Tutor Perini (TPC) 1 Aug 242024 Q2 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the Tutor Perini Corporation Second Quarter 2024 Earnings Conference Call. My name is Latanya, and I will be your coordinator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. [Operator Instructions]

I would now like to turn the conference over to your host for today, Mr. of President Vice Casado, Investor Relations. Jorge proceed. Please

Soroka, everyone, today. With thank Chairman CEO; and for and are you participation and and Ryan President; Smalley, time your Gary Vice us Tutor, President CFO. Hello, Ronald and Senior on call the

discuss management's will remind results our There existing and current call, assessment during everyone which statements, is I making materially. risk differ information. actual be of could will forward-looking results, that an are we that this Before we based our inherent on trends

to required our can future could than will Ronald company are otherwise, on we our other You which law. or our by turn new risk potentially in contribute disclosures that to filed find about information, with assumes to the Form filing whether no factors today. obligation that, as events to February Tutor. we in and XX-Q that you. update Thank XX, And The XXXX, such forward-looking differences Form over I call due statements, XX-K,

Jorge. joining us. you all Good for thank afternoon, Thanks, and

period second $XX the the with $XXX operating compared X-month by segment revenue cash margin cash with XX.X%, improved earnings XXXX result million highest million reported first of flow merger Tutor-Saliba. was growth for XXXX since quarter flow. XX% of strong and any of of segment, operating highlighted quarter profitability operating results growth, continued a with of the of consolidated to Civil Our X% Year-to-date, backlog were our the which second

quarter impacted the share. the by increase fair the which I stock to expense and of in fact in compared during adjustment of settled to due secondarily the by XXXX, to the $X.XX second our awards by last a second due completed Northeast compensation X a increase an were earnings projects price settlement quarter unfavorable an project in impacted highway which liability-classified negatively second the affected value due in share-based the year, primarily earnings $X.XX quarter Our substantial to share

of the $XXX Our reducing year and total by of debt continue we declined our end focus further the million XX% to debt balance over and next. since last year, the or on

all review financial a moment. will Ryan in the details

this in operating most have be that for which year, substantial than help matters, substantial legacy of we of collect of And progress the remaining generated a year to associated to cash record part should make amounts latter to second quarter XXXX. cash strong various in of both if contributed the the years resolving expect which as not would previously, strong, stated We resolve to the cash flow performance. cash continued operating next first year's disputes during and better of I part and drive last we've

new the with for backlog of The value its of significant River Connecticut in a partner. the the quarter project Tutor $X.X Our end quarter Amtrak most billion second in and O&G billion included adjustments received contract XXXX. for company's which replacement the second contract was of $XX.X Industries, bridge at we joint awards long-time venture proportionate Perini share the

at mass electrical additional project the in Highway Black with project care Airport, California in of health for million for $XXX in Force Air New Reservoir, in of at York in Development Base funding additional $XX at and funding Sletten. Andersen connector Construction, Construction transit Midwest Fort million Center various terminal and airport Lauderdale Lunda the for the and Project for certain $XX $XXX million Hillview the $XXX Child The $XXX Rudolph Bridge I-XX California, Guam million International million projects projects million

significant very large project bidding to of period limited continue opportunities. of these on have mega As busy calls, we be have many competition we a discussed with previous and activity for been in

result the for that with to both has and of to competition as contractors probabilities a projects and are is both mentioned imbalance of frankly, so prequalify well continue resources pool past, many the as in encompassed I've in Perini and project supply/demand projects. As small the major bond consistent. successfully limited opportunities of physical the a been financial new there Tutor the potential. bid This of and winning execute terms as extremely bode these well margin This will

anticipates Inglewood for the Transit and has partnership California. we for our this in Project the be at week, with we Southern project's public-private been in contractual Connector contract best or prime of selected that award are fall. proposal City owner serving Inglewood which that Last as Council announced construction We're the Elevate discussions will project the city in consortium, negotiation Inglewood active considering Partners, the and as terms the regarding in pricing value the

other commencing with include in jobs up Bridges will Southern near-term of into XXXX. of our $X number Sawtooth Naval The Line we month, the of project at Project broken proposals be which California, or Manhattan a and we in that Replacement week. our by offered jail August which in prospects latter Puget that smaller facility, the the to proposal multimillion-dollar end this billion $X.X of the in mid- bidding XXXX. Some qualifications our billion dock proposal Washington Sound Gateway part will out tender Southeast the state significant Amtrak's of we've The dry last Shipyard

