Tetra Tech : Q4 2024 Supplemental Financial Information

Unaudited Investors Report												2023														2024
($ in Thousands, Except Per Share Data)		2021 (6)		2022		1st Qtr		2nd Qtr		6 mos		3rd Qtr		9 mos		4th Qtr		Total		1st Qtr		2nd Qtr		6 mos		3rd Qtr		9 Mos		4th Qtr		Total
REVENUE	3,212,899	3,504,048		894,766	1,158,226	2,052,991	1,208,947	3,261,938	1,260,612	4,522,550	1,228,267	1,251,615	2,479,882	1,344,323	3,824,205	1,374,474	5,198,679
REVENUE, NET OF SUBCONTRACTOR COSTS ["Net Revenue" (1)]
Government Services Group (GSG)	1,265,772	1,336,456		353,047		435,550		788,596		390,216	1,178,812		456,628	1,635,440		442,700		466,496		909,196		488,204	1,397,400		512,578	1,909,978
Commercial / International Services Group (CIG)	1,285,811	1,499,124		383,515		534,015		917,530		597,344	1,514,874		600,775	2,115,649		572,469		586,130	1,158,600		621,377	1,779,977		631,907	2,411,884
NET REVENUE (1)	2,551,583	2,835,580		736,562		969,565	1,706,126		987,560	2,693,686	1,057,403	3,751,089	1,015,169	1,052,626	2,067,796	1,109,581	3,177,377	1,144,485	4,321,862
OTHER COSTS OF REVENUE - ADJUSTED (1) (2) (3)	2,053,194	2,266,381		583,316		798,718	1,382,035		798,714	2,180,749		845,311	3,026,060		824,671		845,132	1,669,803		886,409	2,556,213		899,209	3,455,422
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES - ADJUSTED (1) (2)		222,961		235,239		56,502		82,348		138,848		89,064		227,912		77,195		305,107		79,454		89,798		169,251		94,042		263,293		92,731		356,024
ACQUISITION AND INTEGRATION EXPENSES (7)		-		-		3,761		19,944		23,705		2,107		25,812		23,742		49,554		-		-		-		-		-		7,138		7,138
PURCHASE ACCOUNTING / NON-CORE DISPOSITIONS (GAINS)		(3,273)		-		933		7,544		8,477		-		8,477		3,778		12,255		(37)		14		(22)		500		477		2,064		2,541
INCOME FROM OPERATIONS, AS REPORTED		278,701		340,446		92,050		61,011		153,061		97,675		250,736		107,377		358,113		111,081		117,683		228,764		128,630		357,394		143,343		500,737
INCOME FROM OPERATIONS - ADJUSTED (1) (2) (3)		275,428		333,960		96,744		88,499		185,243		99,782		285,025		134,897		419,922		111,044		117,696		228,742		129,130		357,871		152,545		510,416
GSG		174,755		194,037		60,347		52,210		112,557		54,496		167,053		71,501		238,553		63,127		64,007		127,134		71,518		198,651		82,375		281,026
CIG		150,292		192,197		50,108		52,518		102,626		69,572		172,199		79,853		252,052		71,401		75,955		147,356		86,465		233,821		98,300		332,121
Corporate		(49,619)		(52,274)		(13,711)		(16,229)		(29,940)		(24,286)		(54,227)		(16,457)		(70,683)		(23,484)		(22,266)		(45,748)		(28,853)		(74,601)		(28,130)		(102,731)
OPERATING MARGIN [% of Net Revenue] (1) (2) (3)		10.8%		11.8%		13.1%		9.1%		10.9%		10.1%		10.6%		12.8%		11.2%		10.9%		11.2%		11.1%		11.6%		11.3%		13.3%		11.8%
GSG		13.8%		14.5%		17.1%		12.0%		14.3%		14.0%		14.2%		15.7%		14.6%		14.3%		13.7%		14.0%		14.6%		14.2%		16.1%		14.7%
CIG		11.7%		12.8%		13.1%		9.8%		11.2%		11.6%		11.4%		13.3%		11.9%		12.5%		13.0%		12.7%		13.9%		13.1%		15.6%		13.8%
Interest Expense (4)		11,831		11,584		5,372		13,323		18,695		14,869		33,563		12,973		46,536		9,578		9,883		19,461		9,912		29,374		7,897		37,271
