Hudson Yards - Multiple Projects - New York, NY - Total $2.3 Billion

Tutor Perini Reports Second Quarter Results

08/07/2017
  • New awards of $1.6 billion in Q2 2017; $3.7 billion of new awards in first half of 2017
  • Backlog at $7.6 billion, up 21% compared with backlog at the end of 2016
  • 56% of backlog now comprised of higher-margin Civil projects

LOS ANGELES--(BUSINESS WIRE)-- Tutor Perini Corporation (NYSE:TPC), a leading civil, building and specialty construction company, today reported results for the three months ended June 30, 2017. Revenue for the second quarter of 2017 was $1.2 billion, consistent with the revenue for the second quarter of last year. Income from construction operations was $34.0 million for the second quarter of 2017 compared to $48.8 million for the comparable period last year. The decrease in income from construction operations for the second quarter of 2017 was primarily due to unfavorable project adjustments recorded on certain mechanical projects in New York. The decrease was partially offset by increased activity related to certain mass-transit projects in California and New York. The current year period included a $37.0 million legal settlement that was recorded in other income. Net income attributable to Tutor Perini Corporation for the second quarter of 2017 was $30.1 million, or $0.59 per diluted share, compared to $21.4 million, or $0.43 per diluted share for the second quarter of 2016.

Backlog as of June 30, 2017 was $7.6 billion, up 21% compared to $6.2 billion as of December 31, 2016. New awards and adjustments to contracts in process totaled $1.6 billion in the second quarter of 2017 and $3.7 billion in the first six months of 2017, well outpacing revenue in both periods. The Civil segment was the major contributor to new award activity in the first half of 2017. Significant new awards in the second quarter of 2017 included the I-74 bridge project in Iowa valued at $323 million, the East Side Access CQ33 mass-transit project in New York valued at $292 million, two healthcare building projects in California collectively valued at $154 million, additional scope of work valued at $97 million for a technology office project in California, additional scope of work valued at $97 million for the Hudson Yards Platform project, the Henry Hudson Bridge design-build project in New York valued at $82 million and the MD4 highway improvements project in Maryland valued at $78 million.

“Our backlog grew again this quarter as a result of the strong market demand we have been pointing to for some time,” commented Ronald Tutor, Chairman and Chief Executive Officer. Tutor continued, “Our increased backlog and continued success in winning new projects reflects the underlying strength of our business. This, combined with the benefits we anticipate to come from the FAST Act, California’s SB1 transportation bill and several large voter-approved transportation funding measures, provides increased confidence in our outlook for growth and improved profitability. While our second quarter operating results did not meet our expectations, we are well positioned for improved results in the upcoming quarters.”

Outlook and Guidance

Based on the current backlog and market outlook, the Company is affirming its guidance for 2017, with revenue expected to be in excess of $5.5 billion and diluted earnings per share (EPS) expected in the range of $2.10 to $2.40. As previously noted in our earnings releases for the fourth quarter and full year 2016, and for the first quarter of 2017, we anticipate that our 2017 earnings will be weighted towards the second half of the year, consistent with the cyclicality of the Company’s business.

Second Quarter Conference Call

The Company will host a conference call at 2:00 PM Pacific Time on Monday, August 7, 2017, to discuss the second quarter 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. To listen to the webcast, please visit the Company's website at least 15 minutes prior to the start of the call to register and to download and install any necessary software. 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 the planning and scheduling of the 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 and Section 21E of the Securities Exchange Act of 1934, 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 Company’s ability to win new contracts and convert backlog into revenue; the Company's ability to successfully and timely complete construction projects; increased competition and failure to secure new contracts; the outcomes of pending or future litigation, arbitration or other dispute resolution proceedings and the timing of related collections; the potential delay, suspension, termination or reduction in scope of construction projects; the continuing validity of the underlying assumptions and estimates of total forecasted project revenues, costs and profits and project schedules; the availability of borrowed funds on terms acceptable to the Company; failure to meet our obligations under our debt agreements; the ability to retain certain members of management; the ability to obtain surety bonds to secure the Company’s performance under certain construction contracts; possible labor disputes or work stoppages within the construction industry; changes in federal and state appropriations for infrastructure projects and the impact of changing economic conditions on federal, state and local funding for infrastructure projects; possible changes or developments in international or domestic political, social, economic, business, industry, market and regulatory conditions or circumstances; failure to comply with laws and regulations related to government contracts; actions taken or not taken by third parties, including the Company’s customers, suppliers, business partners and competitors and legislative, regulatory, judicial and other governmental authorities and officials; impairments of our goodwill or other indefinite-lived intangible assets; possible systems and information technology disruptions; the impact of inclement weather conditions on projects; 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, 2016 filed with the Securities and Exchange Commission on February 23, 2017. 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 June 30, Six Months Ended June 30,
(in thousands, except per share data) 2017 2016 2017 2016
 
