Cover
Cover - USD ($) $ in Billions | 12 Months Ended | ||
Oct. 03, 2021 | Nov. 12, 2021 | Mar. 28, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Oct. 3, 2021 | ||
Current Fiscal Year End Date | --10-03 | ||
Document Transition Report | false | ||
Entity File Number | 0-19655 | ||
Entity Registrant Name | TETRA TECH, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 95-4148514 | ||
Entity Address, Address Line One | 3475 East Foothill Boulevard | ||
Entity Address, City or Town | Pasadena | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 91107 | ||
City Area Code | 626 | ||
Local Phone Number | 351-4664 | ||
Title of 12(b) Security | Common Stock, $0.01 par value | ||
Trading Symbol | TTEK | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 7.1 | ||
Entity Common Stock, Shares Outstanding | 53,885,546 | ||
Documents Incorporated by Reference | DOCUMENT INCORPORATED BY REFERENCE Portions of registrant's Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference in Part III of this report where indicated. | ||
Entity Central Index Key | 0000831641 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Oct. 03, 2021 | Sep. 27, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 166,568 | $ 157,515 |
Accounts receivable, net | 668,998 | 649,035 |
Contract assets | 103,784 | 92,632 |
Prepaid expenses and other current assets | 112,338 | 81,094 |
Income taxes receivable | 14,260 | 19,509 |
Total current assets | 1,065,948 | 999,785 |
Property and equipment, net | 37,733 | 35,507 |
Right-of-use assets, operating leases | 215,422 | 239,396 |
Investments in unconsolidated joint ventures | 3,282 | 7,332 |
Goodwill | 1,108,578 | 993,498 |
Intangible assets, net | 37,990 | 13,943 |
Deferred tax assets | 54,413 | 32,052 |
Other long-term assets | 53,196 | 57,045 |
Total assets | 2,576,562 | 2,378,558 |
Current liabilities: | ||
Accounts payable | 128,767 | 111,804 |
Accrued compensation | 206,322 | 199,801 |
Contract liabilities | 190,403 | 171,905 |
Short-term lease liabilities, operating leases | 67,452 | 69,650 |
Current portion of long-term debt and other short-term borrowings | 12,504 | 49,264 |
Current contingent earn-out liabilities | 19,520 | 16,142 |
Other current liabilities | 223,515 | 174,890 |
Total current liabilities | 848,483 | 793,456 |
Deferred tax liabilities | 10,563 | 16,316 |
Long-term debt | 200,000 | 242,395 |
Long-term lease liabilities, operating leases | 174,285 | 191,955 |
Long-term contingent earn-out liabilities | 39,777 | 16,475 |
Other long-term liabilities | 69,163 | 80,588 |
Commitments and contingencies (Note 17) | ||
Equity: | ||
Preferred stock – Authorized, 2,000 shares of $0.01 par value; no shares issued and outstanding at October 3, 2021 and September 27, 2020 | 0 | 0 |
Common stock – Authorized, 150,000 shares of $0.01 par value; issued and outstanding, 53,981 and 53,797 shares at October 3, 2021 and September 27, 2020, respectively | 540 | 538 |
Accumulated other comprehensive loss | (125,028) | (161,786) |
Retained earnings | 1,358,726 | 1,198,567 |
Tetra Tech stockholders' equity | 1,234,238 | 1,037,319 |
Noncontrolling interests | 53 | 54 |
Total stockholders' equity | 1,234,291 | 1,037,373 |
Total liabilities and stockholders' equity | $ 2,576,562 | $ 2,378,558 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Oct. 03, 2021 | Sep. 27, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, authorized shares (in shares) | 2,000,000 | 2,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, authorized shares (in shares) | 150,000,000 | 150,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 53,981,000 | 53,797,000 |
Common stock, shares outstanding (in shares) | 53,981,000 | 53,797,000 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands | 12 Months Ended | ||
Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | |
Revenue | $ 3,213,513,000 | $ 2,994,891,000 | $ 3,107,348,000 |
Gross profit | 498,400,000 | 446,535,000 | 408,183,000 |
Selling, general and administrative expenses | (222,972,000) | (204,615,000) | (200,230,000) |
Acquisition and integration expenses | 0 | 0 | (10,351,000) |
Contingent consideration – fair value adjustments | 3,273,000 | 14,971,000 | (1,085,000) |
Impairment of goodwill | 0 | (15,800,000) | (7,755,000) |
Income from operations | 278,701,000 | 241,091,000 | 188,762,000 |
Interest income | 917,000 | 1,375,000 | 1,732,000 |
Interest expense | (12,748,000) | (14,475,000) | (15,358,000) |
Income before income tax expense | 266,870,000 | 227,991,000 | 175,136,000 |
Income tax expense | (34,039,000) | (54,101,000) | (16,375,000) |
Net income | 232,831,000 | 173,890,000 | 158,761,000 |
Net income attributable to noncontrolling interests | (21,000) | (31,000) | (93,000) |
Net income attributable to Tetra Tech | $ 232,810,000 | $ 173,859,000 | $ 158,668,000 |
Earnings per share attributable to Tetra Tech: | |||
Basic (in dollars per share) | $ 4.31 | $ 3.21 | $ 2.89 |
Diluted (in dollars per share) | $ 4.26 | $ 3.16 | $ 2.84 |
Weighted-average common shares outstanding: | |||
Basic (in shares) | 54,078 | 54,235 | 54,986 |
Diluted (in shares) | 54,675 | 55,022 | 55,936 |
Subcontractor costs | |||
Costs of revenue | $ (661,341,000) | $ (646,319,000) | $ (717,711,000) |
Other costs of revenue | |||
Costs of revenue | $ (2,053,772,000) | $ (1,902,037,000) | $ (1,981,454,000) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 232,831 | $ 173,890 | $ 158,761 |
Other comprehensive income, net of tax | |||
Foreign currency translation adjustments, net of tax | 30,644 | 3,435 | (20,866) |
Gain (loss) on cash flow hedge valuations, net of tax | 6,117 | (4,638) | |
Gain (loss) on cash flow hedge valuations, net of tax | (12,125) | ||
Other comprehensive income (loss), net of tax | 36,761 | (1,203) | (32,991) |
Comprehensive income, net of tax | 269,592 | 172,687 | 125,770 |
Comprehensive income attributable to noncontrolling interests, net of tax | 24 | 30 | 336 |
