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

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Tutor Perini Reports Second-Quarter Results

08/06/15
  • Revenue of $1.3 billion, up 21% compared to $1.1 billion in Q2 2014
  • Backlog stable at $7.7 billion compared to $7.8 billion in Q2 2014

SYLMAR, Calif.--(BUSINESS WIRE)-- Tutor Perini Corporation (NYSE: TPC) (the “Company”), a leading civil and building construction company, today reported results for the second quarter of 2015.

Second-Quarter and Six-Month Results

Revenues were $1,312.4 million and $2,378.9 million for the three and six months ended June 30, 2015 compared to $1,084.5 million and $2,039.7 million for the same periods in 2014. Income from construction operations was $30.9 million and $51.0 million for the three and six months ended June 30, 2015 compared to $65.4 million and $106.9 million for the same periods in 2014. Net income for the three and six months ended June 30, 2015 was $11.8 million and $16.9 million compared to $28.5 million and $44.5 million for the same periods in 2014. Basic and diluted earnings per share (EPS) were both $0.24 for the three months ended June 30, 2015 compared to basic and diluted EPS of $0.59 and $0.58 for the same period in 2014. Basic and diluted EPS were $0.35 and $0.34 for the six months ended June 30, 2015 compared to basic and diluted EPS of $0.92 and $0.91 for the same period in 2014.

The most significant revenue drivers in the second quarter were increased activity in the New York area on the JFK runway reconstruction project, the MTA East Side Access CM006 project, the Hudson Yards platform, and various electrical and mechanical projects, as well as increased activity on various bridge projects in the Midwest, the Scarlet Pearl Casino Resort in Mississippi, two confidential technology building projects in California, and the San Diego Courthouse project also in California. Revenue this quarter was impacted by a further delay on the Alaskan Way Viaduct project in Seattle associated with tunnel boring machine repairs and a slow start to the California High-Speed Rail project.

Net income for the second quarter was negatively impacted by a significant loss on the Hudson Yards 52-story Tower C concrete project. This loss, which amounted to an $8.7 million reduction in net income and a corresponding $0.17 reduction in diluted EPS for the second quarter of 2015, was the first major loss for Tutor Perini on a fixed-price contract in the past 20 years. In addition, decreased activity this year on the Alaskan Way Viaduct project contributed to the decrease in net income. The loss was partially offset by positive contributions from the increased revenue drivers mentioned above, particularly the JFK runway project.

At June 30, 2015, working capital was $1,158.7 million, an increase of $44.7 million from $1,114.0 million at December 31, 2014. The Company believes its financial position and available borrowing under existing credit arrangements are sufficient to support the Company’s current backlog and anticipated new work.

Backlog Stable at $7.7 Billion

The backlog of uncompleted construction work at June 30, 2015 remained stable at $7.7 billion, a decrease of $0.1 billion from $7.8 billion reported at both June 30, 2014 and March 31, 2015. New awards and adjustments to contracts in process totaled approximately $1.3 billion in the second quarter of 2015. Significant additions to backlog in the second quarter included $455 million of initial funding for a technology research and development facility project and $72 million of incremental funding for a biotechnology facility project, both in California, and three electrical projects totaling $97 million in New York.

Outlook and Guidance

“Our second-quarter results were highlighted by strong revenue growth and stable backlog which were balanced by lower-than-expected operating income largely due to the significant loss on the Hudson Yards Tower C concrete project,” remarked Ronald Tutor, Chairman and Chief Executive Officer. Tutor continued, “Our strong revenue growth this quarter reflects a continued healthy end market environment. We expect improved performance later this year when tunneling work is anticipated to resume on the Alaskan Way Viaduct project and as our work increases on the California High-Speed Rail and other large projects. Furthermore, I remain confident in our long-term growth trajectory based on our strong backlog and level of pending awards.”

Based on the year-to-date results and the outlook for the remainder of the year, the Company is maintaining its fiscal 2015 guidance for revenue in the range of $5.0 billion to $5.5 billion. However, due to the loss on the Hudson Yards Tower C concrete project and delays on the Alaskan Way Viaduct project, the Company is reducing its fiscal 2015 diluted EPS guidance to a range of $1.90 to $2.10. In addition, the Company expects to favorably resolve certain settlements and legal proceedings by the end of this year, which may enable it to achieve the low end of its previous EPS guidance.

Second-Quarter Conference Call

The Company will host a conference call at 2:00 PM Pacific Time on Thursday, August 6, 2015, 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 webcasted live over the internet and can be accessed on Tutor Perini's website at www.tutorperini.com. To listen to the webcast, please visit Tutor Perini's website at least fifteen minutes prior to the start of the call to register, 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 Tutor Perini's website.

About Tutor Perini Corporation

Tutor Perini Corporation is a leading civil and building 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 excavation, concrete forming and placement, steel erection, electrical and mechanical services, plumbing, and 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.

