421,241
$
249,453
$
1,262,578
$
—
$
1,262,578
Elimination of intersegment revenue
(67,338
)
(5,895
)
—
(73,233
)
—
(73,233
)
Revenue from external customers
$
524,546
$
415,346
$
249,453
$
1,189,345
$
—
$
1,189,345
Income (loss) from construction
operations
$
50,695
$
7,580
$
7,247
$
65,522
$
(17,579
)
(b)
$
47,943
Capital expenditures
$
22,497
$
144
$
325
$
22,966
$
365
$
23,331
Depreciation and amortization(c)
$
11,953
$
495
$
1,018
$
13,466
$
2,761
$
16,227
(a)
During the three months ended September
30, 2020, income (loss) from construction operations was positively
impacted by $19.6 million (a favorable after-tax impact of $14.1
million, or $0.28 per diluted share) as a result of a favorable
arbitration decision related to a dispute in the Specialty
Contractors segment. This favorable impact was largely offset by an
adverse impact of $15.2 million (an unfavorable after-tax impact of
$10.9 million, or $0.21 per diluted share) due to an unfavorable
legal ruling pertaining to a mechanical project in California in
the Specialty Contractors segment.
(b)
Consists primarily of corporate general
and administrative expenses.
(c)
Depreciation and amortization is included
in income (loss) from construction operations.
Tutor Perini
Corporation
Segment Information
(continued)
Unaudited
Reportable Segments
(in thousands)
Civil
Building
Specialty
Contractors
Total
Corporate
Consolidated
Total
Nine Months Ended September 30,
2020
Total revenue
$
1,948,095
$
1,548,223
$
839,040
$
4,335,358
$
—
$
4,335,358
Elimination of intersegment revenue
(280,494
)
(85,298
)
(319
)
(366,111
)
—
(366,111
)
Revenue from external customers
$
1,667,601
$
1,462,925
$
838,721
$
3,969,247
$
—
$
3,969,247
Income (loss) from construction
operations
$
181,756
$
37,120
$
6,591
$
225,467
(a)
$
(37,523
)
(b)
$
187,944
Capital expenditures
$
41,139
$
636
$
952
$
42,727
$
669
$
43,396
Depreciation and amortization(c)
$
67,050
$
1,274
$
2,990
$
71,314
$
8,320
$
79,634
Nine Months Ended September 30,
2019
Total revenue
$
1,516,623
$
1,291,043
$
664,279
$
3,471,945
$
—
$
3,471,945
Elimination of intersegment revenue
(184,925
)
(13,913
)
—
(198,838
)
—
(198,838
)
Revenue from external customers
$
1,331,698
$
1,277,130
$
664,279
$
3,273,107
$
—
$
3,273,107
Income (loss) from construction
operations
$
(72,032
)
$
6,903
$
(160,036
)
$
(225,165
)
(d)
$
(45,696
)
(b)
$
(270,861
)
Capital expenditures
$
60,948
$
349
$
558
$
61,855
$
822
$
62,677
Depreciation and amortization(c)
$
31,608
$
1,495
$
3,143
$
36,246
$
8,295
$
44,541
(a)
During the nine months ended September 30,
2020, income (loss) from construction operations was adversely
impacted by $15.2 million (an unfavorable after-tax impact of $10.9
million, or $0.21 per diluted share) in the third quarter of 2020
due to an unfavorable legal ruling pertaining to a mechanical
project in California in the Specialty Contractors segment, as well
as by $13.2 million (an unfavorable after-tax impact of $9.5
million, or $0.19 per diluted share) in the second quarter of 2020
due to an adverse arbitration ruling pertaining to an electrical
project in New York in the Specialty Contractors segment. These
adverse impacts were mostly offset by $19.6 million (a favorable
after-tax impact of $14.1 million, or $0.28 per diluted share) in
the third quarter of 2020 as a result of a favorable arbitration
decision related to a dispute in the Specialty Contractors
segment.
(b)
Consists primarily of corporate general
and administrative expenses.
(c)
Depreciation and amortization is included
in income (loss) from construction operations.
(d)
During the nine months ended September 30,
2019, the Company recorded a non-cash goodwill impairment charge of
$379.9 million in income (loss) from construction operations (an
unfavorable after-tax impact of $329.5 million, or $6.56 per
diluted share) resulting from an interim impairment test the
Company performed as of June 1, 2019.
