TUTOR PERINI CORP - FORM 8-K - EX-99.1 - August 7, 2018

Attached files

file filename
8-K - 8-K - TUTOR PERINI CORPtpc-20180807x8k.htm

Picture2.jpg



News Release



Tutor Perini Reports Second Quarter 2018 Results



·

Diluted EPS of $0.49, with strong operating margins in the Civil and Building segments

·

New awards of $1.3 billion, reflecting a book-to-burn ratio of 1.2

·

Backlog up 15% year-over-year to a new record high of $8.7 billion

·

Double-digit year-over-year backlog growth across all three segments



LOS ANGELES – (BUSINESS WIRE) – August 7, 2018 – Tutor Perini Corporation (NYSE: TPC), a leading civil, building and specialty construction company, today reported results for the three months ended June 30, 2018. Revenue for the second quarter of 2018 was $1.1 billion compared to $1.2 billion for the second quarter of last year. The decrease was driven by certain Building segment projects that are now complete and the timing of project execution activities on various Civil segment projects in New York and California. Income from construction operations for the second quarter of 2018 was $54.8 million, up 61% compared to $34.0 million for the same quarter of last year. The increase was due to favorable operating margin performance in the Civil and Building segments and the absence of prior-year unfavorable adjustments in the Specialty Contractors segment. Net income attributable to the Company for the second quarter of 2018 was $24.9 million, or $0.49 per diluted share, compared to $30.1 million, or $0.59 per diluted share, for the same quarter of 2017. The results for the prior-year period included a $37.0 million legal settlement that was recorded in other income, which contributed $21.9 million of net income and $0.43 of the reported $0.59 per diluted share.



Backlog as of June 30, 2018 was $8.7 billion, a new record high and up 15% compared to $7.6 billion as of June 30, 2017. New awards and adjustments to contracts in process totaled $1.3 billion in the second quarter of 2018. Significant new awards included the $410 million Purple Line Extension Section 3 Tunnels project in California, the $172 million Baruch Houses mechanical project in New York and the $93 million Broadway Bridge Rehabilitation project in New York.



“Earnings for the second quarter exceeded our expectations largely due to better-than-anticipated margins in our Civil and Building segments,” commented Ronald Tutor, Chairman and Chief Executive Officer. “We also achieved our fourth consecutive quarter of double-digit year-over-year backlog growth, reflecting our continued success in bidding and winning new projects. We believe that our results for the second half of 2018 will continue to improve due to expected increased activity on some of our larger projects.”



Outlook and Guidance



Based on the Company’s results to date and its mid-year forecast, the Company is narrowing its guidance for 2018, with diluted earnings per share (EPS) now expected in the range of $1.90 to $2.05.



1

 

 

Second Quarter Conference Call



The Company will host a conference call at 2:00 PM Pacific Time on Tuesday, August 7, 2018, to discuss the second quarter 2018 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, 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, inaccurate estimates of contract risks, revenue or costs, the timing of new awards or the pace of project execution; the requirement to perform extra, or change order, work resulting in disputes or claims, which may adversely affect our working capital, profits and cash flows; 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; a significant slowdown or decline in economic conditions; increased competition and failure to secure new contracts; client cancellations of, or reductions in scope under, contracts reported in our backlog; actual results could differ from the assumptions and estimates used to prepare financial statements; 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; failure of our joint venture partners to perform their venture obligations, which could impose additional financial and performance obligations on us,

2

 

 

resulting in reduced profits or losses; decreases in the level of government spending for infrastructure and other public projects; inability to retain key members of our management, to hire and retain personnel required to complete projects or implement succession plans for key officers; failure to meet our obligations under our debt agreements; possible systems and information technology interruptions; failure to comply with laws and regulations related to government contracts; inclement weather; 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; impairment of our goodwill or other indefinite-lived intangible assets; 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, 2017 filed on February 27, 2018 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.



