Tutor Perini Corporation
Tutor Perini Corporation is a leading civil and building construction company offering diversified general contracting and design/build services to private clients 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 the planning and scheduling of the manpower, equipment, materials and subcontractors required for a project. We also offer self-performed construction services including excavation, concrete forming and placement, steel erection, electrical and mechanical services, plumbing and HVAC. We are known for our major complex building project commitments as well as our capacity to perform large and complex transportation and heavy civil construction for government agencies and private clients throughout the world.
Results, Third Quarter, 2009
Net income was $26.7 million for the third quarter of 2009, as compared to net income of $34.1 million for the third quarter of 2008. Diluted earnings per common share were $0.54 for the third quarter of 2009, as compared to $1.01 for the third quarter of 2008. Revenues from construction operations were $1.17 billion for the third quarter of 2009, as compared to revenues of $1.41 billion for the third quarter of 2008.
The decrease in net income and revenues primarily reflects the completion of large gaming and hospitality work under contract for the period and a reduced level of new nonresidential building work acquired during the first nine months of 2009. The nonresidential building market, especially in the private sector, continues to be negatively impacted by the challenging economic environment that has caused some customers to delay plans for future projects. Diluted earnings per share decreased from the third quarter of 2008 due to the increased number of outstanding shares issued as a result of the merger with Tutor-Saliba that was completed in September 2008. On a pro forma basis for the third quarter of 2008, including Tutor-Saliba, net income was $30 million, diluted earnings per common share was $0.59 and revenues from construction operations were $1.65 billion.
Nine Months Results
Net income was $104.6 million for the first nine months of 2009, as compared to net income of $87.8 million for the first nine months of 2008. Diluted earnings per common share were $2.13 for the first nine months of 2009, as compared to $2.96 for the first nine months of 2008. On a pro forma basis, including Tutor-Saliba for the first nine months of 2008, net income and diluted earnings per common share were $111.0 million and $2.19, respectively.
Revenues from construction operations were $4.07 billion for the first nine months of 2009, as compared to revenues of $4.06 billion for the first nine months of 2008. On a pro forma basis, including Tutor-Saliba for the first nine months of 2008, revenues from construction operations were $5.09 billion.
Backlog at $4.9 billion
The backlog of uncompleted construction work at September 30, 2009 was $4.9 billion, a decrease of $1.8 billion from the $6.7 billion backlog reported at December 31, 2008. The September 30, 2009 backlog includes new contract awards and adjustments to contracts in process added during the third quarter of 2009 of approximately $941 million, which includes a $240 million solar panel manufacturing plant in California, a $178 million civil infrastructure project at the World Trade Center site, and a $124 million bridge replacement project in California. The decrease in backlog during the first nine months of 2009 reflects the completion of large gaming and hospitality work under contract for the period and a reduced level of new nonresidential building work acquired. Backlog for the civil segment was $863.4 million at September 30, 2009, a $335.4 million (64%) increase from December 31, 2008 and a $292.5 million (51%) increase from June 30, 2009. Recently, the Company was selected to build a correction facility with an approximate value of $400 million. In November, the Company was awarded a $215 million tunnel project near Oakland, California.
Financial Condition Remains Strong in 2009
At September 30, 2009, working capital was $283.6 million, an increase of $58.6 million from $225.0 million at December 31, 2008. The Company had $241.6 million available to borrow under its credit facilities as of September 30, 2009. The Company believes its financial position and credit arrangements are sufficient to support the Company’s current backlog and anticipated new work.
Outlook
Guidance for the full year of 2009 is estimated to be within the ranges previously provided. Revenues are estimated to be in the range of $5.0 to $5.5 billion and diluted earnings per share are estimated to be in the range of $2.60 to $2.70 per share.
The Company is initiating guidance for the full year 2010 with revenues estimated to be in the range of $3.7 to $4.2 billion and diluted earnings per share estimated to be in the range of $2.40 to $2.60 per share.
Ronald Tutor, Chairman and CEO, stated, “The Company has demonstrated its competitive strength in the civil infrastructure markets as evidenced by the recent contract wins in New York and California. Our goal to be a more diversified general contractor will be achieved next year with our civil and management services groups contributing over half of our operating profits at significantly higher margins than what we are able to achieve in our building business. Including recent awards, our Civil Group backlog has almost doubled since the beginning of the year. We continue to benefit from strong execution by all of our operations and have positioned the business to acquire new work as the economy improves.”
Civil Group
Our Civil Group is comprised of the operations of Tutor-Saliba Corporation headquartered in Sylmar, CA, Tutor Perini Corporation of New York, and Cherry Hill Construction, Inc, headquartered in the Baltimore/Washington, DC area, and is engaged in public works construction throughout the U.S., including the repair, replacement and reconstruction of public infrastructure such as highways, bridges and mass transit systems. We have been active in civil construction since 1894 and believe we are expert at managing large, complex civil construction projects. Our corporate integrity, financial strength and outstanding record of performance on challenging civil works projects pre-qualifies us for projects in situations where smaller, less diversified contractors are unable to do so. This is a competitive advantage that makes us an attractive partner on the largest infrastructure projects and prestigious DBOM (design-build-operate-maintain) contracts, which combine the nation's top contractors with engineering firms, equipment manufacturers and project development consultants in a competitive bid selection process to execute highly sophisticated public works projects.
Building Group
The Tutor Perini Building Group is comprised of Perini Building Company, Inc., Tutor-Saliba Corporation, James A. Cummings, Inc., Rudolph and Sletten, Inc. and Keating Building Corporation and focuses on large, complex projects in the hospitality and gaming, sports and entertainment, educational, transportation and healthcare markets. We believe our success results from our proven philosophy, "Building Relationships on Trust," and our ability to manage large, complex projects with aggressive fast-track schedules, elaborate designs and advanced systems while providing accurate budgeting and strict quality control. Although price is a key competitive factor, our strong reputation, long-standing customer relationships and significant level of repeat and referral business have enabled us to achieve our leading position. Our reputation for completing projects on time is a significant competitive advantage in the building market, as any delay in project completion may result in significant loss of revenues for the owner.
Management Services Group
Comprised of Perini Management Services Inc. (PMSI) and Black Construction, the Tutor Perini Management Services Group provides diversified construction and design-build services to the U.S. military and government agencies, surety companies and multi-national corporations. PMSI and Black are well known for their ability to plan and execute rapid response assignments and multi-year contracts through diversified construction and design-build abilities. We have consistently demonstrated superior performance on competitively bid or negotiated multi-year, multi-trade, task order and ID/IQ (Indefinite Delivery/Indefinite Quantity) construction programs.
Most recently, we have been selected by the federal government for significant projects related to defense and reconstruction projects in Iraq and Afghanistan. Black Construction Corporation of Guam is one of the most successful contractors in Guam and the Western Pacific.
The Management Services Group is also under agreement with major North American surety companies to provide rapid response, contract completion services. Upon notification from the surety of a contractor bond default, we provide management or general contracting services to fulfill the contractual and financial obligations of the surety.
