Tutor Perini Provides Update Regarding Recent Developments
Tutor Perini (NYSE: TPC) provided an update on recent developments, including settlement of project-related disputes. The company expects record operating cash flow of $425-$575 million for 2024, surpassing previous estimates. TPC plans to use this cash to prepay $100-$150 million of Term Loan B debt by end of 2024, with additional $50-$75 million in Q1 2025.
The company anticipates a new record backlog of approximately $14 billion as of September 30, 2024, up 35% from June 30, 2024. However, due to net charges from dispute resolutions, TPC expects to report a loss for Q3 2024 and is withdrawing its 2024 EPS guidance. The company expects to return to profitability in 2025.
TPC resolved seven of its largest disputed matters, with four having favorable outcomes. The company will record a $102 million non-cash charge for an adverse arbitration decision and a net $43 million charge for other resolutions. Despite these charges, TPC expects a net cash inflow of approximately $180 million in Q4 2024 from these resolutions.
Il Tutor Perini (NYSE: TPC) ha fornito un aggiornamento sugli sviluppi recenti, compresa la risoluzione delle controversie relative ai progetti. L'azienda prevede un flusso di cassa operativo record di $425-$575 milioni per il 2024, superando le stime precedenti. TPC prevede di utilizzare questo denaro per pagare in anticipo $100-$150 milioni di debito del Term Loan B entro la fine del 2024, con ulteriori $50-$75 milioni nel primo trimestre del 2025.
L'azienda si aspetta un nuovo record di backlog di circa $14 miliardi al 30 settembre 2024, con un aumento del 35% rispetto al 30 giugno 2024. Tuttavia, a causa dei costi netti derivanti dalle risoluzioni delle controversie, TPC prevede di riportare una perdita per il terzo trimestre del 2024 e sta ritirando le previsioni per l'EPS 2024. L'azienda prevede di tornare alla redditività nel 2025.
TPC ha risolto sette delle sue controversie più grandi, con quattro risultati favorevoli. L'azienda registrerà un onere non monetario di $102 milioni per una decisione arbitrale sfavorevole e un onere netto di $43 milioni per altre risoluzioni. Nonostante questi oneri, TPC prevede un afflusso di cassa netto di circa $180 milioni nel quarto trimestre del 2024 da queste risoluzioni.
Tutor Perini (NYSE: TPC) proporcionó una actualización sobre los recientes desarrollos, incluida la resolución de disputas relacionadas con proyectos. La compañía espera un flujo de caja operativo récord de $425-$575 millones para 2024, superando las estimaciones previas. TPC planea usar este efectivo para amortizar $100-$150 millones de deuda del Préstamo a Plazo B para finales de 2024, con otros $50-$75 millones en el primer trimestre de 2025.
La compañía anticipa un nuevo récord de contratos pendientes de aproximadamente $14 mil millones a partir del 30 de septiembre de 2024, un aumento del 35% desde el 30 de junio de 2024. Sin embargo, debido a cargos netos por la resolución de disputas, TPC espera reportar una pérdida para el tercer trimestre de 2024 y está retirando su guía de EPS para 2024. La compañía espera volver a ser rentable en 2025.
TPC resolvió siete de sus disputas más grandes, con cuatro resultados favorables. La compañía registrará un cargo no monetario de $102 millones por una decisión arbitral adversa y un cargo neto de $43 millones por otras resoluciones. A pesar de estos cargos, TPC espera un aflujo de efectivo neto de aproximadamente $180 millones en el cuarto trimestre de 2024 de estas resoluciones.
튜터 페리니 (NYSE: TPC)는 최근 개발 사항에 대한 업데이트를 제공했습니다. 여기에는 프로젝트와 관련된 분쟁의 해결이 포함됩니다. 회사는 2024년 운영 현금 흐름이 4억 2500만 달러에서 5억 7500만 달러에 이를 것으로 예상하며, 이는 이전 추정을 초과하는 수치입니다. TPC는 이 현금을 사용할 계획이며, 2024년 말까지 1억 ~ 1억 5000만 달러의 대출 B 상환을 선행할 것입니다. 또한 2025년 1분기에는 5000만 달러에서 7500만 달러를 추가로 상환할 예정입니다.
회사는 2024년 9월 30일 기준 약 140억 달러의 새로운 기록 감소폭을 예상하고 있습니다, 이는 2024년 6월 30일 대비 35% 증가한 수치입니다. 그러나 분쟁 해결로 인한 순 비용 때문에 TPC는 2024년 3분기 손실을 보고할 것으로 예상하고 있으며, 2024년 EPS 가이던스를 철회하고 있습니다. 회사는 2025년에 수익성이 회복될 것으로 예상하고 있습니다.
TPC는 최대 7개의 대형 분쟁을 해결했으며, 그 중 4개는 유리한 결과를 얻었습니다. 회사는 불리한 중재 결정에 대해 비현금 비용 1억 200만 달러를 기록할 것이며, 기타 해결책에 대해 순 $4300만 달러의 비용을 기록할 것입니다. 이러한 비용에도 불구하고 TPC는 2024년 4분기에 약 1억 8000만 달러의 순 현금 유입을 예상하고 있습니다.
Tutor Perini (NYSE: TPC) a fourni une mise à jour sur les développements récents, y compris le règlement des différends liés aux projets. La société s'attend à un flux de trésorerie d'exploitation record de 425 à 575 millions de dollars pour 2024, dépassant les estimations précédentes. TPC prévoit d'utiliser cet argent pour rembourser par anticipation entre 100 et 150 millions de dollars de dettes de Term Loan B d'ici la fin de 2024, avec un supplément de 50 à 75 millions de dollars au premier trimestre 2025.
