QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
Emerging growth company |
PAGE NO. | ||||||||
ASSETS | July 2, 2023 | October 2, 2022 | |||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net | |||||||||||
Contract assets | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Right-of-use assets, operating leases | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Deferred tax assets | |||||||||||
Other non-current assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued compensation | |||||||||||
Contract liabilities | |||||||||||
Short-term lease liabilities, operating leases | |||||||||||
Current portion of long-term debt | |||||||||||
Current contingent earn-out liabilities | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Deferred tax liabilities | |||||||||||
Long-term debt | |||||||||||
Long-term lease liabilities, operating leases | |||||||||||
Non-current contingent earn-out liabilities | |||||||||||
Other non-current liabilities | |||||||||||
Commitments and contingencies (Note 17) | |||||||||||
Equity: | |||||||||||
Preferred stock - authorized, | |||||||||||
Common stock - authorized, | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Retained earnings | |||||||||||
Tetra Tech stockholders’ equity | |||||||||||
Noncontrolling interests | |||||||||||
Total stockholders' equity | |||||||||||
Total liabilities and stockholders' equity | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
July 2, 2023 | July 3, 2022 | July 2, 2023 | July 3, 2022 | ||||||||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||||||||||
Subcontractor costs | ( | ( | ( | ( | |||||||||||||||||||
Other costs of revenue | ( | ( | ( | ( | |||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Selling, general and administrative expenses | ( | ( | ( | ( | |||||||||||||||||||
Acquisition and integration expenses | ( | ( | |||||||||||||||||||||
Contingent consideration – fair value adjustments | ( | ||||||||||||||||||||||
Income from operations | |||||||||||||||||||||||
Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
Other non-operating income | |||||||||||||||||||||||
Income before income tax expense | |||||||||||||||||||||||
Income tax expense | ( | ( | ( | ( | |||||||||||||||||||
Net income | |||||||||||||||||||||||
Net income attributable to noncontrolling interests | ( | ( | ( | ( | |||||||||||||||||||
Net income attributable to Tetra Tech | $ | $ | $ | $ | |||||||||||||||||||
Earnings per share attributable to Tetra Tech: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||
Weighted-average common shares outstanding: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
July 2, 2023 | July 3, 2022 | July 2, 2023 | July 3, 2022 | ||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income, net of tax | |||||||||||||||||||||||
Foreign currency translation adjustment, net of tax | ( | ( | |||||||||||||||||||||
Gain (loss) on cash flow hedge valuations, net of tax | ( | ( | |||||||||||||||||||||
Net pension adjustments | |||||||||||||||||||||||
Other comprehensive income (loss), net of tax | ( | ( | |||||||||||||||||||||
Comprehensive income, net of tax | $ | $ | $ | $ | |||||||||||||||||||
Comprehensive income attributable to noncontrolling interests, net of tax | |||||||||||||||||||||||
Comprehensive income attributable to Tetra Tech, net of tax | $ | $ | $ | $ |
Nine Months Ended | |||||||||||
July 2, 2023 | July 3, 2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Equity in income of unconsolidated joint ventures | ( | ( | |||||||||
Distributions of earnings from unconsolidated joint ventures | |||||||||||
Amortization of stock-based awards | |||||||||||
Deferred income taxes | |||||||||||
Fair value adjustments to contingent consideration | ( | ||||||||||
(Gain) loss on sale of assets | ( | ||||||||||
Fair value adjustments to foreign currency forward contract | ( | ||||||||||
Changes in operating assets and liabilities, net of effects of business acquisitions: | |||||||||||
Accounts receivable and contract assets | ( | ( | |||||||||
Prepaid expenses and other assets | |||||||||||
Accounts payable | ( | ||||||||||
Accrued compensation | |||||||||||
Contract liabilities | |||||||||||
Other liabilities | ( | ( | |||||||||
Income taxes receivable/payable | |||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Payments for business acquisitions, net of cash acquired | ( | ( | |||||||||
Capital expenditures | ( | ( | |||||||||
Proceeds from sale of assets | |||||||||||
Settlement of foreign currency forward contract | |||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from borrowings | |||||||||||
Repayments on long-term debt | ( | ( | |||||||||
Repurchases of common stock | ( | ||||||||||
Taxes paid on vested restricted stock | ( | ( | |||||||||
Stock options exercised | |||||||||||
Dividends paid | ( | ( | |||||||||
Payments of contingent earn-out liabilities | ( | ( | |||||||||
Principal payments on finance leases | ( | ( | |||||||||
Net cash provided by (used in) financing activities | ( | ||||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ||||||||||
Net (decrease) increase in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents at beginning of period | |||||||||||
Cash and cash equivalents at end of period | $ | $ | |||||||||
Supplemental information: | |||||||||||
Cash paid during the period for: | |||||||||||
Interest | $ | $ | |||||||||
Income taxes, net of refunds received of $ | $ | $ | |||||||||
Supplemental disclosures on non-cash investing activities: | |||||||||||
Issuance of promissory note for business acquisition | $ | $ | |||||||||
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Total Tetra Tech Equity | Non-Controlling Interests | Total Equity | |||||||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||
BALANCE AT APRIL 3, 2022 | $ | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Cash dividends of $ | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Restricted & performance shares released | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Stock repurchases | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
BALANCE AT JULY 3, 2022 | $ | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
BALANCE AT APRIL 2, 2023 | $ | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends of $ | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||
Restricted & performance shares released | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Stock options exercised | |||||||||||||||||||||||||||||||||||||||||||||||
BALANCE AT JULY 2, 2023 | $ | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Total Tetra Tech Equity | Non-Controlling Interests | Total Equity | |||||||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||
BALANCE AT OCTOBER 3, 2021 | $ | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Distributions paid to noncontrolling interests | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Cash dividends of $ | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||
Restricted & performance shares released | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Stock options exercised | |||||||||||||||||||||||||||||||||||||||||||||||
Shares issued for Employee Stock Purchase Plan | |||||||||||||||||||||||||||||||||||||||||||||||
Stock repurchases | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
BALANCE AT JULY 3, 2022 | $ | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
BALANCE AT OCTOBER 2, 2022 | $ | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends of $ | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||
Restricted & performance shares released | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Stock options exercised | |||||||||||||||||||||||||||||||||||||||||||||||
Shares issued for Employee Stock Purchase Plan | |||||||||||||||||||||||||||||||||||||||||||||||
BALANCE AT JULY 2, 2023 | $ | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
July 2, 2023 | July 3, 2022 | July 2, 2023 | July 3, 2022 | ||||||||||||||||||||
Client Sector: | |||||||||||||||||||||||
U.S. federal government (1) | $ | $ | $ | $ | |||||||||||||||||||
U.S. state and local government | $ | $ | |||||||||||||||||||||
U.S. commercial | |||||||||||||||||||||||
International (2) | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Contract Type: | |||||||||||||||||||||||
Fixed-price | $ | $ | $ | $ | |||||||||||||||||||
Time-and-materials | |||||||||||||||||||||||
Cost-plus | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Balance at | |||||||||||
July 2, 2023 | October 2, 2022 | ||||||||||
Contract assets (1) | $ | $ | |||||||||
Contract liabilities | |||||||||||
Net contract liabilities | $ | ( | $ | ( | |||||||
Balance at | |||||||||||
July 2, 2023 | October 2, 2022 | ||||||||||
Billed | $ | $ | |||||||||
Unbilled | |||||||||||
Total accounts receivable | |||||||||||
Allowance for doubtful accounts | ( | ( | |||||||||
Total accounts receivable, net | $ | $ | |||||||||
Amount | |||||
Within 12 months | $ | ||||
Beyond | |||||
Total | $ |
Amount | |||||
Cash and cash equivalents | $ | ||||
Accounts receivable and contract assets | |||||
Prepaid expenses and other current assets | |||||
Income taxes receivables | |||||
Property and equipment | |||||
Right-of-use assets, operating leases | |||||
Intangible assets | |||||
Deferred income taxes | |||||
Other long-term assets | |||||
Total assets acquired | |||||
Accounts payable | $ | ( | |||
Accrued compensation | ( | ||||
Contract liabilities | ( | ||||
Income tax payable | ( | ||||
Short-term lease liabilities, operating leases | ( | ||||
Other current liabilities | ( | ||||
Long-term debt | ( | ||||
Long-term lease liabilities, operating leases | ( | ||||
Other long-term liabilities | ( | ||||
Deferred tax liabilities | ( | ||||
Total liabilities assumed | ( | ||||
Fair value of net assets acquired | |||||
Goodwill | |||||
Total purchase consideration | $ |
Fair Value | Weighted-Average Estimated Useful Life | ||||||||||
(in thousands) | (in years) | ||||||||||
Backlog | $ | ||||||||||
Trade names | |||||||||||
Client relations | |||||||||||
Total intangible assets acquired | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
July 2, 2023 | July 3, 2022 | July 2, 2023 | July 3, 2022 | ||||||||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||||||||||
Net Income including noncontrolling interests | $ | $ | $ | $ |
GSG | CIG | Total | ||||||||||||||||||
Balance at October 2, 2022 | $ | $ | $ | |||||||||||||||||
Acquisition activity | ||||||||||||||||||||
Translation adjustments | ||||||||||||||||||||
Balance at July 2, 2023 | $ | $ | $ | |||||||||||||||||
Period Ended | |||||||||||||||||||||||||||||||||||||||||
July 2, 2023 | October 2, 2022 | ||||||||||||||||||||||||||||||||||||||||
