# EDGAR Filing Document

**Accession Number:** 0000831641
**File Stem:** 0001104659-23-009319
**Filing Date:** 2023-2
**Character Count:** 30271
**Document Hash:** 63a3529c09f144ebcd46551a3b1ce76e
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-23-009319.hdr.sgml**: 20230201

**ACCESSION NUMBER**: 0001104659-23-009319

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230201

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Other Events

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230201

**DATE AS OF CHANGE**: 20230201

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** TETRA TECH INC
- **CENTRAL INDEX KEY:** 0000831641
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-ENGINEERING SERVICES [8711]
- **IRS NUMBER:** 954148514
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1001

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-19655
- **FILM NUMBER:** 23577713

**BUSINESS ADDRESS:**
- **STREET 1:** 3475 EAST FOOTHILL BOULEVARD
- **CITY:** PASADENA
- **STATE:** CA
- **ZIP:** 91107
- **BUSINESS PHONE:** 6263514664

**MAIL ADDRESS:**
- **STREET 1:** 3475 EAST FOOTHILL BOULEVARD
- **CITY:** PASADENA
- **STATE:** CA
- **ZIP:** 91107

?xml version="1.0" encoding="utf-8"?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

Date of Report (Date of earliest event reported):

**February 1, 2023**

**TETRA TECH, INC.**

(Exact name of registrant as specified in its charter)

---

| | | |
|:---|:---|:---|
| **Delaware** | **0-19655** | **95-4148514** |
| (State or other jurisdiction<br> of incorporation) | (Commission<br> File Number) | (IRS Employer<br> Identification Number) |

---

**3475 East Foothill Boulevard, Pasadena, California 91107**

(Address of principal executive office, including zip code)

**(626) 351-4664**

(Registrant's telephone number, including area code)

**Not Applicable**

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

◻ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

◻ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

◻ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

◻ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading symbol(s)** | **Name of each exchange on which registered** |
| Common Stock, $0.01 par value | TTEK | The Nasdaq Stock Market LLC |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging Growth Company ◻

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

---

| | |
|:---|:---|
| **Item 2.02.** | **Results of Operations and Financial Condition.** |

---

On February 1, 2023, Tetra Tech, Inc. ("Tetra Tech") reported its financial results for the first fiscal quarter ended January 1, 2023. A copy of the press release is attached to this report as Exhibit 99.1.

Exhibit 99.1 attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

---

| | |
|:---|:---|
| **Item 8.01.** | **Other Events.** |

---

On February 1, 2023, Tetra Tech announced that its Board of Directors has declared a $0.23 per share quarterly cash dividend. The dividend is payable on February 24, 2023 to stockholders of record as of the close of business on February 13, 2023.

---

| | |
|:---|:---|
| **Item 9.01.** | **Financial Statements and Exhibits.** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp; Exhibits

[99.1](tm235101d1_ex99-1.htm) [Press Release, dated February 1, 2023, reporting the financial results for Tetra Tech's first fiscal quarter ended January 1, 2023, and the declaration of a quarterly cash dividend.](tm235101d1_ex99-1.htm)

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

 **SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, Tetra Tech has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | TETRA TECH, INC. | TETRA TECH, INC. |
| Date: February 1, 2023 | By: | /s/ DAN L. BATRACK |
|  |  | &nbsp;&nbsp;&nbsp; Dan L. Batrack |
|  |  | &nbsp;&nbsp;&nbsp; Chairman and Chief Executive Officer |

---

## Exhibit 99.1

**Exhibit 99.1**

---

| | |
|:---|:---|
| ![](tm235101d1_ex99-1img001.jpg) | **NEWS RELEASE<br> February 1, 2023** |

---

**Tetra Tech Reports Record First Quarter Results**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Record Net Revenue $737 million** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Record EPS $2.18; Record Adjusted EPS $1.34, up 13% Y/Y** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· **Record Backlog of $3.81 billion, up 11% Y/Y** 

*Pasadena, California*. Tetra Tech, Inc. (NASDAQ: TTEK), a leading provider of high-end consulting and engineering services, today announced results for the first quarter ended January 1, 2023.

