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Tutor Perini Reports First Quarter 2024 Results
Revenue was $1.05 billion, up 35% compared to $776.3 million for the first quarter of last year. The strong growth was primarily driven by increased project execution activities on two mass-transit projects in California (one in the Civil segment and one in the Building segment) and a Building segment detention facility project in New York.
Income from construction operations for the first quarter of 2024 was $48.8 million, an improvement of $130.7 million compared to loss from construction operations of $81.9 million for the same period in 2023. The substantial improvement was principally due to the absence of certain significant prior-year unfavorable adjustments, as well as contributions related to the increased project execution activities discussed above. Net income attributable to the Company for the first quarter of 2024 was $15.8 million, or $0.30 of diluted EPS, compared to net loss attributable to the Company of $49.2 million, or a $0.95 loss per diluted share, for the first quarter of 2023.
Backlog grew to $10.0 billion as of March 31, 2024, up 26% compared to $7.9 billion as of March 31, 2023. The Building and Civil segments were the primary contributors to the new award activity in the first quarter of 2024. The most significant new awards and contract adjustments in the first quarter of 2024 included a $243 million health care facility project in California; a $73 million airport hangar project in Florida; $66 million of additional funding for several other health care projects in California; $55 million for three U.S. Navy projects in Diego Garcia; and $52 million of additional funding for three mass-transit projects in California.
As previously disclosed, in February 2024 the Company paid down its Term Loan B by $91 million using available cash on hand that it had accumulated -- a payment that was made more than one month earlier than required. Subsequently, in April 2024, the Company completed a successful debt refinancing, issuing $400 million of 11.875% senior notes due in 2029. The Company will use the proceeds of this transaction combined with $100 million of available cash on hand in early May 2024 to redeem all $500 million of its 6.875% senior notes due in 2025. In addition, subject to the redemption of the Company's 6.875% senior notes and the satisfaction of other customary closing conditions, the maturity of the Company's revolving credit facility will be extended to 2027.
Outlook and Guidance
The Company is focused on continuing to drive shareholder value through its disciplined approach to project bidding and execution, profitable revenue growth and continued strong cash flow. Over the near term, the Company plans to use excess cash to further reduce debt by paying down the remaining balance of the Term Loan B.
Ronald Tutor, Chairman and Chief Executive Officer, remarked, "We delivered great results that were better than expected for the first quarter of 2024, including solid revenue growth and profitability in our Civil and Building segments, strong backlog growth compared to the prior year, and the second-highest operating cash flow result of any first quarter since 2008. We continue to anticipate that our backlog will grow significantly later this year and in 2025, as we pursue and expect to capture our share of various large project opportunities amid a very strong, multi-year demand environment supported by federal, state and local government funding sources, and limited competition for many of the larger projects."
Based on the Company's year-to-date results in 2024 and the current outlook for the remainder of the year, the Company is affirming its 2024 EPS guidance and still expects EPS to be in the range of $0.85 to $1.10.
First Quarter 2024 Conference Call
The Company will host a conference call at 2:00 PM Pacific Time on Thursday, April 25, 2024, to discuss the first quarter 2024 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).