Weighted- Average Remaining Life (in Years) | Gross Amount | Accumulated Amortization | Net Amount | Gross Amount | Accumulated Amortization | Net Amount | |||||||||||||||||||||||||||||||||||
Client relations | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
Backlog | ( | ( | |||||||||||||||||||||||||||||||||||||||
Trade names | ( | ( | |||||||||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | $ | ( | $ |
Amount | |||||
2023 (remaining) | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Beyond | |||||
Total | $ | ||||
Balance at | |||||||||||
July 2, 2023 | October 2, 2022 | ||||||||||
Equipment, furniture and fixtures | $ | $ | |||||||||
Leasehold improvements | |||||||||||
Total property and equipment | |||||||||||
Accumulated depreciation | ( | ( | |||||||||
Property and equipment, net | $ | $ | |||||||||
Declare Date | Dividend Paid Per Share | Record Date | Payment Date | Dividend Paid (in thousands) | ||||||||||||||||||||||
November 7, 2022 | $ | November 21, 2022 | December 9, 2022 | $ | ||||||||||||||||||||||
January 30, 2023 | $ | February 13, 2023 | February 24, 2023 | |||||||||||||||||||||||
May 8, 2023 | $ | May 24, 2023 | June 6, 2023 | |||||||||||||||||||||||
Total dividend paid as of July 2, 2023 | $ | |||||||||||||||||||||||||
November 15, 2021 | $ | December 2, 2021 | December 20, 2021 | $ | ||||||||||||||||||||||
January 31, 2022 | $ | February 11, 2022 | February 25, 2022 | |||||||||||||||||||||||
May 2, 2022 | $ | May 13, 2022 | May 27, 2022 | |||||||||||||||||||||||
Total dividend paid as of July 3, 2022 | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
July 2, 2023 | July 3, 2022 | July 2, 2023 | July 3, 2022 | ||||||||||||||||||||
Operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
Sublease (income) cost | ( | ( | ( | ||||||||||||||||||||
Total lease cost | $ | $ | $ | $ |
Nine Months Ended | ||||||||||||||
July 2, 2023 | July 3, 2022 | |||||||||||||
Operating cash flows for operating leases | $ | $ | ||||||||||||
Right-of-use assets obtained in exchange for new operating lease liabilities |
Balance at | |||||||||||
July 2, 2023 | October 2, 2022 | ||||||||||
Operating leases: | |||||||||||
Right-of-use assets | $ | $ | |||||||||
Lease liabilities: | |||||||||||
Current | |||||||||||
Non-current | |||||||||||
Total operating lease liabilities | $ | $ | |||||||||
Weighted-average remaining lease term: | |||||||||||
Operating leases | |||||||||||
Weighted-average discount rate: | |||||||||||
Operating leases | % | % |
Operating Leases | |||||
2023 (remaining) | $ | ||||
2024 | |||||
2025 | |||||
2026 | |||||
2027 | |||||
Beyond | |||||
Total lease payments | |||||
Less: imputed interest | ( | ||||
Total present value of lease liabilities | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
July 2, 2023 | July 3, 2022 | July 2, 2023 | July 3, 2022 | ||||||||||||||||||||
Net income attributable to Tetra Tech | $ | $ | $ | $ | |||||||||||||||||||
Weighted-average common shares outstanding – basic | |||||||||||||||||||||||
Effect of dilutive stock options and unvested restricted stock | |||||||||||||||||||||||
Weighted-average common shares outstanding – diluted | |||||||||||||||||||||||
Earnings per share attributable to Tetra Tech: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
July 2, 2023 | July 3, 2022 | July 2, 2023 | July 3, 2022 | ||||||||||||||||||||
Revenue | |||||||||||||||||||||||
GSG | $ | $ | $ | $ | |||||||||||||||||||
CIG | |||||||||||||||||||||||
Elimination of inter-segment revenue | ( | ( | ( | ( | |||||||||||||||||||
Total revenue | $ | $ | $ | $ | |||||||||||||||||||
Income from operations | |||||||||||||||||||||||
GSG | $ | $ | $ | $ | |||||||||||||||||||
CIG | |||||||||||||||||||||||
Corporate (1) | ( | ( | ( | ( | |||||||||||||||||||
Total income from operations | $ | $ | $ | $ | |||||||||||||||||||
Balance at | |||||||||||
July 2, 2023 | October 2, 2022 | ||||||||||
Total Assets | |||||||||||
GSG | $ | $ | |||||||||
CIG | |||||||||||
Corporate (1) | |||||||||||
Total assets | $ | $ | |||||||||
Three Months Ended | |||||||||||||||||||||||
Foreign Currency Translation Adjustments | Gain (Loss) on Derivative Instruments | Net Pension Adjustments | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||
Balance at April 3, 2022 | $ | ( | $ | ( | $ | ( | |||||||||||||||||
Other comprehensive (loss) income before reclassifications | ( | ( | |||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss: | |||||||||||||||||||||||
Interest rate contracts, net of tax (1) | — | ( | ( | ||||||||||||||||||||
Net current-period other comprehensive (loss) income | ( | ( | |||||||||||||||||||||
Balance at July 3, 2022 | $ | ( | $ | $ | $ | ( | |||||||||||||||||
Balance at April 2, 2023 | $ | ( | $ | $ | ( | ||||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss: | |||||||||||||||||||||||
Interest rate contracts, net of tax (1) | — | ||||||||||||||||||||||
Net current-period other comprehensive income (loss) | ( | ||||||||||||||||||||||
Balance at July 2, 2023 | $ | ( | $ | $ | $ | ( | |||||||||||||||||
Nine Months Ended | |||||||||||||||||||||||
Foreign Currency Translation Adjustments | Gain (Loss) on Derivative Instruments | Net Pension Adjustments | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||
Balance at October 3, 2021 | $ | ( | $ | ( | $ | ( | |||||||||||||||||
Other comprehensive (loss) income before reclassifications | ( | ( | |||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss: | |||||||||||||||||||||||
Interest rate contracts, net of tax (1) | — | ( | ( | ||||||||||||||||||||
Net current-period other comprehensive (loss) income | ( | ( | |||||||||||||||||||||
Balance at July 3, 2022 | $ | ( | $ | $ | $ | ( | |||||||||||||||||
Balance at October 2, 2022 | $ | ( | $ | $ | ( | ||||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss: | |||||||||||||||||||||||
Interest rate contracts, net of tax (1) | — | ||||||||||||||||||||||
Net current-period other comprehensive income (loss) | ( | ||||||||||||||||||||||
Balance at July 2, 2023 | $ | ( | $ | $ | $ | ( | |||||||||||||||||
Balance at | |||||||||||
July 2, 2023 | October 2, 2022 | ||||||||||
Accounts receivable, net | $ | $ | |||||||||
Contract assets | |||||||||||
Contract liabilities |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
July 2, 2023 | July 3, 2022 | July 2, 2023 | July 3, 2022 | ||||||||||||||||||||
Client Sector | |||||||||||||||||||||||
U.S. federal government (1) | 28.0 | % | 29.4 | % | 30.5 | % | 30.0 | % | |||||||||||||||
U.S. state and local government | 12.5 | 16.9 | 13.9 | 17.9 | |||||||||||||||||||
U.S. commercial | 18.7 | 21.1 | 19.4 | 20.7 | |||||||||||||||||||
International (2) | 40.8 | 32.6 | 36.2 | 31.4 | |||||||||||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
July 2, 2023 | July 3, 2022 | July 2, 2023 | July 3, 2022 | ||||||||||||||||||||
Reportable Segment | |||||||||||||||||||||||
GSG | 43.9 | % | 51.7 | % | 48.0 | % | 52.5 | % | |||||||||||||||
CIG | 57.2 | 49.9 | 53.4 | 49.1 | |||||||||||||||||||
Inter-segment elimination | (1.1) | (1.6) | (1.4) | (1.6) | |||||||||||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
July 2, 2023 | July 3, 2022 | July 2, 2023 | July 3, 2022 | ||||||||||||||||||||
Contract Type | |||||||||||||||||||||||
Fixed-price | 37.4 | % | 37.6 | % | 36.6 | % | 37.7 | % | |||||||||||||||
Time-and-materials | 49.4 | 47.0 | 47.6 | 47.0 | |||||||||||||||||||
Cost-plus | 13.2 | 15.4 | 15.8 | 15.3 | |||||||||||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
July 2, 2023 | July 3, 2022 | Change | July 2, 2023 | July 3, 2022 | Change | ||||||||||||||||||||||||||||||||||||||||||
$ | % | $ | % | ||||||||||||||||||||||||||||||||||||||||||||
($ in thousands, except per share data) | |||||||||||||||||||||||||||||||||||||||||||||||
Revenue | $ | 1,208,947 | $ | 890,231 | $ | 318,716 | 35.8% | $ | 3,261,938 | $ | 2,601,485 | $ | 660,453 | 25.4% | |||||||||||||||||||||||||||||||||
Subcontractor costs | (221,387) | (169,745) | (51,642) | (30.4) | (568,252) | (502,024) | (66,228) | (13.2) | |||||||||||||||||||||||||||||||||||||||
Revenue, net of subcontractor costs (1) | 987,560 | 720,486 | 267,074 | 37.1 | 2,693,686 | 2,099,461 | 594,225 | 28.3 | |||||||||||||||||||||||||||||||||||||||
Other costs of revenue | (798,714) | (575,902) | (222,812) | (38.7) | (2,180,749) | (1,679,937) | (500,812) | (29.8) | |||||||||||||||||||||||||||||||||||||||
Gross profit | 188,846 | 144,584 | 44,262 | 30.6 | 512,937 | 419,524 | 93,413 | 22.3 | |||||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | (89,064) | (60,942) | (28,122) | (46.1) | (227,912) | (173,943) | (53,969) | (31.0) | |||||||||||||||||||||||||||||||||||||||
Acquisition and integration expenses | (2,107) | — | (2,107) | NM | (25,812) | — | (25,812) | NM | |||||||||||||||||||||||||||||||||||||||
Contingent consideration - fair value adjustments | — | 263 | (263) | NM | (8,477) | 64 | (8,541) | NM | |||||||||||||||||||||||||||||||||||||||
Income from operations | 97,675 | 83,905 | 13,770 | 16.4 | 250,736 | 245,645 | 5,091 | 2.1 | |||||||||||||||||||||||||||||||||||||||
Interest expense | (14,869) | (2,919) | (11,950) | (409.4) | (33,563) | (8,967) | (24,596) | (274.3) | |||||||||||||||||||||||||||||||||||||||
Other non-operating income | — | — | — | NM | 89,402 | — | 89,402 | NM | |||||||||||||||||||||||||||||||||||||||
Income before income tax expense | 82,806 | 80,986 | 1,820 | 2.2 | 306,575 | 236,678 | 69,897 | 29.5 | |||||||||||||||||||||||||||||||||||||||
Income tax expense | (22,568) | (22,329) | (239) | (1.1) | (86,781) | (56,473) | (30,308) | (53.7) | |||||||||||||||||||||||||||||||||||||||
Net income | 60,238 | 58,657 | 1,581 | 2.7 | 219,794 | 180,205 | 39,589 | 22.0 | |||||||||||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interests | (3) | (7) | 4 | 57.1 | (23) | (26) | 3 | 11.5 | |||||||||||||||||||||||||||||||||||||||
Net income attributable to Tetra Tech | $ | 60,235 | $ | 58,650 | $ | 1,585 | 2.7 | $ | 219,771 | $ | 180,179 | $ | 39,592 | 22.0 | |||||||||||||||||||||||||||||||||
Diluted earnings per share | $ | 1.12 | $ | 1.09 | $ | 0.03 | 2.8% | $ | 4.10 | $ | 3.32 | $ | 0.78 | 23.5% | |||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
July 2, 2023 | July 3, 2022 | Change | July 2, 2023 | July 3, 2022 | Change | ||||||||||||||||||||||||||||||||||||||||||
$ | % | $ | % | ||||||||||||||||||||||||||||||||||||||||||||
($ in thousands, except per share data) | |||||||||||||||||||||||||||||||||||||||||||||||
Income from operations | $ | 97,675 | $ | 83,905 | $ | 13,770 | 16.4% | $ | 250,736 | $ | 245,645 | $ | 5,091 | 2.1% | |||||||||||||||||||||||||||||||||
COVID-19 credits | — | (1,040) | 1,040 | NM | — | (5,491) | 5,491 | NM | |||||||||||||||||||||||||||||||||||||||