Tutor Perini
Corporation
Condensed Consolidated Balance
Sheets
Unaudited
(in thousands, except share and per share
amounts)
As of September 30,
2020
As of December 31,
2019
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ($104,955 and
$103,850 related to variable interest entities ("VIEs"))
$
348,366
$
193,685
Restricted cash
80,974
8,416
Restricted investments
75,475
70,974
Accounts receivable ($106,085 and $91,090
related to VIEs)
1,565,909
1,354,519
Retainage receivable ($110,794 and $89,132
related to VIEs)
621,414
562,375
Costs and estimated earnings in excess of
billings ($39,147 and $22,764 related to VIEs)
1,180,215
1,123,544
Other current assets ($56,504 and $58,128
related to VIEs)
239,614
197,473
Total current assets
4,111,967
3,510,986
PROPERTY AND EQUIPMENT ("P&E"),
net of accumulated depreciation of $424,065 and $388,147 (net
P&E of $17,634 and $49,919 related to VIEs)
485,861
509,685
GOODWILL
205,143
205,143
INTANGIBLE ASSETS, NET
131,391
155,270
OTHER ASSETS
107,894
104,693
TOTAL ASSETS
$
5,042,256
$
4,485,777
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt, net
of unamortized discount and debt issuance costs totaling $3,115 and
$0
$
99,504
$
124,054
Accounts payable ($101,034 and $93,848
related to VIEs)
811,987
682,699
Retainage payable ($22,864 and $13,967
related to VIEs)
296,200
252,181
Billings in excess of costs and estimated
earnings ($413,659 and $422,847 related to VIEs)
911,378
844,389
Accrued expenses and other current
liabilities ($12,581 and $25,402 related to VIEs)
233,241
206,533
Total current liabilities
2,352,310
2,109,856
LONG-TERM DEBT, less current
maturities, net of unamortized discount and debt issuance costs
totaling $20,934 and $23,343
921,519
710,422
DEFERRED INCOME TAXES
58,416
35,686
OTHER LONG-TERM LIABILITIES
200,714
199,288
TOTAL LIABILITIES
3,532,959
3,055,252
COMMITMENTS AND CONTINGENCIES
EQUITY
Stockholders' equity:
Preferred stock - authorized 1,000,000
shares ($1 par value), none issued
—
—
Common stock - authorized 112,500,000 and
75,000,000 shares ($1 par value), issued and outstanding 50,827,205
and 50,278,816 shares
50,827
50,279
Additional paid-in capital
1,125,455
1,117,972
Retained earnings
386,890
313,991
Accumulated other comprehensive loss
(39,816
)
(42,100
)
Total stockholders' equity
1,523,356
1,440,142
Noncontrolling interests
(14,059
)
(9,617
)
TOTAL EQUITY
1,509,297
1,430,525
TOTAL LIABILITIES AND EQUITY
$
5,042,256
$
4,485,777
Tutor Perini
Corporation
Condensed Consolidated
Statements of Cash Flows
Unaudited
Nine Months Ended September
30,
(in thousands)
2020
2019
Cash Flows from Operating
Activities:
Net income (loss)
$
106,320
$
(283,996
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Goodwill impairment
—
379,863
Depreciation
55,755
41,884
Amortization of intangible assets
23,879
2,657
Share-based compensation expense
10,722
14,331
Change in debt discount and deferred debt
issuance costs
18,960
9,790
Deferred income taxes
22,137
(48,318
)
Gain on sale of property and equipment
(2,609
)
(1,799
)
Changes in other components of working
capital
(107,786
)
(7,148
)
Other long-term liabilities
3,899
3,979
Other, net
(309
)
122
NET CASH PROVIDED BY OPERATING
ACTIVITIES
130,968
111,365
Cash Flows from Investing
Activities:
Acquisition of property and equipment
(43,396
)
(62,677
)
Proceeds from sale of property and
equipment
13,320
4,300
Investment in securities
(22,692
)
(18,790
)
Proceeds from maturities and sales of
investments in securities
19,901
11,078
NET CASH USED IN INVESTING
ACTIVITIES
(32,867
)
(66,089
)
Cash Flows from Financing
Activities:
Proceeds from debt
1,183,012
649,139
Repayment of debt
(1,004,259
)
(583,039
)
Cash payments related to share-based
compensation
(1,697
)
(2,363
)
Distributions paid to noncontrolling
interests
(37,217
)
(21,500
)
Contributions from noncontrolling
interests
—
6,519
Debt issuance, extinguishment and
modification costs
(10,701
)
(504
)
NET CASH PROVIDED BY FINANCING
ACTIVITIES
129,138
48,252
Net increase in cash, cash equivalents
and restricted cash
227,239
93,528
Cash, cash equivalents and restricted
cash at beginning of period
202,101
119,863
Cash, cash equivalents and restricted
cash at end of period
$
429,340
$
213,391
Tutor Perini
Corporation
Backlog Information
Unaudited
(in millions)
Backlog at June 30,
2020
New Awards in the
Three Months Ended September
30, 2020(a)
Revenue in the
Three Months Ended September
30, 2020
Backlog at September 30,
2020
Civil
$
5,536.9
$
282.2
$
(612.0
)
$
5,207.1
Building
2,278.5
186.4
(508.1
)
1,956.8
Specialty Contractors
2,183.2
156.9
(322.0
)
2,018.1
Total
$
9,998.6
$
625.5
$
(1,442.1
)
$
9,182.0
(in millions)
Backlog at December 31,
2019
New Awards in the Nine Months
Ended September 30, 2020(a)
Revenue in the
Nine Months Ended September
30, 2020
Backlog at September 30,
2020
Civil
$
6,037.2
$
837.5
$
(1,667.6
)
$
5,207.1
Building
2,790.3
629.4
(1,462.9
)
1,956.8
Specialty Contractors
2,393.6
463.2
(838.7
)
2,018.1
Total
$
11,221.1
$
1,930.1
$
(3,969.2
)
$
9,182.0
(a)
New awards consist of the original
contract price of projects added to our backlog plus or minus
subsequent changes to the estimated total contract price of
existing contracts.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201104005605/en/
Tutor Perini Corporation Jorge Casado, 818-362-8391 Vice
President, Investor Relations & Corporate Communications
www.tutorperini.com
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