- Record operating cash flow of $308.5 million in 2023, up 49%
compared to the prior record of $207.0 million in 2022
- Term Loan B was paid down by an additional $91 million on
February 23, 2024, earlier than required
- Backlog increased 28% year-over-year to $10.2 billion,
providing visibility for strong revenue growth
- Backlog is expected to continue to grow significantly in
2024 and 2025, as the Company is tracking more than $32 billion of
near-term opportunities over this period
- Senior Notes refinancing is underway, with transaction
expected to be completed by the end of April 2024
- Establishing initial EPS guidance for 2024 in the range of
$0.85 to $1.10
Tutor Perini Corporation (the “Company”) (NYSE: TPC), a leading
civil, building and specialty construction company, reported
results today for the fourth quarter and year ended December 31,
2023 (see attached tables). Revenue for 2023 was $3.9 billion, up
slightly compared to 2022, primarily due to a lower amount of net
unfavorable impacts from settlements, litigation results and other
project charges in 2023 as compared to 2022. Revenue for the Civil
and Building segments grew 9% and 5% in 2023, respectively, driven
in part by increased project execution activities on certain
projects in California, New York, and the Asia-Pacific region,
including Guam. The growth in these segments was mostly offset by a
15% revenue decline for the Specialty Contractors segment in 2023
due to reduced project execution activities on the electrical and
mechanical components of a completed transportation project in the
Northeast.
Loss from construction operations for 2023 was $114.6 million
compared to $204.8 million for 2022. The reduced loss was due to a
lower amount of net unfavorable impacts in 2023 as compared to 2022
that resulted primarily from more favorable expedited settlement
activities and relatively better litigation outcomes in 2023. Net
loss attributable to the Company for 2023 was $171.2 million, or a
$3.30 diluted loss per share, compared to net loss attributable to
the Company of $210.0 million, or a $4.09 diluted loss per share,
for 2022.
The Company generated a record $308.5 million of net cash
provided by operating activities in 2023 compared to the previous
record of $207.0 million in 2022. Operating cash flow in these two
years was higher than in any other year since the merger between
Tutor-Saliba Corporation and Perini Corporation in 2008. The
significant increase in 2023, as compared to 2022, was primarily
driven by improved collection activity, including collections
associated with the continued resolution of certain claims and
unapproved change orders that previously required the use of cash.
The Company reduced its costs and estimated earnings in excess of
billings by $234 million, or 17%, in 2023, and expects a further
significant reduction in 2024, as the majority of the remaining
disputed matters are expected to be resolved by the end of the
year.
Backlog as of December 31, 2023 was $10.2 billion, up 28%
compared to $7.9 billion as of December 31, 2022. New awards and
contract adjustments in 2023 totaled $6.1 billion and the largest
awards included the $2.95 billion Brooklyn Jail project in New
York; $788 million of additional funding for certain mass-transit
projects in California; $287 million of additional funding for two
large health care projects in California; a $222 million military
facilities project at Tinian International Airport in the
Commonwealth of the Northern Mariana Islands; and $127 million of
additional funding for a mass-transit project in Minnesota.
“We delivered a second consecutive year of record operating cash
flow and grew our backlog substantially in 2023,” remarked Ronald
Tutor, Chairman and Chief Executive Officer. “We also made
continued progress in resolving many outstanding disputes and
reducing our unbilled receivables, and continue to believe that we
will resolve the majority of our remaining disputed matters by the
end of 2024. We anticipate double-digit revenue growth and a return
to positive earnings in 2024, with substantially stronger earnings
expected in 2025 and 2026. We also expect continued solid operating
cash flow over the next several years and look forward to capturing
our share of the tremendous pipeline of opportunities we see
ahead.”
Outlook and Guidance
The Company continues to experience high demand for its
services, supported by substantial funding in place at the state
and local levels, as well as the $1.2 trillion Bipartisan
Infrastructure Law that was passed in 2021 at the federal level.
The Company anticipates continued significant backlog growth in
2024 and 2025, as it is currently tracking and expects to capture
its share of more than $75 billion of new project opportunities
over the next three to four years, of which more than $32 billion
are expected in 2024 and 2025.
Based on its assessment of the current market and business
outlook, the Company anticipates double-digit revenue growth in
2024 and a return to positive earnings, with substantially stronger
earnings expected in 2025 and 2026. The Company is establishing its
initial EPS guidance for 2024 at a range of $0.85 to $1.10. As in
prior years, earnings in 2024 are expected to be weighted more
heavily in the second half of the year due to the anticipated
timing of large project activities, as well as typical business
seasonality. The Company expects continued strong operating cash
generation in 2024 and 2025, well in excess of net income for each
year, as a result of continuing robust cash collections, both from
project execution activities and the anticipated resolution of the
majority of the remaining legacy disputed matters.
