Tetra Tech, Inc. (NASDAQ:TTEK) Q4 2018 Earnings Conference Call Transcript

Nov 08, 2018 • 11:00 am ET


Tetra Tech, Inc. (NASDAQ:TTEK) Q4 2018 Earnings Conference Call Transcript


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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 the Company's corporate office at (626) 351-4664. As a reminder, Tetra Tech is also simulcasting this presentation with slides in the Investor section of its website at tetratech.com. This call is being recorded at the request of Tetra Tech, and this broadcast is the copyrighted property of Tetra Tech. Any rebroadcast of this information in whole or part without the prior written permission of Tetra Tech is prohibited.

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 Investors section of Tetra Tech's website.

At this time, I would like to inform you that all participants are in a listen-only mode. At the request of the Company, we will open the conference up for questions-and-answers after the presentation.

With that, I would now like to turn the call over to Dan Batrack. Please go ahead, Mr. Batrack.

Dan Batrack

Great. Thank you very much, Hilary, and good morning, and welcome to our fourth quarter and fiscal year 2018 earnings conference call. We had a very strong fourth quarter, hitting new all-time highs for our ongoing operating income and earnings per share, with record orders driving backlog to over $2.6 billion for the first time ever for the Company.

For the full 2018 fiscal year, we also achieved new records for revenue, net revenue, operating income and earnings per share. And for the first time, generating over $2.9 billion in revenue. Strong orders that drove our backlog to these record levels in the fourth quarter were broad-based across our markets, including government, commercial, state and local and our international work.

It's this momentum and the strong demand for Tetra Tech services that gives us excellent visibility for 2019 and beyond. We are focused on the future, and confident that the Leading With Science solutions that we provide for essential services in water, environment and infrastructure are highly differentiated and highly valued in the markets that we serve.

I'll now provide an overview of our quarterly and annual results and also provide a business outlook for us for 2019, while Steve Burdick, our CFO, will provide additional details on our financial performance and capital allocation for the Company.

We had a very strong quarter, achieving new record highs for operating income and earnings per share for ongoing operations. For our fourth quarter, our revenue from ongoing operations was $747 million, up 3% from the prior year. Our net revenue was $564 million, up 6% from the prior year, which generated an operating income of $62 million, up 9% from last year, resulting in a diluted earnings per