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: unfavorable outcomes of existing or future litigation or dispute resolution proceedings against us or 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; revisions of estimates of contract risks, revenue or costs, economic factors such as inflation, the timing of new awards, or the pace of project execution, which has resulted and may continue to result in losses or lower than anticipated profit; increased competition and failure to secure new contracts; contract requirements to perform extra work beyond the initial project scope, which has and in the future could result in disputes or claims and adversely affect our working capital, profits and cash flows; risks and other uncertainties associated with estimates and assumptions used to prepare our financial statements; a significant slowdown or decline in economic conditions, such as those presented during a recession; 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, as well as damage to our reputation; failure to meet our obligations under our debt agreements (especially in a high interest rate environment); inability to attract and retain our key officers, and to adequately plan for their succession, and hire and retain personnel required to execute and perform on our contracts; possible systems and information technology interruptions and breaches in data security and/or privacy; an inability to obtain bonding, which could have a negative impact on our operations and results; the impact of inclement weather conditions and other events outside of our control on projects; risks related to our international operations, such as uncertainty of U.S. government funding, as well as economic, political, regulatory and other risks, including risks of loss due to acts of war, labor conditions, and other unforeseeable events in countries where we do business, which could adversely affect our revenue and earnings; decreases in the level of government spending for infrastructure and other public projects; downgrades in our credit ratings; client cancellations of, or reductions in scope under, contracts reported in our backlog; risks related to government contracts and related procurement regulations; 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 and/or reputational harm; violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws; significant fluctuations in the market price of our common stock, which could result in substantial losses for stockholders and potentially subject us to securities litigation; public health crises, such as COVID-19, which have adversely impacted, and could in the future adversely impact, our business, financial condition and results of operations by, among other things, delaying the timing of project bids and/or awards and the timing of dispute resolutions and associated collections; physical and regulatory risks related to climate change; impairment of our goodwill or other indefinite-lived intangible assets; the exertion of influence over the Company by our chairman and chief executive officer due to his position and significant ownership interest; 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, 2023 filed on February 28, 2024 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) 2024 2023
---------------------------------------------------------- -------------------- ------------------------------------------------- -------------------- ------------------------------------------------
REVENUE $ 1,048,987 $ 776,300
COST OF OPERATIONS (933,736 ) (800,469 )
---------------------------------------------------------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- -------- --------------------
GROSS PROFIT (LOSS) 115,251 (24,169 )
General and administrative expenses (66,445 ) (57,776 )
---------------------------------------------------------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- -------- --------------------
INCOME (LOSS) FROM CONSTRUCTION OPERATIONS 48,806 (81,945 )
Other income, net 5,311 6,417
Interest expense (19,307 ) (21,513 )
---------------------------------------------------------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- -------- --------------------
INCOME (LOSS) BEFORE INCOME TAXES 34,810 (97,041 )
Income tax (expense) benefit (7,308 ) 48,112
---------------------------------------------------------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- -------- --------------------
NET INCOME (LOSS) 27,502 (48,929 )
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS 11,742 267
---------------------------------------------------------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- -------- --------------------
NET INCOME (LOSS) ATTRIBUTABLE TO TUTOR PERINI CORPORATION $ 15,760 $ (49,196 )
========================================================== ==================== ==================== ========= ==================== ==================== ==================== ======== ====================
BASIC EARNINGS (LOSS) PER COMMON SHARE $ 0.30 $ (0.95 )
========================================================== ==================== ==================== ========= ==================== ==================== ==================== ======== ====================
DILUTED EARNINGS (LOSS) PER COMMON SHARE $ 0.30 $ (0.95 )
========================================================== ==================== ==================== ========= ==================== ==================== ==================== ======== ====================
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING:
52,092 51,551
BASIC
========================================================== ==================== ==================== ========= ==================== ==================== ==================== ======== ====================
Tutor Perini Corporation
Segment Information
Unaudited
Reportable Segments Reportable Segments
------------------------------------------ -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(in thousands) Civil Building Specialty Total Corporate Consolidated
Contractors Total
