- Strong operating cash flow of $58.0 million in Q2 2022
compared to usage of $84.6 million in Q2 2021
- Record year-to-date operating cash flow of $178.7 million,
the largest result for the first six months of any year since the
merger between Tutor-Saliba Corporation and Perini Corporation in
2008
- Backlog increased 14% year-over-year to $8.5 billion
compared to $7.5 billion at Q2 2021
- Anticipate improved operating cash generation for the
remainder of 2022 compared to the second half of 2021
Tutor Perini Corporation (the “Company”) (NYSE: TPC), a leading
civil, building and specialty construction company, reported
results today for the second quarter of 2022. Revenue was $0.9
billion compared to $1.2 billion for the second quarter of last
year. The decrease was primarily due to reduced project execution
activities on various projects in all three segments, most of which
are completed or nearing completion, partially offset by increased
activities on certain newer Civil and Building segment projects.
The revenue decline was also the result of the lingering impact of
the COVID-19 pandemic, which delayed bidding activities and awards
of certain new projects during 2020 and much of 2021. Several
factors, including certain unfavorable project adjustments, certain
settlements of claims and change orders, an unexpected partial
reversal of previously awarded legal damages, and the reduced
profits associated with the lower revenue volume in the quarter had
a significant negative impact on the Company’s earnings for the
second quarter of 2022. As a result, net loss attributable to the
Company for the second quarter of 2022 was $63.0 million, or a
$1.23 loss per diluted share, compared to net income attributable
to the Company of $31.2 million, or $0.61 of earnings per diluted
share, for the second quarter of 2021.
The Company generated $58.0 million and $178.7 million of cash
from operating activities in the second quarter and first six
months of 2022, respectively, compared to usage of $84.6 million
and $131.3 million for the same periods of 2021. The result for the
first six months of 2022 was the largest operating cash flow
generated for the first six months of any year since the merger
between Tutor-Saliba Corporation and Perini Corporation in 2008,
and is already larger than any full-year result since that same
time. In addition, the operating cash flow for the second quarter
2022 was the third-largest operating cash result of any second
quarter since the 2008 merger. The strong cash generation in both
periods was principally driven by improved collection activity,
including the continued resolution of certain claims and unapproved
change orders that previously required the use of cash. The Company
anticipates improved operating cash generation for the remainder of
2022 compared to the second half of 2021.
Backlog increased 14% to $8.5 billion during the second quarter
of 2022 compared to $7.5 billion as of June 30, 2021. The most
significant new awards and contract adjustments in the second
quarter of 2022 included $293 million of additional funding for a
mass-transit project in California; $95 million for an educational
facility project in California; an $85 million military housing
project in Alaska; and several projects in Guam, including a $107
million military housing project, an $84 million wharf improvement
project and two other military facilities projects valued at $73
million and $49 million, respectively. The Company has recently bid
and is preparing to bid various large projects, with potential
awards anticipated later this year and next year. The Company also
expects to benefit significantly over the next several years from
substantial incremental federal funding to be provided under the
Infrastructure Investment and Jobs Act, also known as the
Bipartisan Infrastructure Law, which was enacted last year.
Outlook and Guidance
“We continued to generate strong operating cash in the second
quarter of 2022, which enabled us to achieve a record operating
cash result for the first six months of 2022. To put this in
perspective, through mid-year we have already generated operating
cash that is larger than any full-year result since the merger in
2008, and we continue to expect that operating cash will be strong
for the rest of this year,” said Ronald Tutor, Chairman and Chief
Executive Officer. Tutor continued, "We also experienced a solid
quarter of new awards, which contributed to year-over-year backlog
growth of 14%, and with a large volume of prospective near-term
opportunities, we anticipate that we will see even more robust
backlog growth over the next several quarters. Unfortunately,
certain settlements, legal decisions and unfavorable project
adjustments adversely affected our second quarter earnings.
However, we are encouraged by the progress we continue to make in
resolving disputed matters and collecting significant amounts of
associated cash."
Over the next 30 to 60 days, the Company will be attempting to
settle significant disputes on certain major projects. The
uncertainty related to the outcome of these settlement discussions
makes it difficult to reliably predict at this time what the
Company's expected earnings will be for the remainder of 2022, as
settlements can positively or negatively impact earnings while
generating significant cash. In addition, there can be no assurance
that discussions will result in settlements. For these reasons, the
Company is withdrawing its guidance for 2022 and expects to issue
new guidance once it has greater visibility into the timing and
magnitude of any potential settlements, which it expects to have by
the time of the third quarter earnings announcement. Regardless of
the outcome of any potential settlements, the Company now expects a
net loss for 2022.
