- Anticipating strong operating cash flow of approximately
$175 million year-to-date through Q3 2024 and new record operating
cash flow in the range of $425 million to $575 million for
full-year 2024
- Planning to utilize anticipated strong 2024 cash collections
to prepay $100 million to $150 million of Term Loan B debt by
December 31, 2024, with further prepayments of $50 million to $75
million expected in Q1 2025
- Expecting record backlog of approximately $14 billion as of
September 30, 2024, up 35% compared to the backlog at June 30,
2024, driven by certain significant new project awards, two of
which have not yet been announced
- Awaiting owners’ decisions and potential awards for other
significant new projects in Q4 2024; backlog at year-end 2024 could
be substantially higher than at the end of Q3 2024
- While the Company made considerable progress in resolving
seven of its largest disputed matters, which is expected to
contribute to the strong future operating cash flow, the result is
anticipated to be a net charge to earnings and a net loss for Q3
2024
- Management expects return to profitability in 2025
Tutor Perini Corporation (NYSE: TPC) (the “Company”), a leading
civil, building and specialty construction company, provided an
update today regarding several recent developments, including the
settlement of various project-related disputes, which had both
favorable and adverse implications for the Company. Because of
anticipated cash collections resulting from these settlements and
from other unrelated project activities, some of which are driven
by new awards, the Company expects that its operating cash flow for
2024 will be in the range of $425 million to $575 million,
meaningfully surpassing the Company’s previous record for full-year
operating cash generation in 2023 and significantly greater than
previous estimates. The Company expects to use this anticipated
cash, in part, to prepay its Term Loan B debt by $100 million to
$150 million by the end of 2024, with further prepayments of $50
million to $75 million in the first quarter of 2025.
Significant new award activity is expected to result in a new
record ending backlog of approximately $14 billion as of September
30, 2024, up 35% compared to the backlog reported as of June 30,
2024. The Company continues to expect strong new award bookings in
the near term, as it has recently submitted proposals and is
awaiting owners’ decisions and potential awards for several other
large projects. Accordingly, ending backlog for the fourth quarter
of 2024 could see further significant growth compared to the result
to be reported for the third quarter of 2024.
As a result of the net charges discussed below, the Company
expects that it will report a loss from construction operations and
negative earnings per share for the third quarter of 2024.
Therefore, the Company is withdrawing its EPS guidance for 2024.
The Company does not expect these net charges to affect compliance
with its debt covenants. Excluding the impact of these net charges,
the Company believes that the third-quarter results would have been
profitable, and it would have been in a position to achieve its
previously provided EPS guidance range.
The Company expects to return to profitability in 2025 and will
provide guidance for 2025 in February, when it reports its
full-year 2024 results.
Settlements of Disputed Matters
During the third quarter of 2024 and through the date of this
release, several matters in various stages of litigation or dispute
resolution proceedings with project owners, subcontractors and/or
insurance companies were adjudicated or otherwise settled. The
Company reached resolution or otherwise made significant progress
towards the resolution of various matters, including seven of its
largest outstanding disputed balances, with four of the seven
having favorable outcomes for the Company.
For one matter, the Company expects to record a non-cash,
pre-tax charge to income (loss) from construction operations of
approximately $102 million in the third quarter of 2024 as a result
of an unexpected adverse arbitration decision issued in October
2024 involving a Civil segment bridge project in California. The
Company strongly disagrees with the decision and intends to appeal.
While the arbitration panel agreed with prior non-binding rulings
of an independent dispute resolution board comprised of industry
experts, the most important of which was that the Company was not
provided accurate construction documents for the project, including
geotechnical information, the arbitration panel failed to award the
Company its complete damages and applied offsets that the Company
strongly disputes.
For the resolution of other matters, including the other six
large disputed balances, the Company expects to record a net
pre-tax charge to income (loss) from construction operations of
approximately $43 million in the third quarter of 2024, with an
associated expected net cash inflow to the Company resulting from
these resolutions of approximately $180 million, which is expected
to be received in the fourth quarter of 2024.
Additionally, during the third quarter of 2024, the Company
received a favorable ruling from an independent dispute review
board that issued a non-binding decision as to the quantum of
damages the Company is entitled to recover associated with a claim
on a mass-transportation project in the Northeast. The favorable
dispute review board decision could serve as a meaningful catalyst
in the resolution of this matter.
For some of the matters adjudicated unsuccessfully during the
period, the Company continues to strongly believe that it is
legally entitled to collect all or substantially all of the amounts
previously recorded. However, in light of the rulings and despite
the fact that certain matters will be appealed, the Company expects
to record these charges in the third quarter of 2024, consistent
with applicable accounting standards. These charges primarily
reflect write-downs related to Costs and Estimated Earnings in
Excess of Billings and Accounts Receivable that the Company
previously recorded based on its expected recovery. The outcome of
appeals could result in additional cash collections or payments,
and charges or earnings, which could offset some or all of the
charges mentioned above.
As previously disclosed in the Company’s Annual Report on Form
10-K for the year ended December 31, 2023, and its subsequent
Quarterly Reports on Form 10-Q, the Company is involved in various
lawsuits or dispute resolution proceedings which may involve making
estimates of recovery for additional costs exceeding the contract
price or for amounts not included in the original contract price.
From time to time, the Company may invest significant working
capital on projects while legal and other dispute resolution
proceedings are pending. Adverse outcomes of these litigation or
dispute resolution matters sometimes require the Company to record
an expense or reduce revenue that was previously recorded based on
estimates made and reduce the cash collections previously expected
to be received. Conversely, favorable outcomes of these litigation
or dispute resolution matters can result in gains and increase the
amount of expected cash collections.
