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Tetra Tech: RCM Segment Restructuring
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Pasadena, California - Tetra Tech, Inc. (TTEK) is providing an update on its previously announced plan to restructure the Remediation and Construction Management (RCM) segment. Tetra Tech has completed the RCM segment strategic review, and has decided to retain its core environmental remediation, pipeline, solid waste, and utilities related activities, which collectively represent approximately one half of the RCM segment revenue in fiscal 2014. Tetra Tech will exit all non-core construction markets that require lump-sum fixed-price bidding, which represented the remaining fifty percent of the RCM segment revenue, or fifteen percent of the Company’s total revenue in fiscal 2014. Tetra Tech will continue to offer turn-key solutions for clients by acting as a construction manager or teaming with constructors.
At the beginning of fiscal 2015, the portions of the RCM segment that are core to the Company’s business will be moved to the two front-end focused segments. Substantially all non-core portions of the RCM segment will be closed, sold, or completed in calendar 2014. Revenue, net of subcontractor costs, will be reduced by approximately five to ten percent from fiscal 2014, through these actions. The construction work being exited represents the highest risk and lowest return work within the Company, and did not generate profit or positive cash flow in fiscal 2014. After exiting non-core activities, the Company then plans to report results through two operating segments.
Dan Batrack, Tetra Tech’s Chairman and CEO, commented, “This review has resulted in Tetra Tech being more strategically focused on the front-end science and engineering aspects of a solution that differentiate us in the marketplace, and are the hallmark of our offering. After these actions, Tetra Tech will be positioned to generate higher operating margins, improved cash flow, and the consistent performance that is characteristic of our front two segments.”
Tetra Tech reaffirms its previous EPS guidance for the fourth quarter fiscal 2014. RCM financial results are expected to have no significant net impact to reported GAAP EPS in the fourth quarter. Tetra Tech will provide its fourth quarter results and fiscal 2015 guidance in its quarterly press release, which is scheduled for November 12, 2014.
About Tetra Tech (www.tetratech.com)
Tetra Tech is a leading provider of consulting, engineering, program management, construction management, and technical services. The Company supports government and commercial clients by providing innovative solutions to complex problems focused on water, environment, energy, infrastructure, and natural resources. With 14,000 staff worldwide, Tetra Tech’s capabilities span the entire project life cycle.
Contact:
Tetra Tech, Inc.
Jim Wu, Investor Relations
Charlie MacPherson, Media & Public Relations
(626) 470-2844
Pasadena, California - Tetra Tech, Inc. (TTEK) is providing an update on its previously announced plan to restructure the Remediation and Construction Management (RCM) segment. Tetra Tech has completed the RCM segment strategic review, and has decided to retain its core environmental remediation, pipeline, solid waste, and utilities related activities, which collectively represent approximately one half of the RCM segment revenue in fiscal 2014. Tetra Tech will exit all non-core construction markets that require lump-sum fixed-price bidding, which represented the remaining fifty percent of the RCM segment revenue, or fifteen percent of the Company’s total revenue in fiscal 2014. Tetra Tech will continue to offer turn-key solutions for clients by acting as a construction manager or teaming with constructors.
At the beginning of fiscal 2015, the portions of the RCM segment that are core to the Company’s business will be moved to the two front-end focused segments. Substantially all non-core portions of the RCM segment will be closed, sold, or completed in calendar 2014. Revenue, net of subcontractor costs, will be reduced by approximately five to ten percent from fiscal 2014, through these actions. The construction work being exited represents the highest risk and lowest return work within the Company, and did not generate profit or positive cash flow in fiscal 2014. After exiting non-core activities, the Company then plans to report results through two operating segments.
Dan Batrack, Tetra Tech’s Chairman and CEO, commented, “This review has resulted in Tetra Tech being more strategically focused on the front-end science and engineering aspects of a solution that differentiate us in the marketplace, and are the hallmark of our offering. After these actions, Tetra Tech will be positioned to generate higher operating margins, improved cash flow, and the consistent performance that is characteristic of our front two segments.”
Tetra Tech reaffirms its previous EPS guidance for the fourth quarter fiscal 2014. RCM financial results are expected to have no significant net impact to reported GAAP EPS in the fourth quarter. Tetra Tech will provide its fourth quarter results and fiscal 2015 guidance in its quarterly press release, which is scheduled for November 12, 2014.
About Tetra Tech (www.tetratech.com)
Tetra Tech is a leading provider of consulting, engineering, program management, construction management, and technical services. The Company supports government and commercial clients by providing innovative solutions to complex problems focused on water, environment, energy, infrastructure, and natural resources. With 14,000 staff worldwide, Tetra Tech’s capabilities span the entire project life cycle.
Contact:
Tetra Tech, Inc.
Jim Wu, Investor Relations
Charlie MacPherson, Media & Public Relations
(626) 470-2844