Contact:



Tutor Perini Corporation
Jorge Casado, 818-362-8391
Vice President, Investor Relations & Corporate Communications

www.tutorperini.com



 

3

 

 





 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

Tutor Perini Corporation

Condensed Consolidated Statements of Income

Unaudited



 

 

 

 

 

 

 

 

 

 

 



Three Months Ended June 30,

 

Six Months Ended June 30,

(in thousands, except per common share amounts)

2018

 

2017

 

2018

 

2017

REVENUE

$

 1,120,085 

 

$

 1,247,274 

 

$

 2,148,241 

 

$

 2,364,635 

COST OF OPERATIONS

 

 (1,001,445)

 

 

 (1,144,436)

 

 

 (1,962,533)

 

 

 (2,159,078)

GROSS PROFIT

 

 118,640 

 

 

 102,838 

 

 

 185,708 

 

 

 205,557 

General and administrative expenses

 

 (63,825)

 

 

 (68,793)

 

 

 (131,818)

 

 

 (134,495)

INCOME FROM CONSTRUCTION OPERATIONS

 

 54,815 

 

 

 34,045 

 

 

 53,890 

 

 

 71,062 

Other income, net

 

 1,050 

 

 

 40,990 

 

 

 1,830 

 

 

 41,406 

Interest expense

 

 (15,998)

 

 

 (22,519)

 

 

 (31,063)

 

 

 (38,083)

INCOME BEFORE INCOME TAXES

 

 39,867 

 

 

 52,516 

 

 

 24,657 

 

 

 74,385 

Provision for income taxes

 

 (11,971)

 

 

 (19,883)

 

 

 (7,703)

 

 

 (27,988)

NET INCOME

 

 27,896 

 

 

 32,633 

 

 

 16,954 

 

 

 46,397 

LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

 

 3,013 

 

 

 2,537 

 

 

 4,195 

 

 

 2,537 

NET INCOME ATTRIBUTABLE TO TUTOR PERINI CORPORATION

$

 24,883 

 

$

 30,096 

 

$

 12,759 

 

$

 43,860 

BASIC EARNINGS PER COMMON SHARE

$

 0.50 

 

$

 0.61 

 

$

 0.26 

 

$

 0.89 

DILUTED EARNINGS PER COMMON SHARE

$

 0.49 

 

$

 0.59 

 

$

 0.25 

 

$

 0.86 

WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

 

 

 

BASIC

 

 49,946 

 

 

 49,735 

 

 

 49,880 

 

 

 49,510 

DILUTED

 

 50,440 

 

 

 50,755 

 

 

 50,127 

 

 

 50,853 

    

4

 

 





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tutor Perini Corporation

Segment Information

Unaudited



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Reportable Segments

 

 

 

 

 

 



 

 

 

 

Specialty

 

 

 

 

 

Consolidated

(in thousands)

Civil

 

Building

 

Contractors

 

Total

 

Corporate

 

Total

Three Months Ended June 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

$

 461,614 

 

$

 447,975 

 

$

 270,633 

 

$

 1,180,222 

 

$

 —

 

$

 1,180,222 

Elimination of intersegment revenue

 

 (59,141)

 

 

 (996)

 

 

 —

 

 

 (60,137)

 

 

 —

 

 

 (60,137)

Revenue from external customers

$

 402,473 

 

$

 446,979 

 

$

 270,633 

 

$

 1,120,085 

 

$

 —

 

$

 1,120,085 

Income from construction operations

$

 49,439 

 

$

 12,536 

 

$

 7,454 

 

$

 69,429 

 

$

 (14,614)

(a)

$

 54,815 

Capital expenditures

$

 27,352 

 

$

 592 

 

$

 215 

 

$

 28,159 

 

$

 174 

 

$

 28,333 

Depreciation and amortization(b)

$

 6,569 

 

$

 489 

 

$

 1,106 

 

$

 8,164 

 

$

 2,813 

 

$

 10,977 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 (loss) 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 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Reportable Segments

 

 

 

 

 

 



 

 

 

 

Specialty

 

 

 

 

 

Consolidated

(in thousands)

Civil

 

Building

 

Contractors

 

Total

 

Corporate

 

Total

Six Months Ended June 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

$

 787,014 

 

$

 938,592 

 

$

 545,434 

 

$

 2,271,040 

 

$

 —

 

$

 2,271,040 

Elimination of intersegment revenue

 

 (121,427)

 

 

 (1,372)

 

 

