Tetra Tech Performs Well

Tetra Tech (TTEK - Analyst Report)  reported Q1-09 results: Gross Revenue = $638.7 million, up 35.8%; Net Revenue (i.e., excludes subcontractor costs) = $330.0 million, up 19.1%; Operating Income = $28.6 million, + 26.0%; Net Income = $16.3 million, up 26.4%; Diluted EPS = $0.27, up 24.1%; Backlog = $1.77 billion, up 36.4%. There is joy on Colorado Boulevard.

The Net Revenue breakdown by customer: Federal = 43%, Commercial = 40%, State & Local = 15% and International (includes the results of recently-acquired Wardrop Engineering of Canada) = 15%. Revenue growth in Q1-09: Federal = Gross +8%, Net +12%; Commercial = Gross +127%, Net +43% (~$100 million, or one-half of the total ~$200 contract million value, from one project); State & Local = Gross -14%; Net -10%.

New Segment Net Revenue mix based on Q1-09 results: Environmental Consulting Services (ECS) = 27%; Technical Support Services (TSS) = 23%; Engineering and Architectural Services (EAS) = 19%; Remediation and Construction Management (RCM) = 31%.

Fiscal year 2009 revenue outlook by market: Federal (U.S. Agency for International Development = USAID + Dept. of Defense Base Realignment and Closure = BRAC) = 45% of revenue, growing at 5+%; Commercial (wind energy, water) = 35% of revenue, growing at 5% to 10%; State & Local = 15% of revenue, declining by 5% to 10%; International (Waldrop acquisition) = 5%, growing by > 100%.

The E&C-related spending in the Congressional stimulus proposals is someplace between $159 billion and $160 billion (close enough for government work). Of that, TTEK probably would be qualified to bid on between $46 billion to $58 billion worth of work, of which it hopes to be awarded at least $8 billion.

TTEK is looking down the tunnel, and the light at the other end is the stimulus package.

Read the full analyst report on TTEK