Second Quarter 2022 Conference Call
The Company will host a conference call at 8:00 AM Pacific Time
on Friday, August 5, 2022, to discuss the second quarter 2022
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. 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 customers 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 planning and scheduling of
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 customers 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: revisions of
estimates of contract risks, revenue or costs, economic factors
such as inflation, the timing of new awards, or the pace of project
execution, which has resulted and may continue to result in losses
or lower than anticipated profit; unfavorable outcomes of existing
or future litigation or dispute resolution proceedings against us
or customers (project owners, developers, general contractors,
etc.), 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; contract requirements to perform extra work beyond the
initial project scope, which has and in the future could result in
disputes or claims and adversely affect our working capital,
profits and cash flows; risks and other uncertainties associated
with assumptions and estimates used to prepare our 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, as well as damage to our reputation;
inability to attract and retain our key officers, and to adequately
plan for their succession, and hire and retain personnel required
to execute and perform on our contracts; the COVID-19 pandemic,
which has adversely impacted, and could continue to adversely
impact, our business, financial condition and results of operations
by, among other things, delaying the timing of project bids and/or
awards and the timing of dispute resolutions and associated
collections; risks related to our international operations, such as
uncertainty of U.S. Government funding, as well as economic,
political, regulatory and other risks, including risks of loss due
to acts of war, civil unrest, security issues, labor conditions,
corruption and other unforeseeable events in countries where we do
business, resulting in unanticipated losses; possible systems and
information technology interruptions and breaches in data security
and/or privacy; client cancellations of, or reductions in scope
under, contracts reported in our backlog; failure of our joint
venture partners to perform their venture obligations, which could
impose additional financial and performance obligations on us,
resulting in reduced profits or losses and/or reputational harm;
the impact of inclement weather conditions on projects; decreases
in the level of government spending for infrastructure and other
public projects; risks related to government contracts and related
procurement regulations; failure to meet our obligations under our
debt agreements; securities litigation and/or shareholder activism;
violations of the U.S. Foreign Corrupt Practices Act and similar
worldwide anti-bribery laws; adverse health events, such as an
epidemic or another pandemic; physical and regulatory risks related
to climate change; downgrades in our credit ratings; impairment of
our goodwill or other indefinite-lived intangible assets; the
exertion of influence over the Company by our chairman and chief
executive officer due to his position and significant ownership
interest; 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, 2021 filed on February 24, 2022 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.
Tutor Perini
Corporation
Condensed Consolidated
Statements of Operations
Unaudited
Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands, except per common share
amounts)
2022
2021
2022
2021
REVENUE
$
861,027
$
1,219,243
$
1,813,181
$
