Tutor Perini(US:TPC)2023-11-09 22:06Financial Performance - Consolidated revenue for Q3 2023 was $1.1 billion, and for the nine months ended September 30, 2023, it was $2.9 billion, remaining level compared to the same periods in 2022 [149]. - Loss from construction operations for Q3 2023 was $12.6 million, compared to $6.9 million for the same period in 2022, primarily due to project adjustments and an improved project mix [150]. - Income tax benefit for Q3 2023 was $4.1 million, compared to an income tax expense of $0.6 million for the same period in 2022 [153]. - Diluted loss per common share for Q3 2023 was $0.71, compared to $0.63 for the same period in 2022 [154]. - The company experienced a significant backlog reduction during the pandemic, with backlog declining from $11.2 billion in 2019 to $7.9 billion in 2022, before recovering to $10.6 billion in 2023 [148]. Revenue and Backlog - Consolidated new awards for Q3 2023 totaled $0.8 billion, and for the nine months ended September 30, 2023, it was $5.6 billion, compared to $0.9 billion and $3.0 billion for the same periods in 2022 [155]. - Consolidated backlog as of September 30, 2023, was $10.6 billion, a 34% increase from $7.9 billion as of December 31, 2022 [156]. - The Civil segment backlog was approximately 43%, Building segment 41%, and Specialty Contractors segment 16% as of September 30, 2023 [156]. - The company anticipates continued revenue growth driven by long-term capital spending plans from state, local, and federal customers, despite potential project delays [158]. Segment Performance - Civil segment revenue for Q3 2023 was $520.5 million, a 4% increase from Q3 2022, and for the first nine months of 2023, revenue was $1.424 billion, a 10% increase year-over-year [163]. - Income from construction operations in the Civil segment for Q3 2023 was $46.9 million, up from $22.8 million in Q3 2022, and for the first nine months of 2023, it was $170.3 million compared to $12.1 million in the same period last year [164]. - New awards in the Civil segment totaled $469.0 million for Q3 2023 and $1.5 billion for the first nine months, compared to $225.1 million and $1.4 billion for the same periods in 2022 [167]. - Building segment revenue for Q3 2023 was $365.4 million, a 15% increase from Q3 2022, while revenue for the first nine months was $926.4 million, slightly up from $915.6 million in the same period last year [169]. - The Building segment reported a loss from construction operations of $83.9 million for the first nine months of 2023, compared to income of $9.5 million in the same period of 2022 [170]. - Backlog for the Building segment was $4.3 billion as of September 30, 2023, an 85% increase from $2.3 billion a year earlier, driven by a significant project in Brooklyn [173]. - Specialty Contractors segment revenue decreased by 31% to $174.8 million in Q3 2023 and by 25% to $507.9 million for the first nine months compared to the same periods in 2022 [174]. - Loss from construction operations in the Specialty Contractors segment was $120.7 million for the first nine months of 2023, compared to a loss of $82.5 million in the same period of 2022 [175]. - New awards in the Specialty Contractors segment totaled $128.5 million for Q3 2023, a decrease of 47.5% from $244.1 million in Q3 2022 [177]. - The backlog for the Specialty Contractors segment increased to $1.8 billion as of September 30, 2023, up from $1.4 billion a year earlier, representing a growth of 28.6% [178]. Expenses and Income - Corporate general and administrative expenses rose to $21.1 million for Q3 2023, compared to $16.6 million in Q3 2022, marking a 27.1% increase [179]. - Other income, net for the nine months ended September 30, 2023, increased by $7.3 million to $12.4 million, primarily due to a gain on the sale of property [180]. - Interest expense for the nine months ended September 30, 2023, increased by $14.1 million to $63.8 million, driven by higher interest rates [181]. Tax and Compliance - The effective income tax rate for Q3 2023 was 13.7%, lower than the federal statutory rate of 21%, due to cumulative catch-up adjustments [182]. - The company expects to resolve various disputes and unapproved change orders in 2023, which may positively impact future revenue [147]. - The company expects to remain in compliance with the covenants under the 2020 Credit Agreement going forward [197]. Cash and Debt Management - Cash and cash equivalents were $290.0 million as of September 30, 2023, an increase from $259.4 million at the end of 2022 [186]. - Net cash provided by operating activities for the nine months ended September 30, 2023, was $180.8 million, the second-largest result since the 2008 merger [187]. - Net cash used in investing activities was $43.4 million for the first nine months of 2023, primarily due to capital expenditures of $45.6 million [189]. - As of September 30, 2023, the Company had a debt-to-equity ratio of 0.68, compared to 0.66 at December 31, 2022 [191]. - As of September 30, 2023, the actual first lien net leverage ratio is 2.01 to 1.00, which is below the required maximum of 2.50 to 1.00 [197]. - The 2020 Credit Agreement was amended to set the maximum first lien net leverage ratio to 3.50:1.00 effective for the fiscal quarter ended December 31, 2022, stepping down to 2.50:1.00 for the fiscal quarter ending September 30, 2023 [197]. Market and Risk Management - The Bipartisan Infrastructure Law is expected to provide $1.2 trillion in federal infrastructure funding over the next decade, significantly benefiting the Company's market focus [160]. - There have been no material changes in contractual obligations from those described in the Annual Report on Form 10-K for the year ended December 31, 2022 [198]. - No new accounting pronouncements were issued that are expected to have a material impact on the company's financial position or results of operations during the three and nine months ended September 30, 2023 [200]. - There has been no material change in the company's exposure to market risk from that described in the Annual Report on Form 10-K for the year ended December 31, 2022 [201].