Comprehensive income attributable to Tetra Tech, net of tax | $ 269,568 | $ 172,657 | $ 125,434 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | |
Cash flows from operating activities: | |||
Net income | $ 232,831,000 | $ 173,890,000 | $ 158,761,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 23,805,000 | 24,611,000 | 28,844,000 |
Equity in income of unconsolidated joint ventures | (4,990,000) | (6,605,000) | (4,073,000) |
Distributions of earnings from unconsolidated joint ventures | 4,604,000 | 6,310,000 | 4,048,000 |
Amortization of stock-based awards | 23,067,000 | 19,424,000 | 17,618,000 |
Deferred income taxes | (38,494,000) | 565,000 | (37,615,000) |
Provision for losses on accounts receivables | (4,130,000) | 1,267,000 | 16,964,000 |
Impairment of goodwill | 0 | 15,800,000 | 7,755,000 |
Fair value adjustments to contingent consideration | (3,273,000) | (14,971,000) | 1,085,000 |
Gain on sale of property and equipment | (110,000) | (11,066,000) | (232,000) |
Changes in operating assets and liabilities, net of effects of business acquisitions: | |||
Accounts receivable and contract assets | 17,431,000 | 154,748,000 | (10,226,000) |
Prepaid expenses and other assets | (582,000) | (11,321,000) | 2,568,000 |
Accounts payable | 13,551,000 | (102,162,000) | 39,011,000 |
Accrued compensation | 5,425,000 | (8,173,000) | 18,359,000 |
Contract liabilities | 13,407,000 | 5,894,000 | (6,039,000) |
Other liabilities | 8,740,000 | 19,460,000 | (16,929,000) |
Income taxes receivable/payable | 13,090,000 | (5,192,000) | (11,386,000) |
Net cash provided by operating activities | 304,372,000 | 262,479,000 | 208,513,000 |
Cash flows from investing activities: | |||
Payments for business acquisitions, net of cash acquired | (84,911,000) | (68,488,000) | (84,159,000) |
Capital expenditures | (8,573,000) | (12,245,000) | (16,198,000) |
Proceeds from sale of property and equipment | 492,000 | 17,710,000 | 651,000 |
Net cash used in investing activities | (92,992,000) | (63,023,000) | (99,706,000) |
Cash flows from financing activities: | |||
Proceeds from borrowings | 370,222,000 | 308,364,000 | 417,262,000 |
Repayments on long-term debt | (414,308,000) | (331,066,000) | (415,491,000) |
Repurchases of common stock | (60,000,000) | (117,188,000) | (100,000,000) |
Taxes paid on vested restricted stock | (17,630,000) | (11,166,000) | (6,893,000) |
Payments of contingent earn-out liabilities | (20,251,000) | (22,900,000) | (12,018,000) |
Stock options exercised | 11,250,000 | 10,334,000 | 11,751,000 |
Net change in overdrafts | (36,627,000) | 36,627,000 | 0 |
Dividends paid | (40,041,000) | (34,743,000) | (29,674,000) |
Principal payments on finance leases | (2,714,000) | (1,311,000) | 0 |
Net cash used in financing activities | (210,099,000) | (163,049,000) | (135,063,000) |
Effect of exchange rate changes on cash and cash equivalents | 7,772,000 | 207,000 | (1,727,000) |
Net increase (decrease) in cash and cash equivalents | 9,053,000 | 36,614,000 | (27,983,000) |
Cash and cash equivalents at beginning of year | 157,515,000 | 120,901,000 | 148,884,000 |
Cash and cash equivalents at end of year | 166,568,000 | 157,515,000 | 120,901,000 |
Cash paid during the year for: | |||
Interest | 10,330,000 | 13,256,000 | 12,310,000 |
Income taxes, net of refunds received of $2.1 million, $1.4 million and $5.2 million | $ 59,111,000 | $ 55,039,000 | $ 66,038,000 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | |
Statement of Cash Flows [Abstract] | |||
Income tax refunds received | $ 2.1 | $ 1.4 | $ 5.2 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Total Tetra Tech Equity | Total Tetra Tech EquityCumulative Effect, Period of Adoption, Adjustment | Non-Controlling Interests |
Beginning balance (in shares) at Sep. 30, 2018 | 55,349 | |||||||||
Beginning balance at Sep. 30, 2018 | $ 967,100 | $ (2,767) | $ 553 | $ 148,803 | $ (127,350) | $ 944,965 | $ (2,767) | $ 966,971 | $ (2,767) | $ 129 |
Comprehensive income, net of tax: | ||||||||||
Net income | 158,761 | 158,668 | 158,668 | 93 | ||||||
Foreign currency translation adjustments | (20,866) | (21,109) | (21,109) | 243 | ||||||
Gain on cash flow hedge valuations | (12,125) | (12,125) | (12,125) | |||||||
Comprehensive income, net of tax | 125,770 | 125,434 | 336 | |||||||
Distributions paid to noncontrolling interests | (287) | (287) | ||||||||
Cash dividends | (29,674) | (29,674) | (29,674) | |||||||
Stock-based compensation | 17,618 | 17,618 | 17,618 | |||||||
Restricted & performance shares released (in shares) | 183 | |||||||||
Restricted & performance shares released | (6,893) | $ 2 | (6,895) | (6,893) | ||||||
Stock options exercised (in shares) | 448 | |||||||||
Stock options exercised | 11,751 | $ 5 | 11,746 | 11,751 | ||||||
Shares issued for Employee Stock Purchase Plan (in shares) | 148 | |||||||||
Shares issued for Employee Stock Purchase Plan | 6,846 | $ 2 | 6,844 | 6,846 | ||||||
Stock repurchases (in shares) | (1,563) | |||||||||
Stock repurchases | (100,000) | $ (16) | (99,984) | (100,000) | ||||||
Ending balance (in shares) at Sep. 29, 2019 | 54,565 | |||||||||
Ending balance at Sep. 29, 2019 | 989,464 | $ 546 | 78,132 | (160,584) | 1,071,192 | 989,286 | 178 | |||
Comprehensive income, net of tax: | ||||||||||
Net income | 173,890 | 173,859 | 173,859 | 31 | ||||||
Foreign currency translation adjustments | 3,435 | 3,436 | 3,436 | (1) | ||||||
Gain (loss) on cash flow hedge valuations | (4,638) | (4,638) | (4,638) | |||||||
Comprehensive income, net of tax | 172,687 | 172,657 | 30 | |||||||
Distributions paid to noncontrolling interests | (154) | (154) | ||||||||
Cash dividends | (34,743) | (34,743) | (34,743) | |||||||
Stock-based compensation | 19,424 | 19,424 | 19,424 | |||||||
Restricted & performance shares released (in shares) | 212 | |||||||||
Restricted & performance shares released | (11,166) | $ 2 | (11,168) | (11,166) | ||||||
Stock options exercised (in shares) | 361 | |||||||||
Stock options exercised | 10,334 | $ 4 | 10,330 | 10,334 | ||||||
Shares issued for Employee Stock Purchase Plan (in shares) | 168 | |||||||||