2,426,838
COST OF OPERATIONS
(895,250
)
(1,091,754
)
(1,797,059
)
(2,188,894
)
GROSS PROFIT (LOSS)
(34,223
)
127,489
16,122
237,944
General and administrative expenses
(56,331
)
(58,736
)
(116,583
)
(119,487
)
INCOME (LOSS) FROM CONSTRUCTION
OPERATIONS
(90,554
)
68,753
(100,461
)
118,457
Other income, net
1,020
1,431
4,717
1,606
Interest expense
(16,204
)
(17,938
)
(32,696
)
(35,748
)
INCOME (LOSS) BEFORE INCOME
TAXES
(105,738
)
52,246
(128,440
)
84,315
Income tax (expense) benefit
43,718
(10,635
)
47,607
(17,599
)
NET INCOME (LOSS)
(62,020
)
41,611
(80,833
)
66,716
LESS: NET INCOME ATTRIBUTABLE TO
NONCONTROLLING INTERESTS
983
10,446
3,804
19,517
NET INCOME (LOSS) ATTRIBUTABLE TO TUTOR
PERINI CORPORATION
$
(63,003
)
$
31,165
$
(84,637
)
$
47,199
BASIC EARNINGS (LOSS) PER COMMON
SHARE
$
(1.23
)
$
0.61
$
(1.65
)
$
0.93
DILUTED EARNINGS (LOSS) PER COMMON
SHARE
$
(1.23
)
$
0.61
$
(1.65
)
$
0.92
WEIGHTED-AVERAGE COMMON SHARES
OUTSTANDING:
BASIC
51,276
50,999
51,192
50,956
DILUTED
51,276
51,375
51,192
51,362
Tutor Perini
Corporation
Segment Information
Unaudited
Reportable Segments
(in thousands)
Civil
Building
Specialty
Contractors
Total
Corporate
Consolidated
Total
Three Months Ended June 30,
2022
Total revenue
$
453,215
$
262,556
$
190,464
$
906,235
$
—
$
906,235
Elimination of intersegment revenue
(49,593
)
4,385
—
(45,208
)
—
(45,208
)
Revenue from external customers
$
403,622
$
266,941
$
190,464
$
861,027
$
—
$
861,027
Loss from construction operations
$
(9,767
)
$
(67
)
$
(66,731
)
$
(76,565
)
(a)
$
(13,989
)
(b)
$
(90,554
)
Capital expenditures
$
15,656
$
50
$
816
$
16,522
$
295
$
16,817
Depreciation and amortization(c)
$
15,025
$
390
$
508
$
15,923
$
2,360
$
18,283
Three Months Ended June 30,
2021
Total revenue
$
643,055
$
415,801
$
281,370
$
1,340,226
$
—
$
1,340,226
Elimination of intersegment revenue
(87,703
)
(33,141
)
(139
)
(120,983
)
—
(120,983
)
Revenue from external customers
$
555,352
$
382,660
$
281,231
$
1,219,243
$
—
$
1,219,243
Income (loss) from construction
operations
$
75,073
$
(2,488
)
$
9,960
$
82,545
(d)
$
(13,792
)
(b)
$
68,753
Capital expenditures
$
8,616
$
51
$
19
$
8,686
$
339
$
9,025
Depreciation and amortization(c)
$
31,178
$
424
$
892
$
32,494
$
2,767
$
35,261
(a)
During the three months ended June 30,
2022, the Company’s income (loss) from construction operations was
adversely impacted by $33.5 million ($24.2 million, or $0.47 per
diluted share, after tax) due to an unfavorable adjustment related
to the unforeseen cost of project close-out issues, remediation
work, extended project supervision and associated labor
inefficiencies on the electrical component of a transportation
project in the Northeast in the Specialty Contractors segment, a
non-cash charge of $17.8 million that increased cost of operations
($12.8 million, or $0.25 per diluted share, after tax) associated
with an unexpected partial reversal by an appellate court of
previously awarded legal damages related to a completed electrical
project in New York in the Specialty Contractors segment, and a
$16.2 million unfavorable non-cash impact ($11.6 million, or $0.23
per diluted share, after tax) related to the settlement of a
long-disputed, completed Civil segment project in Maryland.
(b)
Consists primarily of corporate general
and administrative expenses.
(c)
Depreciation and amortization is included
in income (loss) from construction operations.
(d)
During the three months ended June 30,
2021, the Company recorded a reduction of $20.1 million in cost of
operations ($14.6 million, or $0.28 per diluted share, after tax)
due to a favorable trial court ruling awarding the Company the
recovery of certain costs previously incurred on a completed
electrical project in New York in the Specialty Contractors
segment.