------------------------------------------ ----------------------------------------------- ----------------------------------------------- ------------------------------------------------------ ------------------------------------------------- -------------------- ------------------------------------------------------ -------------------- -------------------------------------------------
Three Months Ended March 31, 2024
------------------------------------------ ----------------------------------------------- ----------------------------------------------- ------------------------------------------------------ ------------------------------------------------- -------------------- ------------------------------------------------------ -------------------- -------------------------------------------------
Total revenue $ 502,822 $ 422,176 $ 164,880 $ 1,089,878 $ -- $ 1,089,878
Elimination of intersegment revenue (30,657 ) (10,234 ) -- (40,891 ) -- (40,891 )
------------------------------------------ -------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- -------------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- --------- --------------------
Revenue from external customers $ 472,165 $ 411,942 $ 164,880 $ 1,048,987 $ -- $ 1,048,987
------------------------------------------ -------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- -------------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- --------- --------------------
Income (loss) from construction operations $ 70,743 $ 16,120 $ (18,312 ) $ 68,551 (a) $ (19,745 ) (b) $ 48,806
Capital expenditures $ 8,131 $ 217 $ 303 $ 8,651 $ 1,783 $ 10,434
Depreciation and amortization(c) $ 10,254 $ 585 $ 598 $ 11,437 $ 2,145 $ 13,582
------------------------------------------ ----------------------------------------------- ----------------------------------------------- ------------------------------------------------------ ------------------------------------------------- -------------------- ------------------------------------------------------ -------------------- -------------------------------------------------
Three Months Ended March 31, 2023
------------------------------------------ ----------------------------------------------- ----------------------------------------------- ------------------------------------------------------ ------------------------------------------------- -------------------- ------------------------------------------------------ -------------------- -------------------------------------------------
Total revenue $ 378,224 $ 229,291 $ 196,748 $ 804,263 $ -- $ 804,263
Elimination of intersegment revenue (28,354 ) 362 29 (27,963 ) -- (27,963 )
------------------------------------------ -------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- -------------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- --------- --------------------
Revenue from external customers $ 349,870 $ 229,653 $ 196,777 $ 776,300 $ -- $ 776,300
------------------------------------------ -------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- -------------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- --------- --------------------
Income (loss) from construction operations $ 18,012 $ (70,209 ) $ (12,448 ) $ (64,645 ) (d) $ (17,300 ) (b) $ (81,945 )
Capital expenditures $ 15,065 $ 2,017 $ 444 $ 17,526 $ 270 $ 17,796
________________________________ (a) During the three months ended March 31, 2024, the Company's income (loss) from construction operations was impacted by an unfavorable adjustment of $12.0 million ($8.8 million, or $0.17 per diluted share, after tax) due to an arbitration ruling that only provided a partial award to the Company pertaining to a completed Specialty Contractors segment electrical project in New York, as well as by a favorable adjustment of $10.2 million ($7.5 million, or $0.14 per diluted share, after tax) on a Civil segment mass-transit project in California related to a dispute resolution and associated expected cost savings. (b) Consists primarily of corporate general and administrative expenses. (c) Depreciation and amortization is included in income (loss) from construction operations.
Tutor Perini Corporation
Condensed Consolidated Balance Sheets
Unaudited
(in thousands, except share and per share amounts) As of March 31, As of December 31,
2024 2023
------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------- ------------------------------------------------------ -------------------- ------------------------------------------------------
ASSETS
CURRENT ASSETS:
$ 358,304 $ 380,564
Cash and cash equivalents ($171,727 and $173,118 related to variable interest entities ("VIEs"))
14,749 14,116
Restricted cash
130,499 130,287
Restricted investments
1,057,229 1,054,014
Accounts receivable ($51,822 and $84,014 related to VIEs)
550,224 580,926
Retention receivable ($154,951 and $161,187 related to VIEs)
1,156,571 1,143,846
Costs and estimated earnings in excess of billings ($72,566 and $58,089 related to VIEs)
199,138 217,601
Other current assets ($22,155 and $26,725 related to VIEs)
------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------
3,466,714 3,521,354
Total current assets
------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------
PROPERTY AND EQUIPMENT ("P&E"), net of accumulated depreciation of $546,716 and $534,171 (net P&E of $33,813 and $35,135 related to VIEs) 438,605 441,291
GOODWILL 205,143 205,143
INTANGIBLE ASSETS, NET 67,746 68,305
DEFERRED INCOME TAXES 69,737 74,083
OTHER ASSETS 122,462 119,680
------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------
$ 4,370,407 $ 4,429,856
TOTAL ASSETS
======================================================================================================================================================= ==================== ==================== ============== ==================== ==================== ==================== ============== ====================
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
$ 21,109 $ 117,431
Current maturities of long-term debt
600,190 466,545
Accounts payable ($23,199 and $24,160 related to VIEs)
227,731 223,138
Retention payable ($22,011 and $22,841 related to VIEs)
1,002,268 1,103,530
Billings in excess of costs and estimated earnings ($425,410 and $439,759 related to VIEs)
191,909 214,309
Accrued expenses and other current liabilities ($10,572 and $18,206 related to VIEs)
