Tutor Perini Corporation

Good day, ladies and gentlemen, and welcome to the Tudor Primi Corporation first quarter 2024 earnings conference call. My name is Maria, and I'll be your coordinator for today. All participants are currently in a listen-only mode. Following management's prepared remarks, we will be opening the call for a question and answer session. As a reminder, this conference call is being recorded for replay purposes. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. I will now turn the conference over to your host for today, Mr. Jorge Casado, Vice President of Investor Relations. Please proceed.

Hello, everyone, and thank you for your interest and participation. With us today are Ronald Tudor, Chairman and CEO, Gary Smalley, President, and Ryan Soroka, Senior Vice President and CFO. Before we discuss our results, I will remind everyone that during today's call, we will be making forward-looking statements which are based on management's current assessment of existing trends and information. There is an inherent risk that our actual results could differ materially. You can find our disclosures about risk factors that could potentially contribute to such differences in our Form 10-K, which we filed on February 28, 2024, and in the Form 10-Q that we are filing today. The company assumes no obligation to update forward-looking statements, whether due to new information, future events, or otherwise, other than as required by law. Thank you, and I will now turn the call over to Ronald Tudor.

Thanks, Jorge. Good day and thank you for joining us. We delivered a very good first quarter result that exceeded our expectations and demonstrates that we are on track for double-digit revenue growth and a return to profitability in 2024, just as we had indicated on Ernie's call last quarter. Our first quarter results featured 35% consolidated revenue growth, strong profitability with operating margins of 15% and 3.9% for our civil and building segments, respectively, and 30 cents of diluted earnings per share, which was especially strong given the typical seasonality of our business. Backlog grew 26% year over year and continues to be very healthy at $10 billion and perhaps Most impressively, very strong operating cash flow of $98 million for the quarter, the second highest operating cash flow result of any first quarter since the 2008 merger between Tudor, Saliba, and Perini Corp. Ryan will discuss all the financial details a bit later. Importantly, as previously announced, we recently completed a successful debt refinancing. which strengthened our balance sheet and will extend our debt maturities. We issued 400 million of new senior notes due in 2029, which combined with 100 million of available cash on hand to reduce the prior note, they will be used to redeem the 500 million of senior notes due in 2025. In conjunction with our refinancing, we also amended our credit agreement which will become effective upon the redemption of our existing senior notes, extending the maturity of our revolving credit facility by approximately two years. After we redeem our existing senior notes next week, we will have reduced our total debt by nearly $200 million since the end of last year, and even more, including the fourth quarter of 2023. The continued reduction of debt will be our focus with the strong cash flow expected during the rest of 2024 and even 2025. We continue to make good progress on resolving various disputed matters in the first quarter, which contributed about half of the outstanding operating cash that we generated. We still expect to resolve most of the remaining legacy disputes and collect substantial amounts of associated cash this year with a lesser amount of resolves expected to be finalized in 2025. The dispute resolution activity expected to help drive operating cash flow for both 2024 and 2025 and we expect them to be as strong as 2023's record cash performance. As I mentioned, our first quarter backlog was $10 billion, up a solid 26% year over year. The most significant new awards and contract adjustments in the first quarter include a $243 million healthcare project in California, the $73 million project Titan Hangar 3 project in Florida, $66 million of additional funding for several healthcare projects in California, $55 million for three US Navy projects in Diego Garcia for black construction, and $52 million of additional funding for three mass transit projects in California. We still anticipate that our backlog will grow significantly later this year and in 2025. As we bid and win our share of the major volume of available project opportunities we have discussed in recent quarters, which are supported by the bipartisan infrastructure bill as well as strong state and local funding. Our most significant near-term prospects include the $550 million Raritan Bridge we were low bidder on previously, which is now rebidding in the next 60 days, the $6 billion dry dock project at the Naval Shipyard in the state of Washington, which I believe is going to be broken up into four to six projects less in magnitude but able to be bid on separately. The multi-billion dollar Manhattan jail facility, the $2 billion Honolulu Rail Transit project for which we had been again previously the low bidder to be rejected over lack of funding, the $1.8 billion South Jersey Light Rail Camden line in New Jersey, The $1.5 billion Newark Air Train replacement project, again another project we were previously low bidder, that the owner was unable to award due to budget constraints. That project is now bidding in August. The $1.2 billion Inglewood Transit Connector project in Southern California bidding in June. The $800 million Kensico Eastview Connection Tunnel in New York, which is expected to bid by the end of June, and the $500 and $750 million Palisades and Manhattan Tunnels in New Jersey and New York bidding this summer. We anticipate positive earnings for 2024, again with significantly stronger earnings expected in 2025 and 26. Based on our results to date this year, our assessment of the current market and business outlook and to maintain adequate contingency in the event of unforeseen events, we are affirming our 2024 EPS guidance and still expect EPS to be in the range of 85 cents to $1.10. As in prior years, our earnings are expected to be weighted more heavily in the second half of the year due to the anticipated timing of large project activities, as well as typical seasonality. Thank you. And with that, I'll turn the call over to Ryan to view the financial results.