Acquisition & integration expenses | 2,107 | — | 2,107 | NM | 25,812 | — | 25,812 | NM | |||||||||||||||||||||||||||||||||||||||
Earn-Out adjustments | — | — | — | NM | 8,477 | — | 8,477 | NM | |||||||||||||||||||||||||||||||||||||||
Adjusted income from operations (1) | $ | 99,782 | $ | 82,865 | $ | 16,917 | 20.4% | $ | 285,025 | $ | 240,154 | $ | 44,871 | 18.7% | |||||||||||||||||||||||||||||||||
EPS | $ | 1.12 | $ | 1.09 | $ | 0.03 | 2.8% | $ | 4.10 | $ | 3.32 | $ | 0.78 | 23.5% | |||||||||||||||||||||||||||||||||
COVID-19 credits | — | (0.01) | 0.01 | NM | — | (0.07) | 0.07 | NM | |||||||||||||||||||||||||||||||||||||||
Acquisition & integration expenses | 0.03 | — | 0.03 | NM | 0.55 | — | 0.55 | NM | |||||||||||||||||||||||||||||||||||||||
Earn-out adjustments | — | — | — | NM | 0.13 | — | 0.13 | NM | |||||||||||||||||||||||||||||||||||||||
Foreign exchange forward contract gain | — | — | — | NM | (1.23) | — | (1.23) | NM | |||||||||||||||||||||||||||||||||||||||
Adjusted EPS (1) | $ | 1.15 | $ | 1.08 | $ | 0.07 | 6.5% | $ | 3.55 | $ | 3.25 | $ | 0.30 | 9.2% | |||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
July 2, 2023 | July 3, 2022 | Change | July 2, 2023 | July 3, 2022 | Change | ||||||||||||||||||||||||||||||||||||||||||
$ | % | $ | % | ||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Revenue | $ | 531,050 | $ | 459,987 | $ | 71,063 | 15.4% | $ | 1,565,371 | $ | 1,365,041 | $ | 200,330 | 14.7% | |||||||||||||||||||||||||||||||||
Subcontractor costs | (140,834) | (124,487) | (16,347) | (13.1) | (386,559) | (364,970) | (21,589) | (5.9) | |||||||||||||||||||||||||||||||||||||||
Revenue, net of subcontractor costs | $ | 390,216 | $ | 335,500 | $ | 54,716 | 16.3 | $ | 1,178,812 | $ | 1,000,071 | $ | 178,741 | 17.9 | |||||||||||||||||||||||||||||||||
Income from operations | $ | 54,496 | $ | 45,580 | $ | 8,916 | 19.6% | $ | 167,053 | $ | 147,104 | $ | 19,949 | 13.6% |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
July 2, 2023 | July 3, 2022 | Change | July 2, 2023 | July 3, 2022 | Change | ||||||||||||||||||||||||||||||||||||||||||
$ | % | $ | % | ||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Revenue | $ | 691,386 | $ | 444,238 | $ | 247,148 | 55.6% | $ | 1,741,300 | $ | 1,277,469 | $ | 463,831 | 36.3 | % | ||||||||||||||||||||||||||||||||
Subcontractor costs | (94,042) | (59,252) | (34,790) | (58.7) | (226,426) | (178,079) | (48,347) | (27.1) | |||||||||||||||||||||||||||||||||||||||
Revenue, net of subcontractor costs | $ | 597,344 | $ | 384,986 | $ | 212,358 | 55.2 | $ | 1,514,874 | $ | 1,099,390 | $ | 415,484 | 37.8 | |||||||||||||||||||||||||||||||||
Income from operations | $ | 69,572 | $ | 53,535 | $ | 16,037 | 30.0% | $ | 172,199 | $ | 139,328 | $ | 32,871 | 23.6 | % |
Dividend Per Share | Record Date | Total Maximum Payment (in thousands) | Payment Date | ||||||||||||||||||||
November 7, 2022 | $ | 0.23 | November 21, 2022 | $ | 12,186 | December 9, 2022 | |||||||||||||||||
January 30, 2023 | $ | 0.23 | February 13, 2023 | $ | 12,242 | February 24, 2023 | |||||||||||||||||
May 8, 2023 | $ | 0.26 | May 24, 2023 | $ | 13,840 | June 6, 2023 | |||||||||||||||||
August 7, 2023 | $ | 0.26 | August 23, 2023 | N/A | September 6, 2023 |
101 | The following financial information from our Company’s Quarterly Report on Form 10-Q, for the period ended July 2, 2023, formatted in Inline eXtensible Business Reporting Language: (i) Consolidated Balance Sheets (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Cash Flows, (v) Consolidated Statements of Equity, (vi) Notes to Consolidated Financial Statements. | ||||
104 | Cover Page Interactive Date File (formatted as Inline XBRL and contained in Exhibit 101). |
Dated: August 10, 2023 | TETRA TECH, INC. | ||||||||||
By: | /s/ DAN L. BATRACK | ||||||||||
Dan L. Batrack | |||||||||||
Chairman and Chief Executive Officer | |||||||||||
(Principal Executive Officer) | |||||||||||
By: | /s/ STEVEN M. BURDICK | ||||||||||
Steven M. Burdick | |||||||||||
Executive Vice President, Chief Financial Officer | |||||||||||
(Principal Financial Officer) | |||||||||||
By: | /s/ BRIAN N. CARTER | ||||||||||
Brian N. Carter | |||||||||||
Senior Vice President, Corporate Controller | |||||||||||
(Principal Accounting Officer) |
/s/ Dan L. Batrack | |||||
Dan L. Batrack | |||||
Chairman, Chief Executive Officer and President | |||||
(Principal Executive Officer) |
/s/ Steven M. Burdick | |||||
Steven M. Burdick | |||||
Chief Financial Officer | |||||
(Principal Financial Officer) |
/s/ Dan L. Batrack | |||||
Dan L. Batrack | |||||
Chairman, Chief Executive Officer and President | |||||
August 10, 2023 |
/s/ Steven M. Burdick | |||||
Steven M. Burdick | |||||
Chief Financial Officer | |||||
August 10, 2023 |
3 Month Period Ending July 2, 2023 | Tetra Tech, Inc. | ||||
Alleged violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a mine safety or health hazard (#) | 0 | ||||
Section 104(b) orders (#) | 0 | ||||
Section 104(d) citations and orders (#) | 0 | ||||
Section 110(b)(2) violations (#) | 0 | ||||
Section 107(a) orders (#) | 0 | ||||
Proposed assessments under MSHA ($) whole dollars | 0 | ||||
Mining-related fatalities (#) | 0 | ||||
Section 104(e) notice | 0 | ||||
Notice of the potential for a pattern of violations under Section 104(e) | 0 | ||||
Legal actions before the Federal Mine Safety and Health Review Commission (“FMSHRC”) initiated (#) | 0 | ||||
Legal actions before the FMSHRC resolved | 0 | ||||
Legal actions pending before the FMSHRC, end of period | - | ||||
Contests of citations and orders reference in Subpart B of 29 CFR Part 2700 | 0 | ||||
Contests of proposed penalties referenced in Subpart C of 29 CFR Part 2700 (#) | 0 | ||||
Complaints for compensation referenced in Subpart D of 29 CFR Part 2700 (#) | 0 | ||||
Complaints of discharge, discrimination or interference reference in Subpart E of 29 CFR Part 2700 (#) | 0 | ||||
Applications for temporary relief referenced in Subpart F of 29 CFR Part 2700 (#) | 0 | ||||
Appeals of judges’ decisions or orders reference in Subpart H of 29 CFR Part 2700 (#) | 0 | ||||
Total pending legal actions (#) | 0 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Jul. 02, 2023 |
Oct. 02, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, authorized shares (in shares) | 2,000,000 | 2,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, authorized shares (in shares) | 150,000,000 | 150,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 53,243,000 | 52,981,000 |
Common stock, shares outstanding (in shares) | 53,243,000 | 52,981,000 |
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2023 |
Jul. 03, 2022 |
Jul. 02, 2023 |
Jul. 03, 2022 |
|
Revenue | $ 1,208,947 | $ 890,231 | $ 3,261,938 | $ 2,601,485 |
Gross profit | 188,846 | 144,584 | 512,937 | 419,524 |
Selling, general and administrative expenses | (89,064) | (60,942) | (227,912) | (173,943) |
Acquisition and integration expenses | (2,107) | 0 | (25,812) | 0 |
Contingent consideration – fair value adjustments | 0 | 263 | (8,477) | 64 |
Income from operations | 97,675 | 83,905 | 250,736 | 245,645 |
Interest expense, net | (14,869) | (2,919) | (33,563) | (8,967) |
Other non-operating income | 0 | 0 | 89,402 | 0 |
Income before income tax expense | 82,806 | 80,986 | 306,575 | 236,678 |
Income tax expense | (22,568) | (22,329) | (86,781) | (56,473) |
Net income | 60,238 | 58,657 | 219,794 | 180,205 |
Net income attributable to noncontrolling interests | (3) | (7) | (23) | (26) |
Net income attributable to Tetra Tech, basic | 60,235 | 58,650 | 219,771 | 180,179 |
Net income attributable to Tetra Tech, diluted | $ 60,235 | $ 58,650 | $ 219,771 | $ 180,179 |
Earnings per share attributable to Tetra Tech: | ||||
Basic (in dollars per share) | $ 1.13 | $ 1.10 | $ 4.13 | $ 3.35 |
Diluted (in dollars per share) | $ 1.12 | $ 1.09 | $ 4.10 | $ 3.32 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 53,231 | 53,507 | 53,188 | 53,777 |
Diluted (in shares) | 53,653 | 54,006 | 53,615 | 54,328 |
Subcontractor costs | ||||
Cost of revenue | $ (221,387) | $ (169,745) | $ (568,252) | $ (502,024) |
Other costs of revenue | ||||
Cost of revenue | $ (798,714) | $ (575,902) | $ (2,180,749) | $ (1,679,937) |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2023 |
Jul. 03, 2022 |
Jul. 02, 2023 |
Jul. 03, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 60,238 | $ 58,657 | $ 219,794 | $ 180,205 |
Other comprehensive income, net of tax | ||||
Foreign currency translation adjustment, net of tax | 44,500 | (44,884) | 69,453 | (42,763) |
Gain (loss) on cash flow hedge valuations, net of tax | (1,044) | 2,380 | (2,029) | 9,984 |
Net pension adjustments | 0 | 0 | 2,794 | 0 |
Other comprehensive income (loss), net of tax | 43,456 | (42,504) | 70,218 | (32,779) |
Comprehensive income, net of tax | 103,694 | 16,153 | 290,012 | 147,426 |
Comprehensive income attributable to noncontrolling interests, net of tax | 4 | 6 | 23 | 25 |
Comprehensive income attributable to Tetra Tech, net of tax | $ 103,690 | $ 16,147 | $ 289,989 | $ 147,401 |
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Jul. 02, 2023 |
Jul. 03, 2022 |
|
Statement of Cash Flows [Abstract] | ||
Income tax refunds | $ 1.5 | $ 4.2 |
Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares |
3 Months Ended | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 06, 2023 |
Feb. 24, 2023 |
Dec. 09, 2022 |
May 27, 2022 |
Feb. 25, 2022 |
Dec. 20, 2021 |
Jul. 02, 2023 |
Jul. 03, 2022 |
Jul. 02, 2023 |
Jul. 03, 2022 |
|
Statement of Stockholders' Equity [Abstract] | ||||||||||
Dividend paid per share (in dollars per share) | $ 0.26 | $ 0.23 | $ 0.23 | $ 0.23 | $ 0.20 | $ 0.20 | $ 0.26 | $ 0.23 | $ 0.72 | $ 0.63 |
Basis of Presentation |
9 Months Ended |
---|---|
Jul. 02, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements and related notes of Tetra Tech, Inc. (“we,” “us,” “our” or "Tetra Tech") have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all of the information and footnotes required by U.S. GAAP for complete financial statements and, therefore, should be read in conjunction with the audited consolidated financial statements and the notes contained in our Annual Report on Form 10-K for the fiscal year ended October 2, 2022. These financial statements reflect all normal recurring adjustments that are considered necessary for a fair statement of our financial position, results of operations and cash flows for the interim periods presented. The results of operations and cash flows for any interim period are not necessarily indicative of results for the full fiscal year or for future fiscal years. Certain prior year amounts have been reclassified to conform to the current year presentation in the accompanying notes.
