Tutor Perini(US:TPC)2022-11-03 00:34Financial Data and Key Metrics Changes - The company generated strong operating cash of $73 million for Q3 2022, totaling $251 million for the first nine months, marking the best nine-month operating cash result since the merger in 2008 [6][24] - Revenue for Q3 2022 was $1.1 billion, down 9% from $1.2 billion in the same quarter last year, with a net loss attributable to Tutor Perini of $32 million, or a loss of $0.63 per share [26][33] - Net debt as of September 30, 2022, was $638 million, down 19% from $791 million at the end of 2021 [34] Business Line Data and Key Metrics Changes - Civil segment revenue was $501 million, down from $546 million; Building segment revenue was $318 million, down from $361 million; Specialty Contractors revenue was $252 million, down from $271 million [26] - The Civil segment reported income from construction operations of $23 million, while the Specialty Contractors segment reported a loss of $12 million [29] Market Data and Key Metrics Changes - The backlog remained healthy at $8.4 billion, not including potential awards from the Raritan Bridge and Maryland Highway, which could add over $4.5 billion [7][15] - The company booked $885 million in new awards and contract adjustments during Q3 2022, including significant projects in Puerto Rico and California [14] Company Strategy and Development Direction - The company is focused on resolving disputes and collecting cash, with expectations of significant cash generation in the fourth quarter and next year [39] - The construction industry, particularly infrastructure, is expected to remain resilient in the current economic environment, with increased demand for complex civil projects [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, anticipating a return to consistent earnings per share results next year, driven by new work and cash collections [41] - The company is preparing for significant cash flow from ongoing projects and expects to grow its backlog to record levels [20][40] Other Important Information - The company has amended its credit agreement to temporarily increase the maximum allowable net leverage ratio, providing additional financial flexibility [34] - Debt reduction remains a primary focus, with plans for a significant cash pay down on Term Loan B by April 2023 [35] Q&A Session Summary Question: What needs to be finalized for the Maryland work to be booked into backlog? - The company is in regular meetings with the State of Maryland and expects financial close around April 2023, with optimism about the project's success [43] Question: Thoughts on how backlog converts to revenue? - New work is expected to significantly increase revenue, but major impacts from the Maryland job will likely not be seen until 2024 [44][45] Question: Any updates on ongoing disputes? - The company is attempting to settle two significant claims totaling $200 million, which could impact cash flow and overall results [48] Question: Were there new adverse legal rulings this quarter? - Yes, there was a reversal of a previous positive ruling, but such occurrences are considered rare [50][52] Question: What is the status of the Specialty segment? - The Specialty segment is expected to break even or show a small profit in Q4, depending on the resolution of two major claims [58]