**First Quarter Results** 

Tetra Tech achieved record high quarterly results in key financial metrics, including net revenue, operating margin, EPS and backlog. Revenue in the first quarter totaled $895 million and revenue, net of subcontractor costs (net revenue),<sup>1</sup> was $737 million. Operating income was $92 million; adjusted operating income was $97 million, up 17% year-over-year, which reflects a 90-basis point increase to an all-time high adjusted EBITDA<sup>1</sup> margin of 14.0%. Earnings per share ("EPS") was $2.18; adjusted EPS was $1.34, up 13% over first quarter fiscal 2022. Backlog increased to $3.81 billion, up 11% year-over-year, and up 14% on a constant currency basis.

**Quarterly Dividend** 

On January 30, 2023, Tetra Tech's Board of Directors approved a $0.23 per share dividend, payable on February 24, 2023, to stockholders of record as of February 13, 2023. This represents a 15% increase year-over-year and the 35<sup>th</sup> consecutive quarterly dividend.

**Chairman and CEO Comments** 

Tetra Tech Chairman and CEO, Dan Batrack, commented, "Tetra Tech began fiscal 2023 with record high net revenue and earnings as a result of our strong operations where we are *Leading with Science<sup>®</sup>* in the areas of water, environment and sustainable infrastructure. On a year-over-year basis, we saw double-digit top line growth across both our government and commercial end markets. We also had new orders approaching $1 billion in the quarter contributing to an all-time high backlog of $3.81 billion which further improves our outlook for fiscal 2023 and beyond."

Mr. Batrack further stated, "We are very pleased to announce that we successfully closed the RPS Group transaction at the end of January. The addition of RPS aligns with our strategy to be the premier global high-end consulting and engineering firm addressing the impacts of climate change. RPS brings 5,000 staff that significantly expand our position in U.K. water programs, and add energy transformation expertise in the U.K., Europe and Australia."

<sup>1</sup> Non-GAAP financial measures which the Company believes provide valuable perspectives on its business results.

**Business Outlook**

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

Excluding RPS, Tetra Tech expects EPS for the second quarter of fiscal 2023 to range from $1.03 to $1.08 and net revenue to range from $685 million to $735 million. For fiscal 2023, Tetra Tech is increasing EPS guidance to now range from $4.90 to $5.05 and is increasing net revenue guidance to range from $3.00 billion to $3.15 billion.<sup>2</sup>

RPS is expected to contribute additional net revenue of approximately $100 million in the second quarter and $400 million for fiscal 2023. The impact to adjusted EPS, excluding transaction, integration and intangible amortization expenses, is expected to be approximately $0.10 dilutive for the second quarter and $0.10 accretive in the second half of the year, resulting in neutral impact for fiscal 2023.<sup>3</sup>

**Webcast**

Investors will have the opportunity to access a live audio-visual webcast and supplemental financial information concerning the first quarter of fiscal 2023 results through a link posted on the Company's website at tetratech.com on February 2, 2023, at 8:00 a.m. (PT).

**Reconciliation of GAAP and Non-GAAP Items**

**In thousands (except EPS data)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **Jan. 1, 2023** | **Jan. 2, 2022** | **% Y/Y** |
| Revenue | $894766 | $858510 | 4% |
| &nbsp;&nbsp;&nbsp;Subcontractor costs | (158204) | (179177) |  |
| Net revenue | $736562 | $679333 | 8% |
| Operating income | $92050 | $87220 | 6% |
| &nbsp;&nbsp;&nbsp;Acquisition related costs | 4694 |  |  |
| &nbsp;&nbsp;&nbsp;COVID-19 Credits | – | (4451) |  |
| Adjusted operating income | $96744 | $82769 | 17% |
| EPS | $2.18 | $1.25 | 74% |
| &nbsp;&nbsp;&nbsp;FX hedge gain | (0.94) |  |  |
| &nbsp;&nbsp;&nbsp;Acquisition related costs | 0.10 |  |  |
| &nbsp;&nbsp;&nbsp;COVID-19 Credits | – | (0.06) |  |
| Adjusted EPS | $1.34 | $1.19 | 13% |

---

<sup>2</sup> Reconciliation of the net revenue guidance to the most directly comparable GAAP measure is not available without unreasonable efforts because the Company cannot predict the magnitude and timing of all the components required to provide such reconciliation with sufficient precision.

<sup>3</sup> Reconciliation of adjusted EPS guidance to the most directly comparable GAAP measure is not available without unreasonable efforts because the Company cannot predict with sufficient precision all the components required to provide such reconciliation, including transaction, integration, and intangible amortization expenses related to the RPS transaction.