|
Recent Accounting Pronouncements |
9 Months Ended |
---|---|
Jul. 02, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2021, the Financial Accounting Standards Board issued ASU 2021-10, Government Assistance (Topic 832), which requires annual disclosures for transactions with a government authority that are accounted for by applying a grant or contribution model by analogy, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity's financial statements. ASU 2021-10 was effective for us beginning in the first quarter of fiscal 2023. In fiscal 2020, the Canadian federal government implemented the Canadian Emergency Wage Subsidy ("CEWS") program in response to the negative impact of the coronavirus disease 2019 pandemic on businesses operating in Canada. Our Canadian legal entities qualified for and applied for these CEWS cash benefits to partially offset the impacts of revenue reductions and on-going staffing costs. The $26.0 million total received was initially recorded in " " until all potential amendments to the qualification criteria, including some that were proposed with retroactive application, were finalized in fiscal 2022. As there are no further contingencies, beginning in fiscal 2023, the amounts received will be distributed to all Canadian employees. We expect to distribute approximately $9 million in the next twelve months. Accordingly, this amount was reclassified from "Other current liabilities" to "Accrued compensation" on our consolidated balance sheet at October 2, 2022. The remaining $17.0 million, which we expect to distribute beyond one year, was reclassified to " ". We do not expect there will be any related impact to our operating income, and we have no outstanding applications for further government assistance.
|
Revenue and Contract Balances |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue and Contract Balances | Revenue and Contract BalancesWe disaggregate revenue by client sector and contract type, as we believe it best depicts how the nature, timing and uncertainty of revenue and cash flows are affected by economic factors. The following tables present revenue disaggregated by client sector and contract type (in thousands):
(1) Includes revenue generated under U.S. federal government contracts performed outside the United States. (2) Includes revenue generated from non-U.S. clients, primarily in Canada, Australia and the United Kingdom. Other than the U.S. federal government, no single client accounted for more than 10% of our revenue for the three and nine months ended July 2, 2023 and July 3, 2022. Contract Assets and Contract Liabilities We invoice customers based on the contractual terms of each contract. However, the timing of revenue recognition may differ from the timing of invoice issuance. Contract assets represent revenue recognized in excess of the amounts for which we have the contractual right to bill our customers. Such amounts are recoverable from customers based upon various measures of performance, including achievement of certain milestones or completion of a contract. In addition, many of our time and materials arrangements are billed in arrears pursuant to contract terms that are standard within the industry, resulting in contract assets and/or unbilled receivables being recorded, as revenue is recognized in advance of billings. Contract retentions, included in contract assets, represent amounts withheld by clients until certain conditions are met or the project is completed, which may extend beyond one year. Contract liabilities consist of billings in excess of revenue recognized. Contract liabilities decrease as we recognize revenue from the satisfaction of the related performance obligation and increase as billings in advance of revenue recognition occur. Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. There were no substantial non-current contract assets or liabilities for the periods presented. Net contract assets/liabilities consisted of the following (in thousands):
(1) Includes $8.1 million and $23.3 million of contract retentions at July 2, 2023 and October 2, 2022, respectively. In the first nine months of fiscal 2023 and 2022, we recognized revenue of approximately $143 million and $111 million, respectively, from the amounts included in the contract liability balances at the end of fiscal 2022 and 2021, respectively. We recognize revenue primarily using the cost-to-cost measure of progress method to estimate progress towards completion. Changes in those estimates could result in the recognition of cumulative catch-up adjustments to the contract’s inception-to-date revenue, costs and profit in the period in which such changes are made. As a result, in the first nine months of fiscal 2023, we recognized net favorable revenue and operating income adjustments of $4.0 million (substantially all in the first quarter). In the third quarter and first nine months of fiscal 2022, we recognized net unfavorable revenue and operating income adjustments of $2.8 million and net favorable revenue and operating income adjustments of $2.2 million, respectively. Changes in revenue and cost estimates could also result in a projected loss, determined at the contract level, which would be recorded immediately in earnings. At July 2, 2023 and October 2, 2022, our consolidated balance sheets included liabilities for anticipated losses of $9.7 million and $10.0 million, respectively. The estimated cost to complete these related contracts at July 2, 2023 and October 2, 2022 was approximately $69 million and $80 million, respectively. Accounts Receivable, Net Net accounts receivable consisted of the following (in thousands):
Billed accounts receivable represent amounts billed to clients that have not been collected. Unbilled accounts receivable, which represent an unconditional right to payment subject only to the passage of time, include unbilled amounts typically resulting from revenue recognized but not yet billed pursuant to contract terms or billed after the period end date. Substantially all of our unbilled receivables at July 2, 2023 are expected to be billed and collected within 12 months. The allowance for doubtful accounts represents amounts that are expected to become uncollectible or unrealizable in the future. We determine an estimated allowance for uncollectible accounts based on management's consideration of trends in the actual and forecasted credit quality of our clients, including delinquency and payment history; type of client, such as a government agency or a commercial sector client; and general economic and industry conditions. Other than the U.S. federal government, no single client accounted for more than 10% of our accounts receivable at July 2, 2023 and October 2, 2022. Remaining Unsatisfied Performance Obligations (“RUPO”) Our RUPO represents a measure of the total dollar value of work to be performed on contracts awarded and in progress. We had $4.4 billion of RUPO at July 2, 2023. RUPO increases with awards from new contracts or additions on existing contracts, and decreases as work is performed and revenue is recognized on existing contracts. RUPO may also decrease when projects are canceled or modified in scope. We include a contract within our RUPO when the contract is awarded and an agreement on contract terms has been reached. We expect to satisfy our RUPO at July 2, 2023 over the following periods (in thousands):
Although RUPO reflects business that is considered to be firm, cancellations, deferrals or scope adjustments may occur. RUPO is adjusted to reflect any known project cancellations, revisions to project scope and cost, foreign currency exchange fluctuations and project deferrals, as appropriate. Our operations and maintenance contracts can generally be terminated by the clients without a substantive financial penalty. Therefore, the remaining performance obligations on such contracts are limited to the notice period required for the termination (usually 30, 60, or 90 days).
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Acquisitions |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions On September 23, 2022, we made an all cash offer to acquire all of the outstanding shares of RPS Group plc ("RPS"), a publicly traded company on the London Stock Exchange for 222 pence per share, through a scheme of arrangement, which was unanimously recommended by RPS' Board of Directors. On November 3, 2022, RPS' shareholders approved the scheme of arrangement. On January 19, 2023, the court-sanctioned scheme of arrangement to purchase RPS was approved, and we completed the acquisition on January 23, 2023. RPS employs approximately 5,000 associates in the United Kingdom, Europe, Asia Pacific and North America, delivering high-end solutions, especially in energy transformation, water and program management for government and commercial clients. Substantially all of RPS is included in our Commercial/International Services Group ("CIG") segment. The total purchase price of RPS was approximately £633 million ($784 million). In the third quarter and first nine months of fiscal 2023, we incurred acquisition and integration costs of $2.1 million and $25.8 million, respectively, primarily for professional fees, substantially all of which were paid as of the end of the third quarter of fiscal 2023. On January 23, 2023, we also settled a foreign exchange forward contract that was integral to our plan to finance the RPS acquisition. The cash gain of $109.3 million did not qualify for hedge accounting. As a result, the gain was recognized as non-operating income over the life of the contract and not included in the purchase price allocation below. However, the cash proceeds of $109.3 million economically reduced the purchase price for the shares of RPS to approximately $675 million. This forward contract is explained further in Note 15, "Derivative Financial Instruments". The table below represents the preliminary purchase price allocation for RPS based on estimates, assumptions, valuations and other analyses as of January 23, 2023, that has not been finalized in order to make a definitive allocation. The purchase consideration, excluding the aforementioned forward contract gain, is allocated to the tangible and intangible assets, and liabilities of RPS based on their estimated fair values, with any excess purchase consideration allocated to goodwill as follows (in thousands):
The following table summarizes the estimated fair values that were assigned to intangible assets at the acquisition date:
Supplemental Pro Forma Information (Unaudited) Following are the supplemental consolidated financial results of Tetra Tech and RPS on an unaudited pro forma basis, as if the RPS acquisition had been consummated as of the beginning of fiscal 2022 (in thousands):
RPS contributed revenue of $220.4 million and $389.9 million for the third quarter and first nine months of fiscal 2023, respectively, to our consolidated results. For the third quarter of fiscal 2023, RPS' net income, including interest expense, was $0.7 million, or $0.01 per share, before the related intangible amortization of $10.4 million. For the first nine months of fiscal 2023, RPS' net loss, including interest expense, was $1.0 million, or $0.02 per share, before the related intangible amortization of $18.1 million. In the second quarter of fiscal 2023, we also acquired Amyx, Inc. (“Amyx”), an enterprise technology services, cybersecurity and management consulting firm. Based in Reston, Virginia, Amyx, with over 500 employees, provides application modernization, cybersecurity, systems engineering, financial management and program management support on over 30 Federal Government programs. Amyx is included in our Government Services Group ("GSG") segment. The total fair value of the purchase price of Amyx was $120.9 million, comprised of a $100.0 million payable in a promissory note issued to the sellers (paid subsequent to closing), $8.7 million of payables related to estimated post-closing adjustments, and $12.2 million for the estimated fair value of contingent earn-out obligations, with a maximum of $25.0 million, based upon the achievement of specified operating income targets in each of the three years following the acquisition date. Amyx was not considered significant to our consolidated financial statements. As a result, no pro forma information has been provided. In fiscal 2022, we acquired The Integration Group of America ("TIGA"), Piteau Associates (“PAE”) and two other financially immaterial acquisitions. TIGA is based in Spring, Texas and is an industry leader in process automation and system integration solutions, including customized software and platform (SaaS/PaaS) applications, advanced data analytics, cloud data integration and platform virtualization. PAE is based in Vancouver, British Columbia and is a global leader in sustainable natural resource analytics including hydrologic numerical modeling and dewatering system design. PAE is part of our CIG segment, and TIGA and the other financially immaterial acquisitions are part of our GSG segment. The total fair value of the purchase price for all four acquisitions was $88.3 million. This amount is comprised of $44.0 million in initial cash payments made to the sellers, $2.5 million of receivables (net) related to estimated post-closing adjustments for the net assets acquired, $15.5 million payable in a promissory note issued to the sellers along with related transaction expenses of the sellers (which were subsequently paid in July 2022), and $31.3 million for the estimated fair value of contingent earn-out obligations, with a maximum of $47.0 million, based upon the achievement of specified operating income targets in each of the to five years following the acquisitions. These acquisitions were not considered significant, individually or in the aggregate, to our consolidated financial statements. As a result, no pro forma information has been provided. The majority of the goodwill from the fiscal 2023 acquisitions is not deductible for tax purposes, while the majority of the goodwill from the fiscal 2022 acquisitions is deductible for tax purposes. The results of fiscal 2022 and 2023 acquisitions were included in our consolidated financial statements beginning on the respective closing dates. Goodwill additions resulting from the fiscal 2023 business combinations are primarily attributable to the significant technical expertise residing in embedded workforces that are sought out by clients, synergies expected to arise after the acquisitions in the areas of enterprise technology services, data management, energy transformation, water, program management, and data analytics and the long-standing reputations of RPS and Amyx. These acquisitions further expand and complement our market-leading positions in water, renewable energy and sustainable infrastructure; enhanced by a combined suite of differentiated data analytics and