Other non-operating Income (FX Hedge Gain)		-		19,904		67,995		21,407		89,402		-		89,402		-		89,402		-		-		-		-		-		-		-
INCOME BEFORE INCOME TAX EXPENSE		266,870		348,766		154,673		69,095		223,768		82,806		306,576		94,404		400,979		101,503		107,799		209,302		118,718		328,020		135,446		463,466
Income Tax Expense		34,039		85,602		37,958		26,254		64,212		22,568		86,781		40,745		127,526		26,523		31,341		57,864		32,894		90,758		39,265		130,023
NET INCOME ATTRIBUTABLE TO TETRA TECH		232,810		263,125		116,706		42,830		159,536		60,235		219,771		53,649		273,420		74,972		76,446		151,418		85,810		237,228		96,154		333,382
DILUTED AVERAGE SHARES		273,375		270,815		267,645		268,135		267,975		268,265		268,075		268,510		268,185		268,690		269,375		269,125		270,260		269,505		271,656		270,042
DILUTED EPS ATTRIBUTABLE TO TETRA TECH, AS REPORTED	$	0.85	$	0.97	$	0.44	$	0.16	$	0.60	$	0.22	$	0.82	$	0.20	$	1.02	$	0.28	$	0.28	$	0.56	$	0.32	$	0.88	$	0.35	$	1.23
ADJUSTED DILUTED EPS (1) (2) (3) (5)	$	0.76	$	0.90	$	0.27	$	0.14	$	0.41	$	0.23	$	0.80	$	0.33	$	1.04	$	0.28	$	0.28	$	0.56	$	0.32	$	0.88	$	0.38	$	1.26
ADJUSTED EBITDA (1) (2) (3)		299,212		360,954		103,351		105,409		208,760		119,463		328,223		152,873		481,096		130,520		135,416		265,936		148,619		414,554		169,478		584,032
ADJUSTED EBITDA MARGIN [% of Net Revenue] (1) (2) (3)		11.7%		12.7%		14.0%		10.9%		12.2%		12.1%		12.2%		14.5%		12.8%		12.9%		12.9%		12.9%		13.4%		13.0%		14.8%		13.5%
DAYS IN SALES OUTSTANDING (1)		63.3		61.1		61.3		59.4		59.4		58.4		58.4		54.4		54.4		55.3		55.3		55.3		54.1		54.1		54.9		54.9
CASH FLOW FROM OPERATIONS		304,372		336,188		25,191		87,932		113,123		132,930		246,053		122,410		368,463		9,246		102,935		112,181		140,929		253,110		105,598		358,708
CAPITAL EXPENDITURES		8,573		10,582		4,996		5,298		10,294		7,027		17,322		9,580		26,901		3,456		4,007		7,463		3,861		11,324		6,811		18,135
Y/Y NET REVENUE GROWTH % (1)		8.6%		11.1%		8.4%		38.6%		23.7%		37.1%		28.3%		43.6%		32.3%		37.8%		8.6%		21.2%		12.4%		18.0%		8.2%		15.2%
GSG		13.3%		5.6%		7.9%		29.1%		18.7%		16.3%		17.9%		35.7%		22.4%		25.4%		7.1%		15.3%		25.1%		18.5%		12.3%		16.8%
CIG		4.4%		16.6%		8.9%		47.5%		28.4%		55.2%		37.8%		50.3%		41.1%		49.3%		9.8%		26.3%		4.0%		17.5%		5.2%		14.0%
NET REVENUE % BY CLIENT TYPE (1)
International		32%		34%		31%		38%		35%		43%		38%		40%		39%		40%		41%		40%		40%		40%		39%		40%
U.S. Commercial		22%		21%		24%		19%		21%		20%		21%		19%		20%		19%		17%		18%		19%		18%		19%		18%
U.S. Federal Government		30%		28%		28%		31%		30%		25%		28%		29%		28%		30%		31%		31%		30%		31%		31%		31%
U.S. State & Local Government		16%		17%		17%		12%		14%		12%		13%		12%		13%		11%		11%		11%		11%		11%		11%		11%
NET REVENUE % BY CONTRACT TYPE (1)
Fixed-Price		37%		38%		38%		36%		37%		38%		37%		36%		37%		39%		37%		38%		42%		39%		39%		39%
Time-and-Materials		49%		48%		47%		47%		47%		50%		48%		49%		49%		45%		47%		46%		44%		46%		45%		45%
Cost-Plus		14%		14%		15%		17%		16%		12%		15%		15%		14%		16%		16%		16%		14%		15%		16%		16%
BACKLOG (1)	3,480,254	3,744,133	3,814,258	4,274,660	4,274,660	4,386,343	4,386,343	4,790,442	4,790,442	4,736,507	4,739,481	4,739,481	5,230,131	5,230,131	5,375,979	5,375,979

