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Tetra Tech Reports Fourth Quarter And Fiscal 2015 Results

The following excerpt is from the company's SEC filing.

Q4-15 EPS from ongoing operations of $0.50, up 39%

Q4-15 EBITDA margin from ongoing operations 13%

Strong FY15 cash flow from operations, up 28%

Backlog up year-over-year

Pasadena, California

. Tetra Tech, Inc. (NASDAQ: TTEK) today announced results for the fourth quarter and fiscal year ended September 27, 2015.

Fourth Quarter Results

Revenue in the quarter was $578.4 million, and revenue, net of subcontractor costs(1) (net revenue), was $427.0 million. Revenue and net revenue decreased 3% in the fourth quarter of fiscal 2015 compared to the same period in fiscal 2 014, excluding the impact from foreign currency translation. The year-over-year decrease was due in large part to the wind-down of the Remediation and Construction Management (RCM) business. Diluted earnings (loss) per share (EPS) on a GAAP basis were ($0.53) in the fourth quarter of fiscal 2015, which included a non-cash goodwill impairment charge of $0.96 associated with our mining business. Operating income from ongoing operations(2) was $45.7 million and diluted EPS

on the same basis were $0.50, up on a constant currency basis 29% and 44%, respectively, compared to the fourth quarter of fiscal 2014. Cash generated from operations was $28.7 million.

Quarterly Dividend and Share Repurchase Program

On November 9, 2015, Tetra Techs Board of Directors declared a quarterly dividend of $0.08 per share (1.2% yield) payable on December 11, 2015 to stockholders of record as of November 30, 2015. In fiscal 2015, Tetra Tech returned approximately $118 million to its shareholders comprised of $100 million in share repurchases and $18 million in dividends. The Company has $100 million remaining under the previously approved $200 million share repurchase program.

Acquisition of Coffey International Limited

On October 14, 2015, Tetra Tech announced the execution of a Bid Implementation Agreement to acquire 100% of the outstanding shares of Coffey International Limited (Coffey) for A$0.425 cash per share.

The closing is conditional on the satisfactory completion of customary conditions, including

that Tetra Tech acquires at least 90% of Coffeys shares. Tetra Techs off-market tender offer for Coffey shares opened on November 10, 2015. The acquisition is expected to close in the second quarter fiscal 2016.

(1) Tetra Techs revenue includes a significant amount of subcontractor costs and, therefore, the Company believes revenue, net of subcontractor costs, which is a non-GAAP financial measure, provides a valuable perspective on its business results.

(2) For ongoing operations, refer to the Operating Results table for reconciliation.

Fiscal Year Results

Revenue and net revenue for fiscal 2015 were $2.3 billion and $1.72 billion, respectively. Revenue and net revenue for fiscal 2015 decreased 5% and 4%, respectively, compared to fiscal 2014, excluding the impact from foreign currency translation. Consistent with the fourth quarter of fiscal 2015, the year-over-year decrease in revenue was due in large part to the wind-down of RCM. EPS on a GAAP basis were $0.64 for fiscal year 2015, which included a non-cash goodwill impairment charge of $0.93. Operating income from ongoing operations was $154.0 million and diluted EPS on the same basis were $1.63, up on a constant currency basis 12% and 30%, respectively, compared to fiscal 2014. Cash generated from operations was $162.8 million, up 28% compared to fiscal 2014.

Comments on Results

Tetra Techs Chairman and CEO, Dan Batrack commented, We had a solid fourth quarter, generating a 13% EBITDA margin from ongoing operations and strong cash flow from operations. Our successful business model has enabled us to pay a dividend, repurchase shares and invest in the Companys growth, both organically and through acquisitions.

We announced our intent to acquire Coffey, a world-class consulting and engineering firm with 3,300 staff worldwide, including offices across Australia, Asia Pacific, the UK and the U.S., to support our strategy to access new geographic markets and expand our leadership position with clients. Together with Coffey we will be the global leader in international development. Coffey will also provide us a platform to provide water and environmental services to support Australias infrastructure expansion. The continued performance of our ongoing operations combined with the Coffey acquisition provides Tetra Tech a solid foundation with additional growth opportunities for fiscal 2016.

Business Outlook

The following statements are based on current expectations. These statements are forward-looking and the actual results could differ materially. These statements do not include the potential impact of future acquisitions that may be completed, including Coffey, or developments that become evident after the date of this release. The Business Outlook section should be read in conjunction with the information on forward-looking statements at the end...


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