The Company is working to refinance its Senior Notes due in 2025
and anticipates that it will complete a refinancing transaction by
the end of April 2024. On February 23, 2024, the Company further
paid down its Term Loan B by approximately $91 million (a payment
that was required to be made by the first week of April 2024),
reducing the Term Loan balance to $276.1 million from its original
$425 million. After this paydown, the Company still has significant
cash available, which is anticipated to be used for further debt
reduction in conjunction with the expected refinancing. The Company
may consider a broader refinancing that could extend the maturities
for all of its debt, should market conditions provide such
opportunity.
Fourth Quarter 2023 Conference Call
The Company will host a conference call at 2:00 PM Pacific Time
on Wednesday, February 28, 2024, to discuss the fourth quarter and
full year 2023 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).
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: 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; 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; 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 estimates and assumptions used to prepare our
financial statements; a significant slowdown or decline in economic
conditions, such as those presented during a recession; 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; possible systems and information
technology interruptions and breaches in data security and/or
privacy; 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, labor conditions, and other unforeseeable events in
countries where we do business, which could adversely affect our
revenue and earnings; decreases in the level of government spending
for infrastructure and other public projects; the impact of
inclement weather conditions and other events outside our control
on projects; client cancellations of, or reductions in scope under,
contracts reported in our backlog; risks related to government
contracts and related procurement regulations; 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;
violations of the U.S. Foreign Corrupt Practices Act and similar
worldwide anti-bribery laws; public health crises, such as
COVID-19, have adversely impacted, and could in the future
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; physical and regulatory risks related to
climate change; impairment of our goodwill or other
indefinite-lived intangible assets; our ability to refinance our
2017 Senior Notes, including the timing and terms of a refinancing
process, is subject to market and other conditions and may not be
successful or may be completed on terms less favorable to the
Company than currently anticipated; an inability to obtain bonding
could have a negative impact on our operations and results; failure
to meet our obligations under our debt agreements (especially in a
high interest rate environment), including the spring-forward
maturity of our Term Loan B and/or Revolver on certain dates in
2025 if any of the 2017 Senior Notes remain outstanding as of such
dates; downgrades in our credit ratings; the exertion of influence
over the Company by our chairman and chief executive officer due to
his position and significant ownership interest; significant
fluctuations in the market price of our common stock, which could
result in substantial losses for stockholders and potentially
subject us to securities litigation; 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, 2023
filed on February 28, 2024 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
Consolidated Statements of
Operations
Quarter Ended December
31,
Year Ended December
31,
