Tetra Tech Inc. (TTEK, Financial) filed Quarterly Report for the period ended 2012-01-01.
Tetra Tech Inc. has a market cap of $1.46 billion; its shares were traded at around $23.42 with a P/E ratio of 16.5 and P/S ratio of 0.6. Tetra Tech Inc. had an annual average earning growth of 13.2% over the past 5 years.
We account for the majority of our unconsolidated joint ventures using the equity method of accounting. Under this method, we recognize our proportionate share of the net earnings of these joint ventures as a single line item under Other costs of revenue in our condensed consolidated statements of income. For the first quarters of fiscal 2012 and 2011, we reported $1.0 million and $0.9 million of equity in earnings of unconsolidated joint ventures, respectively. Our maximum exposure to loss as a result of our investments in unconsolidated VIEs is typically limited to the aggregate of the carrying value of the investment and future funding commitments. Future funding commitments for the unconsolidated VIEs are immaterial. For consolidated joint ventures, the assets are restricted for use only by those joint ventures and are not available for our general operations. Our consolidated and unconsolidated joint ventures are each, individually and in aggregate, immaterial to our condensed consolidated financial statements.
We experienced strong growth in our U.S. commercial, international, and U.S. state and local government sectors, driven by demand for our water, environmental, infrastructure design and construction management services in the industrial, energy and mining markets worldwide. Additionally, the growth resulted from strength in our front-end water, environmental, and infrastructure engineering and design services for certain U.S. federal government clients including FAA, U.S. General Services Administration (GSA), NSF and various military branches of the DoD. The growth in revenue and revenue, net of subcontractor costs, was due partially to the contributions of $37.1 million and $34.0 million, respectively, from fiscal 2011 acquisitions. The overall growth was partially offset by a decline in our U.S. federal government business due primarily to the wind-down of several large projects for the USACE, USAID, U.S. Department of Energy (DOE) and U.S. Environmental Protection Agency (EPA), and delays on new awards for certain large U.S. federal construction management in the U.S. and abroad. Revenue, net of subcontractor costs, grew at a faster pace than revenue due to an increase in self-performed work on energy and USAID programs. Additionally, a revenue decline on USACE construction management programs did not have a significant impact to our revenue, net of subcontractor costs, because these programs had a high level of subcontracting activities.
Revenue growth was driven by the continued international expansion of our water, environmental and infrastructure design services. Our international operations, primarily in Canada, contributed an additional $35 million and $36.4 million to revenue and revenue, net of subcontractor costs, respectively, compared with last years first quarter. Acquisitions completed during fiscal 2011 contributed to this growth. To a lesser extent, the growth resulted from increased activity on U.S. commercial projects and economically driven priority U.S. federal government programs. Operating income increased due to revenue growth, partially offset by increased contract costs on certain projects.
We have foreign currency exchange rate exposure in our results of operations and equity primarily as a result of the currency translation related to our Canadian subsidiaries where the local currency is the functional currency. To the extent the U.S. dollar strengthens against the CAD, the translation of these foreign currency denominated transactions will result in the reduced revenue, operating expenses, assets and liabilities. Similarly, our revenue, operating expenses, assets and liabilities will increase if the U.S. dollar weakens against the CAD. For the first quarters of fiscal 2012 and 2011, 23.4% and 20.7% of our consolidated revenue, respectively, was generated by our international business, and such revenue was primarily denominated in CAD. For the first quarter of fiscal 2012, the effect of foreign exchange rate translation on the condensed consolidated balance sheets was an increase in equity of $10.8 million compared to an increase in equity of $7.4 million in the first quarter of fiscal 2011. These amounts were recognized as an adjustment to equity through other comprehensive income.
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Tetra Tech Inc. has a market cap of $1.46 billion; its shares were traded at around $23.42 with a P/E ratio of 16.5 and P/S ratio of 0.6. Tetra Tech Inc. had an annual average earning growth of 13.2% over the past 5 years.