digital technologies, and expansion into existing and new geographies. Our fiscal 2022 goodwill additions are primarily attributable to the significant technical expertise residing in embedded workforces that are sought out by clients, long-term management experience, the industry reputations and the synergies expected to arise after the acquisitions in the areas of data management, digitization, modeling, water and natural resources. These acquired capabilities, when combined with our existing global consulting and engineering business, result in opportunities that allow us to provide services under contracts that could not have been pursued individually by either us or the acquired companies. Intangible assets with finite lives arise from business acquisitions and are amortized based on the period over which the contractual or economic benefit of the intangible assets are expected to be realized or on a straight-line basis over the useful lives of the underlying assets, ranging from to eight years. These consist of client relations, backlog and trade names. For detailed information regarding our intangible assets, see Note 5, “Goodwill and Intangible Assets”. Most of our acquisition agreements include contingent earn-out agreements, which are generally based on the achievement of future operating income thresholds. The contingent earn-out arrangements are based on our valuations of the acquired companies and reduce the risk of overpaying for acquisitions if the projected financial results are not achieved. The fair values of any earn-out arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates. For each transaction, we estimate the fair value of contingent earn-out payments as part of the initial purchase price and record the estimated fair value of contingent consideration as a liability in “Current contingent earn-out liabilities” and “Non-current contingent earn-out liabilities” on the consolidated balance sheets. We consider several factors when determining that contingent earn-out liabilities are part of the purchase price, including the following: (1) the valuation of our acquisitions is not supported solely by the initial consideration paid, and the contingent earn-out formula is a critical and material component of the valuation approach to determining the purchase price; and (2) the former owners of acquired companies that remain as key employees receive compensation other than contingent earn-out payments at a reasonable level compared with the compensation of our other key employees. The contingent earn-out payments are not affected by employment termination. We measure our contingent earn-out liabilities at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy. We use a probability-weighted discounted income approach as a valuation technique to convert future estimated cash flows to a single present value amount. The significant unobservable inputs used in the fair value measurements are operating income projections over the earn-out period (generally to five years), and the probability outcome percentages we assign to each scenario. Significant increases or decreases to either of these inputs in isolation would result in a significantly higher or lower liability, with a higher liability capped by the contractual maximum of the contingent earn-out obligation. Ultimately, the liability will be equivalent to the amount paid, and the difference between the fair value estimate and amount paid will be recorded in earnings. The amount paid that is less than or equal to the contingent earn-out liability on the acquisition date is reflected as cash used in financing activities in our consolidated statements of cash flows. Any amount paid in excess of the contingent earn-out liability on the acquisition date is reflected as cash used in operating activities in our consolidated statements of cash flows. We review and re-assess the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could differ materially from the initial estimates. Changes in the estimated fair value of our contingent earn-out liabilities related to the time component of the present value calculation are reported in interest expense. Adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in operating income. For the first nine months of fiscal 2023, we evaluated our estimates for contingent consideration liabilities for the remaining earn-out periods for each individual acquisition, which included a review of their financial results to-date, the status of ongoing projects in their RUPO, and the inventory of prospective new contract awards. During the first nine months of fiscal 2023, we recorded adjustments to our contingent earn-out liabilities and reported a related net charge to operating income of $8.5 million (all the in first half of fiscal 2023). The net charge primarily resulted from increased valuations of the contingent consideration liabilities for our prior acquisitions of Segue Technologies, Inc., Hoare Lea, LLP and TIGA reflecting financial performance that exceeded our previous expectations. For the third quarter and first nine months of fiscal 2022, we had no material adjustments to our contingent earn-out liabilities in operating income. At July 2, 2023, there was a total potential maximum of $120.3 million of outstanding contingent consideration related to acquisitions. Of this amount, $76.6 million was estimated as the fair value and accrued on our consolidated balance sheet at July 2, 2023.
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets The following table summarizes the changes in the carrying value of goodwill by reportable segment (in thousands):
The foreign currency translation adjustments resulted from our foreign subsidiaries with functional currencies that are different than our reporting currency. These goodwill amounts are presented net of reductions from historical impairment adjustments. The gross amounts for GSG were $646.4 million and $536.8 million at July 2, 2023 and October 2, 2022, respectively, excluding accumulated impairment of $17.7 million at each date. The gross amounts of goodwill for CIG were $1,379.7 million and $712.8 million at July 2, 2023 and October 2, 2022, respectively, excluding accumulated impairment of $121.5 million at each date. We perform our annual goodwill impairment review at the beginning of our fiscal fourth quarter. Our most recent annual review at July 4, 2022 (i.e. the first day of our fourth quarter in fiscal 2022) indicated that we had no impairment of goodwill, and all of our reporting units had estimated fair values that were in excess of their carrying values, including goodwill. At July 4, 2022, and after the reallocation of goodwill on the first day of fiscal 2022, we had no reporting units that had estimated fair values that exceeded their carrying values by less than 165%. We also regularly evaluate whether events and circumstances have occurred that may indicate a potential change in the recoverability of goodwill. We perform interim goodwill impairment reviews between our annual reviews if certain events and circumstances have occurred, such as a deterioration in general economic conditions; an increase in the competitive environment; a change in management, key personnel, strategy or customers; negative or declining cash flows; or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods. Although we believe that our estimates of fair value for these reporting units are reasonable, if financial performance for these reporting units falls significantly below our expectations or market prices for similar business decline, the goodwill for these reporting units could become impaired. The following table presents the gross amount and accumulated amortization of our acquired identifiable intangible assets with finite useful lives included in “Intangible assets, net” on the consolidated balance sheets ($ in thousands):
Amortization expense for the three and nine months ended July 2, 2023 was $14.1 million and $29.6 million, compared to $3.7 million and $9.6 million for the prior-year periods. Estimated amortization expense for the remainder of fiscal 2023 and succeeding years is as follows (in thousands):
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Property and Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment | Property and EquipmentProperty and equipment consisted of the following (in thousands):
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Stock Repurchase and Dividends |
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Stock Repurchase And Dividends [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Repurchase and Dividends | Stock Repurchase and Dividends On October 5, 2021, our Board of Directors authorized a new stock repurchase program under which we could repurchase up to $400 million of our common stock. We did not repurchase any shares of our common stock in the first nine months of fiscal 2023. At July 2, 2023, we had a remaining balance of $347.8 million under our stock repurchase program. The following table presents dividends declared and paid in the first nine months of fiscal 2023 and 2022:
Subsequent Event. On August 7, 2023, our Board of Directors declared a quarterly cash dividend of $0.26 per share payable on September 6, 2023 to stockholders of record as of the close of business on August 23, 2023.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases Our operating leases are primarily for corporate and project office spaces. To a much lesser extent, we have operating leases for vehicles and equipment. Our operating leases have remaining lease terms of one month to ten years, some of which may include options to extend the leases for up to five years. We determine if an arrangement is a lease at inception. Operating leases are included in "Right-of-use assets, operating leases", "Short-term lease liabilities, operating leases" and "Long-term lease liabilities, operating leases" in the consolidated balance sheets. Our finance leases are immaterial. Right-of-use ("ROU") assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, incremental borrowing rates are used based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset at the commencement date also includes any lease payments made to the lessor at or before the commencement date and initial direct costs less lease incentives received. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. The components of lease costs are as follows (in thousands):
Supplemental cash flow information related to leases is as follows (in thousands):
Supplemental balance sheet and other information related to leases are as follows (in thousands):
At July 2, 2023, we have no material operating leases that have not yet commenced. A maturity analysis of the future undiscounted cash flows associated with our lease liabilities at July 2, 2023 is as follows (in thousands):
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Stockholders' Equity and Stock Compensation Plans |
9 Months Ended |
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Jul. 02, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity and Stock Compensation Plans | Stockholders’ Equity and Stock Compensation PlansWe recognize the fair value of our stock-based awards as compensation expense on a straight-line basis over the requisite service period in which the award vests. Stock-based compensation expense for the three and nine months ended July 2, 2023 was $7.0 million and $21.6 million, respectively, compared to $6.7 million and $19.1 million for the same periods last year. Most of these amounts were included in selling, general and administrative expenses on our consolidated statements of income. In the first nine months of fiscal 2023, we awarded 56,214 performance share units (“PSUs”) to our non-employee directors and executive officers at a fair value of $195.50 per share on the award date. All PSUs are performance-based and vest, if at all, after the conclusion of the three-year performance period. The number of PSUs that ultimately vest is based 50% on the growth in our diluted earnings per share and 50% on our relative total shareholder return over the vesting period. Additionally, we awarded 103,016 restricted stock units (“RSUs”) to our non-employee directors, executive officers and employees at a fair value of $156.10 per share on the award date. All executive officer and employee RSUs have time-based vesting over a four-year period, and the non-employee director RSUs vest after one year. |
Earnings per Share ("EPS") |
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Earnings per Share ("EPS") | Earnings per Share (“EPS”)Basic EPS is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding, less unvested restricted stock for the period. Diluted EPS is computed by dividing net income by the weighted-average number of common shares outstanding and dilutive potential common shares for the period. Potential common shares include the weighted-average dilutive effects of outstanding stock options and unvested restricted stock using the treasury stock method. The following table presents the number of weighted-average shares used to compute basic and diluted EPS (in thousands, except per share data):
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Income Taxes |
9 Months Ended |
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Jul. 02, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rates for the first nine months of fiscal 2023 and 2022 were 28.3% and 23.9%, respectively. Income tax expense was reduced by $2.2 million and $4.9 million of excess tax benefits on share-based payments in the first nine months of fiscal 2023 and 2022, respectively. In addition, income tax expense in the first nine months of fiscal 2023 included non-operating income tax expenses of $7.2 million ($6.9 million in the second quarter) to recognize the tax liability for foreign earnings, primarily in the U.K. and Australia, that are no longer indefinitely reinvested and to increase the liability for an uncertain tax position. Excluding the impact of the excess tax benefits on share-based payments and the non-operating tax expenses in the second and third quarter of fiscal 2023, our effective tax rates in the first nine months of fiscal 2023 and 2022 were 26.7% and 25.9%, respectively. At July 2, 2023 and October 2, 2022, the liability for income taxes associated with uncertain tax positions was $48.8 million and $10.6 million, respectively. These liabilities could materially decrease within the next 12 months as some related examinations have commenced. These liabilities represent our current estimates of the additional tax liabilities that we may be assessed when the related audits are concluded. If these audits are resolved in a manner more unfavorable than our current expectations, our additional tax liabilities could be materially higher than the amounts currently recorded resulting in additional tax expense.