Revenue $ 1,247,274 $ 1,308,130 $ 2,364,635 $ 2,393,499
 
Cost of operations   (1,144,436 )   (1,198,360 )   (2,159,078 )   (2,178,637 )
 
Gross profit 102,838 109,770 205,557 214,862
 
General and administrative expenses   (68,793 )   (60,941 )   (134,495 )   (125,911 )
 
INCOME FROM CONSTRUCTION OPERATIONS 34,045 48,829 71,062 88,951
 
Other income, net 40,990 2,485 41,406 3,166
Interest expense   (22,519 )   (15,534 )   (38,083 )   (29,614 )
 
INCOME BEFORE INCOME TAXES 52,516 35,780 74,385 62,503
 
Provision for income taxes   (19,883 )   (14,419 )   (27,988 )   (25,743 )
 
NET INCOME 32,633 21,361 46,397 36,760
 
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS (2,537 )       (2,537 )    
 
NET INCOME ATTRIBUTABLE TO TUTOR PERINI CORPORATION $ 30,096   $ 21,361   $ 43,860   $ 36,760  
 
BASIC EARNINGS PER COMMON SHARE $ 0.61   $ 0.43   $ 0.89   $ 0.75  
 
DILUTED EARNINGS PER COMMON SHARE $ 0.59   $ 0.43   $ 0.86   $ 0.74  
 
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING:
BASIC   49,735     49,131     49,510     49,105  
DILUTED   50,755     49,561     50,853     49,423  
         
Tutor Perini Corporation
Segment Information
Unaudited
 
Reportable Segments
Specialty Consolidated
(in thousands) Civil Building Contractors Total Corporate Total

Three Months Ended June 30, 2017

Total revenue $ 538,552 $ 508,769 $ 281,857 $ 1,329,178 $ $ 1,329,178
Elimination of intersegment revenue   (65,970 )   (15,934 )       (81,904 )       (81,904 )
Revenue from external customers $ 472,582 $ 492,835 $ 281,857 $ 1,247,274 $ $ 1,247,274
Income from construction operations $ 58,144 $ 5,736 $ (14,007 ) $ 49,873 $ (15,828 ) (a) $ 34,045
Capital expenditures $ 1,850 $ 104 $ 286 $ 2,240 $ 271 $ 2,511
Depreciation and amortization (b) $ 5,236 $ 513 $ 1,193 $ 6,942 $ 2,820 $ 9,762
 

Three Months Ended June 30, 2016

Total revenue $ 504,930 $ 546,157 $ 318,902 $ 1,369,989 $ $ 1,369,989
Elimination of intersegment revenue   (39,223 )   (22,636 )       (61,859 )       (61,859 )
Revenue from external customers $ 465,707 $ 523,521 $ 318,902 $ 1,308,130 $ $ 1,308,130
Income from construction operations $ 45,056 $ 13,223 $ 5,413 $ 63,692 $ (14,863 )

(a)

$ 48,829
Capital expenditures $ 3,545 $ 81 $ 119 $ 3,745 $ 124 $ 3,869
Depreciation and amortization (b) $ 12,447 $ 549 $ 1,263 $ 14,259 $ 2,887 $ 17,146
 
Reportable Segments
Specialty Consolidated
(in thousands) Civil Building Contractors Total Corporate Total

Six Months Ended June 30, 2017

Total revenue $ 905,363 $ 1,019,936 $ 597,553 $ 2,522,852 $ $ 2,522,852
Elimination of intersegment revenue   (128,206 )   (30,011 )       (158,217 )       (158,217 )
Revenue from external customers $ 777,157 $ 989,925 $ 597,553 $ 2,364,635 $ $ 2,364,635
Income from construction operations $ 90,032 $ 10,977 $ 755 $ 101,764 $ (30,702 ) (a) $ 71,062
Capital expenditures $ 7,417 $ 148 $ 293 $ 7,858 $ 325 $ 8,183
Depreciation and amortization (b) $ 21,554 $ 1,031 $ 2,385 $ 24,970 $ 5,788 $ 30,758
 

Six Months Ended June 30, 2016

Total revenue $ 872,431 $ 1,034,151 $ 600,675 $ 2,507,257 $ $ 2,507,257
Elimination of intersegment revenue   (70,866 )   (42,892 )       (113,758 )       (113,758 )
Revenue from external customers $ 801,565 $ 991,259 $ 600,675 $ 2,393,499 $ $ 2,393,499
Income from construction operations $ 78,721 $ 25,673 $ 14,826 $ 119,220 $ (30,269 ) (a) $ 88,951
Capital expenditures $ 7,157 $ 302 $ 744 $ 8,203 $ 478 $ 8,681
Depreciation and amortization (b) $ 20,531 $ 1,106 $ 2,568 $ 24,205 $ 5,751 $ 29,956
 
(a) Consists primarily of corporate general and administrative expenses.
(b) Depreciation and amortization is included in income from construction operations.
   