Highlight of Business Operations:
We recognize the fair value of our stock-based compensation 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 first quarters of fiscal 2012 and 2011 was $2.9 million and $2.8 million, respectively. The majority of these amounts was included in Selling, general and administrative (SG&A) expenses in our condensed consolidated statements of income. In the first quarter of fiscal 2012, we granted 407,249 stock options with an exercise price of $22.53 per share and an estimated weighted-average fair value of $9.36 per share. In addition, we awarded 105,567 shares of restricted stock to our directors and executive officers at the fair value of $22.53 per share on the award date. All of these shares are performance-based and vest over a three-year period. The number of shares that ultimately vest is based on the growth in our diluted earnings per share. Additionally, we awarded 181,348 restricted stock units (RSUs) to our employees at the fair value of $22.53 per share on the award date. All of the RSUs have time-based vesting over a four-year period.We account for the majority of our unconsolidated joint ventures using the equity method of accounting. Under this method, we recognize our proportionate share of the net earnings of these joint ventures as a single line item under Other costs of revenue in our condensed consolidated statements of income. For the first quarters of fiscal 2012 and 2011, we reported $1.0 million and $0.9 million of equity in earnings of unconsolidated joint ventures, respectively. Our maximum exposure to loss as a result of our investments in unconsolidated VIEs is typically limited to the aggregate of the carrying value of the investment and future funding commitments. Future funding commitments for the unconsolidated VIEs are immaterial. For consolidated joint ventures, the assets are restricted for use only by those joint ventures and are not available for our general operations. Our consolidated and unconsolidated joint ventures are each, individually and in aggregate, immaterial to our condensed consolidated financial statements.
We experienced strong growth in our U.S. commercial, international, and U.S. state and local government sectors, driven by demand for our water, environmental, infrastructure design and construction management services in the industrial, energy and mining markets worldwide. Additionally, the growth resulted from strength in our front-end water, environmental, and infrastructure engineering and design services for certain U.S. federal government clients including FAA, U.S. General Services Administration (GSA), NSF and various military branches of the DoD. The growth in revenue and revenue, net of subcontractor costs, was due partially to the contributions of $37.1 million and $34.0 million, respectively, from fiscal 2011 acquisitions. The overall growth was partially offset by a decline in our U.S. federal government business due primarily to the wind-down of several large projects for the USACE, USAID, U.S. Department of Energy (DOE) and U.S. Environmental Protection Agency (EPA), and delays on new awards for certain large U.S. federal construction management in the U.S. and abroad. Revenue, net of subcontractor costs, grew at a faster pace than revenue due to an increase in self-performed work on energy and USAID programs. Additionally, a revenue decline on USACE construction management programs did not have a significant impact to our revenue, net of subcontractor costs, because these programs had a high level of subcontracting activities.
Revenue growth was driven by the continued international expansion of our water, environmental and infrastructure design services. Our international operations, primarily in Canada, contributed an additional $35 million and $36.4 million to revenue and revenue, net of subcontractor costs, respectively, compared with last years first quarter. Acquisitions completed during fiscal 2011 contributed to this growth. To a lesser extent, the growth resulted from increased activity on U.S. commercial projects and economically driven priority U.S. federal government programs. Operating income increased due to revenue growth, partially offset by increased contract costs on certain projects.
We have foreign currency exchange rate exposure in our results of operations and equity primarily as a result of the currency translation related to our Canadian subsidiaries where the local currency is the functional currency. To the extent the U.S. dollar strengthens against the CAD, the translation of these foreign currency denominated transactions will result in the reduced revenue, operating expenses, assets and liabilities. Similarly, our revenue, operating expenses, assets and liabilities will increase if the U.S. dollar weakens against the CAD. For the first quarters of fiscal 2012 and 2011, 23.4% and 20.7% of our consolidated revenue, respectively, was generated by our international business, and such revenue was primarily denominated in CAD. For the first quarter of fiscal 2012, the effect of foreign exchange rate translation on the condensed consolidated balance sheets was an increase in equity of $10.8 million compared to an increase in equity of $7.4 million in the first quarter of fiscal 2011. These amounts were recognized as an adjustment to equity through other comprehensive income.
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