The statements contained in this Release 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. 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 successfully and timely complete construction projects; the Company’s ability to win new contracts and convert backlog into revenue; the Company’s ability to realize the anticipated economic and business benefits of its acquisitions and its strategy to assemble and operate a Specialty Contractors business segment; the potential delay, suspension, termination, or reduction in scope of a construction project; the continuing validity of the underlying assumptions and estimates of total forecasted project revenue, costs and profits and project schedules; the outcomes of pending or future litigation, arbitration or other dispute resolution proceedings; the availability of borrowed funds on terms acceptable to the Company; the ability to retain certain members of management; the ability to obtain surety bonds to secure its 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; and 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; 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, 2014 filed with the Securities and Exchange Commission on February 26, 2015. 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
Consolidated Condensed Balance Sheets (Unaudited)
(in thousands, except par value)
 
June 30, 2015 December 31, 2014
ASSETS
 
CURRENT ASSETS:
Cash and cash equivalents $ 106,917 $ 135,583
Restricted cash 39,493 44,370
Accounts receivable, including retainage 1,553,514 1,479,504
Costs and estimated earnings in excess of billings 816,480 726,402
Deferred income taxes 17,952 17,962
Other current assets   103,243     68,735  
Total current assets 2,637,599 2,472,556
 
Property and equipment, net 537,833 527,602
 
Goodwill 585,006 585,006
Intangible assets, net 98,368 100,254
Other   84,830     87,897  
 
Total assets $ 3,943,636   $ 3,773,315  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
CURRENT LIABILITIES:
Current maturities of long-term debt $ 86,101 $ 81,292
Accounts payable, including retainage 963,230 798,174
Billings in excess of costs and estimated earnings 263,400 319,296
Accrued expenses and other current liabilities   166,198     159,814  
Total current liabilities   1,478,929     1,358,576  
 
Long-term debt, less current maturities 806,652 784,067
Deferred income taxes 150,193 150,371
Other long-term liabilities   113,284     114,796  
Total liabilities   2,549,058     2,407,810  
 
CONTINGENCIES AND COMMITMENTS
 
STOCKHOLDERS’ EQUITY:
Preferred stock, $1 par value:
Authorized – 1,000,000 shares
Issued and outstanding – none
Common stock, $1 par value:
Authorized – 75,000,000 shares
Issued and outstanding – 49,069,589 shares and 48,671,492 shares 49,070 48,671
Additional paid-in capital 1,039,425 1,025,941
Retained earnings 349,414 332,511
Accumulated other comprehensive loss   (43,331 )   (41,618 )
Total stockholders' equity   1,394,578     1,365,505  
 
Total liabilities and stockholders' equity $ 3,943,636   $ 3,773,315  
 
 
                       
Tutor Perini Corporation
Consolidated Condensed Statements of Operations (Unaudited)
(in thousands, except per share data)
 
Three Months Ended June 30, Six Months Ended June 30,
2015 2014 2015 2014
 
Revenues $ 1,312,438 $ 1,084,510 $ 2,378,903 $ 2,039,743
 
Cost of operations   1,213,818     954,979     2,189,524     1,804,865  
 
Gross profit 98,620 129,531 189,379 234,878
 
General and administrative expenses   67,739     64,088     138,414     127,938  
 
INCOME FROM CONSTRUCTION OPERATIONS 30,881 65,443 50,965 106,940
 
Other income (expense), net 100 (6,974 ) (655 ) (10,347 )
Interest expense   (10,989 )   (10,857 )   (22,113 )   (21,688 )
 
Income before income taxes 19,992 47,612 28,197 74,905
 
Provision for income taxes   (8,215 )   (19,067 )   (11,294 )   (30,421 )
 
NET INCOME $ 11,777   $ 28,545   $ 16,903   $ 44,484  
 
BASIC EARNINGS PER COMMON SHARE $ 0.24   $ 0.59   $ 0.35   $ 0.92  
 
DILUTED EARNINGS PER COMMON SHARE $ 0.24   $ 0.58   $ 0.34   $ 0.91  
 
 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
BASIC 49,028 48,543 48,890 48,492
Effect of dilutive stock options and restricted stock units   800     510     798     500  
DILUTED   49,828     49,053     49,688     48,992  
 
 
                     
Tutor Perini Corporation
Consolidated Condensed Statements of Cash Flows (Unaudited)
(In thousands)
 
Six Months Ended June 30,
2015

2014

Cash Flows from Operating Activities:
Net income $ 16,903 $ 44,484
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization 21,434 30,078
Stock-based compensation expense 13,324 9,920
Excess income tax benefit from stock-based compensation (162 )
Deferred income taxes (177 ) (64 )
Loss on sale of investments 1,786
(Gain) loss on sale of property and equipment (313 ) 427
Other long-term liabilities 42 5,559
Other non-cash items (3,259 ) 1,562
Changes in other components of working capital   (79,550 )   (155,187 )
NET CASH USED IN OPERATING ACTIVITIES   (31,758 )   (61,435 )
 