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Reportable Segments |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reportable Segments | Reportable Segments We manage our operations under two reportable segments. Our GSG reportable segment primarily includes activities with U.S. government clients (federal, state and local) and all activities with development agencies worldwide. Our CIG reportable segment primarily includes activities with U.S. commercial clients and international clients other than development agencies. GSG provides high-end consulting and engineering services primarily to U.S. government clients (federal, state and local) and development agencies worldwide. GSG supports U.S. government civilian and defense agencies with services in water, environment, sustainable infrastructure, information technology and disaster management. GSG also provides engineering design services for U.S. based federal and municipal clients, especially in water infrastructure, flood protection and solid waste. GSG also leads our support for development agencies worldwide, especially in the United States, United Kingdom and Australia. CIG primarily provides high-end consulting and engineering services to U.S. commercial clients, and international clients inclusive of the commercial and government sectors. CIG supports commercial clients across the Fortune 500, renewable energy, industrial, high performance buildings and aerospace markets. CIG also provides sustainable infrastructure and related environmental, engineering and project management services to commercial and local government clients across Canada, in Asia Pacific (primarily Australia and New Zealand), the United Kingdom, as well as Brazil and Chile. Management evaluates the performance of these reportable segments based upon their respective segment operating income before the effect of amortization expense related to acquisitions, and other unallocated corporate expenses. We account for inter-segment revenues and transfers as if they were to third parties; that is, by applying a negotiated fee onto the costs of the services performed. All significant intercompany balances and transactions are eliminated in consolidation. In the third quarter and first nine months of fiscal 2023, our Corporate segment operating losses included $2.1 million and $25.8 million of acquisition and integration expenses, respectively, as described in Note 4, “Acquisitions”. The following tables summarize financial information regarding our reportable segments (in thousands):
(1) Includes amortization of intangibles, acquisition and integration expenses, as well as other costs and other income not allocable to our reportable segments.
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Fair Value Measurements |
9 Months Ended |
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Jul. 02, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value MeasurementsThe fair value of long-term debt was determined using the present value of future cash flows based on the borrowing rates currently available for debt with similar terms and maturities (Level 2 measurement, as described in “Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the fiscal year ended October 2, 2022). The carrying value of our long-term debt approximated fair value at July 2, 2023 and October 2, 2022. At July 2, 2023, we had borrowings of $919.4 million outstanding under our Amended Credit Agreement, which were primarily used to fund business acquisitions, working capital needs, and capital expenditures. |
Credit Facility |
9 Months Ended |
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Jul. 02, 2023 | |
Debt Disclosure [Abstract] | |
Credit Facility | Credit FacilityOn October 26, 2022, we entered into a Third Amended and Restated Credit Agreement that provides for an additional $500 million senior secured term loan facility (the "New Term Loan Facility") increasing our total borrowing capacity to $1.55 billion. On January 23, 2023, we drew the entire amount of the New Term Loan Facility to partially finance the RPS acquisition. The remaining purchase price was financed with existing cash on hand and borrowings under the existing Amended Revolving Credit Facility. The New Term Loan Facility is not subject to any amortization payments of principal and matures on the third anniversary of the RPS acquisition closing date. On February 18, 2022, we entered into Amendment No. 2 to Second Amended and Restated Credit Agreement (“Amended Credit Agreement”) with a total borrowing capacity of $1.05 billion that will mature in February 2027. The Amended Credit Agreement is a $750 million senior secured, five-year facility that provides for a $250 million term loan facility (the “Amended Term Loan Facility”) and a $500 million revolving credit facility (the “Amended Revolving Credit Facility”). In addition, the Amended Credit Agreement includes a $300 million accordion feature that allows us to increase the Amended Credit Agreement to $1.05 billion subject to lender approval. The Amended Credit Agreement provides for, among other things, (i) refinance indebtedness under our Credit Agreement dated at July 30, 2018; (ii) finance open market repurchases of common stock, acquisitions, and cash dividends and distributions; and (iii) utilize the proceeds for working capital, capital expenditures and other general corporate purposes. The Amended Credit Agreement provides for a reduction in the interest grid for meeting certain sustainability targets related to the (i) reduction of greenhouse gas emissions through the Company’s projects and operational sustainability initiatives and (ii) improvement of peoples’ lives as a result of the Company’s projects that provide environmental, social and governance benefits. The Amended Revolving Credit Facility includes a $100 million sublimit for the issuance of standby letters of credit, a $20 million sublimit for swingline loans and a $300 million sublimit for multicurrency borrowings and letters of credit. The entire Amended Term Loan Facility was drawn on February 18, 2022. The Amended Term Loan Facility is subject to quarterly amortization of principal at 5% annually commencing June 30, 2022. We may borrow on the Amended Revolving Credit Facility, at our option, at either (a) a benchmark rate plus a margin that ranges from 1.000% to 1.875% per annum, or (b) a base rate for loans in U.S. dollars (the highest of the U.S. federal funds rate plus 0.50% per annum, the bank’s prime rate or the Secured Overnight Financing Rate ("SOFR") rate plus 1.00%, plus a margin that ranges from 0% to 0.875% per annum. In each case, the applicable margin is based on our Consolidated Leverage Ratio, calculated quarterly. The Amended Term Loan Facility is subject to the same interest rate provisions. The Amended Credit Agreement expires on February 18, 2027, or earlier at our discretion upon payment in full of loans and other obligations. The Amended Credit Agreement contains certain affirmative and restrictive covenants, and customary events of default. The financial covenants provide for a maximum Consolidated Leverage Ratio of 3.25 to 1.00 (total funded debt/EBITDA, as defined in the Amended Credit Agreement) and a minimum Consolidated Interest Coverage Ratio of 3.00 to 1.00 (EBITDA/Consolidated Interest Charges, as defined in the Amended Credit Agreement). Our obligations under the Amended Credit Agreement are guaranteed by certain of our domestic subsidiaries and are secured by first priority liens on (i) the equity interests of certain of our subsidiaries, including those subsidiaries that are guarantors or borrowers under the Amended Credit Agreement, and (ii) the accounts receivable, general intangibles and intercompany loans and those of our subsidiaries that are guarantors or borrowers.
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Derivative Financial Instruments |
9 Months Ended |
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Jul. 02, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments We use certain interest rate derivative contracts to hedge interest rate exposures on our variable rate debt. We also enter into foreign currency derivative contracts with financial institutions to reduce the risk that cash flows and earnings could adversely be affected by foreign currency exchange rate fluctuations. Our hedging program is not designated for trading or speculative purposes. We recognize derivative instruments as either assets or liabilities on the accompanying consolidated balance sheets at fair value. We record changes in the fair value (i.e., gains or losses) of the derivatives that have been designated as cash flow hedges in our consolidated balance sheets as accumulated other comprehensive income, and in our consolidated statements of income for those derivatives designated as fair value hedges. Our derivative contracts are categorized within Level 2 of the fair value hierarchy. In the fourth quarter of fiscal 2022, we entered into a forward contract to acquire GBP 714.0 million at a rate of 1.0852 for a total of USD 774.8 million that was integrated with our plan to acquire RPS. This contract matured on December 30, 2022. On December 28, 2022, we entered into an extension of the integrated forward contract to acquire GBP 714.0 million at a rate of 1.086 for a total of USD 775.4 million, extending the maturity date to January 23, 2023, the closing date of the RPS acquisition. Although an effective economic hedge of our foreign exchange risk related to this transaction, the forward contract did not qualify for hedge accounting. As a result, the forward contract was marked-to-market with changes in fair value recognized in earnings each period. The intrinsic value of the forward contract was immaterial at inception as the GBP/USD spot and forward exchange rates were essentially the same. The fair value of the forward contract at October 2, 2022 was $19.9 million, and an unrealized gain of the same amount was recognized in our fourth quarter of fiscal 2022 results. On January 23, 2023, the forward contract was settled at the fair value of $109.3 million. We recognized additional gains of $68.0 million and $21.4 million in the first and second quarters of fiscal 2023, respectively. All gains related to this transaction were reported in “Other non-operating income" on our consolidated income statements for the respective periods. In fiscal 2018, we entered into five interest rate swap agreements that we designated as cash flow hedges to fix the interest rate on the borrowings under our term loan facility. At July 2, 2023, the notional principal of our outstanding interest swap agreements was $190.6 million ($38.1 million each.) The interest rate swaps have a fixed interest rate of 2.79% and expire in July 2023 for all five agreements. At July 2, 2023 and October 2, 2022, the fair values of the effective portion of our interest rate swap agreements designated as cash flow hedges before tax effect were unrealized gains of $0.4 million and $2.4 million, respectively, which were reported in "Other non-current assets" on our consolidated balance sheets. Additionally, the related loss of $1.0 million and $2.0 million for the three and nine months ended July 2, 2023, compared to the related gain of $2.4 million and $10.0 million for the prior-year periods, were recognized and reported on our consolidated statements of comprehensive income. We expect to reclassify a credit of $0.4 million from accumulated other comprehensive loss to interest expense during the fourth quarter of fiscal 2023, up to the expiration date in July 2023. There were no other derivative instruments designated as hedging instruments for the first nine months of fiscal 2023.
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Reclassifications Out of Accumulated Other Comprehensive Income |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassifications Out of Accumulated Other Comprehensive Income | Reclassifications Out of Accumulated Other Comprehensive IncomeThe accumulated balances and activities for the three and nine months ended July 2, 2023 and July 3, 2022 related to reclassifications out of accumulated other comprehensive income are summarized as follows (in thousands):
(1) This accumulated other comprehensive component is reclassified to “Interest expense” in our consolidated statements of income. See Note 15 “Derivative Financial Instruments”, for more information.
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Commitments and Contingencies |
9 Months Ended |
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Jul. 02, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We are subject to certain claims and lawsuits typically filed against the consulting and engineering profession, alleging primarily professional errors or omissions. We carry professional liability insurance, subject to certain deductibles and policy limits, against such claims. However, in some actions, parties are seeking damages that exceed our insurance coverage or for which we are not insured. While management does not believe that the resolution of these claims will have a material adverse effect, individually or in aggregate, on our financial position, results of operations or cash flows, management acknowledges the uncertainty surrounding the ultimate resolution of these matters. On July 15, 2019, following an initial January 14, 2019 filing, the Civil Division of the United States Attorney's Office filed an amended complaint in intervention in three qui tam actions filed against our subsidiary, Tetra Tech EC, Inc. ("TtEC"), in the U.S. District Court for the Northern District of California. The complaint alleges False Claims Act violations and breach of contract related to TtEC's contracts to perform environmental remediation services at the former Hunters Point Naval Shipyard in San Francisco, California. TtEC disputes the claims and will defend this matter vigorously. We are currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any. |
Related Party Transactions |
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Jul. 02, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | Related Party Transactions We often provide services to unconsolidated joint ventures. Our revenue related to services we provided to unconsolidated joint ventures for the third quarter and first nine months of fiscal 2023 was approximately $22 million and $65 million, respectively, compared to $24 million and $74 million for the same periods last year. Our related reimbursable costs for the third quarter and nine months of fiscal 2023 were approximately $21 million and $61 million, respectively. Our related reimbursable costs for the third quarter and nine months of fiscal 2022 were approximately $23 million and $70 million, respectively. Our consolidated balance sheets also included the following amounts related to these services (in thousands):
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Insider Trading Arrangements |
3 Months Ended |
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Jul. 02, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Recent Accounting Pronouncements (Policies) |
9 Months Ended |
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Jul. 02, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | In November 2021, the Financial Accounting Standards Board issued ASU 2021-10, Government Assistance (Topic 832), which requires annual disclosures for transactions with a government authority that are accounted for by applying a grant or contribution model by analogy, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity's financial statements. ASU 2021-10 was effective for us beginning in the first quarter of fiscal 2023. In fiscal 2020, the Canadian federal government implemented the Canadian Emergency Wage Subsidy ("CEWS") program in response to the negative impact of the coronavirus disease 2019 pandemic on businesses operating in Canada. Our Canadian legal entities qualified for and applied for these CEWS cash benefits to partially offset the impacts of revenue reductions and on-going staffing costs. The $26.0 million total received was initially recorded in " " until all potential amendments to the qualification criteria, including some that were proposed with retroactive application, were finalized in fiscal 2022. As there are no further contingencies, beginning in fiscal 2023, the amounts received will be distributed to all Canadian employees. We expect to distribute approximately $9 million in the next twelve months. Accordingly, this amount was reclassified from "Other current liabilities" to "Accrued compensation" on our consolidated balance sheet at October 2, 2022. The remaining $17.0 million, which we expect to distribute beyond one year, was reclassified to " ". We do not expect there will be any related impact to our operating income, and we have no outstanding applications for further government assistance.
