Tutor Perini Fourth-Quarter and Fiscal 2013 Results show revenues were $1,099.3 million and $4,175.7 million for the fourth quarter and fiscal 2013, respectively, compared to $1,114.2 million and $4,111.5 million for the same periods last year. Income from construction operations was $70.2 million and $203.8 million for the fourth quarter and fiscal 2013, respectively, compared to $60.7 million and a loss from construction operations of $221.8 million for the same periods last year. Net income was $33.3 million and $87.3 million for the fourth quarter and fiscal 2013, respectively, compared to $41.6 million and a net loss of $265.4 million for the same periods last year. Diluted earnings per share (EPS) were $0.68 and $1.80 for the fourth quarter and fiscal 2013, respectively, compared to $0.86 and a diluted loss per share of $5.59 for the same periods last year.
On an adjusted basis, net income and diluted EPS for the fourth quarter of 2012 were $31.9 million and $0.66, respectively. Adjustments for the fourth quarter of 2012 included a $12.7 million tax benefit associated with the $376.6 million goodwill and intangible asset impairment charge which the Company recognized in the second quarter of 2012 and a $5.0 million pre-tax ($3.0 million after-tax) charge related to an adverse jury verdict received in December 2012. For fiscal 2012, adjusted net income was $70.3 million, or $1.46 per diluted share. Fiscal 2012 adjustments included the impairment charge and related $50.2 million tax benefit together with a $2.7 million realized loss on the sale of certain auction rate securities and $3.6 million in discrete tax adjustments recorded in the first quarter of 2012. Net income and diluted EPS excluding these adjustments are non-GAAP financial measures, which are discussed below and are reconciled to the most directly comparable GAAP measures in the financial tables attached hereto.
Revenues decreased 1.3% in the fourth quarter primarily due to activity last year on Hurricane Sandy related projects in New York. Revenues increased 1.6% in fiscal 2013 primarily as a result of activity on certain hospitality and gaming projects as well as the start-up of projects at Hudson Yards in New York. The decrease in net income for the fourth quarter was primarily related to impairment charge tax benefits taken in 2012. The increase in fiscal 2013 net income was primarily driven by the impairment charge taken in 2012. Excluding the impairment charge and other discrete items discussed above, the increases in net income for both the fourth quarter and fiscal 2013 were primarily driven by strong operating performance in the Civil segment.
The Company generated $61.8 million and $50.7 million of cash from operating activities in the fourth quarter and fiscal 2013, respectively, compared to the use of $40.0 million and $67.9 million in the same periods last year. Cash generation in fiscal 2013 was primarily driven by increased net income and a payment received related to a legal settlement, offset by cash paid for interest and taxes and a payment made in 2013 related to an adverse jury verdict rendered in late 2012. At December 31, 2013, working capital was $787.4 million, an increase of $39.8 million from $747.6 million at December 31, 2012. The Company believes its financial position and available borrowing under existing credit arrangements are sufficient to support the Company’s current backlog and anticipated new work.
Backlog Increased to $7.0 Billion. The backlog of uncompleted construction work at December 31, 2013 was $7.0 billion, an increase of $1.4 billion from $5.6 billion reported at December 31, 2012. Revenue earned during the fourth quarter partially offset a continued strong volume of new awards and adjustments to contracts in process, which together added approximately $1.2 billion. Significant additions to backlog in the fourth quarter included the $510 million platform project at Hudson Yards in New York City, the Company’s approximately $200 million share of the St. Croix Crossing bridge project connecting Oak Park Heights, Minnesota and St. Joseph, Wisconsin, a $61 million mixed-use building development project in New Orleans, Louisiana, and a $41 million landfill closure and sewer improvements project in Guam.
Importantly, while the backlog only includes approximately $220 million related to the Hudson Yards South Tower and 500 W. 30th Street projects in New York due to the customer’s direct contracts with certain subcontractors, the Company is earning a construction management fee based on the total construction value of approximately $860 million, as well as its normal profit margin on certain self-performed components.
Outlook and Guidance: Reflecting on the Company’s results, Ronald Tutor, Chairman and Chief Executive Officer, remarked, “Tutor Perini had a very good year in 2013 capped by strong fourth-quarter profit, cash generation, and backlog. The Company has successfully transitioned the business into one which is now solidly driven by our Civil and Specialty Contracting groups.” Tutor continued, “Fiscal 2014 is already off to a great start as we continue growing our backlog with several large recently announced new contracts. Our guidance reflects our expectations for improved growth and profitability in 2014, and our large backlog together with a significant volume of pending awards provides increased confidence for a favorable multi-year outlook.”
Based on the current market outlook and expectations, the Company is introducing its fiscal 2014 guidance for revenue in the range of $4.5 billion to $5.0 billion and diluted EPS in the range of $2.20 to $2.40. As is typical in our business, our earnings in 2014 are expected to be weighted towards the second half of the year.
Non-GAAP Financial Measures: To supplement our consolidated financial statements presented based on accounting principles generally accepted in the United States of America (“GAAP”), we sometimes use non-GAAP measures of income from operations, net income, EPS and other measures that we believe are appropriate to enhance an overall understanding of our historical financial performance and future prospects. The Company is providing these measures to provide additional information to facilitate the comparison of past and present operations, and they are among the indicators management uses as a basis for evaluating its financial performance as well as for forecasting future periods. For these reasons, management believes these non-GAAP measures can be useful operating performance measures to be considered by investors, potential investors, and others. These measures are not intended to replace the presentation of our financial results in accordance with GAAP, and they should be considered in addition to, and not in lieu of, our GAAP results. The non-GAAP financial measures that we provide may not be comparable to other similarly titled measures of other companies. A table reconciling reported income/loss from construction operations, net income/loss, and diluted earnings/loss per share under GAAP to adjusted income from operations, net income and diluted EPS in 2012 is attached.
Fourth-Quarter Conference Call: TP hosted a conference call this afternoon to discuss the fourth-quarter and fiscal 2013 results.
The conference call was webcast live over the internet. It can now be accessed on Tutor Perini's website at www.tutorperini.com. This webcast will be available for replay on Tutor Perini's website for 90 days.