**About Tetra Tech**

Tetra Tech is a leading provider of high-end consulting and engineering services for projects worldwide. With 27,000 associates working together, Tetra Tech provides clear solutions to complex problems in water, environment, sustainable infrastructure, renewable energy, and international development. We are *Leading with Science<sup>®</sup>* to provide sustainable and resilient solutions for our clients. For more information about Tetra Tech, please visit <u>tetratech.com</u>, follow us on Twitter (<u>@TetraTech</u>), or like us on <u>Facebook</u>.

CONTACTS:

Jim Wu, Investor Relations

Charlie MacPherson, Media & Public Relations

(626) 470-2844

*<u>Forward-Looking Statements</u>*

*This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The use of words such as "anticipate," "expect," "could," "may," "intend," "plan" and "believe," among others, generally identify forward-looking statements. These forward-looking statements are based on currently available operating, financial, economic and other information, and are subject to a number of risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results. A variety of factors, many of which are beyond our control, could cause actual future results or events to differ materially from those projected in the forward-looking statements in this release, including but not limited to: continuing worldwide political and economic uncertainties; the U.S. Administration's potential changes to fiscal policies; the cyclicality in demand for our overall services; the fluctuation in demand for oil and gas, and mining services; risks related to international operations; concentration of revenues from U.S. government agencies and potential funding disruptions by these agencies; dependence on winning or renewing U.S. government contracts; the delay or unavailability of public funding on U.S. government contracts; the U.S. government's right to modify, delay, curtail or terminate contracts at its convenience; compliance with government procurement laws and regulations; the impact of global pandemics like COVID-19; credit risks associated with certain clients in certain geographic areas or industries; acquisition strategy and integration risks; goodwill or other intangible asset impairment; the failure to comply with worldwide anti-bribery laws; the failure to comply with domestic and international export laws; the failure to properly manage projects; the loss of key personnel or the inability to attract and retain qualified personnel; the ability of our employees to obtain government granted eligibility; the use of estimates and assumptions in the preparation of financial statements; the ability to maintain adequate workforce utilization; the use of the percentage-of-completion method of accounting; the inability to accurately estimate and control contract costs; the failure to adequately recover on our claims for additional contract costs; the failure to win or renew contracts with private and public sector clients; growth strategy management; backlog cancellation and adjustments; risks relating to cyber security breaches; the failure of partners to perform on joint projects; the failure of subcontractors to satisfy their obligations; requirements to pay liquidated damages based on contract performance; the adoption of new legal requirements; changes in resource management, environmental or infrastructure industry laws, regulations or programs; changes in capital markets and the access to capital; credit agreement covenants; industry competition; liability related to legal proceedings, investigations, and disputes; the availability of third-party insurance coverage; the ability to obtain adequate bonding; employee, agent, or partner misconduct; employee risks related to international travel; safety programs; conflict of interest issues; liabilities relating to reports and opinions; liabilities relating to environmental laws and regulations; force majeure events; protection of intellectual property rights; stock price volatility; the ability to impede a business combination based on Delaware law and charter documents; and other risks and uncertainties as may be described in Tetra Tech's periodic filings with the Securities and Exchange Commission, including those described in the "Risk Factors" section of Tetra Tech's Annual Report on Form 10-K for the fiscal year ended October 2, 2022. Readers should not place undue reliance on forward-looking statements since such information speaks only as of the date of this release. Tetra Tech does not intend to update forward-looking statements and expressly disclaims any obligation to do so.*

 

*<u>Non-GAAP Financial Measures</u>*

*To supplement the financial results presented in accordance with generally accepted accounting principles in the United States ("GAAP"), we present certain non-GAAP financial measures within the meaning of Regulation G under the Securities Exchange Act of 1934, as amended. We provide these non-GAAP financial measures because we believe they provide a valuable perspective on our financial results. However, non-GAAP measures have limitations as analytical tools and should not be considered in isolation and are not in accordance with, or a substitute for, GAAP measures. In addition, other companies may define non-GAAP measures differently which limits the ability of investors to compare non-GAAP measures of Tetra Tech to those used by our peer companies. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is included in this release.*