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Revenue and Contract Assets and Contract Liabilities | We invoice customers based on the contractual terms of each contract. However, the timing of revenue recognition may differ from the timing of invoice issuance. Contract assets represent revenue recognized in excess of the amounts for which we have the contractual right to bill our customers. Such amounts are recoverable from customers based upon various measures of performance, including achievement of certain milestones or completion of a contract. In addition, many of our time and materials arrangements are billed in arrears pursuant to contract terms that are standard within the industry, resulting in contract assets and/or unbilled receivables being recorded, as revenue is recognized in advance of billings. Contract retentions, included in contract assets, represent amounts withheld by clients until certain conditions are met or the project is completed, which may extend beyond one year. Contract liabilities consist of billings in excess of revenue recognized. Contract liabilities decrease as we recognize revenue from the satisfaction of the related performance obligation and increase as billings in advance of revenue recognition occur. Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. There were no substantial non-current contract assets or liabilities for the periods presented.We recognize revenue primarily using the cost-to-cost measure of progress method to estimate progress towards completion. Changes in those estimates could result in the recognition of cumulative catch-up adjustments to the contract’s inception-to-date revenue, costs and profit in the period in which such changes are made.Our RUPO represents a measure of the total dollar value of work to be performed on contracts awarded and in progress. We had $4.4 billion of RUPO at July 2, 2023. RUPO increases with awards from new contracts or additions on existing contracts, and decreases as work is performed and revenue is recognized on existing contracts. RUPO may also decrease when projects are canceled or modified in scope. We include a contract within our RUPO when the contract is awarded and an agreement on contract terms has been reached.Although RUPO reflects business that is considered to be firm, cancellations, deferrals or scope adjustments may occur. RUPO is adjusted to reflect any known project cancellations, revisions to project scope and cost, foreign currency exchange fluctuations and project deferrals, as appropriate. Our operations and maintenance contracts can generally be terminated by the clients without a substantive financial penalty. Therefore, the remaining performance obligations on such contracts are limited to the notice period required for the termination (usually 30, 60, or 90 days).
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Accounts Receivable, Net | Billed accounts receivable represent amounts billed to clients that have not been collected. Unbilled accounts receivable, which represent an unconditional right to payment subject only to the passage of time, include unbilled amounts typically resulting from revenue recognized but not yet billed pursuant to contract terms or billed after the period end date. Substantially all of our unbilled receivables at July 2, 2023 are expected to be billed and collected within 12 months. The allowance for doubtful accounts represents amounts that are expected to become uncollectible or unrealizable in the future. We determine an estimated allowance for uncollectible accounts based on management's consideration of trends in the actual and forecasted credit quality of our clients, including delinquency and payment history; type of client, such as a government agency or a commercial sector client; and general economic and industry conditions. |
Revenue and Contract Balances (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of revenue disaggregated by client sector and contract type | The following tables present revenue disaggregated by client sector and contract type (in thousands):
(1) Includes revenue generated under U.S. federal government contracts performed outside the United States. (2) Includes revenue generated from non-U.S. clients, primarily in Canada, Australia and the United Kingdom.
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Summary of net contract assets/liabilities | Net contract assets/liabilities consisted of the following (in thousands):
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Components of net accounts receivable | Net accounts receivable consisted of the following (in thousands):
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Remaining performance obligation, expected timing | We expect to satisfy our RUPO at July 2, 2023 over the following periods (in thousands):
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Acquisitions (Tables) |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The table below represents the preliminary purchase price allocation for RPS based on estimates, assumptions, valuations and other analyses as of January 23, 2023, that has not been finalized in order to make a definitive allocation. The purchase consideration, excluding the aforementioned forward contract gain, is allocated to the tangible and intangible assets, and liabilities of RPS based on their estimated fair values, with any excess purchase consideration allocated to goodwill as follows (in thousands):
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Schedule of Acquired Finite-Lived Intangible Assets by Major Class | The following table summarizes the estimated fair values that were assigned to intangible assets at the acquisition date:
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Business Acquisition, Pro Forma Information | Following are the supplemental consolidated financial results of Tetra Tech and RPS on an unaudited pro forma basis, as if the RPS acquisition had been consummated as of the beginning of fiscal 2022 (in thousands):
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Goodwill and Intangible Assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of changes in the carrying value of goodwill | The following table summarizes the changes in the carrying value of goodwill by reportable segment (in thousands):
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Summary of acquired identifiable intangible assets with finite useful lives | The following table presents the gross amount and accumulated amortization of our acquired identifiable intangible assets with finite useful lives included in “Intangible assets, net” on the consolidated balance sheets ($ in thousands):
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Estimated amortization expense for the remainder of the fiscal year and the succeeding years | Estimated amortization expense for the remainder of fiscal 2023 and succeeding years is as follows (in thousands):
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Property and Equipment (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of property and equipment | Property and equipment consisted of the following (in thousands):
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Stock Repurchase and Dividends (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Repurchase And Dividends [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of dividends declared and paid | The following table presents dividends declared and paid in the first nine months of fiscal 2023 and 2022:
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Leases (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of components of lease cost | The components of lease costs are as follows (in thousands):
Supplemental cash flow information related to leases is as follows (in thousands):
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Summary of supplemental balance sheet and other information | Supplemental balance sheet and other information related to leases are as follows (in thousands):
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Summary of maturity of future undiscounted cash flows associated with operating lease liabilities | A maturity analysis of the future undiscounted cash flows associated with our lease liabilities at July 2, 2023 is as follows (in thousands):
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Earnings per Share ("EPS") (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of number of weighted-average shares used to compute basic and diluted EPS | The following table presents the number of weighted-average shares used to compute basic and diluted EPS (in thousands, except per share data):
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Reportable Segments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized financial information of reportable segments | The following tables summarize financial information regarding our reportable segments (in thousands):
(1) Includes amortization of intangibles, acquisition and integration expenses, as well as other costs and other income not allocable to our reportable segments.
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Reclassifications Out of Accumulated Other Comprehensive Income (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 02, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of reclassifications out of accumulated other comprehensive income | The accumulated balances and activities for the three and nine months ended July 2, 2023 and July 3, 2022 related to reclassifications out of accumulated other comprehensive income are summarized as follows (in thousands):
(1) This accumulated other comprehensive component is reclassified to “Interest expense” in our consolidated statements of income. See Note 15 “Derivative Financial Instruments”, for more information.
|
Related Party Transactions (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 02, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of related party transactions | Our consolidated balance sheets also included the following amounts related to these services (in thousands):
|
Recent Accounting Pronouncements (Details) $ in Millions |
Oct. 02, 2022
USD ($)
|
---|---|
Accounting Changes and Error Corrections [Abstract] | |
Government assistance, amount, cumulative, current | $ 26.0 |
Government Assistance, Current, Statement of Financial Position [Extensible Enumeration] | Other current liabilities |
Government assistance, amount expected to be recognized in next twelve months | $ 9.0 |
Government assistance, amount, cumulative, noncurrent | $ 17.0 |
Government Assistance, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other non-current liabilities |
Revenue and Contract Balances - Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2023 |
Jul. 03, 2022 |
Jul. 02, 2023 |
Jul. 03, 2022 |
|
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 1,208,947 | $ 890,231 | $ 3,261,938 | $ 2,601,485 |
Fixed-price | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 452,605 | 335,014 | 1,194,266 | 982,565 |
Time-and-materials | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 596,904 | 417,898 | 1,550,970 | 1,221,598 |
Cost-plus | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 159,438 | 137,319 | 516,702 | 397,322 |
U.S. federal government | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 338,022 | 261,434 | 996,471 | 781,503 |
U.S. state and local government | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 151,462 | 150,731 | 452,447 | 465,770 |
U.S. commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 225,907 | 188,255 | 633,401 | 536,901 |
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 493,556 | $ 289,811 | $ 1,179,619 | $ 817,311 |
Revenue and Contract Balances - Summary of Contract Liabilities/Assets (Details) - USD ($) $ in Thousands |
Jul. 02, 2023 |
Oct. 02, 2022 |
---|---|---|
Disaggregation of Revenue [Line Items] | ||
Contract assets | $ 125,360 | $ 92,405 |
Contract liabilities | 351,048 | 241,340 |
