Tetra Tech : 2022 Annual Report

Sustainable Solutions for Water, Environment, and Infrastructure

2022 ANNUAL REPORT

$4.26

$4.86

$2.84

$3.16

$

EPS

$209

$262

$304

$336

$M

Cash from

Operations

$3,092

$3,239

$3,480

$3,744

$M

Dear Shareholders,

Today, Tetra Tech's high-end consulting and engineering services are more in demand than ever before to address our clients' rapidly expanding needs associated with climate change-including water management, environmental protection, design of sustainable and resilient infrastructure, and support the transition to renewable energy. In 2022 we used our Leading with Science® approach to provide solutions for our clients for more than 80,000 projects in 125 countries. Our projects protected and restored biodiversity,

created sustainable water supplies, restored the environment, and decarbonized buildings, infrastructure, and power supplies.

The significant global demand for our services has resulted in Tetra Tech achieving new all-time-high records in fiscal year 2022 for revenue, net revenue, earnings per share, and backlog. In fiscal year 2022, gross revenue was $3.5 billion and net revenue increased to $2.8 billion, up 9 percent and 11 percent, respectively from 2021. Our differentiated high-end services generated all-time-high operating income of $340 million resulting in an Earnings Per Share of $4.86, up 14 percent from last year. As a result of our consistent and disciplined capital allocation, we returned $246 million to our shareholders through dividends and stock buybacks and generated a 54 percent shareholder return over the past 3 years.

We ended the year with an all-time-high backlog of $3.74 billion, up 8 percent from the same time last year. While it was an exceptional year for orders, we finished the year with the highest bookings of orders in the history of the Company, exceeding $1.3 billion just in the fourth quarter. During the year, we won significant programs with government and commercial clients, adding more than $5 billion in new contract capacity worldwide to address flood risk management, water and sanitation, dam safety, carbon mitigation, biodiversity, renewable energy, and a wide range of environmental data analytics solutions. Our strong, broad-based backlog provides us with extraordinary visibility and momentum as we begin fiscal year 2023.

In alignment with our strategic plan, in 2022 we acquired four companies that are leaders in digital transformation, advanced data analytics, and sustainability consulting. The addition of two digital water companies-Enterprise Automation, Inc. and TIGA, Inc.-brought us industry-leading software engineers and consultant expertise to address complex challenges

related to water and big data. Also in 2022, the addition of Axiom Data Science provided Tetra Tech with unique expertise in

technology for the analysis of massive ocean and coastal data sets, while Piteau Associates brought us global leadership in hydraulic modeling and sustainable water management for commercial clients. In September 2022, we announced our offer

to acquire the RPS Group, which, when completed in January 2023, will bring 5,000 staff with high-end expertise

Backlog

• $1.2 trillion Infrastructure Investment and Jobs Act

• $280 billion CHIPs Act

• $369 billion Inflation Reduction Act

in energy transformation, water, program management, and data analytics. The addition of RPS will increase our global reach with an established presence in Europe, add significant technical resources to expand our market-leading position in renewable energy, and expand our suite of differentiated technologies.

As we enter fiscal year 2023, we see strong demand from our long-term clients for our differentiated Leading with Science approach to solve water, environmental, and sustainable infrastructure priorities. While we expect to see continued growth internationally, led by our operations in Canada, the United Kingdom and Australia; we expect the fastest growth to

be in the United States. In the United States, an unprecedented sequence of three major legislative actions over the past year have set the stage for future spending increases directly aligned with Tetra Tech's strengths: water management, environmental restoration, sustainability consulting, and renewable energy services. Tetra Tech is recognized as an industry leader in these markets as demonstrated by our #1 rankings with Engineering News-Record in water, environmental management, hydro plants, water treatment/desalination, and water treatment/supply, and numerous top 10 rankings, including wind power, solar power, and green building design.

We are ready to address this extraordinary federal growth opportunity by leveraging our more than 50 years of experience and $25 billion in contract capacity with U.S. government agencies. With new funding incentives for renewable energy, we also see opportunities to further expand our work with energy utilities and commercial clients and build on experience gained through performing more than 1,000 high-end siting and permitting projects across the United States.

As we look to the future, we are committed to serving our clients by Leading with Science and benefiting the world through our work. We will continue to advance Tetra Tech's 2030 goal to improve the lives of one billion people around the world through the projects we perform, from our baseline of 411 million people set in 2022. We also have committed to an additional 50 percent reduction of greenhouse gas (Scope 1, 2, and 3 CO2e) emissions from our operations, furthering the 70 percent reduction in greenhouse gas achieved since the inception of our sustainability program in 2010.

Across our operations, we are committed to advancing diversity, equity, and inclusion. We believe that our diverse, high performing individuals and teams bring a wide range of perspectives and experiences to their engagement with coworkers and their understanding of our clients' needs and project objectives. As part of Tetra Tech's commitment to a culture of inclusion, our Employee Resource Groups bring together communities focused on the experiences of Black, Latino/Hispanic, Pan-Asian, Women, Veterans, Disabled, and LGBTQIA+ employees and Emerging Professionals that broaden and enhance companywide interaction and support for our employees. As a high-end consultancy, we also actively encourage continuous learning through our project teams and the Tetra Tech Academy, with global access to training, networking, and technology exchange programs.

With today's challenges associated with climate change, the need for reliable water supplies, and risks to coastal regions, there has never been more demand for the services we provide. Our clients are committing funding and resources and launching new multiyear programs to address these rising concerns that transcend political affiliations. With the addition of the RPS Group, in 2023 we will increase our global resources and expand our suite of differentiated technologies. By leveraging the alignment of client needs and Tetra Tech's high-end expertise, we will advance our goal to be the global industry leader in sustainable solutions for water, environment, and sustainable infrastructure.

On behalf of Tetra Tech, I thank you for your continued confidence and support.

Sincerely,

Dan Batrack, Chairman and CEO

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________________________________________________

FORM 10-K

(Mark One)

• ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended October 2, 2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Transition Period from	to
	Commission File Number 0-19655
	____________________________________________________________________________
	TETRA TECH, INC.
	(Exact name of registrant as specified in its charter)
	Delaware	95-4148514
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3475 East Foothill Boulevard, Pasadena, California 91107

(Address of principal executive offices) (Zip Code)

[phone]

(Registrant's telephone number, including area code)

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

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

None

________________________________________________________________________

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ 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. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of the registrant's common stock held by non-affiliates on April 3, 2022, was $8.9 billion (based upon the closing price of a share of registrant's common stock as reported by the Nasdaq National Market on that date).

On November 9, 2022, 52,981,143 shares of the registrant's common stock were outstanding.

DOCUMENT INCORPORATED BY REFERENCE

Portions of registrant's Proxy Statement for its 2023 Annual Meeting of Stockholders are incorporated by reference in Part III of this report where indicated.