LOS ANGELES (July 29, 2020)—Tutor Perini Corporation reported results for the 3 months ended June 30, 2020. Revenue was $1.3 billion, up 13% compared to $1.1 billion for the second quarter of last year. The company experienced revenue growth across all segments despite impacts from the COVID-19 pandemic, which reduced the company’s revenue for the second quarter by an estimated $130 million due to temporary project suspensions and reduced productivity that primarily impacted the Building and Specialty Contractors segments. The growth was driven by increased activities on large infrastructure projects that are progressing.

Income from construction operations for the second quarter of 2020 was $57.7 million compared to a loss from construction operations of $341.7 million for the second quarter of last year that resulted primarily from a $379.9 million pre-tax non-cash goodwill impairment charge recorded in that period. Income from construction operations for the second quarter of 2020 increased 51% compared to adjusted income from construction operations of $38.2 million for the same period last year.

Net income attributable to the company for the second quarter of 2020 was $18.7 million, or $0.37 per diluted share, compared to a net loss attributable to the company of $320.5 million, or a loss of $6.38 per diluted share, and adjusted net income of $9.0 million, or adjusted diluted EPS of $0.18, for the second quarter of 2019. Adjusted income from construction operations, adjusted net income attributable to the company and adjusted diluted EPS are non-GAAP financial measures and exclude the impact of the goodwill impairment charge. These non-GAAP financial measures are reconciled to the most nearly comparable GAAP financial measures in the financial tables below.


 

The significant growth in adjusted income from construction operations and adjusted diluted EPS for the second quarter of 2020 was principally due to contributions from the above-mentioned infrastructure projects, partially offset by a $13.2 million (approximately $0.19 per diluted share) charge related to an unfavorable arbitration ruling pertaining to an electrical project in New York and the aforementioned COVID-19 impacts, which reduced income from construction operations and diluted EPS by approximately $9 million and $0.13, respectively.

Second quarter 2020 backlog remained robust at $10.0 billion compared to $11.4 billion reported for the same quarter last year. Backlog declined as a result of the higher current year revenue generated from near-record backlog at the end of 2019 outpacing current year new awards. In the second quarter of 2020, new awards totaled $0.7 billion and included more than $300 million of additional funding for certain civil segment projects and over $235 million for various building segment projects in California. The company anticipates bidding on several large civil segment projects in the second half of this year and expects that backlog will continue to support strong revenue growth.

The company generated $92.2 million of operating cash in the second quarter of 2020, the largest second-quarter operating cash result since the merger in 2008 and nearly seven-fold better than the $13.3 million generated in the second quarter of 2019. Strong cash contributions driven by increased project execution activities on certain higher-margin projects were enhanced by progress made on the resolution and collection of disputed balances and a modest decrease in working capital in the second quarter of 2020.

Settlements of certain disputed matters resulted in the collection of approximately $40 million in the quarter. Through the first half of 2020, the company generated $58.2 million of operating cash, an improvement of nearly $170 million compared to the use of $111.5 million through the first half of 2019. The solid operating cash flow year-to-date resulted from the strong cash contributions associated with the increased project execution activities mentioned above and progress made on the resolution and collection of disputed balances, which more than offset an increase of $68.5 million in investment in working capital.

Barring any significant impact on cash flows from the COVID-19 pandemic, the company continues to anticipate that substantial cash collections associated with large projects and ongoing dispute resolution efforts will contribute to strong operating cash flow throughout the remainder of 2020. The company continues to evaluate options to address the spring-forward provision of its revolving credit facility and the refinancing or retirement of its outstanding Convertible Notes. New credit arrangements are expected to be finalized and announced in the third quarter of 2020.

 

“We delivered solid results for the second quarter and first half of 2020, highlighted by the largest second-quarter operating cash result since the merger in 2008 and double-digit revenue growth year-to-date across all segments,” said Ronald Tutor, chairman and chief executive officer. Tutor continued, “Favorable execution on our large infrastructure projects is driving our strong revenue and earnings growth. Importantly, we produced these solid results despite the impacts of the COVID-19 pandemic. Finally, we have made good progress toward settlements of disputes with project owners and anticipate additional settlements and associated cash collections later this year and next year.”