Net contract liabilities | (225,688) | (148,935) |
Contract Retentions | ||
Disaggregation of Revenue [Line Items] | ||
Contract assets | $ 8,100 | $ 23,300 |
Revenue and Contract Balances - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 03, 2022 |
Jul. 02, 2023 |
Jul. 03, 2022 |
Oct. 02, 2022 |
|
Revenue from Contract with Customer [Abstract] | ||||
Contract liability revenue recognized during the period | $ 143,000 | $ 111,000 | ||
Net favorable (unfavorable) revenue and operating income adjustments | $ (2,800) | 4,000 | $ 2,200 | |
Liabilities for anticipated losses | 9,700 | $ 10,000 | ||
Estimated cost to complete the related contracts | $ 69,000 | $ 80,000 | ||
Period for billing and collecting unbilled receivables | 12 months | |||
Remaining unsatisfied performance obligation | $ 4,353,338 | |||
Remaining performance obligation, termination notice period one | 30 days | |||
Remaining performance obligation, termination notice period two | 60 days | |||
Remaining performance obligation, termination notice period three | 90 days |
Revenue and Contract Balances - Accounts Receivable, Net (Details) - USD ($) $ in Thousands |
Jul. 02, 2023 |
Oct. 02, 2022 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Billed | $ 677,915 | $ 491,700 |
Unbilled | 331,381 | 267,161 |
Total accounts receivable | 1,009,296 | 758,861 |
Allowance for doubtful accounts | (7,209) | (3,749) |
Total accounts receivable, net | $ 1,002,087 | $ 755,112 |
Acquisitions - Supplemental Pro Forma Information (Details) - RPS Group PLC - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2023 |
Jul. 03, 2022 |
Jul. 02, 2023 |
Jul. 03, 2022 |
|
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Revenue | $ 1,208,947 | $ 1,085,799 | $ 3,519,792 | $ 3,160,341 |
Net Income including noncontrolling interests | $ 61,770 | $ 45,456 | $ 104,564 | $ 101,519 |
Goodwill and Intangible Assets - Goodwill (Details) $ in Thousands |
9 Months Ended |
---|---|
Jul. 02, 2023
USD ($)
| |
Goodwill | |
Balance at beginning of the period | $ 1,110,412 |
Acquisition activity | 723,932 |
Translation adjustments | 52,510 |
Balance at end of the period | 1,886,854 |
GSG | |
Goodwill | |
Balance at beginning of the period | 519,102 |
Acquisition activity | 104,100 |
Translation adjustments | 5,459 |
Balance at end of the period | 628,661 |
CIG | |
Goodwill | |
Balance at beginning of the period | 591,310 |
Acquisition activity | 619,832 |
Translation adjustments | 47,051 |
Balance at end of the period | $ 1,258,193 |
Goodwill and Intangible Assets - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Jul. 04, 2022 |
Jul. 02, 2023 |
Jul. 03, 2022 |
Jul. 02, 2023 |
Jul. 03, 2022 |
Oct. 02, 2022 |
|
Goodwill [Line Items] | ||||||
Impairment of goodwill | $ 0 | |||||
Percentage of excess of fair value over carrying value (less than) | 165.00% | |||||
Amortization expense | $ 14,100,000 | $ 3,700,000 | $ 29,600,000 | $ 9,600,000 | ||
GSG | ||||||
Goodwill [Line Items] | ||||||
Gross amounts of goodwill | 646,400,000 | 646,400,000 | $ 536,800,000 | |||
Accumulated impairment | 17,700,000 | 17,700,000 | 17,700,000 | |||
CIG | ||||||
Goodwill [Line Items] | ||||||
Gross amounts of goodwill | 1,379,700,000 | 1,379,700,000 | 712,800,000 | |||
Accumulated impairment | $ 121,500,000 | $ 121,500,000 | $ 121,500,000 |
Goodwill and Intangible Assets - Estimated Amortization Expense (Details) - USD ($) $ in Thousands |
Jul. 02, 2023 |
Oct. 02, 2022 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 (remaining) | $ 13,541 | |
2024 | 46,669 | |
2025 | 34,702 | |
2026 | 29,585 | |
2027 | 24,577 | |
Beyond | 75,958 | |
Net Amount | $ 225,032 | $ 29,163 |
Property and Equipment (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Jul. 02, 2023 |
Jul. 03, 2022 |
Jul. 02, 2023 |
Jul. 03, 2022 |
Oct. 02, 2022 |
|
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 189,568 | $ 189,568 | $ 129,138 | ||
Accumulated depreciation | (108,247) | (108,247) | (96,822) | ||
Property and equipment, net | 81,321 | 81,321 | 32,316 | ||
Depreciation expense related to property and equipment | 5,600 | $ 3,200 | 13,700 | $ 9,900 | |
Equipment, furniture and fixtures | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 141,619 | 141,619 | 96,710 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 47,949 | $ 47,949 | $ 32,428 |
Stock Repurchase and Dividends - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 9 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 06, 2023 |
Aug. 07, 2023 |
Jun. 06, 2023 |
Feb. 24, 2023 |
Dec. 09, 2022 |
May 27, 2022 |
Feb. 25, 2022 |
Dec. 20, 2021 |
Jul. 02, 2023 |
Jul. 03, 2022 |
Jul. 02, 2023 |
Jul. 03, 2022 |
Oct. 05, 2021 |
|
Subsequent Event [Line Items] | |||||||||||||
Remaining authorized amount under share repurchase program | $ 347.8 | $ 347.8 | |||||||||||
Dividend paid per share (in dollars per share) | $ 0.26 | $ 0.23 | $ 0.23 | $ 0.23 | $ 0.20 | $ 0.20 | $ 0.26 | $ 0.23 | $ 0.72 | $ 0.63 | |||
Subsequent Event | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Quarterly cash dividend declared (in dollars per share) | $ 0.26 | ||||||||||||
Forecast | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Dividend paid per share (in dollars per share) | $ 0.26 | ||||||||||||
October 2021 Stock Repurchase Program | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Maximum repurchase amount under stock repurchase program | $ 400.0 |
Stock Repurchase and Dividends - Schedule of Dividends Declared and Paid (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 06, 2023 |
Feb. 24, 2023 |
Dec. 09, 2022 |
May 27, 2022 |
Feb. 25, 2022 |
Dec. 20, 2021 |
Jul. 02, 2023 |
Jul. 03, 2022 |
Jul. 02, 2023 |
Jul. 03, 2022 |
|
Stock Repurchase And Dividends [Abstract] | ||||||||||
Dividend paid per share (in dollars per share) | $ 0.26 | $ 0.23 | $ 0.23 | $ 0.23 | $ 0.20 | $ 0.20 | $ 0.26 | $ 0.23 | $ 0.72 | $ 0.63 |
Dividend Paid | $ 13,840 | $ 12,242 | $ 12,186 | $ 12,311 | $ 10,769 | $ 10,793 | $ 38,268 | $ 33,873 |
Leases - Narrative (Details) |
Jul. 02, 2023 |
---|---|
Lessee, Lease, Description [Line Items] | |
Renewal term (up to) | 5 years |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 month |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 10 years |
Leases - Components of Lease Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2023 |
Jul. 03, 2022 |
Jul. 02, 2023 |
Jul. 03, 2022 |
|
Leases [Abstract] | ||||
Operating lease cost | $ 24,775 | $ 21,004 | $ 70,155 | $ 64,015 |
Sublease (income) cost | (46) | 140 | (125) | (116) |
Total lease cost | $ 24,729 | $ 21,144 | $ 70,030 | $ 63,899 |
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Jul. 02, 2023 |
Jul. 03, 2022 |
|
Leases [Abstract] | ||
Operating cash flows for operating leases | $ 57,871 | $ 50,965 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 72,294 | $ 32,175 |
Leases - Supplemental Balance Sheet and Other Information (Details) - USD ($) $ in Thousands |
Jul. 02, 2023 |
Oct. 02, 2022 |
---|---|---|
Operating leases: | ||
Right-of-use assets | $ 207,218 | $ 182,319 |
Lease liabilities: | ||
Current | 68,555 | 57,865 |
Non-current | 163,919 | 146,285 |
Total operating lease liabilities | $ 232,474 | $ 204,150 |
Weighted-average remaining lease term: | ||
Operating leases | 5 years | 5 years |
Weighted-average discount rate: | ||
Operating leases | 3.00% | 2.20% |
Leases - Maturity Analysis of the Future Undiscounted Cash Flows of Operating and Finance Lease Liabilities (Details) - USD ($) $ in Thousands |
Jul. 02, 2023 |
Oct. 02, 2022 |
---|---|---|
Operating Leases | ||
2023 (remaining) | $ 20,727 | |
2024 | 69,302 | |
2025 | 53,634 | |
2026 | 36,291 | |
2027 | 25,689 | |
Beyond | 45,624 | |
Total lease payments | 251,267 | |
Less: imputed interest | (18,793) | |
Total present value of lease liabilities | $ 232,474 | $ 204,150 |
Earnings per Share ("EPS") (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2023 |
Jul. 03, 2022 |
Jul. 02, 2023 |
Jul. 03, 2022 |
|
Earnings Per Share [Abstract] | ||||
Net income attributable to Tetra Tech, basic | $ 60,235 | $ 58,650 | $ 219,771 | $ 180,179 |
Net income attributable to Tetra Tech, diluted | $ 60,235 | $ 58,650 | $ 219,771 | $ 180,179 |
Weighted-average common shares outstanding – basic (in shares) | 53,231 | 53,507 | 53,188 | 53,777 |
Effect of dilutive stock options and unvested restricted stock (in shares) | 422 | 499 | 427 | 551 |
Weighted-average common stock outstanding – diluted (in shares) | 53,653 | 54,006 | 53,615 | 54,328 |
Earnings per share attributable to Tetra Tech: | ||||
Basic (in dollars per share) | $ 1.13 | $ 1.10 | $ 4.13 | $ 3.35 |
Diluted (in dollars per share) | $ 1.12 | $ 1.09 | $ 4.10 | $ 3.32 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Apr. 02, 2023 |
Jul. 02, 2023 |
Jul. 03, 2022 |
Oct. 02, 2022 |
|
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 28.30% | 23.90% | ||
Reduction in income tax expense due to excess tax benefits on share-based payments | $ 2.2 | $ 4.9 | ||
Non-recurring income tax expense | $ 6.9 | $ 7.2 | ||
Effective tax rate, excluding excess tax benefits on share-based payments | 26.70% | 25.90% | ||
Liability for uncertain tax positions | $ 48.8 | $ 10.6 |
Reportable Segments - Narrative (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jul. 02, 2023
USD ($)
|
Jul. 03, 2022
USD ($)
|
Jul. 02, 2023
USD ($)
segment
|
Jul. 03, 2022
USD ($)
|
|
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | segment | 2 | |||
Acquisition and integration expenses | $ 2,107 | $ 0 | $ 25,812 | $ 0 |
RPS Group PLC | ||||
Segment Reporting Information [Line Items] | ||||
Acquisition and integration expenses | $ 2,100 | $ 25,800 |
Reportable Segments (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Jul. 02, 2023 |
Jul. 03, 2022 |
Jul. 02, 2023 |
Jul. 03, 2022 |
Oct. 02, 2022 |
|
Segment Reporting Information [Line Items] | |||||
Revenue | $ 1,208,947 | $ 890,231 | $ 3,261,938 | $ 2,601,485 | |
Income from operations | 97,675 | 83,905 | 250,736 | 245,645 | |
Total Assets | 3,973,578 | 3,973,578 | $ 2,622,776 | ||
Operating segments | GSG | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 531,050 | 459,987 | 1,565,371 | 1,365,041 | |
Income from operations | 54,496 | 45,580 | 167,053 | 147,104 | |
Total Assets | 588,469 | 588,469 | 558,764 | ||
Operating segments | CIG | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 691,386 | 444,238 | 1,741,300 | 1,277,469 | |
Income from operations | 69,572 | 53,535 | 172,199 | 139,328 | |
Total Assets | 1,058,974 | 1,058,974 | 688,640 | ||
Elimination of inter-segment revenue | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | (13,489) | (13,994) | (44,733) | (41,025) | |
Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Income from operations | (26,393) | $ (15,210) | (88,516) | $ (40,787) | |
Total Assets | $ 2,326,135 | $ 2,326,135 | $ 1,375,372 |
Fair Value Measurements (Details) $ in Millions |
Jul. 02, 2023
USD ($)
|
---|---|
Amended Credit Agreement | |
Debt Instrument [Line Items] | |
Amount outstanding under credit facility | $ 919.4 |
Commitments and Contingencies (Details) |
Jul. 15, 2019
action
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Number of qui tam actions | 3 |
Related Party Transactions (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Jul. 02, 2023 |
Jul. 03, 2022 |
Jul. 02, 2023 |
Jul. 03, 2022 |
Oct. 02, 2022 |
|
Related Party Transaction [Line Items] | |||||
Revenue | $ 1,208,947 | $ 890,231 | $ 3,261,938 | $ 2,601,485 | |
Reimbursable costs | 21,000 | 23,000 | 61,000 | 70,000 | |
Accounts receivable, net | 1,002,087 | 1,002,087 | $ 755,112 | ||
Contract assets | 125,360 | 125,360 | 92,405 | ||
Contract liabilities | 351,048 | 351,048 | 241,340 | ||
Related Party | |||||
Related Party Transaction [Line Items] | |||||
Revenue | 22,000 | $ 24,000 | 65,000 | $ 74,000 | |
Accounts receivable, net | 22,234 | 22,234 | 16,818 | ||
Contract assets | 1,800 | 1,800 | 2,935 | ||
Contract liabilities | $ 2,768 | $ 2,768 | $ 3,464 |
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