Reportable Segments
(in thousands)
Civil
Building
Specialty
Contractors
Total
Corporate
Consolidated
Total
Six Months Ended June 30, 2022
Total revenue
$
913,957
$
618,534
$
421,328
$
1,953,819
$
—
$
1,953,819
Elimination of intersegment revenue
(119,540
)
(20,945
)
(153
)
(140,638
)
—
(140,638
)
Revenue from external customers
$
794,417
$
597,589
$
421,175
$
1,813,181
$
—
$
1,813,181
Income (loss) from construction
operations
$
(10,734
)
$
9,397
$
(70,625
)
$
(71,962
)
(a)
$
(28,499
)
(b)
$
(100,461
)
Capital expenditures
$
26,831
$
52
$
1,454
$
28,337
$
508
$
28,845
Depreciation and amortization(c)
$
32,025
$
791
$
1,010
$
33,826
$
4,695
$
38,521
Six Months Ended June 30, 2021
Total revenue
$
1,226,199
$
872,971
$
606,318
$
2,705,488
$
—
$
2,705,488
Elimination of intersegment revenue
(195,272
)
(83,078
)
(300
)
(278,650
)
—
(278,650
)
Revenue from external customers
$
1,030,927
$
789,893
$
606,018
$
2,426,838
$
—
$
2,426,838
Income (loss) from construction
operations
$
125,178
$
8,728
$
11,284
$
145,190
(d)
$
(26,733
)
(b)
$
118,457
Capital expenditures
$
18,180
$
124
$
164
$
18,468
$
392
$
18,860
Depreciation and amortization(c)
$
53,891
$
856
$
1,851
$
56,598
$
5,537
$
62,135
(a)
During the six months ended June 30, 2022,
the Company’s income (loss) from construction operations was
adversely impacted by $33.5 million ($24.2 million, or $0.47 per
diluted share, after tax) due to an unfavorable adjustment related
to the unforeseen cost of project close-out issues, remediation
work, extended project supervision and associated labor
inefficiencies on the electrical component of a transportation
project in the Northeast in the Specialty Contractors segment, and
$29.1 million ($22.9 million, or $0.45 per diluted share, after
tax) on a Civil segment mass-transit project in California, which
resulted from the successful negotiation of significant lower
margin (and lower risk) change orders that increased the project’s
overall estimated profit but reduced the project’s percentage of
completion and overall margin percentage. The Company’s income
(loss) from construction operations was also impacted by a non-cash
charge of $25.5 million ($18.3 million, or $0.36 per diluted share,
after tax) due to an adverse legal ruling on a dispute related to a
Civil segment bridge project in New York, a non-cash charge of
$17.8 million that increased cost of operations ($12.8 million, or
$0.25 per diluted share, after tax) associated with an unexpected
partial reversal by an appellate court of previously awarded legal
damages related to a completed electrical project in New York in
the Specialty Contractors segment, a $16.2 million unfavorable
non-cash impact ($11.6 million, or $0.23 per diluted share, after
tax) related to the settlement of a long-disputed, completed Civil
segment project in Maryland, and a $14.6 million ($11.2 million, or
$0.22 per diluted share, after tax) unfavorable adjustment split
evenly between the Civil and Building segments due to changes in
estimates on a transportation project in the Northeast.
(b)
Consists primarily of corporate general
and administrative expenses.
(c)
Depreciation and amortization is included
in income (loss) from construction operations.
(d)
During the six months ended June 30, 2021,
the Company recorded a reduction of $20.1 million in cost of
operations ($14.6 million, or $0.28 per diluted share, after tax)
due to a favorable trial court ruling awarding the Company the
recovery of certain costs previously incurred on a completed
electrical project in New York in the Specialty Contractors
segment.
Tutor Perini
Corporation
Condensed Consolidated Balance
Sheets
Unaudited
(in thousands, except share and per share
amounts)
As of June 30,
2022
As of December 31,
2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ($169,266 and
$102,679 related to variable interest entities (“VIEs”))
$
309,267
$
202,197
Restricted cash
4,485
9,199
Restricted investments
84,498
84,355
Accounts receivable ($99,872 and $116,415
related to VIEs)
1,337,017
1,454,319
Retention receivable ($178,575 and
$162,259 related to VIEs)
552,695
568,881
Costs and estimated earnings in excess of
billings ($67,874 and $143,105 related to VIEs)
1,372,640
1,356,768
Other current assets ($42,844 and $43,718
related to VIEs)
207,881
186,773
Total current assets
3,868,483
3,862,492
