Tutor Perini Corporation

Good day, ladies and gentlemen, and welcome to Tudor Perini Corporation's first quarter 2025 earnings conference call. My name is Sheri, and I will 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, Jorge Casado, Vice President, Investor Relations. Please proceed.

Hello, everyone, and thank you for joining us. With us today are Gary Smalley, CEO and President, Ron Tuner, Executive Chairman, and Ryan Soroka, Executive Vice President and CFO. Before we discuss our results, I will remind everyone that during this 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 contribute to such differences in our Form 10-K, which we filed on February 27, 2025, and in our 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 with that, I will turn the call over to Gary Smalley.

Thanks, Jorge. Hello, everyone, and thank you all for joining us. We're off to a great start in 2025 with outstanding first quarter results that highlight our strong growth and performance across all key metrics and that were, quite frankly, better than expected. Specifically, Year over year, our first quarter revenue grew 19% to $1.25 billion. Operating income was up 34% to $65 million. Earnings per share increased 77% to 53 cents. And our backlog grew 94% to a new all-time record of $19.4 billion. In addition, our operating cash flow was $23 million, a solid result for the first quarter considering that historically, Our first quarter cash flow tends to be low and often negative due to seasonality. All in all, our first quarter EPS was the second best of any first quarter in TutorPrinti's history, and our operating cash flow was the third best first quarter result ever. Our business is performing well, and I'm pleased to report that it was a clean first quarter with solid project execution and no material project adjustments, even for dispute resolutions. Ryan will go over the specifics of our financial results, but overall our revenue and earnings were driven by increased project execution activities on certain newer higher margin projects that all have substantial scope of work remaining. Our operating cash flow for the first quarter of 2025 was driven by collections from newer and ongoing projects, unlike last year's first quarter cash flow, which included a large amount of collections related to dispute resolutions. We still expect to make progress this year resolving various other disputes and collecting significant associated cash, but those collections are expected later in the year. During the first quarter, we continued to win new projects, booking impressive $2 billion of new awards and contract adjustments, adding to our already record backlog. Our book-to-burn ratio for the first quarter was a solid 1.6x. Backlog for the civil and specialty contractor segments also set new records. The most significant new awards and contract adjustments in the first quarter included the $1.18 billion Manhattan Tunnel project in New York, which is a component of the broader Gateway program that includes critical rail infrastructure along the northeast corridor between Newark and New York Penn Station. $241 million of additional funding for the Apra Harbor waterfront repairs project in Guam which brings the current value of this project to more than $570 million, $111 million of additional funding for certain healthcare facility projects in California, an electrical project in Texas valued at more than $100 million, and $99 million of additional funding for an existing electrical project in Texas. The outlook is excellent for strong, sustained backlog this year with the potential for further backlog growth Our new award bookings continue to be healthy in the second quarter, as we have already won a $500 million healthcare project in California that was recently awarded funding for the construction phase after having been in pre-construction for the past year. In addition to this project, there are several other building segment projects currently in the pre-construction phase that we expect will soon also advance to the construction phase, including another healthcare project also in California valued at $1 billion. Our bidding pipeline continues to be full of opportunities this year and over the next several years. Our record backlog enables us to be even more selective than before as to which of the opportunities we will pursue and to focus on bidding projects that have favorable contractual terms, limited competition, and higher margins. Also, the Indo-Pacific region continues to be a major area of project opportunities. driven in large part by the U.S. military's Pacific Deterrence Initiative, which aims to enhance U.S. military infrastructure and readiness. Black Construction, our Guam-based subsidiary, has had tremendous success in capturing new projects and continues to be well-positioned to win other major projects in the region. Tutti Perini and Black Construction together have been successful in capturing four recent Multiple Award Construction Contracts, or MACs, with a combined contract capacity of more than $32 billion over the next eight years. This capacity will be shared among us and the other firms that have been awarded these MACs, and the MACs essentially put us on the bidder's list, enabling us to pursue the numerous project task orders that will be ultimately awarded. Ron, would you take a couple of minutes to discuss some of our other civil bidding opportunities on the horizon? and also what you are seeing in the early stages of project execution as we kick off work on the major projects that have been awarded over the last few quarters.