Tetra Tech, Inc. (NASDAQ:TTEK) Q1 2023 Earnings Call Transcript

Noelle Dilts: Sure. I think, I commit €“ so, I think I guess, just while we’re on the RPS topic. I know that sales synergies have been discussed, as a key reason for the acquisition. Could you expand upon how you’re thinking about some of those opportunities, and really the growth potential of the combined sort of Tetra Tech-RPS entity again as you look out over the next couple of years?

Dan Batrack: I’m really excited about that. I know that our financial folks and certainly I take great satisfaction on the accretion. I know we’ve talked about — expect the RPS accretion to Tetra Tech once they’ve joined us for a year and we’ve actually had them integrated to be in the mid- to upper teens on a financial basis. I still believe that’s easily achievable. In fact we look to perhaps do even better than that. But what actually is the most exciting is the revenue synergies. And I think that Tetra Tech combined with RPS gives us new geography and new capability that — and I won’t use these terms very often is unmatched in permitting for some of the most innovative renewable energy programs out around the world. And offshore wind is of course one of the very biggest.

I know Jill spoke a bit to it. But RPS would not have the ability to have access to the US markets that Tetra Tech brings and Tetra Tech would not have any meaningful participation in the largest new growth areas for offshore wind that go through the North Sea and other areas. So, I do think this is an example that’s one plus one is not slightly more. I think it’s one plus one is four or five. The other item we’ve been very anxious to participate we think we can bring enormous value to the UK water markets. Tetra Tech has been doing water quality programs. We’ve been doing impacts of agriculture and livestock loading into water quality streams with respect to things like total maximum daily loads for chemical loading. This is the new priority for the AMP programs or the asset management programs for the water utilities in the United Kingdom and that’s what Tetra Tech’s been doing for the US EPA and the US local state and governments here for the past 30 to 40 years and it’s just new advent as a priority in the UK.

So, I think what we have plus the position that RPS has a holding framework or master service agreement contracts with every one of the major water utilities in the UK is another area where it’s not just plus one is slightly more than two I think it’s a big move. And while RPS currently is number five or number six ranking as far as revenues for the UK water utilities, I think with the advent of Tetra Tech we’re going to move up that rank pretty fast by providing much better value that the water utilities have never seen before. And they can do it on the back of the investments that was made by the US government measured in the hundreds of millions of dollars if not billions. They don’t have to invest that. They can get that by Tetra Tech bringing that technology capability to the UK and actually building on the backs of the investments done here in the United States.

Noelle Dilts: Great. Thanks very much.

Operator: Thank you. Our next questions come from the line of Andy Wittmann with Baird. Please proceed with your question.