Tetra Tech, Inc. (NASDAQ:TTEK) Q4 2017 Earnings Conference Call Transcript
Nov 09, 2017 • 11:00 am ET
Good morning, and thank you for joining the Tetra Tech Earnings Call. By now you should have received a copy of the press release. If you have not, please contact to the Company's corporate office at (626) 351-4664. With us today from management are Dan Batrack, Chairman and CEO; and Steve Burdick, CFO. They will provide a brief overview of the results and we'll then open up the call for questions.
(Forward-Looking Cautionary Statements) In addition, since management will be presenting some non-GAAP financial measures as references, the appropriate GAAP financial reconciliations are posted in the IR section of Tetra Tech's website.
With that, I would now like to turn the call over to Dan Batrack. Please go ahead, Mr. Batrack.
Thank you very much, Regina, and good morning, and welcome to our fourth quarter and fiscal year 2017 earnings conference call. We had an excellent fourth quarter and close to our 2017 fiscal year. With rapidly growing opportunities in water and environmental projects and a record high backlog, we're entering 2018 fiscal year in a stronger position than ever before.
Now, I'll begin today's call with an overview of our quarterly and annual results. And I will follow later in the call with the business outlook, while Steve Burdick, our CFO, will provide additional details on our financial performance and our capital allocations.
We had an excellent fourth quarter in record highs for revenue, operating income and earnings per share. For our fourth quarter, our revenue from ongoing operations was $729 million, up 10% from the prior year. Our net revenue was $533 million, up 9% from the prior year, which generated an operating income of $57 million, which was up 18% year-over-year. $57 million in operating income resulted in a diluted earnings per share of $0.63 for the quarter, which is up 15% year-over-year. And finally our backlog or looking to the future work for us, was up 8% year-over-year at $2.536 billion, the highest in the 51-year history of the Company.
I'd now like to provide an overview of our customer performance. Our record fourth quarter performance was led by strong growth across end-markets, especially for our US state and local, and our US federal work. State and local revenues were very strong this quarter with an organic net revenue growth of 30% year-over-year. This growth was a direct result of the work in high-growth areas of the states of California, Texas and Florida, where we're performing water infrastructure work, and where we've even started performing emergency planning and recovery services in the mid to late September period, which was very near the end of our fourth quarter.
For our US federal clients, which represented about 30% of our net revenue in the quarter, we had grown that by 14% year-over-year. Growth in our US federal work was driven by strong year-over-year growth in our Department of Defense and in our international development work.
Our US commercial work was also up, it was up 10% year-over-year