Shares issued for Employee Stock Purchase Plan | 8,715 | $ 1 | 8,714 | 8,715 | ||||||
Stock repurchases (in shares) | (1,509) | |||||||||
Stock repurchases | (117,188) | $ (15) | (105,432) | (11,741) | (117,188) | |||||
Ending balance (in shares) at Sep. 27, 2020 | 53,797 | |||||||||
Ending balance at Sep. 27, 2020 | 1,037,373 | $ 538 | 0 | (161,786) | 1,198,567 | 1,037,319 | 54 | |||
Comprehensive income, net of tax: | ||||||||||
Net income | 232,831 | 232,810 | 232,810 | 21 | ||||||
Foreign currency translation adjustments | 30,644 | 30,641 | 30,641 | 3 | ||||||
Gain (loss) on cash flow hedge valuations | 6,117 | 6,117 | 6,117 | |||||||
Comprehensive income, net of tax | 269,592 | 269,568 | 24 | |||||||
Distributions paid to noncontrolling interests | (25) | (25) | ||||||||
Cash dividends | (40,041) | (40,041) | (40,041) | |||||||
Stock-based compensation | 23,067 | 23,067 | 23,067 | |||||||
Restricted & performance shares released (in shares) | 215 | |||||||||
Restricted & performance shares released | $ (17,630) | $ 3 | (17,633) | (17,630) | ||||||
Stock options exercised (in shares) | 324 | 324 | ||||||||
Stock options exercised | $ 11,250 | $ 3 | 11,247 | 11,250 | ||||||
Shares issued for Employee Stock Purchase Plan (in shares) | 124 | |||||||||
Shares issued for Employee Stock Purchase Plan | 10,705 | $ 1 | 10,704 | 10,705 | ||||||
Stock repurchases (in shares) | (479) | |||||||||
Stock repurchases | (60,000) | $ (5) | (27,385) | (32,610) | (60,000) | |||||
Ending balance (in shares) at Oct. 03, 2021 | 53,981 | |||||||||
Ending balance at Oct. 03, 2021 | $ 1,234,291 | $ 540 | $ 0 | $ (125,028) | $ 1,358,726 | $ 1,234,238 | $ 53 |
Consolidated Statements of Eq_2
Consolidated Statements of Equity (Parenthetical) - $ / shares | Sep. 03, 2021 | May 28, 2021 | Feb. 26, 2021 | Dec. 11, 2020 | Sep. 04, 2020 | May 29, 2020 | Feb. 28, 2020 | Dec. 13, 2019 | Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 |
Statement of Stockholders' Equity [Abstract] | |||||||||||
Cash dividends paid per share (in dollars per share) | $ 0.20 | $ 0.20 | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.15 | $ 0.15 | $ 0.74 | $ 0.64 | $ 0.54 |
Description of Business
Description of Business | 12 Months Ended |
Oct. 03, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business We are a leading global provider of consulting and engineering services that focuses on water, environment, sustainable infrastructure, renewable energy, and international development. We are a global company that is Leading with Science® to provide innovative solutions for our public and private clients. We typically begin at the earliest stage of a project by identifying technical solutions and developing execution plans tailored to our clients’ needs and resources. Our solutions may span the entire life cycle of consulting and engineering projects and include applied science, data analysis, research, engineering, design, project management, and operations and maintenance. |
Basis of Presentation and Prepa
Basis of Presentation and Preparation | 12 Months Ended |
Oct. 03, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Preparation | Basis of Presentation and Preparation Principles of Consolidation and Presentation. The consolidated financial statements include our accounts and those of joint ventures of which we are the primary beneficiary. All significant intercompany balances and transactions have been eliminated in consolidation. Fiscal Year. We report results of operations based on 52/53-week periods ending on the Sunday nearest September 30. Fiscal 2021 contained 53 weeks, and fiscal 2020 and 2019 each contained 52 weeks. Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires us to make estimates and assumptions. These estimates and assumptions affect the amounts reported in our consolidated financial statements and accompanying notes. Although such estimates and assumptions are based on management's best knowledge of current events and actions we may take in the future, actual results could differ materially from those estimates. Cash and Cash Equivalents. Cash and cash equivalents include highly liquid investments with original maturities of 90 days or less. We classify cash and cash equivalents as restricted when we are unable to freely use such cash and cash equivalents for our general operating purposes. Restricted cash balances are reported within our "Prepaid expenses and other current assets" on the consolidated balance sheets. Occasionally, we have book overdrafts which represent checks issued in excess of funds on deposit in our bank accounts that have not yet been paid by the applicable bank at the balance sheet date. Bank overdrafts occur when a bank honors disbursements in excess of funds on deposit in our bank accounts. We classify book and bank overdrafts as short-term borrowings on our consolidated balance sheets, and report the change in overdrafts as a financing activity in our consolidated statements of cash flows. Insurance Matters, Litigation and Contingencies. In the normal course of business, we are subject to certain contractual guarantees and litigation. In addition, we maintain insurance coverage for various aspects of our business and operations. We record in our consolidated balance sheets amounts representing our estimated liability for these legal and insurance obligations. Any adjustments to these liabilities are recorded in our consolidated statements of income. Accounts Receivable – Net. Net accounts receivable consists of billed and unbilled accounts receivable, and allowances for doubtful accounts. Billed accounts receivable represent amounts billed to clients that have not been collected. Unbilled accounts receivable, which represent an unconditional right to payment subject only to the passage of time, include unbilled amounts typically resulting from revenue recognized but not yet billed pursuant to contract terms or billed after the period end date. Most