 —

 

 

 (122,799)

 

 

 —

 

 

 (122,799)

Revenue from external customers

$

 665,587 

 

$

 937,220 

 

$

 545,434 

 

$

 2,148,241 

 

$

 —

 

$

 2,148,241 

Income from construction operations

$

 52,278 

 

$

 18,961 

 

$

 14,689 

 

$

 85,928 

 

$

 (32,038)

(a)

$

 53,890 

Capital expenditures

$

 46,548 

 

$

 870 

 

$

 634 

 

$

 48,052 

 

$

 251 

 

$

 48,303 

Depreciation and amortization(b)

$

 12,325 

 

$

 970 

 

$

 2,218 

 

$

 15,513 

 

$

 5,651 

 

$

 21,164 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)  Consists primarily of corporate general and administrative expenses.

(b)  Depreciation and amortization is included in income from construction operations.















5

 

 





 

 

 

 

 



 

 

 

 

 

Tutor Perini Corporation

Condensed Consolidated Balance Sheets

Unaudited



 

 

 

 

 



As of June 30,

 

As of December 31,

(in thousands, except share and per share amounts)

2018

 

2017

ASSETS

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

Cash and cash equivalents ($53,575 and $53,067 related to variable interest entities (VIEs))

$

 138,569 

 

$

 192,868 

Restricted cash

 

 3,434 

 

 

 4,780 

Restricted investments

 

 52,900 

 

 

 53,014 

Accounts receivable ($57,008 and $30,003 related to VIEs)

 

 1,272,932 

 

 

 1,265,717 

Retainage receivable ($24,288 and $12,410 related to VIEs)

 

 490,751 

 

 

 535,939 

Costs and estimated earnings in excess of billings

 

 1,044,233 

 

 

 932,758 

Other current assets ($35,657 and $0 related to VIEs)

 

 141,472 

 

 

 89,316 

Total current assets

 

 3,144,291 

 

 

 3,074,392 

PROPERTY AND EQUIPMENT ("P&E"), net of accumulated depreciation

of $337,101 and $359,188 (net P&E of $41,150 and $11,641 related to VIEs)

 

 490,614 

 

 

 467,499 

GOODWILL

 

 585,006 

 

 

 585,006 

INTANGIBLE ASSETS, NET

 

 87,683 

 

 

 89,454 

OTHER ASSETS

 

 50,171 

 

 

 47,772 

TOTAL ASSETS

$

 4,357,765 

 

$

 4,264,123 



 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

Current maturities of long-term debt

$

 28,105 

 

$

 30,748 

Accounts payable ($44,118 and $19,243 related to VIEs)

 

 625,436 

 

 

 699,971 

Retainage payable

 

 236,545 

 

 

 261,820 

Billings in excess of cost and estimated earnings ($240,545 and $120,952 related to VIEs)

 

 574,392 

 

 

 456,869 

Accrued expenses and other current liabilities

 

 134,264 

 

 

 132,438 

Total current liabilities

 

 1,598,742 

 

 

 1,581,846 

LONG-TERM DEBT, less current maturities, net of unamortized
discounts and debt issuance costs totaling $40,437 and $45,631

 

 794,509 

 

 

 705,528 

DEFERRED INCOME TAXES

 

 106,284 

 

 

 108,504 

OTHER LONG-TERM LIABILITIES

 

 145,764 

 

 

 163,465 

TOTAL LIABILITIES

 

 2,645,299 

 

 

 2,559,343 



 

 

 

 

 

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 50,010,863 and 49,781,010 shares

 

 50,011 

 

 

 49,781 

Additional paid-in capital

 

 1,093,874 

 

 

 1,084,205 

Retained earnings

 

 631,004 

 

 

 622,007 

Accumulated other comprehensive loss

 

 (44,805)

 

 

 (42,718)

Total stockholders' equity

 

 1,730,084 

 

 

 1,713,275 

Noncontrolling interests

 

 (17,618)

 

 

 (8,495)

TOTAL EQUITY

 

 1,712,466 

 

 

 1,704,780 



 

 

 

 

 

TOTAL LIABILITIES AND EQUITY

$

 4,357,765 

 

$

 4,264,123 

    

