Tutor Perini(US:TPC)2024-04-25 21:06Part I. Financial Information Financial Statements This section presents the unaudited condensed consolidated financial statements for Tutor Perini Corporation for the quarter ended March 31, 2024, including Statements of Operations, Balance Sheets, and Cash Flows, with detailed notes on accounting policies and financial items Condensed Consolidated Statements of Operations The company achieved a net income of $27.5 million in Q1 2024, a significant turnaround from a $48.9 million loss in Q1 2023, with revenue increasing 35% year-over-year Q1 2024 vs Q1 2023 Statement of Operations Highlights | Metric (in thousands, except per share) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenue | $1,048,987 | $776,300 | | Gross Profit (Loss) | $115,251 | $(24,169) | | Income (Loss) from Construction Operations | $48,806 | $(81,945) | | Net Income (Loss) Attributable to Tutor Perini | $15,760 | $(49,196) | | Diluted Earnings (Loss) Per Common Share | $0.30 | $(0.95) | Condensed Consolidated Balance Sheets As of March 31, 2024, total assets were $4.37 billion, total liabilities $3.07 billion, and total equity $1.30 billion, reflecting shifts in working capital and debt Balance Sheet Summary (in thousands) | Metric | As of March 31, 2024 | As of December 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $3,466,714 | $3,521,354 | | Total Assets | $4,370,407 | $4,429,856 | | Total Current Liabilities | $2,043,207 | $2,124,953 | | Total Liabilities | $3,067,173 | $3,145,945 | | Total Equity | $1,303,234 | $1,283,911 | Condensed Consolidated Statements of Cash Flows The company generated $98.3 million in net cash from operating activities in Q1 2024, driven by net income and working capital, despite a $109.6 million use in financing activities Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $98,274 | $21,328 | | Net Cash Used in Investing Activities | $(10,321) | $(6,887) | | Net Cash Provided by (Used in) Financing Activities | $(109,580) | $14,369 | | Net Increase (Decrease) in Cash | $(21,627) | $28,810 | Notes to Condensed Consolidated Financial Statements This section details financial statement line items, covering revenue recognition, contract assets, debt, legal contingencies, segment performance, and subsequent events like new senior note issuance Q1 2024 Revenue by Segment (in thousands) | Segment | Q1 2024 Revenue | Q1 2023 Revenue | | :--- | :--- | :--- | | Civil | $472,165 | $349,870 | | Building | $411,942 | $229,653 | | Specialty Contractors | $164,880 | $196,777 | | Total | $1,048,987 | $776,300 | - As of March 31, 2024, total contract assets were $1.81 billion, including $519.4 million in claims and $558.5 million in unapproved change orders28 - Subsequent to the quarter end, on April 22, 2024, the company issued $400.0 million of 11.875% Senior Notes due 2029. The proceeds, along with cash on hand, will be used to redeem the existing $500.0 million 6.875% Senior Notes due 2025, resulting in a $100.0 million net reduction in principal debt132135 Q1 2024 Income (Loss) from Construction Operations by Segment (in thousands) | Segment | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Civil | $70,743 | $18,012 | | Building | $16,120 | $(70,209) | | Specialty Contractors | $(18,312) | $(12,448) | Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses Q1 2024 financial results, noting a 35% revenue increase to $1.05 billion, a swing to $48.8 million in construction income, and a strong $10.0 billion backlog, supported by solid liquidity and debt refinancing Executive Overview Q1 2024 performance significantly improved with consolidated revenue reaching $1.05 billion, construction operations turning profitable at $48.8 million, and a strong $10.0 billion backlog Q1 2024 Key Performance Indicators | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenue | $1.05 billion | $776.3 million | | Income (Loss) from Construction Operations | $48.8 million | $(81.9) million | | Diluted EPS | $0.30 | $(0.95) | | New Awards | $872.8 million | $766.7 million | - Consolidated backlog was $10.0 billion as of March 31, 2024, slightly down from $10.2 billion at year-end 2023. The backlog mix is 41% Civil, 42% Building, and 17% Specialty Contractors150 - The outlook remains favorable, supported by long-term capital spending plans, voter-approved measures like Los Angeles County's Measure M, and the federal Bipartisan Infrastructure Law152153154 Results of Segment Operations Civil segment revenue increased 35% with a 293% jump in income, Building segment revenue grew 79% turning profitable, while Specialty Contractors saw a 16% revenue decline and increased operating loss - Civil Segment: Revenue grew 35% to $472.2 million and income from operations increased 293% to $70.7 million, primarily due to increased activity on a mass-transit project in California and the absence of a prior-year unfavorable adjustment157158 - Building Segment: Revenue increased 79% to $411.9 million, swinging to an income of $16.1 million from a loss of $70.2 million in the prior year. The improvement was principally due to the absence of a prior-year $72.2 million non-cash charge from an adverse legal ruling162163 - Specialty Contractors Segment: Revenue decreased 16% to $164.9 million, with the loss from operations widening to $18.3 million from $12.4 million. The change was primarily due to a $12.0 million unfavorable adjustment from an arbitration ruling on a completed project in New York167168 Liquidity and Capital Resources The company maintains solid liquidity with $98.3 million in Q1 2024 operating cash flow, $1.4 billion working capital, and recently refinanced debt to reduce outstanding principal by $100 million - Generated $98.3 million in net cash from operating activities in Q1 2024, the second-largest first-quarter result since 2008179 - Working capital was $1.4 billion at March 31, 2024, with a current ratio of 1.70, compared to 1.66 at December 31, 2023184 - In February 2024, made a mandatory principal prepayment of $91.0 million on the Term Loan B from annual excess cash flow191 - Post-quarter end, issued $400 million of 2024 Senior Notes and will redeem $500 million of 2017 Senior Notes, resulting in a $100 million net debt reduction and extending maturities194198 Quantitative and Qualitative Disclosures About Market Risk The company reports no material changes in its market risk exposure since the Annual Report on Form 10-K for the year ended December 31, 2023 - There has been no material change in the company's exposure to market risk since the year-end 2023 report202 Controls and Procedures Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the quarter203 - No material changes to internal control over financial reporting occurred during the quarter204 Part II. Other Information Legal Proceedings This section refers to Note 11 of the Condensed Consolidated Financial Statements for detailed information on pending legal matters, including the Alaskan Way Viaduct case - For information on pending legal matters, the report refers to Note 11 of the Notes to Condensed Consolidated Financial Statements205 Risk Factors The company reports no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2023 - There have been no material changes to the company's risk factors as disclosed in the 2023 Annual Report on Form 10-K206 Mine Safety Disclosures The company provides required mine safety disclosures in Exhibit 95 to Form 10-Q, as its construction services to the mining industry may classify it as a mine operator under the Mine Act - The company provides mine safety disclosures as required by the Dodd-Frank Act because it provides construction services to the mining industry, which may classify it as a mine operator207 Other Information During Q1 2024, no directors or Section 16 officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No directors or Section 16 officers adopted or terminated any Rule 10b5-1 trading plans during the first quarter of 2024208 Exhibits This section lists exhibits filed with Form 10-Q, including the indenture for new 2024 Senior Notes, an amendment to the 2020 Credit Agreement, and Sarbanes-Oxley certifications - Key exhibits filed include the Indenture for the 2024 Senior Notes (4.1), the Fifth Amendment to the Credit Agreement (10.2), and Sarbanes-Oxley certifications (31.1, 31.2, 32.1, 32.2)209