Tutor Perini(TPC)2024-08-02 22:14Financial Data and Key Metrics Changes - The company reported a 10% consolidated revenue growth, with revenue for Q2 2024 at $1.13 billion compared to $1.02 billion in Q2 2023 [3][13] - Operating cash flow for Q2 2024 was $53 million, with year-to-date operating cash flow of $151 million, marking the second highest result since the 2008 merger [4][12] - Total debt decreased by $223 million or 25% since the end of last year, bringing total debt to $676 million [5][19] - Net income attributable to the company was $800,000 or $0.02 per diluted share, compared to a net loss of $38 million or a loss of $0.72 per share in Q2 2023 [18] Business Line Data and Key Metrics Changes - Civil segment revenue for Q2 2024 was $546 million, essentially flat compared to Q2 2023, but up 13% year-to-date [14] - Building segment revenue increased by 26% year-over-year to $418 million, driven by healthcare and educational facility projects [14] - Specialty Contractors segment revenue was $163 million, up 20% compared to the same quarter last year, despite some reduced project execution activities [14][15] Market Data and Key Metrics Changes - The company’s backlog was $10.4 billion at the end of Q2 2024, with significant new awards including a $1.3 billion bridge project and various other projects totaling over $1 billion [6][11] - The company anticipates substantial backlog growth due to limited competition for large projects, which is expected to bode well for future revenue and margin potential [7][11] Company Strategy and Development Direction - The company is focused on reducing debt and improving cash flow, with expectations of resolving legacy disputes and collecting associated cash in the latter part of 2024 and early 2025 [5][25] - The company is optimistic about substantial backlog growth and revenue increases in 2025 and 2026, reaffirming EPS guidance for 2024 in the range of $0.85 to $1.10 [11][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong cash generation and operating performance, with expectations for improved earnings in the second half of 2024 due to project timing and seasonality [11][25] - The company noted that while some legacy losses remain, they are working through these issues and expect to see improvements in the Specialty Contractors segment over the next year [29][30] Other Important Information - The increase in share-based compensation expense negatively impacted earnings by $0.19 per share due to a significant rise in stock price [4][21] - Corporate G&A expenses rose to $32 million in Q2 2024, primarily due to higher share-based compensation [17] Q&A Session Summary Question: What is the expected earnings ramp-up in Q3 versus Q4? - Management indicated that both Q3 and Q4 are expected to be stronger, with Q4 likely being slightly stronger than Q3 due to improvements in specialty and larger projects generating higher earnings [27][28] Question: What is causing the losses in the Specialty segment? - Management noted that legacy losses, particularly in Five Star Electric, are still being resolved, with expectations that these issues will diminish by the end of next year [29][30] Question: Is there a cash settlement expected in Q3? - Management confirmed that a significant cash settlement is expected in Q3, with about 60% already collected [31] Question: Will Civil segment margins improve in the second half? - Management believes that while margins will improve, they may not be significantly stronger due to the nature of project ramp-ups [33] Question: What percentage of Q2 cash from operations was from settled claims? - Management estimated that roughly 50% of Q2 cash from operations was from settled claims [34] Question: Will intersegment revenue continue to grow? - Management indicated that intersegment revenue is expected to remain flat in the short term but may increase as more work is secured in the Northeast [35][37] Question: What is the current stance on contract terms and retainage? - Management stated that they do not accept onerous terms and have successfully negotiated favorable terms in recent contracts [42]