Tutor Perini Corporation
Condensed Consolidated Balance Sheets
Unaudited
 
(in thousands, except share and per share amounts) June 30, 2017 December 31, 2016
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ($37,445 and $0 related to variable interest

entities ("VIEs"))

$ 172,927 $ 146,103
Restricted cash 52,051 50,504
Accounts receivable ("AR") including retainage of $602,581 and $569,391

(AR of $56,912 and $0 related to VIEs)

1,838,359 1,743,300
Costs and estimated earnings in excess of billings 850,634 831,826
Other current assets   77,736     66,023  
Total current assets 2,991,707 2,837,756
 
Property and equipment, net of accumulated depreciation

of $339,045 and $313,783

456,001 477,626
Goodwill 585,006 585,006
Intangible assets, net 91,226 92,997
Other assets   40,926     45,235  
TOTAL ASSETS $ 4,164,866   $ 4,038,620  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 30,333 $ 85,890
Accounts payable ("AP") including retainage of $274,045 and $258,294

(AP of $57,888 and $0 related to VIEs)

899,284 994,016
Billings in excess of costs and estimated earnings ($30,293 and

$0 related to VIEs)

339,808 331,112
Accrued expenses and other current liabilities   176,148     107,925  
Total current liabilities 1,445,573 1,518,943
 
Long-term debt, less current maturities, net of unamortized discounts

and debt issuance costs totaling $57,434 and $56,072

832,327 673,629
Deferred income taxes 131,292 131,007
Other long-term liabilities   155,810     162,018  
TOTAL LIABILITIES   2,565,002     2,485,597  
 
CONTINGENCIES AND COMMITMENTS
 
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 49,760,256 and 49,211,353 shares

49,760 49,211
Additional paid-in capital 1,075,637 1,075,600
Retained earnings 517,485 473,625
Accumulated other comprehensive loss   (44,305 )   (45,413 )
Total Stockholders Equity 1,598,577 1,553,023
Noncontrolling interests   1,287      
TOTAL STOCKHOLDERS' EQUITY   1,599,864     1,553,023  
 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,164,866   $ 4,038,620  
   
Tutor Perini Corporation
Condensed Consolidated Statements of Cash Flows
Unaudited
 
Six Months Ended June 30,
(in thousands) 2017 2016
Cash flows from operating activities:
Net income $ 46,397 $ 36,760
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation 28,987 28,185
Amortization of intangible assets 1,771 1,771
Share-based compensation expense 10,420 6,959
Change in debt discounts and deferred debt issuance costs 11,950 3,348
Deferred income taxes (1 ) (371 )
(Gain) loss on sale of property and equipment (349 ) 204
Other long-term liabilities (2,801 ) (3,811 )
Other non-cash items 1,785 1,200
Changes in other components of working capital   (132,779 )   (69,669 )
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES   (34,620 )   4,576  
 
Cash flows from investing activities:
Acquisition of property and equipment excluding financed purchases (8,183 ) (8,681 )
Proceeds from sale of property and equipment 1,336 1,092
Investments in securities restricted in use (9,297 )
Change in restricted cash   (1,547 )   (3,599 )
NET CASH USED IN INVESTING ACTIVITIES   (17,691 )   (11,188 )
 
Cash flows from financing activities:
Issuance of convertible notes 200,000
Proceeds from debt 1,276,457 711,092
Repayment of debt (1,171,954 ) (871,654 )
Issuance of common stock and effect of cashless exercise (10,809 )
Distributions paid to noncontrolling interests (2,500 )
Contributions from noncontrolling interests 1,250
Debt issuance costs   (13,309 )   (14,656 )
NET CASH PROVIDED BY FINANCING ACTIVITIES   79,135     24,782  
 
Net increase in cash and cash equivalents 26,824 18,170
Cash and cash equivalents at beginning of period   146,103     75,452  
Cash and cash equivalents at end of period $ 172,927   $ 93,622  
     
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) March 31, 2017 June 30, 2017(a) June 30, 2017 June 30, 2017
Civil $ 3,865.7 $ 847.5 $ (472.6 ) $ 4,240.6
Building 1,750.3 550.9 (492.8 ) 1,808.4

Specialty Contractors

  1,554.5   238.9   (281.9 )   1,511.5
Total $ 7,170.5 $ 1,637.3 $ (1,247.3 ) $ 7,560.5
 
Revenue
New Awards in the Recognized in the
Backlog at Six Months Ended Six Months Ended Backlog at
(in millions) December 31, 2016 June 30, 2017(a) June 30, 2017 June 30, 2017
Civil $ 2,672.1 $ 2,345.7 $ (777.2 ) $ 4,240.6
Building 1,981.2 817.1 (989.9 ) 1,808.4

Specialty Contractors

  1,573.8   535.3   (597.6 )   1,511.5
Total $ 6,227.1 $ 3,698.1 $ (2,364.7 ) $ 7,560.5
 
 
(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.

Source: Tutor Perini Corporation

Tutor Perini Corporation

Jorge Casado, 818-362-8391

Vice President, Investor Relations & Corporate Communications

www.tutorperini.com

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