of our unbilled receivables at October 3, 2021 are expected to be billed and collected within 12 months. Unbilled accounts receivable also include amounts related to requests for equitable adjustment to contracts that provide for price redetermination. These amounts are recorded only when they can be reliably estimated and realization is probabl e. The allowance for doubtful accounts represents amounts that are expected to become uncollectible or unrealizable in the future. We determine an estimated allowance for uncollectible accounts based on management's consideration of trends in the actual and forecasted credit quality of our clients, including delinquency and payment history; type of client, such as a government agency or a commercial sector client; and general economic and industry conditions, including the potential impacts of the coronavirus disease 2019 ("COVID-19") pandemic, that may affect our clients' ability to pay. Contract Assets and Contract Liabilities. Contract assets represent revenue recognized in excess of the amounts for which we have the contractual right to bill our customers. Contract retentions, included in contract assets, represent amounts withheld by clients until certain conditions are met or the project is completed, which may extend beyond one year. Contract liabilities represent the amount of cash collected from clients and billings to clients on contracts in advance of work performed and revenue recognized. The majority of these amounts are expected be earned within 12 months and are classified as current liabilities. Prepaid and other current assets. Prepaid assets consist primarily of payments for insurance and software costs and are amortized over the estimated period of benefit. Other current assets include primarily sales/services and use tax receivables from our U.S and foreign operations. Property and Equipment. Property and equipment are recorded at cost and d epreciated over their estimated useful lives using the straight-line method. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from our consolidated balance sheets and any resulting gain or loss is reflected in our consolidated statements of income. Expenditures for maintenance and repairs are expensed as incurred. Generally, estimated useful lives range from three Long-Lived Assets. We evaluate the recoverability of our long-lived assets when the facts and circumstances suggest that the assets may be impaired. This assessment is performed based on the estimated undiscounted cash flows compared to the carrying value of the assets. If the future cash flows (undiscounted and without interest charges) are less than the carrying value, a write-down would be recorded to reduce the related asset to its estimated fair value. Leases. We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use ("ROU") assets, and current and long-term operating lease liabilities in the consolidated balance sheets. Our finance leases are reported in "Other long-term assets", "Other current liabilities", and "Other long-term liabilities" on our consolidated balance sheet. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, incremental borrowing rates are used based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset at the commencement date also includes any lease payments made to the lessor at or before the commencement date and initial direct costs less lease incentives received. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. We recognize a liability for contra ct termination costs associated with an exit activity for costs that will continue to be incurred under a lease for its remaining term without economic benefit to us, initially measured at its fair value at the cease-use date. The fair value is determined based on the remaining lease rentals, adjusted for the effects of any prepaid or deferred items recognized under the lease, and reduced by estimated sublease rentals. Business Combinations. The cost of an acquired company is assigned to the tangible and intangible assets purchased and the liabilities assumed based on their fair values at the date of acquisition. The determination of fair values of these assets and liabilities requires us to make estimates and use valuation techniques when a market value is not readily available. Any excess of purchase price over the fair value of net tangible and intangible assets acquired is allocated to goodwill. Goodwill typically represents the value paid for the assembled workforce and enhancement of our service offerings. Transaction costs associated with business combinations are expensed as incurred. Goodwill and Intangible Assets. Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in a business acquisition. Following an acquisition, we perform an analysis to value the acquired company's tangible and identifiable intangible assets and liabilities. With respect to identifiable intangible assets, we consider backlog, non-compete agreements, client relations, trade names, patents and other assets. We amortize our intangible assets based on the period over which the contractual or economic benefits of the intangible assets are expected to be realized. We assess the recoverability of the unamortized balance of our intangible assets when indicators of impairment are present based on expected future profitability and undiscounted expected cash flows and their contribution to our overall operations. Should the review indicate that the carrying value is not fully recoverable, the excess of the carrying value over the fair value of the intangible assets would be recognized as an impairment loss. We test our goodwill for impairment on an annual basis, and more frequently when an event occurs, or circumstances indicate that the carrying value of the asset may not be recoverable. We believe the methodology that we use to review impairment of goodwill, which includes a significant amount of judgment and estimates, provides us with a reasonable basis to determine whether