**Tetra Tech, Inc**

**Consoldiated Balance Sheet - Unaudited**

**(unaudited - in thousands, except par value)**

---

| | | |
|:---|:---|:---|
|  | **January 1,**<br>**2023** | **October 2,**<br>**2022** |
| **Assets** |  |  |
| &nbsp;&nbsp;&nbsp;**Current assets:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $164397 | $185094 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | 795872 | 755112 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract assets | 80903 | 92405 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 193635 | 125605 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 1234807 | 1158216 |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | 34890 | 32316 |
| &nbsp;&nbsp;&nbsp;Right-of-use assets, operating leases | 182500 | 182319 |
| &nbsp;&nbsp;&nbsp;Goodwill | 1133303 | 1110412 |
| &nbsp;&nbsp;&nbsp;Intangible assets, net | 27536 | 29163 |
| &nbsp;&nbsp;&nbsp;Deferred tax assets | 52009 | 47804 |
| &nbsp;&nbsp;&nbsp;Other non-current assets | 66435 | 62546 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $**2731480** | $**2622776** |
| **Liabilities and Equity** |  |  |
| &nbsp;&nbsp;&nbsp;**Current liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $151256 | $147436 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued compensation | 184468 | 237669 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract liabilities | 274118 | 241340 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Short-term lease liabilities, operating leases | 55809 | 57865 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current portion of long-term debt | 12505 | 12504 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current contingent earn-out liabilities | 33701 | 28797 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current liabilities | 158758 | 190406 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 870615 | 916017 |
| &nbsp;&nbsp;&nbsp;Deferred tax liabilities | 32779 | 15161 |
| &nbsp;&nbsp;&nbsp;Long-term debt | 234120 | 246250 |
| &nbsp;&nbsp;&nbsp;Long-term lease liabilities, operating leases | 148034 | 146285 |
| &nbsp;&nbsp;&nbsp;Non-current contingent earn-out liabilities | 35328 | 36769 |
| &nbsp;&nbsp;&nbsp;Other non-current liabilities | 86637 | 79157 |
| **Equity:** |  |  |
| &nbsp;&nbsp;&nbsp;Preferred stock - authorized, 2,000 shares of $0.01 par value; no shares issued and outstanding at January 1, 2023 and October 2, 2022 |  |  |
| &nbsp;&nbsp;&nbsp;Common stock - authorized, 150,000 shares of $0.01 par value; issued and outstanding, 53,226 and 52,981 at January 1, 2023 and October 2, 2022, respectively | 532 | 530 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 3281 |  |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (175126) | (208144) |
| &nbsp;&nbsp;&nbsp;Retained earnings | 1495221 | 1390701 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tetra Tech stockholders' equity | 1323908 | 1183087 |
| &nbsp;&nbsp;&nbsp;Noncontrolling interests | 59 | 50 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 1323967 | 1183137 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities and stockholders' equity** | $**2731480** | $**2622776** |

---

**Tetra Tech, Inc**

**Consolidated Statements of Income**

**(unaudited - in thousands, except par value)**

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
|  | **January 1,**<br>**2023** | **January 2,**<br>**2022** |
| Revenue | $894766 | $858510 |
| Subcontractor costs | (158204) | (179177) |
| Other costs of revenue | (583316) | (539567) |
| &nbsp;&nbsp;&nbsp;Gross profit | 153246 | 139766 |
| Selling, general and administrative expenses | (56502) | (52546) |
| Acquisition and integration expenses | (3761) |  |
| Contingent consideration - fair value adjustments | (933) | - |
| Income from operations | 92050 | 87220 |
| &nbsp;&nbsp;&nbsp;Interest expense, net | (5372) | (2904) |
| Other non-operating income | 67995 | - |
| &nbsp;&nbsp;&nbsp;Income before income tax expense | 154673 | 84316 |
| Income tax expense | (37958) | (15817) |
| &nbsp;&nbsp;&nbsp;Net income | 116715 | 68499 |
| &nbsp;&nbsp;&nbsp;Net income attributable to noncontrolling interests | (9) | (10) |
| &nbsp;&nbsp;&nbsp;Net income attributable to Tetra Tech | $116706 | $68489 |
| Earnings per share attributable to Tetra Tech: |  |  |
| &nbsp;&nbsp;&nbsp;Basic | $2.20 | $1.27 |
| &nbsp;&nbsp;&nbsp;Diluted | $2.18 | $1.25 |
| Weighted-average common shares outstanding: |  |  |
| &nbsp;&nbsp;&nbsp;Basic | 53069 | 53937 |
| &nbsp;&nbsp;&nbsp;Diluted | 53529 | 54577 |