6

 

 





 

 

 

 

 



 

 

 

 

 

Tutor Perini Corporation

Condensed Consolidated Statements of Cash Flows

Unaudited



 

 

 

 

 



Six Months Ended June 30,

(in thousands)

2018

 

2017

Cash Flows from Operating Activities:

 

 

 

 

 

Net income

$

 16,954 

 

$

 46,397 

Adjustments to reconcile net income to net cash used in operating activities:

 

 

 

 

 

Depreciation

 

 19,393 

 

 

 28,987 

Amortization of intangible assets

 

 1,771 

 

 

 1,771 

Share-based compensation expense

 

 12,063 

 

 

 10,420 

Change in debt discounts and deferred debt issuance costs

 

 5,914 

 

 

 11,950 

Deferred income taxes

 

 116 

 

 

 (1)

Loss (gain) on sale of property and equipment

 

 1,474 

 

 

 (349)

Changes in other components of working capital 

 

 (113,887)

 

 

 (132,779)

Other long-term liabilities

 

 (5,276)

 

 

 (2,801)

Other, net

 

 (902)

 

 

 1,785 

NET CASH USED IN OPERATING ACTIVITIES

 

 (62,380)

 

 

 (34,620)



 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

Acquisition of property and equipment

 

 (48,303)

 

 

 (8,183)

Proceeds from sale of property and equipment

 

 4,120 

 

 

 1,336 

Investment in securities

 

 (8,549)

 

 

 (9,297)

Proceeds from maturities and sales of investments in securities

 

 7,982 

 

 

 —

NET CASH USED IN INVESTING ACTIVITIES

 

 (44,750)

 

 

 (16,144)



 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

Proceeds from debt

 

 1,246,677 

 

 

 1,276,457 

Repayment of debt

 

 (1,165,283)

 

 

 (1,171,954)

Business acquisition related payment

 

 (15,951)

 

 

 —

Issuance of common stock and effect of cashless exercise

 

 (2,458)

 

 

 (10,809)

Distributions paid to noncontrolling interests

 

 (12,500)

 

 

 (2,500)

Contributions from noncontrolling interests

 

 1,000 

 

 

 1,250 

Debt issuance and extinguishment costs

 

 —

 

 

 (13,309)

NET CASH PROVIDED BY FINANCING ACTIVITIES

 

 51,485 

 

 

 79,135 



 

 

 

 

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 (55,645)

 

 

 28,371 

Cash, cash equivalents and restricted cash at beginning of period

 

 197,648 

 

 

 196,607 

Cash, cash equivalents and restricted cash at end of period

$

 142,003 

 

$

 224,978 

  

  

7

 

 





 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

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, 2018

 

June 30, 2018(a)

 

June 30, 2018

 

June 30, 2018

Civil

$

 4,475.4 

 

$

 664.5 

 

$

 (402.5)

 

$

 4,737.4 

Building

 

 2,237.0 

 

 

 295.6 

 

 

 (447.0)

 

 

 2,085.6 

Specialty Contractors

 

 1,765.0 

 

 

 373.9 

 

 

 (270.6)

 

 

 1,868.3 

Total

$

 8,477.4 

 

$

 1,334.0 

 

$

 (1,120.1)

 

$

 8,691.3 



 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

Revenue

 

 

 



 

 

 

New Awards in the

 

Recognized in the

 

 

 



Backlog at

 

Six Months Ended

 

Six Months Ended

 

Backlog at

(in millions)

December 31, 2017

 

June 30, 2018(a)

 

June 30, 2018

 

June 30, 2018

Civil

$

 4,118.2 

 

$

 1,284.8 

 

$

 (665.6)

 

$

 4,737.4 

Building

 

 1,701.4 

 

 

 1,321.4 

 

 

 (937.2)

 

 

 2,085.6 

Specialty Contractors

 

 1,463.8 

 

 

 949.9 

 

 

 (545.4)

 

 

 1,868.3 

Total

$

 7,283.4 

 

$

 3,556.1 

 

$

 (2,148.2)

 

$

 8,691.3 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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.

  

  

8

 

Stock widget

Investing forum

TUTOR PERINI CORP Reports