AirTrain bidding bidding ago. early Jersey low will Glassboro-Camden project we when in were Midtown $X.X some South reservoir it year New initially Line you, the which billion billion September, and X years project sites next York, project will The $X New X California, later this remind Northern in Jersey, December, parts I'll The rail, bidder be year. bid X $X in to billion which bid next in light in the proposed Newark $X.X Bus billion year. which in Terminal Replacement The replacement likely

million for finally, in the anticipate Bus will New And York Bridge backlog Manhattan October. low you New XXXX year, the previously and available $XXX excuse were in the grow significant -- this in we we these New of $XXX Garage million substantially of our which the later million again, bidding and Raritan our Jersey in Northern me, remind in other project project October. $XXX also replacement The next we in very Tunnel bidding Jersey, bidding XX the that work. as bidder. Because year continue capture bid and project opportunities, I'll share And to

the to Our and beyond $X.XX. We previous anticipate XXXX first significantly well backlog and and back of quarter to billion seasonality. in prior that, earnings XXXX. months. next results of range expect our $XX.X current would to typical record date to the X record due climb be of are was the we outlook, that guidance project in timing assessment EPS Based as as will I year on market $X.XX the reaffirming the levels business our backlog our of that in activities over second stronger to large business half expect the still EPS this of

earnings next and expect even greater. stronger also We year XXXX in

And the financial Thank that, the call results. to turn you. with Ryan I over to review

impacts I a Good We quarter XXXX for moment. earnings mentioned, last results to Thank the notable with quarter will despite overall you, Ron. improved good of second had year discuss X Ron everyone. afternoon, in compared which that the earnings same

operating cash second best our was fact especially are second of the flow half since of that as $XXX.X operating first result XXXX. strong well our our XXXX flow We as pleased quarter $XX.X million cash with million

terms. this and contractual of cash project strong year anticipated the remaining cash that activities previously, flows and continue year will generation be mentioned beyond I've execution to we next As improved disputes. driven by that, various should increased remain expect And solid, our enhanced resolutions by

deleveraging cash our the With over past strong have generation sheet. the strides balance we several significant we've quarters, in had made

As excess B. and $XXX end Term off reduce last year by cash down XX% continue and this year our reduced mentioned, next eventually million to already year. we've any further total debt plan of debt, paying our We Ron using to by our Loan since first, or paying the

project and the Northern care New as Brooklyn Columbia. the of jail billion, Now growth segment projects let's $X.XX as certain York last Building British same activities including XXXX results. educational second Islands $X.XX for facility the discuss The primarily and compared certain on year. the health the was segment billion California, in was in various and by solid to driven projects, quarter quarter increased in projects Revenue Mariana California Civil XX% for up P&L well

$XXX for Civil of level second revenue the quarter quarter was essentially compared million, to XXXX segment year. the last second

certain the that activities New Civil as first increased XXXX. Building was Jail to year-to-date, XXXX XX% was compared half mentioned to projects on care facility the year-over-year, segment I as $XXX note of it's well XX% half driven in and up York. project in California important first Brooklyn revenue second for on quarter educational up health the by mostly segment million, However, of the revenue

year in electrical mechanical the prior projects to offset are legal industrial compared to Specialty revenue ruling execution last activities quarter Contractors York, nearing New year well The up partially various absence project adjustments mechanical on completion. project of of project reduced are adverse as in XXXX XX% in facility Northeast and partially unfavorable of all an of was current year year, transportation by quarter on of and the New the the was in or educational increase project on due as million, $XXX in completed prior the a quarter segment second scope the and York. in facilities electrical second complete which Arizona an

of million the of settlement activities for for the $XX.X to of contributions adjustments. projects project to of XXXX same price operations by to as share-based partially quarter The year. unfavorable adjustment that construction in significant increased of liability-classified Civil the on significant to as by was certain from of segment well absence due the as net second related The the X second mostly as impact stock I our of was prior the Income Northeast. due mentioned increase increase unfavorable increase $XX.X compensation a well million awards highway expense compared million a offset additional in completed was $X of value the year million last quarter due an to quarter was during the $XX on fair XXXX execution

awards Gary segment charge after core quarter segment million about XXXX, $XX.X of impact of the of $XX income the will I for second XX.X%, even construction these provide a mentioned. from commentary responding some margin strong liability-classified million, the Civil additional operations with shortly. operating

million impacted of we XXXX loss improvement second the to results $XX in adjustments Building construction that operations a second Building immaterial recorded in the to segment was due this margin quarter unfavorable X.X% income was the segment segment's quarter XXXX. $X from some the operating notable of million, of compared quarter.