---

**Tetra Tech, Inc.**

**Consolidated Statements of Cash Flows**

**(unaudited, in thousands)**

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
|  | **January 1,**<br>**2023** | **January 2,**<br>**2022** |
| **Cash flows from operating activities:** |  |  |
| Net income | $116715 | $68499 |
| Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 6616 | 6111 |
| &nbsp;&nbsp;&nbsp;Equity in income of unconsolidated joint ventures | (1447) | (1440) |
| &nbsp;&nbsp;&nbsp;Distributions of earnings from unconsolidated joint ventures | 1115 | 842 |
| &nbsp;&nbsp;&nbsp;Amortization of stock-based awards | 7184 | 5828 |
| &nbsp;&nbsp;&nbsp;Deferred income taxes | (15935) | (878) |
| &nbsp;&nbsp;&nbsp;Fair value adjustments to contingent consideration | 933 |  |
| &nbsp;&nbsp;&nbsp;Fair value adjustments to foreign currency forward contract | (67995) |  |
| Changes in operating assets and liabilities, net of effects of business acquisitions: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable and contract assets | (16175) | (21560) |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 5967 | 5364 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 3820 | 14056 |
| &nbsp;&nbsp;&nbsp;Accrued compensation | (53201) | (40321) |
| &nbsp;&nbsp;&nbsp;Contract liabilities | 27769 | 29227 |
| &nbsp;&nbsp;&nbsp;Other liabilities | (26432) | 11854 |
| &nbsp;&nbsp;&nbsp;Income taxes receivable/payable | 4387 | 4837 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash provided by operating activities** | **25191** | **82419** |
| **Cash flows from investing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Payments for business acquisitions, net of cash acquired |  | (8858) |
| &nbsp;&nbsp;&nbsp;Capital expenditures | (4996) | (1518) |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of assets | 51 | 3514 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash used in investing activities** | **(4945)** | **(6862)** |
| **Cash flows from financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from borrowings | 60889 | 54989 |
| &nbsp;&nbsp;&nbsp;Repayments on long-term debt | (73125) | (3956) |
| &nbsp;&nbsp;&nbsp;Repurchases of common stock |  | (50000) |
| &nbsp;&nbsp;&nbsp;Taxes paid on vested restricted stock | (16586) | (24949) |
| &nbsp;&nbsp;&nbsp;Stock options exercised | 57 | 960 |
| &nbsp;&nbsp;&nbsp;Dividends paid | (12186) | (10793) |
| &nbsp;&nbsp;&nbsp;Payments of contingent earn-out liabilities |  | (1720) |
| &nbsp;&nbsp;&nbsp;Principal payments on finance leases | (1316) | (945) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash used in financing activities** | **(42267)** | **(36414)** |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 8695 | (169) |
| Net increase (decrease) in cash, cash equivalents, and restricted cash | (13326) | 38974 |
| Cash, cash equivalents and restricted cash at beginning of period | 185491 | 166568 |
| **Cash, cash equivalents and restricted cash at end of period** | $**172165** | $**205542** |
| **Supplemental information:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid during the period for: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest | $3433 | $2456 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes, net of refunds received of $0.1 million and $2.3 million | $14540 | $11535 |
| &nbsp;&nbsp;&nbsp;Reconciliation of cash, cash equivalents and restricted cash: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $164397 | $205542 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted cash | 7768 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total cash, cash equivalents and restricted cash** | $**172165** | $**205542** |