La société anticipe un nouveau record de carnet de commandes d'environ 14 milliards de dollars au 30 septembre 2024, en hausse de 35 % par rapport au 30 juin 2024. Cependant, en raison des charges nettes liées aux résolutions de différends, TPC s'attend à enregistrer une perte pour le troisième trimestre 2024 et retire ses prévisions de bénéfice par action pour 2024. La société s'attend à retrouver la rentabilité en 2025.
TPC a résolu sept de ses plus grands litiges, dont quatre ont abouti à des résultats favorables. La société enregistrera un charge non monétaire de 102 millions de dollars pour une décision d'arbitrage défavorable et une charge nette de 43 millions de dollars pour d'autres résolutions. Malgré ces charges, TPC prévoit un afflux de trésorerie net d'environ 180 millions de dollars au quatrième trimestre 2024 provenant de ces résolutions.
Tutor Perini (NYSE: TPC) hat ein Update zu den jüngsten Entwicklungen gegeben, einschließlich der Beilegung projektbezogener Streitigkeiten. Das Unternehmen erwartet einen Rekordbetriebscashflow von 425 bis 575 Millionen Dollar für 2024, was die bisherigen Schätzungen übertrifft. TPC plant, dieses Geld zu verwenden, um bis Ende 2024 zwischen 100 und 150 Millionen Dollar der Term Loan B-Schulden vorzeitig zu tilgen, sowie weitere 50 bis 75 Millionen Dollar im ersten Quartal 2025.
Das Unternehmen rechnet mit einem neuen Rekordauftragsbestand von etwa 14 Milliarden Dollar zum 30. September 2024, was einem Anstieg von 35% seit dem 30. Juni 2024 entspricht. Aufgrund der Nettokosten aus Streitbeilegungen erwartet TPC jedoch, im dritten Quartal 2024 einen Verlust zu melden und die Prognose für das EPS 2024 zurückzuziehen. Das Unternehmen erwartet, 2025 wieder profitabel zu sein.
TPC hat sieben der größten strittigen Angelegenheiten geklärt, wobei vier mit günstigen Ergebnissen endeten. Das Unternehmen wird einen nicht zahlungswirksamen Aufwand von 102 Millionen Dollar für eine nachteilige Schiedsrichterentscheidung verbuchen und einen netto Aufwand von 43 Millionen Dollar für weitere Beilegungen. Trotz dieser Aufwände erwartet TPC einen netto Cash-Zufluss von etwa 180 Millionen Dollar im vierten Quartal 2024 aus diesen Beilegungen.
- Record operating cash flow of $425-$575 million expected for 2024
- Plans to prepay $100-$150 million of Term Loan B debt by end of 2024
- New record backlog of approximately $14 billion as of September 30, 2024, up 35% from June 30, 2024
- Net cash inflow of approximately $180 million expected in Q4 2024 from dispute resolutions
- Expecting to return to profitability in 2025
- Anticipates reporting a loss for Q3 2024
- Withdrawing 2024 EPS guidance
- $102 million non-cash charge for adverse arbitration decision
- Net $43 million charge for other dispute resolutions
Insights
This update from Tutor Perini contains several significant financial developments:
- Anticipated record operating cash flow of
$425-$575 million for 2024, far exceeding previous estimates - Plans to prepay
$100-$150 million of Term Loan B debt by end of 2024, with additional$50-$75 million in Q1 2025 - Expected record backlog of
$14 billion as of Q3 2024, up35% from Q2 - Net charge to earnings in Q3 2024 due to dispute resolutions, resulting in a quarterly loss
- Return to profitability expected in 2025
The strong cash flow and debt reduction plans are positive, potentially improving the company's financial position. However, the unexpected legal setbacks and resulting Q3 loss are concerning. The record backlog suggests strong future revenue potential, but execution will be key. Overall, this update presents a mixed financial picture with both promising and challenging elements for investors to consider.
The legal aspects of this update are particularly noteworthy:
- Resolution of seven major disputed matters, with four favorable outcomes for Tutor Perini
- An adverse arbitration decision resulting in a
$102 million non-cash, pre-tax charge - Net
$43 million pre-tax charge from other dispute resolutions - Appeals planned for unfavorable rulings
- A favorable non-binding decision from a dispute review board on a separate claim
These legal outcomes demonstrate the significant impact of dispute resolutions on the company's financials. The mixed results highlight the unpredictability of legal proceedings in the construction industry. The company's strong disagreement with certain rulings and intent to appeal suggests ongoing legal challenges. Investors should be aware that future appeals could potentially reverse some negative impacts, but also that legal uncertainties may persist, affecting financial stability and predictability.
From a market perspective, this update reveals several key points:
- Record backlog of
$14 billion , indicating strong market demand for Tutor Perini's services - Significant new project awards driving backlog growth, including a
$1.66 billion project in Honolulu - Potential for additional major project awards in Q4 2024, including multi-billion dollar opportunities
- Anticipated return to profitability in 2025
The substantial backlog growth suggests a robust pipeline of future work, which could translate to increased revenue and potentially improved profitability in the coming years. The company's success in winning large projects indicates strong competitive positioning in the market. However, the short-term financial setbacks and legal challenges may impact investor confidence. The construction market appears to be providing ample opportunities, but Tutor Perini's ability to execute these projects profitably will be important for long-term success and investor sentiment.
-
Anticipating strong operating cash flow of approximately
$175 million $425 million $575 million -
Planning to utilize anticipated strong 2024 cash collections to prepay
$100 million $150 million $50 million $75 million -
Expecting record backlog of approximately
$14 billion 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
Significant new award activity is expected to result in a new record ending backlog of approximately
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
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
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
With the significant operating cash flow expected in the fourth quarter of 2024, the Company anticipates prepaying
Backlog
As a result of the recently announced award of the
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
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
Source: Tutor Perini Corporation
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