adjustments. Contractors million the some was improvement The segment for primarily a second compared a of in quarter the absence of from $XX loss of to favorable last much larger due construction posted of year. prior to million Specialty loss year XXXX quarter $X operations The second and significant the

expense quarter significant that, million mentioned second G&A with earlier, to the same due million million compared from resulted I the was the to the $XX Other $XX $X of quarter as was to increase second million in last XXXX Corporate compensation for increase the quarter our higher compared last price XXXX. in stock in income year, of expense $X the year. share-based

and the effective second a quarter of $XX year tax tax to for million $XXX,XXX income this of rate to compared Income expense million tax year. will million the XXXX expense expense with quarter, XXXX was help was XXXX, year. tax years. with an compared continue effective second the the Interest that this reduce last corresponding $X as mentioned of quarter our quarter rate net XX.X% an $XX and in future helping last outlays to income I operating to X.X% last you for for I same in will are losses generated year taxes we remind all, in cash of

the of compared second second of of income XXXX. $X.XX per quarter for or per net $X.XX earnings $XX share in Net million a $XXX,XXX a loss the of was share Tutor loss attributable or XXXX diluted to Perini of quarter to

next we of in continue anticipate year large the pointed will growth earnings projects solid bid revenue to and year. to and substantially double-digit of stronger be recently have bidding prospective and We the earnings year XXXX many with full this or XXXX for expected Ron XXXX.

prospects quarters substantial over and earnings revenue strong for are growth coming the about optimistic backlog We several in years. the and next our growth

Now will touch the balance again upon sheet. I

of down $XX of mostly million, Loan recent paydown million Our XX% B total XXXX refinancing notes was to compared XX, of our million and new senior we Term of XXXX million December replaced $XXX debt as of XXXX, or in million $XXX June XX, on million with which because senior XXXX, the our as $XXX notes. $XXX $XXX

be we the continue As to with of in the in June agreement future. expect to the and XX, XXXX, covenants are compliance in compliance under credit

in guidance EPS XXXX our affirming $X.XX. range we're the indicated, of Ron as Finally, to $X.XX

between expense million guidance G&A now to updated the regarding is to and expense million of be million. for depreciation earlier. still in still expected amortization which expense expected with be I as anticipated is Depreciation share-based Interest due to and higher be increase amortization $XX $XX $XXX at compensation at with approximately XXXX be about the Our is approximately for million, million are to million million, and assumptions mentioned our will $XXX follows: $XX XXXX $X $XX noncash. XXXX expense

tax rate income still be to effective XX%. XX% Our XXXX expected approximately for is to

owner-funded. million We interest expect $XX being and And average million to anticipated million that approximately now weighted now $XX capital diluted approximately million million. expenditures million million, and to outstanding are $XX still shares about with to anticipate project-specific for $XX to noncontrolling be between $X of XX We $XX XXXX. be

Gary. I'll you. And that, with over the call Thank to turn

Thanks, Ryan.

to some $X.XX Compensation drive where Let our the independent certain are quarter me awards weighting last compared years, and last of to to designed compensation share of that second help on performance-based expense been share Board stock for price share-based few color improvement. decided the working With year. price consultant Committee per increase the provide in the correctly with compensation has increase an our

to relative When is stock price in Because CPSUs. to will paid changes criteria the you in awards it's be performance somewhat new was times, based on accounted driving the to some focus what with reflected cases, peers some be combine other remeasurement cash, price therefore, pool, company's depleted share for and stock or the believed awards were as improvement with In units targets. to liability out as annual in growth on aggressive a require these share this earnings. rather value they're performance quarterly cash-settled issued awards fair fair any value and

dollar-based pool really a pool into awards share faster was with stock CPSUs clip. short-term low a at of and because stock causes use equity to the share the to solution low eat the price deal So a depleted price the

not We a expect And year's equity to confident be proxy are proposal long-term shares to for during for we a be that we with to performance, will additional support next Future seek from the awards operational of authorization such purposes incentive our improving to This more able season. management when earnings a shareholders. quarter settled this volatility significant we improvement stock instead from in share in be our issue units eventually saw we have pool are will and restricted constrained price. can the less share CPSUs stock, the expected of cash. eliminate that

disclosed Of course, was in that either the our this But silver this movement shareholder a price and negative. to positive lining earnings, in use first is and of value of significant CPSUs there or creation. quarter the in a accordingly, result their impact cash quarterly The share little which was large is positive nature in are XX-Ks. it XX-Qs such

