AECOM Technology Corporation (ACM)
F1Q09 (Qtr End 12/31/08) Earnings Call
February 10, 2009 11:00 AM ET
Paul J. Gennaro, Jr. - Senior Vice President Investor Relations and Corporate Communications, Chief Communications Officer
John M. Dionisio - President and Chief Executive Officer
Michael S. Burke - Executive Vice President and Chief Financial Officer
Joseph Foresi - Janney Montgomery Scott
Steven Fisher - UBS Securities
Andy Kaplowitz - Barclays Capital
Vance Edelson - Morgan Stanley
John Rogers - D.A. Davidson & Co.
Andrea Wirth - Robert W. Baird & Co.
Avram Fisher - BMO Capital Markets
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And I would now like to turn the conference over to Mr. Paul Gennaro, Vice President of Investor Relations. Go ahead, sir.
Paul J. Gennaro, Jr.
Thank you, Joe. And welcome everyone to AECOM's first quarter 2009 earnings conference call.
On slide two. As we begin let me remind you that today's discussion contains forward-looking statements based on the environment as we see it today and as such does include risks and uncertainties. As you know our actual results might differ materially from those projected in these forward-looking statements.
Please refer to our press release or slide two of the earnings presentation and to our reports filed with the Securities and Exchange Commission for more information on the specific risk factors that could cause actual results to differ materially. As we begin our call, let me remind you of some of the important information about our earnings that are posted on the investor website, investors.aecom.com.
First, we posted our earnings release and updated financial statements on the site for anyone who still needs to access. Second, a replay of today's call will be posted there at around noon Eastern and will remain there for approximately two weeks.
Please go to slide three. And lastly, since we are using some non-GAAP financial measures as references, the appropriate GAAP financial reconciliations are posted on our website as well.
Presenting today will be John M. Dionisio, President and Chief Executive Officer; and Michael S. Burke, Executive Vice President and Chief Financial Officer.
John, please go ahead.
John M. Dionisio
Thank you, Paul. Good morning and welcome everyone. On our call today I will begin with a few opening remarks and then Mike will discuss our financial performance. Following Mike I will provide additional details about important business trends and our outlook.
Let me begin by saying that the infrastructure market remains robust. Our end markets including transportation, waste water, government facilities, and program management continue to perform well during the first quarter. An important indicator about future performance is a fact that we recorded a significant number of new wins and increased our backlog despite a global economic environment.
That said we are fully aware that we are competing in a very tough global economy and we are closely monitoring all aspects of our business. Although that downturn has affected the privately financed facilities market which is a relatively small segment of our overall business. Our outlook remain strong and we are confident of continued growth in 2009 and beyond.
Now, I would like to turn the call over to Mike, who will present our financial performance. Mike, please go ahead.
Michael S. Burke
Thank you, John.
Please turn to slide five.
First of all we are pleased with our first quarter results and our continuing momentum. Net income from continuing operations was $40.5 million up 37% year-over-year, EPS from continuing operations was $0.38 per share up 31% year-over-year. Backlog increased 32% to $9 billion and we closed the quarter with $243 million in cash and cash equivalents.
Please turn to the next slide.
During the first quarter, we generated strong top-line growth and we increased our gross revenue by 35% over last year's first quarter to $1.5 billion. Our net service revenue was up 32% to $889 million. On a organic basis, gross revenue was up 9% over last year and net service revenue was up 4%.
We did discuss on our last conference call that our actual results might be affected by volatility and foreign exchange rates and that has been the case as the dollar has significantly appreciated relative to foreign currencies over the last year.
Adjusting for the changes in foreign currency rates are underlying gross revenue organic growth rate would have been 15% and our net service revenue would have been 13%. Revenue growth in continued margin improvements both in and outside of the U.S. drove our operating income from continuing operations to $70 million, a 57% increase over last year's first quarter.
Net income from continuing operations increased 37% over last year. Earnings per share from continuing operations increased 31% over the last year to $0.38.
Please turn to the next slide.
The PTS segment accounted for 85% of our first quarter gross revenue. We continued to generate strong growth in this segment during the quarter with gross revenues increasing 38% over last year's first quarter to $1.2 billion and net service revenues increasing 30% to $846 million.
Operating income for our PTS segment increased 44% over the first quarter of last year to $77 million. This significant increase in our operating income was due to improved leveraging of our overhead cost across the organization. Our PTS net service revenue reflects 11% organic growth rate after adjusting for foreign currency. This growth was fueled by large multi-year projects across diverse business lines with strong wins around the globe.