Tetra Tech Reports First Quarter Results

Tetra Tech, Inc. (NASDAQ: TTEK) today announced results for the first quarter ended December 27, 2009.

First Quarter Results

Revenue in the quarter was $542.0 million, down 15.1% from $638.7 million, and revenue, net of subcontractor costs, was $343.5 million, up 4.1% from $330.0 million for the same quarter last year. Income from operations was $31.1 million, up 8.7% from $28.6 million for the same quarter last year. Net income was $18.7 million, up 14.7% from $16.3 million for the same quarter last year. Diluted EPS was $0.30, up 11.4% from $0.27 for the same quarter last year. Backlog was $1.61 billion, up 1.8% from $1.58 billion at the end of the fourth quarter last year, and down 8.9% from $1.77 billion at the end of the first quarter last year. Cash used in operations was $5.2 million, an improvement of 81.4% from $27.7 million used in the same quarter last year.

Tetra Tech’s Chairman and CEO, Dan Batrack commented, "Our first quarter results met net revenue and EPS guidance. We are forecasting that the remainder of fiscal 2010 will remain strong for our front-end consulting and engineering services. However, we now believe that back-end construction management services will weaken in the second quarter and remain soft for the remainder of the fiscal year, driven primarily by the commercial market downturn and the continued slow pace of stimulus spending. Due to forecasted reductions in our construction management services, we have lowered our guidance for the remainder of fiscal 2010.”

Business Outlook

The following statements are based on current expectations. These statements are forward-looking and the actual results could differ materially. These statements do not include the potential impact of transactions that may be completed or developments that become evident after the date of this release. The Business Outlook section should be read in conjunction with the information on forward-looking statements at the end of this release.

Tetra Tech expects diluted EPS for the second quarter of fiscal 2010 to be in the range of $0.20 to $0.23. Revenue, net of subcontractor costs, for the second quarter is expected to range from $310 million to $330 million. For fiscal 2010, Tetra Tech is lowering its guidance, and now expects diluted EPS to be $1.08 to $1.18. Revenue, net of subcontractor costs, for fiscal 2010 is now expected to range from $1.4 billion to $1.5 billion.

Webcast

Investors will have the opportunity to access a live audio-visual webcast and supplemental financial information concerning the first quarter results through a link posted on the Company’s website at www.tetratech.com on January 28, 2010 at 8:00 a.m. (PST).

About Tetra Tech (www.tetratech.com)

Tetra Tech is a leading provider of consulting, engineering, program management, construction, and technical services addressing the resource management and infrastructure markets. The Company supports government and commercial clients by providing innovative solutions focused on water, the environment, and energy. With approximately 10,000 employees worldwide, Tetra Tech’s capabilities span the entire project life cycle.

Forward-Looking Statements

This news release contains forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include information concerning future events and the future financial performance of Tetra Tech that involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results. Readers are urged to read the documents filed by Tetra Tech with the SEC, specifically the most recent reports on Form 10-K, 10-Q, and 8-K, each as it may be amended from time to time, which identify risk factors that could cause actual results to differ materially from the forward-looking statements. Among the important factors or risks that could cause actual results or events to differ materially from those in the forward-looking statements in this release are: worldwide political and economic uncertainties; fluctuations in annual revenue, expenses and operating results; the cyclicality in demand for state and local government and commercial services; credit risks associated with certain commercial clients; concentration of revenues from government agencies and funding disruptions by these agencies; a shift in U.S. defense spending; a delay in the completion of the U.S. government budget process; violations of government contractor regulations; dependence on winning or renewing federal, state and local government contracts; the delay or unavailability of public funding; the government’s right to modify, delay, curtail or terminate contracts at its convenience; the failure to properly manage projects; the loss of key personnel or the inability to attract and retain qualified personnel; the use of estimates and assumptions in the preparation of financial statements; the ability to maintain adequate utilization of our workforce; the use of the percentage-of-completion method of accounting; the inability to accurately estimate contract risks, revenue and costs; the failure to win or renew contracts with private and public sector clients; acquisition strategy and integration risks; goodwill or other intangible asset impairment; growth strategy management; adverse resolution of an IRS examination; backlog cancellation and adjustments; risks associated with international operations; the failure of partners to perform on joint projects; the failure of subcontractors to satisfy their obligations; changes in resource management or infrastructure industry laws, regulations or programs; changes in capital markets and the access to capital; credit agreement covenants; industry competition; the volatility of common stock value; liability risks and the ability to obtain or maintain adequate insurance; liability related to legal proceedings; the ability to obtain adequate bonding; employee, agent or partner misconduct; employee risks related to international travel; safety programs; conflict of interest issues; liabilities relating to environmental laws and regulations; force majeure events; protection of intellectual property rights; and the completion of the enterprise resource planning system. Any projections in this release are based on limited information currently available to Tetra Tech, which is subject to change. Although any such projections and the factors influencing them will likely change, Tetra Tech will not necessarily update the information, since Tetra Tech will only provide guidance at certain points during the year. Readers should not place undue reliance on forward-looking statements since such information speaks only as of the date of this release.