1. Non-GAAPfinancial measure
2. Excludes purchase accounting and non-core dispositions, and acquisition and integration expenses
3. Excludes non-recurring COVID-19 related costs / benefits
4. Includes write-off of deferred debt origination fees of $2.7M in Q1-23 and $1.1M in Q2-23
5. Excludes non-recurring tax items, FX hedge gain and write-off of deferred debt origination fees
6. FY21 contained one extra week (53 total)
7. Includes lease impairment charge of $16.4M in Q4-23

Tetra Tech, Inc.

Regulation G Information

September 29, 2024

Reconciliation of Revenue to Revenue, Net of Subcontractor Costs ("Net Revenue")(in millions)

						2023							2024
Consolidated	2021	2022	1st Qtr	2nd Qtr	6 Mos	3rd Qtr	9 Mos	4th Qtr	Total	1st Qtr	2nd Qtr	6 mos	3rd Qtr	9 Mos	4th Qtr	Total
Revenue	3,213.5	3,504.0	894.8	1,158.2	2,053.0	1,208.9	3,261.9	1,260.6	4,522.6	1,228.3	1,251.6	2,479.9	1,344.3	3,824.2	1,374.5	5,198.7
Subcontractor Costs	(661.3)	(668.5)	(158.2)	(188.7)	(346.9)	(221.4)	(568.3)	(203.2)	(771.5)	(213.1)	(199.0)	(412.1)	(234.7)	(646.8)	(230.0)	(876.8)
Net Revenue	2,551.6	2,835.5	736.6	969.5	1,706.1	987.5	2,693.6	1,057.4	3,751.1	1,015.2	1,052.6	2,067.8	1,109.6	3,177.4	1,144.5	4,321.9
GSG Segment
Revenue	1,772.9	1,820.9	471.1	563.3	1,034.3	531.0	1,565.4	593.5	2,158.9	575.0	597.1	1,172.2	640.6	1,812.7	670.6	2,483.4
Subcontractor Costs	(507.1)	(484.4)	(118.0)	(127.7)	(245.7)	(140.8)	(386.6)	(136.9)	(523.4)	(132.3)	(130.6)	(263.0)	(152.3)	(415.3)	(158.1)	(573.4)
Net Revenue	1,265.8	1,336.5	353.1	435.6	788.6	390.2	1,178.8	456.6	1,635.5	442.7	466.5	909.2	488.3	1,397.4	512.5	1,910.0
CIG Segment
Revenue	1,500.1	1,738.4	439.6	610.4	1,049.9	691.4	1,741.3	683.3	2,424.6	669.1	671.2	1,340.3	723.6	2,063.9	722.9	2,786.7
Subcontractor Costs	(214.3)	(239.3)	(56.0)	(76.4)	(132.4)	(94.0)	(226.4)	(82.6)	(309.0)	(96.6)	(85.1)	(181.7)	(102.2)	(283.9)	(90.9)	(374.8)
Net Revenue	1,285.8	1,499.1	383.6	534.0	917.5	597.4	1,514.9	600.7	2,115.6	572.5	586.1	1,158.6	621.4	1,780.0	632.0	2,411.9
Reconciliation of Net Income Attributable to Tetra Tech to Adjusted EBITDA
(in thousands)
						2023							2024
	2021	2022	1st Qtr	2nd Qtr	6 Mos	3rd Qtr	9 Mos	4th Qtr	Total	1st Qtr	2nd Qtr	6 mos	3rd Qtr	9 Mos	4th Qtr	Total
Net Income Attributable to Tetra Tech	232,810	263,125	116,706	42,830	159,536	60,235	219,771	53,649	273,420	74,972	76,446	151,418	85,810	237,228	96,154	333,382
Income Tax Expense	34,039	85,602	37,958	26,254	64,212	22,568	86,780	40,745	127,526	26,523	31,341	57,864	32,894	90,757	39,266	130,023
Interest Expense1	11,831	11,584	5,372	13,323	18,695	14,869	33,564	12,973	46,537	9,578	9,883	19,461	9,912	29,374	7,897	37,271
Depreciation	12,337	13,859	3,178	4,849	8,027	5,624	13,651	6,330	19,980	6,951	5,637	12,588	5,713	18,301	5,421	23,722
Amortization	11,468	13,174	3,438	12,072	15,510	14,060	29,570	11,656	41,226	12,533	12,094	24,627	13,790	38,417	11,538	49,955
FX Hedge Gain	-	(19,904)	(67,995)	(21,407)	(89,402)	-	(89,402)	-	(89,402)	-	-	-	-	-	-	-
EBITDA	302,485	367,440	98,657	77,921	176,578	117,356	293,934	125,353	419,287	130,557	135,401	265,958	148,119	414,077	160,276	574,353
Contingent Consideration	(3,273)	-	933	7,544	8,477	-	8,477	3,778	12,255	(37)	14	(22)	500	477	2,064	2,541
Acquisition & Integration Expenses2	-	-	3,761	19,944	23,705	2,107	25,812	23,742	49,554	-	-	-	-	-	7,138	7,138
COVID-19 Credits	-	(6,486)	-	-	-	-	-	-	-	-	-	-	-	-	-	-
Adjusted EBITDA	299,212	360,954	103,351	105,409	208,760	119,463	328,223	152,873	481,096	130,520	135,415	265,936	148,619	414,554	169,478	584,032