Management Remarks
Gary Smalley, President, commented, “We have made and continue
to make tremendous strides in resolving many of our larger,
long-standing disputes and collecting substantial amounts of
associated cash. We are pleased that we expect to deliver a third
consecutive year of record operating cash flow, with this year’s
result well above last year's. We plan to utilize a substantial
portion of this cash to pay down much of our Term Loan B debt by
the end of this year, with further deleveraging planned in the
first quarter of 2025. This continued debt reduction from improved
cash collections is another step along the path of optimizing our
capital structure, which will enable us to reduce our interest
costs considerably.”
Ronald Tutor, Chairman and Chief Executive Officer, remarked,
“Unfortunately, we received a couple of unexpected and rather
inexplicable legal decisions that will negatively impact earnings
for the third quarter of 2024. We strongly disagree with both
rulings and are appealing them. We hope to reverse the negative
impact of these decisions in the future. With many of our larger
disputes now behind us, we anticipate that we will experience less
earnings volatility in 2025 and beyond. Finally, we are enjoying a
remarkably successful year in terms of major new awards that are
driving our backlog to new record levels, setting a solid
foundation for revenue growth and strong profitability and cash
flow in the years ahead. Our backlog could continue to grow
substantially in the near term due to certain bids outstanding and
other projects that will be bidding soon.”
Cash and Debt
For the nine months ended September 30, 2024, the Company
expects to report operating cash flow of approximately $175
million. Operating cash flow for the fourth quarter of 2024 is
expected to be in the range of $250 million to $400 million, such
that operating cash generation for the full year of 2024 is
estimated to be in the range of $425 million to $575 million. Even
the low end of this anticipated range would significantly surpass
the Company’s previous all-time record operating cash flow of $308
million in 2023. The strong operating cash flow anticipated for the
fourth quarter is expected to be driven by collections related to
the resolution of the aforementioned disputed matters, as well as
cash generation related to project execution activities for new and
existing projects. The wide range in the estimated generation of
operating cash in the fourth quarter of 2024 is due to the
uncertainty as to the precise timing of when certain large payments
will be collected, though any amounts in this range that are not
collected in the fourth quarter of 2024 are expected to be
collected in the first quarter of 2025.
With the significant operating cash flow expected in the fourth
quarter of 2024, the Company anticipates prepaying $100 million to
$150 million of its outstanding Term Loan B debt prior to December
31, 2024. The Company also estimates that it will prepay an
additional $50 million to $75 million of the Term Loan B debt in
the first quarter of 2025 with cash generated from operations.
Backlog
As a result of the recently announced award of the $1.66 billion
City Center Guideway and Stations project in Honolulu, Hawaii, as
well as certain other significant new awards that were booked in
the third quarter of 2024, which will be announced soon, ending
backlog for the third quarter of 2024 is expected to be
approximately $14 billion, a 35% increase over backlog as of June
30, 2024, and far exceeding the Company’s previous record backlog
of $11.6 billion that was reported for the first quarter of 2019.
In addition, the Company has submitted or will submit proposals and
expects owners’ decisions in November on the multi-billion-dollar
Manhattan Jail project, the $1.8 billion Amtrak Sawtooth Bridges
project, the $1.5 billion Newark AirTrain project, and the $550
million Raritan River Bridge Replacement project. Accordingly,
ending backlog for the fourth quarter of 2024 could reflect further
significant growth.
Preliminary Estimates and Results
The preliminary estimates of the Company’s results presented
above are based upon currently available information, and are
subject to revision as a result of, among other things, the
completion of the Company’s financial closing procedures, the
completion of its financial statements for such period and the
completion of other operational procedures (all of which have not
yet been completed), including the possibility of changes as a
result of resolutions on open litigation, arbitration or other
settlement negotiations that could occur through the filing of the
Company’s Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 2024. Additional items that may require
adjustments to the preliminary estimates may be identified. The
Company’s actual results may be materially different from its
preliminary estimates, which should not be regarded as a
representation by the Company or its management as to the Company’s
actual results for the fiscal quarter ended, and as of, September
30, 2024. You should not place undue reliance on this preliminary
information. In addition, the preliminary data is not necessarily
indicative of the Company’s results for any future period. During
the course of the preparation of the Company’s financial statements
and related notes as of and for the three months ended September
30, 2024, the Company may identify items that would require
material adjustments to these preliminary estimates. As a result,
you should exercise caution in relying on this information and
should not draw any inferences from this information. These
preliminary estimates have been prepared by and are the
responsibility of the Company’s management. Deloitte & Touche
LLP, the Company’s independent registered public accounting firm,
has not audited, reviewed, compiled or performed any procedures
with respect to these preliminary estimates, and accordingly,
Deloitte & Touche LLP does not express an opinion or any other
form of assurance with respect thereto.
Note Regarding Forward-Looking Statements
The statements contained in this release 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 impacts 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; 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; 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; an inability to obtain
bonding, which could have a negative impact on our operations and
results; the impact of inclement weather conditions and other
events outside of our control on projects; 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;
increased competition and failure to secure new contracts; a
significant slowdown or decline in economic conditions, such as
those presented during a recession; decreases in the level of
government spending for infrastructure and other public 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; 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; failure to meet our
obligations under our debt agreements (especially in a high
interest rate environment); downgrades in our credit ratings;
violations of the U.S. Foreign Corrupt Practices Act and similar
worldwide anti‐bribery laws; public health crises, such as
COVID‐19, which 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; 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, 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.
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).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241021252515/en/
Tutor Perini Corporation Jorge Casado, 818-362-8391 Vice
President, Investor Relations and Corporate Communications
www.tutorperini.com
Grafico Azioni Tutor Perini (NYSE:TPC)
Storico
Da Nov 2024 a Dic 2024
Grafico Azioni Tutor Perini (NYSE:TPC)
Storico
Da Dic 2023 a Dic 2024