impairment has occurred. However, many of the factors employed in determining whether our goodwill is impaired are outside of our control and it is reasonably likely that assumptions and estimates will change in future periods. These changes could result in future impairments. We perform our annual goodwill impairment review at the beginning of our fiscal fourth quarter. Our last annual review was performed at June 28, 2021 (i.e., the first day of our fiscal fourth quarter). In addition, we regularly evaluate whether events and circumstances have occurred that may indicate a potential change in recoverability of goodwill. We perform interim goodwill impairment reviews between our annual reviews if certain events and circumstances have occurred, including a deterioration in general economic conditions, an increased competitive environment, a change in management, key personnel, strategy or customers, negative or declining cash flows, or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods. We assess goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a component. Our operating segments are the same as our reportable segments and our reporting units for goodwill impairment testing are the components one level below our reportable segments. These components constitute a business for which discrete financial information is available and where segment management regularly reviews the operating results of that component. We aggregate components within an operating segment that have similar economic characteristics. The impairment test for goodwill involves the comparison of the estimated fair value of each reporting unit to the reporting unit's carrying value, including goodwill. We estimate the fair value of reporting units based on a comparison and weighting of the income approach, specifically the discounted cash flow method and the market approach, which estimates the fair value of our reporting units based upon comparable market prices and recent transactions and also validates the reasonableness of the multiples from the income approach. The development of the present value of future cash flow projections includes assumptions and estimates derived from a review of our expected revenue growth rates, operating profit margins, discount rates, and the terminal growth rate. If the fair value of a reporting unit exceeds its carrying amount, the goodwill of that reporting unit is not considered impaired. However, if its carrying value exceeds its fair value, our goodwill is impaired, and we are required to record a non-cash charge that could have a material adverse effect on our consolidated financial statements. An impairment loss recognized, if any, should not exceed the total amount of goodwill allocated to the reporting unit. Contingent Consideration. Most of our acquisition agreements include contingent earn-out arrangements, which are generally based on the achievement of future operating income thresholds. The contingent earn-out arrangements are based upon our valuations of the acquired companies and reduce the risk of overpaying for acquisitions if the projected financial results are not achieved. The fair values of these earn-out arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates. For each transaction, we estimate the fair value of contingent earn-out payments as part of the initial purchase price and record the estimated fair value of contingent consideration as a liability in "Current contingent earn-out liabilities" and "Long-term contingent earn-out liabilities" on the consolidated balance sheets. We consider several factors when determining that contingent earn-out liabilities are part of the purchase price, including the following: (1) the valuation of our acquisitions is not supported solely by the initial consideration paid, and the contingent earn-out formula is a critical and material component of the valuation approach to determining the purchase price; and (2) the former owners of acquired companies that remain as key employees receive compensation other than contingent earn-out payments at a reasonable level compared with the compensation of our other key employees. The contingent earn-out payments are not affected by employment termination. We measure our contingent earn-out liabilities at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy. We use a probability weighted discounted income approach as a valuation technique to convert future estimated cash flows to a single present value amount. The significant unobservable inputs used in the fair value measurements are operating income projections over the earn-out period (generally three We review and re-assess the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could differ materially from the initial estimates. Changes in the estimated fair value of our contingent earn-out liabilities related to the time component of the present value calculation are reported in interest expense. Adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in operating income. Other current liabilities. Other current liabilities consists primarily of accrued insurance, contingent liabilities, sales/services and use taxes due to our U.S. and foreign operations, other tax accruals and accrued professional fees. Fair Value of Financial Instruments. We determine the fair values of our financial instruments, including short-term investments, debt instruments, derivative instruments and pension plan assets bas ed on inputs or assumptions that market participants would use in pricing an asset or a liability. We categorize our instruments using a valuation hierarchy for disclosure of the inputs used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. The classification of a financial asset or liability within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair values based on their short-term nature. The carrying amounts of our revolving credit facility approximates fair value because the interest rates are based upon variable