(in thousands, except per common
share amounts)
2023
2022
2023
2022
REVENUE
$
1,021,471
$
906,648
$
3,880,227
$
3,790,755
COST OF OPERATIONS
(972,552
)
(943,498
)
(3,739,603
)
(3,761,143
)
GROSS PROFIT (LOSS)
48,919
(36,850
)
140,624
29,612
General and administrative expenses
(71,393
)
(60,561
)
(255,221
)
(234,376
)
LOSS FROM CONSTRUCTION
OPERATIONS
(22,474
)
(97,411
)
(114,597
)
(204,764
)
Other income, net
4,758
1,618
17,200
6,732
Interest expense
(21,315
)
(19,927
)
(85,157
)
(69,638
)
LOSS BEFORE INCOME TAXES
(39,031
)
(115,720
)
(182,554
)
(267,670
)
Income tax benefit
2,953
28,051
54,957
75,098
NET LOSS
(36,078
)
(87,669
)
(127,597
)
(192,572
)
LESS: NET INCOME ATTRIBUTABLE TO
NONCONTROLLING INTERESTS
11,451
5,248
43,558
17,437
NET LOSS ATTRIBUTABLE TO TUTOR PERINI
CORPORATION
$
(47,529
)
$
(92,917
)
$
(171,155
)
$
(210,009
)
BASIC LOSS PER COMMON SHARE
$
(0.91
)
$
(1.80
)
$
(3.30
)
$
(4.09
)
DILUTED LOSS PER COMMON SHARE
$
(0.91
)
$
(1.80
)
$
(3.30
)
$
(4.09
)
WEIGHTED-AVERAGE COMMON SHARES
OUTSTANDING:
BASIC
52,024
51,505
51,845
51,324
DILUTED
52,024
51,505
51,845
51,324
Tutor Perini
Corporation
Segment Information
Reportable Segments
(in thousands)
Civil
Building
Specialty
Contractors
Total
Corporate
Consolidated
Total
Quarter ended December 31, 2023
Total revenue
$
493,641
$
383,168
$
186,034
$
1,062,843
$
—
$
1,062,843
Elimination of intersegment revenue
(34,263
)
(7,073
)
(36
)
(41,372
)
—
(41,372
)
Revenue from external customers
$
459,378
$
376,095
$
185,998
$
1,021,471
$
—
$
1,021,471
Income (loss) from construction
operations
$
28,301
$
(7,289
)
$
(24,113
)
$
(3,101
)
$
(19,373
)
(a)
$
(22,474
)
Capital expenditures
$
4,669
$
216
$
159
$
5,044
$
2,319
$
7,363
Depreciation and amortization(b)
$
9,932
$
572
$
589
$
11,093
$
2,151
$
13,244
Quarter ended December 31, 2022
Total revenue
$
478,806
$
345,320
$
140,229
$
964,355
$
—
$
964,355
Elimination of intersegment revenue
(39,246
)
(18,388
)
(73
)
(57,707
)
—
(57,707
)
Revenue from external customers
$
439,560
$
326,932
$
140,156
$
906,648
$
—
$
906,648
Income (loss) from construction
operations
$
9,071
$
(2,287
)
$
(85,558
)
$
(78,774
)
$
(18,637
)
(a)
$
(97,411
)
Capital expenditures
$
11,116
$
1,360
$
343
$
12,819
$
4,152
$
16,971
Depreciation and amortization(b)
$
6,932
$
452
$
559
$
7,943
$
2,367
$
10,310
Reportable Segments
(in thousands)
Civil
Building
Specialty
Contractors
Total
Corporate
Consolidated
Total
Year ended December 31, 2023
Total revenue
$
1,971,194
$
1,302,636
$
694,038
$
3,967,868
$
—
$
3,967,868
Elimination of intersegment revenue
(87,329
)
(97
)
(215
)
(87,641
)
—
(87,641
)
Revenue from external customers
$
1,883,865
$
1,302,539
$
693,823
$
3,880,227
$
—
$
3,880,227
Income (loss) from construction
operations
$
198,609
$
(91,206
)
$
(144,822
)
$
(37,419
)
$
(77,178
)
(a)
$
(114,597
)
Capital expenditures
$
41,318
$
3,932
$
1,250
$
46,500
$
6,453
$
52,953
Depreciation and amortization(b)
$
31,685
$
2,227
$
2,445
$
36,357
$
8,872
$
45,229
Year ended December 31, 2022
Total revenue
$
1,956,968
$
1,305,468
$
813,531
$
4,075,967
$
—
$
4,075,967
Elimination of intersegment revenue
(222,086
)
(62,897
)
(229
)
(285,212
)
—
(285,212
)
Revenue from external customers
$
1,734,882
$
1,242,571
$
813,302
$
3,790,755
$
—
$
3,790,755
Income (loss) from construction
operations
$
21,123
$
7,166
$
(168,019
)
$
(139,730
)
$
(65,034
)
(a)
$
(204,764
)
Capital expenditures
$
49,819
$
2,333
$
2,545
$
54,697
$
5,083
$
59,780
Depreciation and amortization(b)
$
51,123
$
1,713
$
2,098
$
54,934
$
9,430
$
64,364
(a)
Consists primarily of corporate general
and administrative expenses.
(b)
Depreciation and amortization is included
in income (loss) from construction operations.