Cash Flows from Investing Activities:
Acquisition of property and equipment excluding financed purchases (29,544 ) (26,730 )
Proceeds from sale of property and equipment 1,122 1,906
Proceeds from sale of available-for-sale securities 44,497
Change in restricted cash   4,877     (33 )
NET CASH (USED BY) PROVIDED BY INVESTING ACTIVITIES   (23,545 )   19,640  
 
Cash Flows from Financing Activities:
Proceeds from debt 473,490 717,484
Repayment of debt (446,239 ) (649,282 )
Business acquisition-related payments (1,260 )
Excess income tax benefit from stock-based compensation 162
Issuance of common stock and effect of cashless exercise (776 ) (1,531 )
Debt issuance costs       (3,681 )
NET CASH PROVIDED BY FINANCING ACTIVITIES   26,637     61,730  
 
Net (Decrease) Increase in Cash and Cash Equivalents (28,666 ) 19,935
Cash and Cash Equivalents at Beginning of Year   135,583     119,923  
Cash and Cash Equivalents at End of Period $ 106,917   $ 139,858  
 
Supplemental Disclosure of Cash Paid For:
Interest $ 26,148   $ 21,830  
Income taxes $ 19,717   $ 33,668  
Supplemental Disclosure of Non-cash Transactions:
Property and equipment acquired through financing arrangements not included above $   $ 27,045  
 
 
                                   
Tutor Perini Corporation
Segment Information
(in thousands)
 
Reportable Segments        
Specialty Consolidated
Civil Building Contractors Totals Corporate Total

Three Months Ended June 30, 2015

Total revenues $ 573,360 $ 472,247 $ 326,798 $ 1,372,405 $ $ 1,372,405
Elimination of intersegment revenues (39,180 )   (20,843 )   56   (59,967 )       (59,967 )
Revenues from external customers $ 534,180 $ 451,404 $ 326,854 $ 1,312,438 $ $ 1,312,438
Income from construction operations $ 46,329 $ (12,592 ) $ 13,743 $ 47,480 $ (16,599 ) (a) $ 30,881
 

Three Months Ended June 30, 2014

Total revenues $ 398,123 390,353 321,959 1,110,435 $ 1,110,435
Elimination of intersegment revenues (7,584 )   (18,341 )     (25,925 )       (25,925 )
Revenues from external customers $ 390,539 $ 372,012 $ 321,959 $ 1,084,510 $ $ 1,084,510
Income from construction operations $ 58,002 7,674 12,633 78,309 (12,866 ) (a) $ 65,443
 
Reportable Segments        
Specialty Consolidated
Civil Building Contractors Totals Corporate Total

Six Months Ended June 30, 2015

 

Total revenues $ 966,236 $ 888,309 $ 619,816 $ 2,474,361 $ $ 2,474,361
Elimination of intersegment revenues (57,382 )   (38,076 )     (95,458 )       (95,458 )
Revenues from external customers $ 908,854 $ 850,233 $ 619,816 $ 2,378,903 $ $ 2,378,903
Income from construction operations $ 76,923 $ (14,870 ) $ 24,267 $ 86,320 $ (35,355 ) (a) $ 50,965
 

Six Months Ended June 30, 2014

Total revenues $ 774,515 $ 701,668 $ 614,104 $ 2,090,287 $ $ 2,090,287
Elimination of intersegment revenues (18,820 )   (31,724 )     (50,544 )       (50,544 )
Revenues from external customers $ 755,695 $ 669,944 $ 614,104 $ 2,039,743 $ $ 2,039,743
Income from construction operations $ 102,347 $ 9,497 $ 20,450 $ 132,294 $ (25,354 ) (a) $ 106,940
 
(a) Consists primarily of corporate general and administrative expenses.
 
 
 
Tutor Perini Corporation
Backlog Information
(in millions)
                       
Revenues
Recognized in the
Backlog at New Business Three Months Ended Backlog at
March 31, 2015 Awarded (a) June 30, 2015 June 30, 2015
 
Civil $ 3,411.8 $ 251.0 $ (534.2 ) $ 3,128.6
Building 2,254.8 679.8 (451.4 ) 2,483.2

Specialty Contractors

  2,121.7   342.8   (326.8 )   2,137.7
Total $ 7,788.3 $ 1,273.6 $ (1,312.4 ) $ 7,749.5
 
 
Revenues
Recognized in the
Backlog at New Business Six Months Ended Backlog at
December 31, 2014 Awarded (a) June 30, 2015 June 30, 2015
 
Civil $ 3,563.2 $ 474.3 $ (908.9 ) $ 3,128.6
Building 2,187.8 1,145.6 (850.2 ) 2,483.2
Specialty Contractors   2,080.7   676.8   (619.8 )   2,137.7
Total $ 7,831.7 $ 2,296.7 $ (2,378.9 ) $ 7,749.5
 

(a) New business awarded consists 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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