PROPERTY AND EQUIPMENT ("P&E"),
net of accumulated depreciation of $507,400 and $483,417 (net
P&E of $13,905 and $2,203 related to VIEs)
427,894
429,645
GOODWILL
205,143
205,143
INTANGIBLE ASSETS, NET
74,891
85,068
OTHER ASSETS
143,272
142,550
TOTAL ASSETS
$
4,719,683
$
4,724,898
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt
$
30,565
$
24,406
Accounts payable ($66,971 and $96,097
related to VIEs)
555,365
512,056
Retention payable ($39,580 and $37,007
related to VIEs)
227,725
268,945
Billings in excess of costs and estimated
earnings ($458,713 and $355,270 related to VIEs)
956,735
761,689
Accrued expenses and other current
liabilities ($10,880 and $8,566 related to VIEs)
192,931
210,017
Total current liabilities
1,963,321
1,777,113
LONG-TERM DEBT, less current
maturities, net of unamortized discount and debt issuance costs
totaling $15,575 and $17,109
937,743
969,248
DEFERRED INCOME TAXES
6,836
70,989
OTHER LONG-TERM LIABILITIES
243,837
233,828
TOTAL LIABILITIES
3,151,737
3,051,178
COMMITMENTS AND CONTINGENCIES
EQUITY
Stockholders' equity:
Preferred stock - authorized 1,000,000
shares ($1 par value), none issued
—
—
Common stock - authorized 112,500,000
shares ($1 par value), issued and outstanding 51,357,691 and
51,095,706 shares
51,358
51,096
Additional paid-in capital
1,137,966
1,133,150
Retained earnings
429,673
514,310
Accumulated other comprehensive loss
(48,963
)
(43,635
)
Total stockholders' equity
1,570,034
1,654,921
Noncontrolling interests
(2,088
)
18,799
TOTAL EQUITY
1,567,946
1,673,720
TOTAL LIABILITIES AND EQUITY
$
4,719,683
$
4,724,898
Tutor Perini
Corporation
Condensed Consolidated
Statements of Cash Flows
Unaudited
Six Months Ended June
30,
(in thousands)
2022
2021
Cash Flows from Operating
Activities:
Net income (loss)
$
(80,833
)
$
66,716
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation
28,344
44,821
Amortization of intangible assets
10,177
17,314
Share-based compensation expense
4,814
5,033
Change in debt discounts and deferred debt
issuance costs
1,817
3,868
Deferred income taxes
(61,145
)
2,213
(Gain) loss on sale of property and
equipment
(168
)
360
Changes in other components of working
capital
269,104
(278,943
)
Other long-term liabilities
7,885
6,801
Other, net
(1,297
)
515
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES
178,698
(131,302
)
Cash Flows from Investing
Activities:
Acquisition of property and equipment
(28,845
)
(18,860
)
Proceeds from sale of property and
equipment
6,420
3,623
Investments in securities
(10,409
)
(18,096
)
Proceeds from maturities and sales of
investments in securities
4,919
10,497
NET CASH USED IN INVESTING
ACTIVITIES
(27,915
)
(22,836
)
Cash Flows from Financing
Activities:
Proceeds from debt
412,357
308,181
Repayment of debt
(439,236
)
(367,007
)
Cash payments related to share-based
compensation
(1,009
)
(1,625
)
Distributions paid to noncontrolling
interests
(24,500
)
(7,250
)
Contributions from noncontrolling
interests
3,961
4,000
NET CASH USED IN FINANCING
ACTIVITIES
(48,427
)
(63,701
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
102,356
(217,839
)
Cash, cash equivalents and restricted
cash at beginning of period
211,396
451,852
Cash, cash equivalents and restricted
cash at end of period
$
313,752
$
234,013
Tutor Perini
Corporation
Backlog Information
Unaudited
(in millions)
Backlog at
March 31, 2022
New Awards in the
Three Months
Ended
June 30, 2022(a)
Revenue Recognized
in the
Three Months Ended
June 30, 2022
Backlog at
June 30, 2022
Civil
$
4,609.6
$
720.6
$
(403.6
)
$
4,926.6
Building
2,303.5
206.6
(266.9
)
2,243.2
Specialty Contractors
1,366.7
190.1
(190.5
)
1,366.3
Total
$
8,279.8
$
1,117.3
$
(861.0
)
$
8,536.1
(in millions)
Backlog at
December 31,
2021
New Awards in the
Six Months
Ended
June 30,
2022(a)
Revenue Recognized
in the
Six Months
Ended
June 30, 2022
Backlog at
June 30, 2022
Civil
$
4,553.5
$
1,167.5
$
(794.4
)
$
4,926.6
Building
2,308.9
531.9
(597.6
)
2,243.2
Specialty Contractors
1,373.2
414.3
(421.2
)
1,366.3
Total
$
8,235.6
$
2,113.7
$
(1,813.2
)
$
8,536.1
(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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220805005070/en/
Tutor Perini Corporation Jorge Casado, 818-362-8391 Vice
President, Investor Relations & Corporate Communications
www.tutorperini.com
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