------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------
2,043,207 2,124,953
Total current liabilities
------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------
LONG-TERM DEBT, less current maturities, net of unamortized discount and debt issuance costs totaling $9,389 and $11,000 780,058 782,314
OTHER LONG-TERM LIABILITIES 243,908 238,678
------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------
3,067,173 3,145,945
TOTAL LIABILITIES
------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------
COMMITMENTS AND CONTINGENCIES
EQUITY
Stockholders' equity:
-- --
Preferred stock - authorized 1,000,000 shares ($1 par value), none issued
52,284 52,025
Common stock - authorized 112,500,000 shares ($1 par value), issued and outstanding 52,284,162 and 52,025,497 shares
1,146,008 1,146,204
Additional paid-in capital
148,906 133,146
Retained earnings
(40,162 ) (39,787 )
Accumulated other comprehensive loss
------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------
1,307,036 1,291,588
Total stockholders' equity
Noncontrolling interests (3,802 ) (7,677 )
------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------
1,303,234 1,283,911
TOTAL EQUITY
------------------------------------------------------------------------------------------------------------------------------------------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- --------------------
Tutor Perini Corporation
Condensed Consolidated Statements of Cash Flows
Unaudited
Three Months Ended March 31, Three Months Ended March 31,
------------------------------------------------------------------------------------------ --------------------------------------------------------------------------------------------------------------------------
(in thousands) 2024 2023
------------------------------------------------------------------------------------------ ------------------------------------------------------ -------------------- ------------------------------------------------
Cash Flows from Operating Activities:
$ 27,502 $ (48,929 )
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
13,023 9,849
Depreciation
559 559
Amortization of intangible assets
5,524 3,071
Share-based compensation expense
1,806 1,004
Change in debt discounts and deferred debt issuance costs
3,494 (86,265 )
Deferred income taxes
(227 ) (4,975 )
Gain on sale of property and equipment
47,173 148,182
Changes in other components of working capital
790 (2,256 )
Other long-term liabilities
(1,370 ) 1,088
Other, net
------------------------------------------------------------------------------------------ -------------------- -------------- -------------------- -------------------- -------------------- -------- --------------------
98,274 21,328
NET CASH PROVIDED BY OPERATING ACTIVITIES
------------------------------------------------------------------------------------------ -------------------- -------------- -------------------- -------------------- -------------------- -------- --------------------
Cash Flows from Investing Activities:
(10,434 ) (17,796 )
Acquisition of property and equipment
628 6,540
Proceeds from sale of property and equipment
(12,045 ) (386 )
Investments in securities
11,530 4,755
Proceeds from maturities and sales of investments in securities
------------------------------------------------------------------------------------------ -------------------- -------------- -------------------- -------------------- -------------------- -------- --------------------
(10,321 ) (6,887 )
NET CASH USED IN INVESTING ACTIVITIES
------------------------------------------------------------------------------------------ -------------------- -------------- -------------------- -------------------- -------------------- -------- --------------------
Cash Flows from Financing Activities:
-- 259,500
Proceeds from debt
(100,188 ) (238,101 )
Repayment of debt
(1,440 ) (123 )
Cash payments related to share-based compensation
(7,400 ) (8,500 )
Distributions paid to noncontrolling interests
-- 2,000
Contributions from noncontrolling interests
(552 ) (407 )
Debt issuance, extinguishment and modification costs
------------------------------------------------------------------------------------------ -------------------- -------------- -------------------- -------------------- -------------------- -------- --------------------
(109,580 ) 14,369
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
------------------------------------------------------------------------------------------ -------------------- -------------- -------------------- -------------------- -------------------- -------- --------------------
Net increase (decrease) in cash, cash equivalents and restricted cash (21,627 ) 28,810
Cash, cash equivalents and restricted cash at beginning of period 394,680 273,831
------------------------------------------------------------------------------------------ -------------------- -------------- -------------------- -------------------- -------------------- -------- --------------------
Tutor Perini Corporation Backlog Information
(in millions) Backlog at New Awards in the Revenue Recognized in the Backlog at
December 31, 2023 Three Months Ended Three Months Ended March 31, 2024
March 31, 2024(a) March 31, 2024
--------------------- -------------------- ---------------------------- -------------------- ----------------------------- -------------------- ----------------------------- -------------------- ---------------------------
Civil $ 4,240.6 $ 328.2 $ (472.2 ) $ 4,096.6
Building 4,177.5 404.3 (411.9 ) 4,169.9
Specialty Contractors 1,740.3 140.3 (164.9 ) 1,715.7
--------------------- -------------------- -------------------- -------- -------------------- -------------------- --------- -------------------- -------------------- -------- - -------------------- -------------------- -------
______________________________________________________
View source version on businesswire.com: https://www.businesswire.com/news/home/20240425223754/en/
SOURCE: Tutor Perini Corporation
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Tutor Perini Corporation Jorge Casado, 818-362-8391 Vice President, Investor Relations & Corporate Communications www.tutorperini.com
COMTEX_451421197/1006/2024-04-25T16:15:01