Tutor Perini
Corporation
Consolidated Balance
Sheets
As of December 31,
(in thousands, except share and per share
amounts)
2023
2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ($173,118 and
$168,408 related to variable interest entities (“VIEs”))
$
380,564
$
259,351
Restricted cash
14,116
14,480
Restricted investments
130,287
91,556
Accounts receivable ($84,014 and $54,040
related to VIEs)
1,054,014
1,171,085
Retention receivable ($161,187 and
$187,615 related to VIEs)
580,926
585,556
Costs and estimated earnings in excess of
billings ($58,089 and $83,911 related to VIEs)
1,143,846
1,377,528
Other current assets ($26,725 and $33,340
related to VIEs)
217,601
179,215
Total current assets
3,521,354
3,678,771
PROPERTY AND EQUIPMENT:
Land
44,127
44,433
Building and improvements
132,639
124,429
Construction equipment
613,166
590,089
Other equipment
185,530
181,649
975,462
940,600
Less accumulated depreciation
(534,171
)
(505,512
)
Total property and equipment, net ($35,135
and $22,133 related to VIEs)
441,291
435,088
GOODWILL
205,143
205,143
INTANGIBLE ASSETS, NET
68,305
70,542
DEFERRED INCOME TAXES
74,083
15,910
OTHER ASSETS
119,680
137,346
TOTAL ASSETS
$
4,429,856
$
4,542,800
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt
$
117,431
$
70,285
Accounts payable ($24,160 and $36,484
related to VIEs)
466,545
495,345
Retention payable ($22,841 and $44,859
related to VIEs)
223,138
246,562
Billings in excess of costs and estimated
earnings ($439,759 and $480,839 related to VIEs)
1,103,530
975,812
Accrued expenses and other current
liabilities ($18,206 and $5,082 related to VIEs)
214,309
179,523
Total current liabilities
2,124,953
1,967,527
LONG-TERM DEBT, less current
maturities, net of unamortized discount and debt issuance costs
totaling $11,000 and $13,980
782,314
888,154
DEFERRED INCOME TAXES
956
4,649
OTHER LONG-TERM LIABILITIES
237,722
240,486
TOTAL LIABILITIES
3,145,945
3,100,816
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 52,025,497 and
51,521,336 shares
52,025
51,521
Additional paid-in capital
1,146,204
1,140,933
Retained earnings
133,146
304,301
Accumulated other comprehensive loss
(39,787
)
(47,037
)
Total stockholders' equity
1,291,588
1,449,718
Noncontrolling interests
(7,677
)
(7,734
)
TOTAL EQUITY
1,283,911
1,441,984
TOTAL LIABILITIES AND EQUITY
$
4,429,856
$
4,542,800
Tutor Perini
Corporation
Consolidated Statements of
Cash Flows
Year Ended December
31,
(in thousands)
2023
2022
Cash Flows from Operating
Activities:
Net loss
$
(127,597
)
$
(192,572
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation
42,992
49,838
Amortization of intangible assets
2,237
14,526
Share-based compensation expense
12,259
9,065
Change in debt discounts and deferred debt
issuance costs
5,458
3,697
Deferred income taxes
(64,820
)
(79,449
)
(Gain) loss on sale of property and
equipment
(5,016
)
145
Changes in other components of working
capital
428,910
390,424
Other long-term liabilities
3,754
14,317
Other, net
10,294
(3,020
)
NET CASH PROVIDED BY OPERATING
ACTIVITIES
308,471
206,971
Cash Flows from Investing
Activities:
Acquisition of property and equipment
(52,953
)
(59,780
)
Proceeds from sale of property and
equipment
10,062
8,599
Investments in securities
(48,351
)
(23,948
)
Proceeds from maturities and sales of
investments in securities
12,997
9,493
NET CASH USED IN INVESTING
ACTIVITIES
(78,245
)
(65,636
)
Cash Flows from Financing
Activities:
Proceeds from debt
712,324
693,757
Repayment of debt
(773,999
)
(732,101
)
Cash payments related to share-based
compensation
(969
)
(1,734
)
Distributions paid to noncontrolling
interests
(46,500
)
(47,386
)
Contributions from noncontrolling
interests
2,000
8,688
Debt issuance, extinguishment and
modification costs
(2,233
)
(124
)
NET CASH USED IN FINANCING
ACTIVITIES
(109,377
)
(78,900
)
Net increase in cash, cash equivalents
and restricted cash
120,849
62,435
Cash, cash equivalents and restricted
cash at beginning of year
273,831
211,396
Cash, cash equivalents and restricted
cash at end of year
$
394,680
$
273,831
Tutor Perini
Corporation
Backlog Information
Unaudited
(in millions)
Backlog at September
30, 2023
New Awards in the
Quarter Ended December 31, 2023(a)
Revenue Recognized in the
Quarter Ended December 31, 2023
Backlog at December 31,
2023
Civil
$
4,529.6
$
170.4
$
(459.4
)
$
4,240.6
Building
4,340.1
213.5
(376.1
)
4,177.5
Specialty Contractors
1,780.2
146.1
(186.0
)
1,740.3
Total
$
10,649.9
$
530.0
$
(1,021.5
)
$
10,158.4
(in millions)
Backlog at December 31,
2022
New Awards in the Year
Ended December 31, 2023(a)
Revenue Recognized in the
Year Ended December 31, 2023
Backlog at December 31,
2023
Civil
$
4,416.3
$
1,708.2
$
(1,883.9
)
$
4,240.6
Building
2,223.6
3,256.4
(1,302.5
)
4,177.5
Specialty Contractors
1,289.2
1,144.9
(693.8
)
1,740.3
Total
$
7,929.1
$
6,109.5
$
(3,880.2
)
$
10,158.4
(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/20240228767188/en/
Tutor Perini Corporation Jorge Casado, 818-362-8391 Vice
President, Investor Relations & Corporate Communications
www.tutorperini.com
Tutor Perini (NYSE:TPC)
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Tutor Perini (NYSE:TPC)
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