---

**Tetra Tech, Inc.**

**Regulation G Information**

**December 2022**

**<u>Reconciliation of Revenue to Revenue, Net of Subcontractor Costs ("Net Revenue")</u>**

**(in millions)** 

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | | **2022** | **2022** | **2022** | **2022** | **2022** | **2022** | **2022** | |
|  | **2020** | **2021** | **1st Qtr** | **2nd Qtr** | **6 Mos** | **3rd Qtr** | **9 Mos** | **4th Qtr** | **Total** | **2023**<br>**1st Qtr** |
| **<u>Consolidated</u>** |  |  |  |  |  |  |  |  |  |  |
| Revenue (As Reported) | 2994.9 | 3213.5 | 858.5 | 852.7 | 1711.3 | 890.2 | 2601.5 | 902.6 | 3504.0 | 894.8 |
| RCM / Non-Cash Claims | (0.2) | (0.6) | - | - | - | - | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjusted Revenue | 2994.7 | 3212.9 | 858.5 | 852.7 | 1711.3 | 890.2 | 2601.5 | 902.6 | 3504.0 | 894.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjusted Subcontractor Costs | (646.1) | (661.3) | (179.2) | (153.1) | (332.3) | (169.7) | (502.0) | (166.4) | (668.5) | (158.2) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjusted Net Revenue | 2348.6 | 2551.6 | 679.3 | 699.6 | 1379.0 | 720.5 | 2099.5 | 736.2 | 2835.5 | 736.6 |
| **<u>GSG Segment</u>** |  |  |  |  |  |  |  |  |  |  |
| Revenue | 1578.3 | 1772.9 | 456.1 | 449.0 | 905.1 | 460.0 | 1365.0 | 455.8 | 1820.9 | 471.1 |
| Subcontractor Costs | (460.8) | (507.1) | (129.0) | (111.5) | (240.5) | (124.5) | (365.0) | (119.4) | (484.4) | (118.0) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjusted Net Revenue | 1117.5 | 1265.8 | 327.1 | 337.5 | 664.6 | 335.5 | 1000.0 | 336.4 | 1336.5 | 353.1 |
| **<u>CIG Segment</u>** |  |  |  |  |  |  |  |  |  |  |
| Revenue | 1471.1 | 1500.1 | 416.3 | 416.9 | 833.2 | 444.2 | 1277.5 | 461.0 | 1738.4 | 439.6 |
| Non-Cash Claims |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjusted Revenue | 1471.1 | 1500.1 | 416.3 | 416.9 | 833.2 | 444.2 | 1277.5 | 461.0 | 1738.4 | 439.6 |
| Subcontractor Costs | (240.0) | (214.3) | (64.0) | (54.8) | (118.8) | (59.3) | (178.1) | (61.2) | (239.3) | (56.0) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjusted Net Revenue | 1231.1 | 1285.8 | 352.3 | 362.1 | 714.4 | 384.9 | 1099.4 | 399.8 | 1499.1 | 383.6 |
| **<u>RCM Segment</u>** |  |  |  |  |  |  |  |  |  |  |
| Revenue | 0.2 | 0.6 |  |  |  |  |  |  |  |  |
| Subcontractor Costs | (0.2) | - | - | - | - | - | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;Net Revenue | - | 0.6 | - | - | - | - | - | - | - | - |

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**<u>Reconciliation of Net Income Attributable to Tetra Tech to EBITDA</u>**

**(in thousands)**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | | **2022** | **2022** | **2022** | **2022** | **2022** | **2022** | **2022** | |
|  | **2020** | **2021** | **1st Qtr** | **2nd Qtr** | **6 Mos** | **3rd Qtr** | **9 Mos** | **4th Qtr** | **Total** | **2023**<br>**1st Qtr** |
| Net Income Attributable to Tetra Tech | 173859 | 232810 | 68489 | 53040 | 121529 | 58650 | 180179 | 82947 | 263125 | 116706 |
| Interest Expense<sup>1</sup> | 13100 | 11831 | 2904 | 3144 | 6048 | 2919 | 8966 | 2618 | 11584 | 5372 |
| Depreciation | 13017 | 12337 | 3433 | 3310 | 6743 | 3200 | 9945 | 3914 | 13859 | 3178 |
| Amortization | 11594 | 11468 | 2678 | 3241 | 5919 | 3682 | 9601 | 3573 | 13174 | 3438 |
| Contingent Consideration | (13371) | (3273) |  |  |  |  |  |  |  | 933 |
| Goodwill Impairment | 15800 |  |  |  |  |  |  |  |  |  |
| FX Hedge Gain |  |  |  |  |  |  |  | (19904) | (19904) | (67995) |
| Income Tax Expense | 54101 | 34039 | 15817 | 18327 | 34144 | 22329 | 56472 | 29129 | 85602 | 37958 |
| &nbsp;&nbsp;&nbsp;&nbsp;**EBITDA** | 268100 | 299212 | 93321 | 81062 | 174383 | 90780 | 265163 | 102277 | 367440 | 99590 |
| Acquisition & Integration Expenses |  |  |  |  |  |  |  |  |  | 3761 |
| Non-Core Dispositions | (8524) |  |  |  |  |  |  |  |  |  |
| COVID-19 Charges (Credits) | 8233 |  | (4451) |  | (4451) | (1041) | (5492) | (994) | (6486) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**Adjusted EBITDA** | **267809** | **299212** | **88870** | **81062** | **169932** | **89739** | **259671** | **101283** | **360954** | **103351** |

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<sup>1</sup> Includes write-off of deferred debt origination fees in Q1-23 of $2.7M