1. Includes write-off of deferred debt origination fees of $2.7M in Q1-23 and $1.1M in Q2-23
2. Includes lease impairment charge of $16.4M in Q4-23

Tetra Tech, Inc

Consolidated Balance Sheets

(unaudited - in thousands, except par value)

	September 29,			October 1,
Assets		2024			2023
Current assets:
Cash and cash equivalents	$	232,689	$	168,831
Accounts receivable, net		1,051,461			974,535
Contract assets		129,678			113,939
Prepaid expenses and other current assets		91,585			89,096
Income taxes receivable		21,970			9,623
Total current assets		1,527,383			1,356,024
Property and equipment, net		73,065			74,832
Right-of-use assets, operating leases		177,950			175,932
Goodwill		2,046,569			1,880,244
Intangible assets, net		160,585			173,936
Deferred tax assets		105,529			89,002
Other non-current assets		101,595			70,507
Total assets	$	4,192,676		$	3,820,477
Liabilities and Equity
Current liabilities:
Accounts payable	$	197,440	$	173,271
Accrued compensation		332,096			302,755
Contract liabilities		351,738			335,044
Short-term lease liabilities, operating leases		63,419			65,005
Current contingent earn-out liabilities		26,934			51,108
Other current liabilities		247,900			280,959
Total current liabilities		1,219,527			1,208,142
Deferred tax liabilities		30,162			14,256
Long-term debt		812,634			879,529
Long-term lease liabilities, operating leases		140,095			144,685
Non-current contingent earn-out liabilities		21,812			22,314
Other non-current liabilities		138,033			148,045
Equity:
Preferred stock - authorized, 2,000 shares of $0.01 par value; no shares
issued and outstanding at September 29, 2024 and October 1, 2023		-			-
Common stock - authorized, 750,000 shares of $0.01 par value; issued
and outstanding, 267,717 and 266,238 shares at September 29, 2024 and
October 1, 2023, respectively		2,677			2,662
Additional paid-in capital		35,900			-
Accumulated other comprehensive loss		(78,875)			(195,295)
Retained earnings		1,870,620			1,596,066
Tetra Tech stockholders' equity		1,830,322			1,403,433
Noncontrolling interests		91			73
Total stockholders' equity		1,830,413			1,403,506
Total liabilities and stockholders' equity	$	4,192,676		$	3,820,477

Tetra Tech, Inc.

