Tetra Tech recovers and seeks contracts in homeland security.After a bumpy 2005 due to a restructuring process that began the previous year, resource management consultant Tetra Tech Inc.'s income statement is starting to come out from under water. The Pasadena-based engineering and technical services firm reported $9 million in earnings in its second quarter, compared to a $124 million loss a year ago as the company exited what was considered a more risky business line. And the market has taken notice, with the company's share price rising 32 percent over the past 52 weeks, closing at $17.87 on July 5. Tetra Tech, whose resume includes work on the Los Angeles River The Los Angeles River is an intermittent river flowing through Los Angeles County, California, from Canoga Park in the west end of the San Fernando Valley, 51 miles (82 km) southeast to its mouth in Long Beach. Revitalization Master Plan program and watershed management programs in the Chesapeake Bay Chesapeake Bay, inlet of the Atlantic Ocean, c.200 mi (320 km) long, from 3 to 30 mi (4.8–48 km) wide, and 3,237 sq mi (8,384 sq km), separating the Delmarva Peninsula from mainland Maryland. and Virginia. , Great Lakes Great Lakes, group of five freshwater lakes, central North America, creating a natural border between the United States and Canada and forming the largest body of freshwater in the world, with a combined surface area of c.95,000 sq mi (246,050 sq km). , and Sacramento/San Joaquin River Delta A delta is a landform where the mouth of a river flows into an ocean, sea, desert, estuary, lake or another river. It builds up sediment outwards into the flat area which the river's flow encounters (as a deltaic deposit , is increasingly targeting contracts in the higher-profile defense and homeland security Noun 1. Homeland Security - the federal department that administers all matters relating to homeland security Department of Homeland Security executive department - a federal department in the executive branch of the government of the United States markets. In April, for example, the company said it had been awarded a $20.1 million contract to provide base realignment and closure Base Realignment and Closure (or BRAC) is a process of the United States federal government directed at the administration and operation of the Armed Forces, used by the United States Department of Defense (DoD) and Congress to close excess military installations and realign technical support and environmental services The various combinations of scientific, technical, and advisory activities (including modification processes, i.e., the influence of manmade and natural factors) required to acquire, produce, and supply information on the past, present, and future states of space, atmospheric, , including work at the San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden Bay's Hunters Point Naval Shipyard. A month later came announcement of $40 million worth of U.S. defense contracts to construct and renovate facilities for the Iraqi Army and Iraqi national police. Earlier in the year the company won a $216 million contract to assist with clearing unexploded bombs and other ordnance in Iraq. Jefferies & Co. Inc. analyst Matthew McKay noted that after spending much of last year on restructuring activities, Tetra Tech now appears focused on "big picture" issues, such as evaluating potential acquisition targets to strengthen its capabilities in the core water resources market, as well as growing business in the systems support and security markets. "Tetra Tech is emerging as a much healthier, more scalable and efficient business that should win more than its fair share of awards due to industry-leading service quality," said McKay in a research note, noting that the company is well positioned to capture post-Katrina and post-Iraq war reconstruction contracts, as well other military work. Founded in the mid-1960s to provide engineering services related to waterways, harbors and coastal areas, Tetra Tech diversified into water quality, environmental, and infrastructure work. It's considered the nation's leading water technical services firm, and competes with Los Angeles-based Jacobs Engineering Group Jacobs Engineering Group Inc. (NYSE: JEC), a publicly traded company with annual revenues approaching $7 billion, provides professional technical services. Headquartered in Pasadena, CA, Jacobs offers support to industrial, commercial, and government clients across multiple Inc. and Windsor, Conn.-based TRC TRC Noun (in South Africa) Truth and Reconciliation Commission: a commission which encourages people who committed human rights abuses or acts of terror during the apartheid era to reveal the truth about their crimes in return for immunity from prosecution Companies Inc. in other markets. Around 46 percent of its contracts are from the federal government, with state and local governments comprising 19 percent of business and commercial clients another 35 percent. Among its biggest clients are branches of the U.S. Department of Defense, the U.S. Environmental Protection Agency Environmental Protection Agency (EPA), independent agency of the U.S. government, with headquarters in Washington, D.C. It was established in 1970 to reduce and control air and water pollution, noise pollution, and radiation and to ensure the safe handling and , the Federal Aviation Administration Federal Aviation Administration (FAA), component of the U.S. Department of Transportation that sets standards for the air-worthiness of all civilian aircraft, inspects and licenses them, and regulates civilian and military air traffic through its air traffic control and the U.S. Department of Energy. Major corporate clients include Lockheed Martin Corp. and General Motors Corp. Starting two years ago, management decided to consolidate certain operations in its wired communications and civil infrastructure businesses, including closing offices, reworking less profitable contracts and dumping bad lease arrangements. Last year, the company got entirely out of the wireless communications market it had entered in the early 2000s. Lost revenue and shutdown-related severance costs resulted in significant charges over several quarters, including a nearly $38 million loss in the second quarter of 2005. Last year also saw the beginning of a changing of the top guard with the recruiting of both new blood and company veterans. LiSan Hwang, who had been with the company since its early years, retired in November as chief executive and was succeeded by chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. Dan Batrack, who has been with the company 25 years. The board in March decided to formally separate the chief executive and chairman posts by electing Albert Smith, a Lockheed Martin executive who became a director in May 2005, as chairman to succeed Hwang. Over the next 12 months, management said it will focus on increasing organic growth into the mid-single digits and increasing operating margins to about 10 percent. Over the long term, the company wants to grow its top line annually at approximately 15 percent, with about half of that coming from organic growth, and half of it from acquisitions. Longer term, it also plans to expand internationally, where it now has a very small presence. DEBORAH CROWE Staff Reporter YEAR 2005 2004 Revenue (millions) $899.2 $975.2 Total Expenses (millions) 1,012.8 925.6 Operating Inc. (millions) (loss) (113.7) 49.6 Net Income (millions) (loss) (99.5) 23.7 Earnings Per Share (loss) ($1.75) 0.42 SUMMARY Business: Resource management Headquarters: Pasadena CEO: Dan L. Batrack Market Cap: $1.02 billion Dividend Yield: N/A Total Liabilities: $239.8 million P/E Ratio: 114.39 Long-Term Debt: $74.5 million |
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