With Ron. that, I'll back turn to the over call

XXXX earnings for quarter with $XX flow of and Thanks, operating Gary. in backlog To the first revenue delivered segment, for the Civil recap growth growth, the improved of consolidated quarter. cash strong second the highlights, we profitability million

share, our explained I Although caused that the that per think events were earnings. we earnings the in unanticipated disappointed reduction in

first highest of Our million our of flow the cash still year-to-date strong merger. 'XX since operating operating was cash second half $XXX flow We result to the in very would be XXXX cash execution associated anticipate in cash our amount strong resolve activities. disputes of normal collect to the legacy from and as along of the substantial and healthy majority generating remaining 'XX continue we project any with

with respectively, revenue higher XXXX. still each also XXXX in solid and earnings, We in earnings expect growth of 'XX and significantly

competition share for very hopefully, project. the available the year by substantially end of into record large we very large grow as win next, projects anticipated to these bid mega with the new should our and levels, backlog limited of and Our

to turn operator with And that, call you. for Thank your I questions. the the

Our UBS. Instructions] [Operator comes with first question from Fisher Steven

you on ramp-up to have full the progress here. that fair the Relative hit year, continued bit half Congratulations of that. still the the a for second in guidance to

extent the earnings clarify an sort cadence seasonally you charges QX by not up And a us that bit? QX? from quarter revenues through? of sense is expect or QX expect just earnings a bigger more say, you that to perspective. of ramp than having what Maybe a assuming you that much to ramp is of, I'm little give can driven going can what So versus you QX

Yes, Steve, this is Gary.

to combination it's be I think going a things. of

what to when all, impact about of QX. your larger or do question -- First expect we the in QX

look coin back a you stronger could If far over you historically is a time, as whether almost QX flip QX. as

be by will it say, QX. than some so going stronger. QX say they're a driven this this be So case, stronger certainly, little year, losses. less in, would both continued to of to And we're I looking specialty, probably be in improvements at

And drive to which continue latter start to think guess, part also I help the weakest. is first looking generate to always some to well. year higher that at correctly the of certainly because And I the earnings, then as for we're improvement you've the alluded larger us is of quarter in will strength the of volume projects -- the indirectly

second always Second is quarter the almost weakest.

So we certainly half case for and point. year. this second what we year be at to have expect this of rest the That's the that's do stronger, always the the planned

to you there? losses it's the terms mentioned there helpful. it outlook moment? is very sounds quite us And Specialty And yet. generating give can What's you And the kind of at there? in less losses. turn the That's of happening still to maybe segment, What not just profitability expected like the

get I'd we those Star to a of out which number working going we're say in diminish, around a extent year. through done them a And it continue losses. although the in and Five and the to in losses number them of year, is be do The just business. as WDF. certain historically to are litigation as of your not we lesser and/or to Civil We're since preponderance it's resolved have legacy mediation Electric just hard of get Well, until arms issues many of and negotiations next but end they have this will the of not have in well

to could I if time. progress. A made a point Steve, within are going of part being secure volume this ago, bit that the we need give us. we're business and -- Yes, of of New -- significant work this opportunities we some more and segment under We as at that positively seeing, year and us that's units a obviously, that. there, we we we've And lot will talking what will, the with from is that segment specialty add to impact new in on just also. in though, were And our out up will about this out help that related hopefully more volume York,

So of volume this you is quarter what a related. saw lot

year, part time. if question few very had And then that of look, -- we'd out this end these of hoped from the about specialty we by in you and be charges, we look, had your the timing, under this

So progress, We're alluded these resolving that's positive. in things. as making to Ron

we new us the from in this in We primarily Look, signed projects be New we'll now, and have a think that York. the will behind work year profitable us. -- think the be generating behind will up that volume specialty

there, bit just but a patience, So give your We're appreciate quite more not little obviously. us almost time.