reference rates. Certain other assets and liabilities, such as contingent earn-out liabilities and amounts related to cash-flow hedges, are required to be carried in our consolidated financial statements at fair value. Our fair value measurement methods may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Although we believe our valuation methods are appropriate and consistent with those used by other market participants, the use of different methodologies or assumptions to determine fair value could result in a different fair value measurement at the reporting date. Derivative Financial Instruments. We account for our derivative instruments as either assets or liabilities and carry them at fair value. For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated as cash flow hedges, the effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income (loss) in stockholders' equity and reclassified into income in the same period or periods during which the hedged transaction affects earnings. The ineffective portion of the gain or loss on the derivative instrument, if any, is recognized in current income. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. The net gain or loss on the effective portion of a derivative instrument that is designated as an economic hedge of the foreign currency translation exposure generated by the re-measurement of certain assets and liabilities denominated in a non-functional currency in a foreign operation is reported in the same manner as a foreign currency translation adjustment. Accordingly, any gains or losses related to these derivative instruments are recognized in current income. Derivatives that do not qualify as hedges are adjusted to fair value through current income. Deferred Compensation. We maintain a non-qualified defined contribution supplemental retirement plan for certain key employees and non-employee directors that is accounted for in accordance with applicable authoritative guidance on accounting for deferred compensation arrangements where amounts earned are held in a rabbi trust and invested. Employee deferrals are deposited into a rabbi trust, and the funds are generally invested in individual variable life insurance contracts that we own and are specifically designed to informally fund savings plans of this nature. Our consolidated balance sheets reflect our investment in variable life insurance contracts in "Other long-term assets." Our obligation to participating employees is reflected in "Other long-term liabilities." The net gains and losses related to the deferred compensation plan are reported as part of “Selling, general and administrative expenses” in our consolidated statements of income . Pension Plan . In connection with a fiscal 2021 acquisition, we assumed a defined benefit pension plan. We calculate the market-related value of assets, which is used to determine the return-on-assets component of annual pension expense and the cumulative net unrecognized gain or loss subject to amortization. This calculation reflects our anticipated long-term rate of return and amortization of the difference between the actual return (including capital, dividends, and interest) and the expected return. Cumulative net unrecognized gains or losses that exceed 10% of the greater of the projected benefit obligation or the fair market related value of plan assets are subject to amortization. Income Taxes. We file a consolidated U.S. federal income tax return. In addition, we file other returns that are required in the states, foreign jurisdictions and other jurisdictions in which we do business. We account for certain income and expense items differently for financial reporting and income tax purposes. Deferred tax assets and liabilities are computed for the difference between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to reverse. In determining the need for a valuation allowance, management reviews both positive and negative evidence, including current and historical results of operations, future income projections, scheduled reversals of deferred tax amounts, availability of carrybacks, and potential tax planning strategies. Based on our assessment, we have concluded that a portion of the deferred tax assets will not be realized. According to the authoritative guidance on accounting for uncertainty in income taxes, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. This guidance also addresses de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and disclosure requirements for uncertain tax positions. Concentration of Credit Risk. Financial instruments that subject us to credit risk consist primarily of cash and cash equivalents and net accounts receivable. In th e event that we have surplus cash, we place our temporary cash investments with lower ris k financial institutions and, by policy, limit the amount of investment exposure to any one financial institution. Approximately 24% of accounts receivable were due from various agencies of the U.S. federal government at fiscal 2021 year-end. The remaining accounts receivable are generally diversified due to the large number of organizations comprising our client base and their geographic dispersion. We perform ongoing credit evaluations of our clients and maintain an allowance for potential credit losses. Approximately 50%, 20% and 30% of our fiscal 2021 revenue was generated from our U.S. government, U.S. commercial and international clients, respectively. Foreign Currency Translation. We determine the functional currency of our foreign operating units based upon the primary currency in which they operate. These operating units maintain their accounting records in their local currency, primarily Canadian and Australian dollars, and British pounds. Where the functional currency is not the U.S. dollar, translation of assets and liabilities to U.S. dollars is based on exchange rates at the balance sheet date. Translation of revenue and expenses to U.S. dollars is based on the average rate