Tutor Perini Corporation
Tutor Perini Corporation (the "Company") 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: First Quarter 2010
Net income was $20.9 million for the first quarter of 2010, as compared to net income of $39.0 million for the first quarter of 2009. Diluted earnings per common share were $0.42 for the first quarter of 2010, as compared to diluted earnings per common share of $0.80 for the first quarter of 2009. Revenues from construction operations were $865.1 million for the first quarter of 2010, as compared to revenues of $1.5 billion for the first quarter of 2009.
Operating results for the first quarter of 2010 were reduced primarily as a result of the completion of $6.2 billion in contracts for MGM's Project CityCenter in December 2009 and work in Iraq that contributed higher margins during the first quarter of 2009. In addition, we continue to experience lower new work awards in the Building segment as a result of reduced spending in the overall building industry.
Backlog: $3.8 billion at March 31, 2010
The backlog of uncompleted construction work at March 31, 2010 was $3.8 billion, a decrease of $0.5 billion from the $4.3 billion backlog reported at December 31, 2009. The March 31, 2010 backlog includes new contract awards and adjustments to contracts in process added during the first quarter of 2010 of approximately $312 million, including a $92 million contract for construction of an energy research plant in California and a $40 million contract for construction of a government hospital project in Florida. Our overall backlog decreased during the first quarter of 2010, reflecting the completion of large hospitality and gaming work under contract for the period, including Project CityCenter, and the continued lack of nonresidential building new work acquired. However, we have pending awards and prospects for both public and private sector customers that we anticipate will enter backlog in the near future. For example, we were recently identified as the low bidder on four civil projects totaling approximately $366 million in California, New Jersey, New York and Maryland. We expect these projects to enter our backlog in the second quarter of 2010.
Financial Condition
At March 31, 2010, working capital was $324.0 million, an increase of $20.9 million from $303.1 million at December 31, 2009. In January 2010, the Company amended its line of credit agreement, increasing total available borrowings at March 31, 2010 to $311.5 million. 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 2010 is estimated to be within the range previously provided. Revenues are estimated to be in the range of $3.4 to $3.9 billion and diluted earnings per common share are estimated to be in the range of $2.00 to $2.20 per share.
Ronald Tutor, Chairman and CEO, said: "With continued focus on our higher-margin civil and management service group contributions to operating profits, combined with incremental improvement in the overall building industry, we remain confident in our ability to leverage our diversified platform for long term growth. We believe that there are notable signs of improvement in the broad economy, such as available financing, that we anticipate will translate into promising bidding opportunities for our Company."
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.