that lastly, the quarter in And cash then this you but have helpful. yet. settlement rather, didn't did correctly P&L, just a collect from the press hit I perhaps release that QX, understand this you That's the

collection much of QX? coming have is? already QX awareness And for that's how of you so And share cash cash can settlement that's in basically, right, that if some you

amount. come inconsequential. too of we'll rest collected XX% than it specifics fairly you I can't much in Yes. but about -- wasn't really of it on it was will collection, the we've the And QX. it say in, It a and already significant Well, more was give

part improvement be what for this quarter, that and the XXX% QX year helping in like. amount of cash will flow QX. latter So amount have this the that cash will be for cash bodes we in Certainly, large at the looks with the well that certainly flow of

with The Riley. from comes question next Alex Rygiel B.

here. on quarter Civil My Congratulations margins Min issue actually business. increase question are around the with even the really the Obviously, for Alex. slight and is on is in This this your good backlog quarter. the

half operating year than at the projects, in segment? we ramp-up margins the Civil first half, look Given the for margins second should to the the of the be stronger expected

projects the I of high-margin all many take don't while are going last in online. be got get think they'll stronger to in because projects a we Civil coming these X these years

ago our However, most Civil margin. of years operation is X even from high

I of think I will it's but projects. think it better, So the because just new be don't

Civil continue the to will just think improve. margin I

continue will improve. It to

Excellent. Okay.

all is That for I'll see. back. get time I had actually being. Let's the

Thanks, Min.

The with Thompson, next question comes from Adam Thalhimer Davis.

was the Nice QX ops of quarter. percent from settled cash What claims? from

that ballpark numbers, The half. a We way but look to at that's disclose half roughly best Yes. is estimate. XX-XX, precise pretty it's don't and good

Okay.

continuing? Intersegment quarters. Just a be specific last been for you question, the has modeling must the Do really higher X There that revenue see jobs.

other Yes. the I mean rate it roughly at probably supporting segment as Civil right segments, I at we're in Building. is the the continues -- and at now. think specialty particular, And

Building when profits as clarity, propose projects the just to up the subsidiaries, to earn with just They profits it's arm's subcontract these to they a market and to had will it. our them sum a point on if whatever lump an handled of company. -- no they're subsidiaries contract length and of relationship So bear, get like we we

And though even is I we subsidiaries. between forced the we're wholly only to hope take revenue that out then difference their when stranger owned a consolidate, clarifies... the So and them

bit to of then we're speak intersegment you it's revenue that to just intercompany right, of. we more add continue or more in be going Ryan up in the Northeast, then the I'd work And term, to get a But Adam, add flat. is what saying, going little to the short as

Okay.

like And on grow, potential just for construction to out. revenue One the had this it saying I questions there's you're call, next of specialty modeling maybe a it sounds year.

next year. Definitely,

down. have Okay. that I modeled

wrong. was I Clearly, Okay.

Yes.

will work far Civil Adam, is as our prospects through lot as them look Northeast. get way that And a share of that unit business are additional the have. a Tutor WDF, subsidiary, have units the fair A our subsidiary, a of the will be or Electric, but are from then Star projects lot so content talked Five that we when in and those to there. of our East of electrical out then those. those be Ron lot Perini pursuing those, will has business it So mechanical work And that at

So that you ramp. expect should to

Well, you has close -- and our try Inglewood $XXX Mechanical Connector cost as typically, if look to we of the our Electrical million group Project, in that job.

So our us percentage with they trail really a of work.

So as And their our it. typically, goes up, backlog fairly with it's goes consistent.

it. Got

can you just And a on Okay. job. bidders -- fewer a give you thing, Ron, last just high-level update per said

retainage. what high-level with a So on and with seeing you're update terms

anything. the we Well, to hold line. and maximum we've don't able to anywhere, agree we accept the retainage is been X%

owners a and welcome fact, We never also, hear as anything again. all are listening, onerous. it to terms, of so our renegotiate matter if there's all they're We the

for to always onerous their We rarely terms whoever more theory mobilization the any And are. bidder, Our job. the been our with board, every and need onerous X one position years, other successfully consistent been recognize the been And in work they've across them the light, able simple. than on last accept We've the off contract. they and able it's almost of dollars won't dollars. we negotiate on force to we've very to is out seen not terms

Good quarter. good. Sounds

Thanks, Adam.

back floor Tutor the turn to closing like would I comments. for to time, Ronald over this Mr. At you. Thank

to we your for we as need to going, get to be, with you everyone, where you, we're where and we patience continue are continued again. thank where we're thank pleased and Well,

concludes today's does teleconference. This

You and great a your may time. you this participation, your have disconnect at lines day. for Thank