Consolidated Statements of Income

(unaudited - in thousands, except per share data)

		Three Months Ended			Fiscal Year Ended
	September 29,			October 1,		September 29,			October 1,
Revenue		2024			2023			2024			2023
$	1,374,474		$	1,260,612		$	5,198,679		$	4,522,550
Subcontractor costs		(229,989)			(203,209)			(876,817)			(771,461)
Other costs of revenue		(899,209)			(845,311)			(3,455,422)			(3,026,060)
Gross profit		245,276			212,092			866,440			725,029
Selling, general and administrative expenses		(92,731)			(77,195)			(356,024)			(305,107)
Acquisition and integration expenses		(7,138)			(7,357)			(7,138)			(33,169)
Right-of-use operating lease asset impairment		-			(16,385)			-			(16,385)
Contingent consideration - fair value adjustments		(2,064)			(3,778)			(2,541)			(12,255)
Income from operations		143,343			107,377			500,737			358,113
Interest expense, net		(7,897)			(12,974)			(37,271)			(46,537)
Other non-operating income		-			-			-			89,402
Income before income tax expense		135,446			94,403			463,466			400,978
Income tax expense		(39,266)			(40,745)			(130,023)			(127,526)
Net income		96,180			53,658			333,443			273,452
Net income attributable to noncontrolling interests		(26)			(9)			(61)			(32)
Net income attributable to Tetra Tech	$	96,154		$	53,649		$	333,382		$	273,420
Earnings per share attributable to Tetra Tech:
Basic	$	0.36	$	0.20	$	1.25	$	1.03
Diluted
$	0.35	$	0.20	$	1.23	$	1.02
Weighted-average common shares outstanding:
Basic		267,687			266,235			267,364			266,015
Diluted
	271,656			268,510			270,042			268,185
Cash dividends paid per share	$	0.058	$	0.052	$	0.220	$	0.196

Tetra Tech, Inc.

Consolidated Statements of Cash Flows

(unaudited - in thousands)
		Fiscal Year Ended
		Sep 29,			Oct 1,
		2024			2023
Cash flows from operating activities:	$	333,443
Net income	$	273,452
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		73,677			61,206
Amortization of stock-based awards		31,155			28,607
Deferred income taxes		(19,980)			(21,204)
Fair value adjustments to contingent consideration		2,541			12,255
Right-of-use operating lease asset impairment		-			16,385
Fair value adjustments to foreign currency forward contract		-			(89,402)
Acquisition and integration expenses		7,138			-
Other non-cash items		5,369			975
Changes in operating assets and liabilities, net of effects of business acquisitions:
Accounts receivable and contract assets		(40,188)			(19,783)
Prepaid expenses and other assets		(20,894)			78,686
Accounts payable		18,091			(19,214)
Accrued compensation		6,657			37,094
Contract liabilities		4,704			44,152
Cash settled contingent earn-out liability		(7,943)			-
Income taxes receivable/payable		(35,530)			40,527
Other liabilities		468			(75,273)
Net cash provided by operating activities		358,708			368,463
Cash flows from investing activities:
Payments for business acquisitions, net of cash acquired		(93,650)			(854,319)
Settlement of foreign currency forward contract		-			109,306
Capital expenditures		(18,135)			(26,901)
Proceeds from sale of assets		742			715
Net cash used in investing activities		(111,043)			(771,199)
Cash flows from financing activities:
Proceeds from borrowings		217,000			994,859
Repayments on long-term debt		(287,000)			(1,026,051)
Proceeds from issuance of convertible notes		-			575,000
Payment of debt issuance costs		-			(14,451)
Capped call transactions		-			(51,750)
Shares repurchased for tax withholdings on share-based awards		(12,982)			(16,833)
Payments of contingent earn-out liabilities		(46,107)			(21,328)
Stock options exercised		3,067			626
Dividends paid		(58,828)			(52,113)
Principal payments on finance leases		(6,530)			(5,579)
Net cash (used in) provided by financing activities		(191,380)			382,380

Effect of exchange rate changes on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year

7,5734,093

63,858(16,263)

168,831185,094

Cash and cash equivalents at end of year	$	232,689	$	168,831
Supplemental information:
Cash paid during the year for:					47,367
Interest	$	36,855
Income taxes, net of refunds received of $4.2 million and $2.2 million	$	180,707			93,176