during the period. Translation gains or losses are reported as a component of other comprehensive income (loss). Gains or losses from foreign currency transactions are included in income from operations. Reclassifications. Certain reclassifications were made to the prior years to conform to the current-year presentation. Recently Issued Accounting Pronouncements Adopted in Fiscal 2021. In June 2016, the FASB issued updated guidance, Accounting Standards Update ("ASU") 2016-13, related to the measurement of credit losses for certain financial assets. This guidance replaced the previous incurred loss methodology with an expected credit loss methodology. It requires us to recognize an allowance equal to our current estimate of all contractual cash flows that we do not expect to collect. We adopted this guidance in the first quarter of fiscal 2021, and the adoption did not have a material impact on our consolidated financial statements. Our estimate considered relevant information about past events, current conditions, and reasonable and supportable forecasts impacting the collectability of the reported amounts. In August 2018, the FASB issued updated guidance modifying certain fair value measurement disclosures. The guidance contains additional disclosures to enable users of the financial statements to better understand the entity’s assumption used to develop significant unobservable inputs for Level 3 fair value measurements, but also eliminates the requirement for entities to disclose the amount of and reasons for transfers between Level 1 and Level 2 investments within the fair value hierarchy. We adopted this guidance in the first quarter of fiscal 2021, and the adoption did not have a material impact on our consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted. In December 2019, the FASB issued ASU 2019-12, which simplifies the accounting for income taxes by removing certain exceptions to general principles in Topic 740 and amending certain existing guidance for clarity. This guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2020 (first quarter of fiscal 2022 for us). Early adoption is permitted. We do not expect the adoption of this guidance to have an impact on our consolidated financial statements. In May 2020, the Securities and Exchange Commission issued guidance amending certain financial disclosures about acquired and disposed businesses. The amendments are designed to assist registrants in making more meaningful determinations of whether a subsidiary or an acquired or disposed business is significant, and to improve the related disclosure requirements. The guidance is effective for fiscal years beginning after December 31, 2020 (first quarter of fiscal 2022 for us). We do not expect the adoption of this guidance to have an impact on our consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, which requires the recognition and measurement of contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers. |
Revenue and Contract Balances
Revenue and Contract Balances | 12 Months Ended |
Oct. 03, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue and Contract Balances | Revenue and Contract Balances We recognize revenue over time as the related performance obligation is satisfied by transferring control of a promised good or service to our customers. Progress toward complete satisfaction of the performance obligation is primarily measured using a cost-to-cost measure of progress method. The cost input is based primarily on contract cost incurred to date compared to total estimated contract cost. This measure includes forecasts based on the best information available and reflects our judgement to faithfully depict the value of the services transferred to the customer. For certain on-call engineering or consulting and similar contracts, we recognize revenue in the amount which we have the right to invoice the customer if that amount corresponds directly with the value of our performance completed to date. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost measure of progress method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs indicates a loss, a provision for the entire estimated loss on the contract is made in the period in which the loss becomes evident. Disaggregation of Revenue We disaggregate revenue by client sector and contract type, as we believe it best depicts how the nature, timing, and uncertainty of revenue and cash flows are affected by economic factors. The following tables present revenue disaggregated by client sector and contract type: Fiscal Year Ended October 3, September 27, September 29, 2019 (in thousands) Client Sector: U.S. state and local government $ 536,309 $ 439,019 $ 587,364 U.S. federal government (1) 1,081,608 993,835 941,102 U.S. commercial 638,169 674,605 719,314 International (2) 957,427 887,432 859,568 Total $ 3,213,513 $ 2,994,891 $ 3,107,348 Contract Type: Fixed-price $ 1,191,244 $ 1,078,432 $ 1,048,158 Time-and-materials 1,492,813 1,391,592 1,509,900 Cost-plus 529,456 524,867 549,290 Total $ 3,213,513 $ 2,994,891 $ 3,107,348 (1) Includes revenue generated under U.S. federal government contracts performed outside the United States. (2) Includes revenue generated from foreign operations, primarily in Canada, Australia, the United Kingdom, and revenue generated from non-U.S. clients. Other than the U.S. federal governme nt, no single client accounted for more than 10% of our revenue for fiscal 2021 and 2020. Contract Assets and Contract Liabilities We invoice customers based on the contractual terms of each contract. However, the timing of revenue recognition may differ from the timing of invoice issuance. Contract assets represent revenue recognized in excess of the amounts for which we have the contractual right to bill our customers. Such amounts are recoverable from customers based upon various measures of performance, including achievement of certain milestones or completion of a contract. In addition, many of our time and materials arrangements are billed in arrears pursuant to contract terms that are standard within the industry, resulting in contract assets and/or unbilled receivables being recorded, as revenue is recognized in advance of billings. Contract retentions, included in contract assets, represent amounts withheld by clients until certain conditions are met or the project is completed, which may extend beyond one year. Contract liabilities consist of billings in excess of revenue recognized. Contract liabilities decrease as we recognize revenue from the satisfaction of the related performance obligation and increase as billings in advance of revenue recognition occur. Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. There were no substantial non-current contract assets or liabilities for the periods presented. Net contract liabilities consisted of the following: Balance at October 3, September 27, 2020 (in thousands) Contract assets (1) $ 103,784 $ 92,632 Contract liabilities 190,403 171,905 Net contract liabilities $ (86,619) $ (79,273) (1) Include s $12.2 million and $12.3 million of contract retentions as of October 3, 2021 and September 27, 2020, respectively. In fiscal 2021, we recognized revenue of approximately $119 million from amounts included in the contract liability balance at the end of fiscal 2020, compared to approximately $118 million for the compara tive prior-year period. We recognize revenue primarily using the cost-to-cost measure of progress method, which involves the estimates of progress towards completion. Changes in those estimates could result in the recognition of cumulative catch-up adjustments to the contract’s inception-to-date revenue, costs and profit in the period in which such changes are made. As a result, we recognized net favorable operating income adjustments of $0.7 million and $0.8 million for fiscal 2021 and 2020, respectively, exclusive of the amounts related to claims described below. Changes in revenue and cost estimates could also result in a projected loss, determined at the contract level, which would be recorded i mmediately in earnings. As of October 3, 2021 and September 27, 2020, our consolidated balance sheets included liabilities for anticipated losses o f $12.7 million and $13.2 million, respectively. The estimated cost to complete these related contracts as of October 3, 2021 and September 27, 2020 was approximate ly $104 million and $118 million, respectively. Accounts Receivable, Net Net accounts receivable consisted of the following: Balance at October 3, September 27, (in thousands) Billed $ 432,814 $ 402,818 Unbilled 240,536 253,364 Total accounts receivable 673,350 656,182 Allowance for doubtful accounts (4,352) (7,147) Total accounts receivable, net $ 668,998 $ 649,035 Billed accounts receivable represent amounts billed to clients that have not been collected. Unbilled accounts receivable, which represent an unconditional right to payment subject only to the passage of time, include unbilled amounts typically resulting from revenue recognized but not yet billed pursuant to contract terms or billed after the period end date. Most of our unbilled receivables at October 3, 2021 are expected to be billed and collected within 12 months. The allowance for doubtful accounts represents amounts that are expected to become uncollectible or unrealizable in the future. We determine an estimated allowance for uncollectible accounts based on management's consideration of trends in the actual and forecasted credit quality of our clients, including delinquency and payment history; type of client, such as a government agency or a commercial sector client; and general economic and industry conditions, including the potential impacts of the COVID-19 pandemic, that may affect our clients' ability to pay. Total accounts receivable at October 3, 2021 and September 27, 2020 included approximate ly $11 million a nd $14 million, respectively, related to claims, including requests for equitable adjustment, on contracts that provide for price redetermination. Claims are amounts in excess of agreed contract prices that we seek to collect from our clients or other third parties for delays, errors in specifications and designs, contract terminations, change orders in dispute or unapproved as to both scope and price, or other causes of unanticipated additional costs. Factors considered in determining whether revenue associated with claims (including change orders in dispute and unapproved change orders in regards to both scope and price) should be recognized include the following: (a) the contract or other evidence provides a legal basis for the claim, (b) additional costs were caused by circumstances that were unforeseen at the contract date and not the result of deficiencies in our performance, (c) claim-related costs are identifiable and considered reasonable in view of the work performed, and (d) evidence supporting the claim is objective and verifiable. This can lead to a situation in which costs are recognized in one period and revenue is recognized in a subsequent period when a client agreement is obtained, or a claims resolution occurs. We regularly evaluate all unsettled claim amounts and record appropriate adjustments to operating earnings when it is probable that the claim will result in a different contract value than the amount previously estimated. In fiscal 2021 (all in the second quarter), we recognized increases to revenue and related gains of $2.8 million in our Commercial/International Services Group ("CIG"). In fi scal 2020, we recorded net losses in operating income related to claims of $4.4 million in our CIG segment. No single client accounted for more than 10% of our accounts receivable at October 3, 2021 and September 27, 2020. Remaining Unsatisfied Performance Obligations (“RUPOs”) Our RUPOs represent a measure of the total dollar value of work to be performed on contracts awarded and in progress. We h ad $3.5 billion of RUP Os as of October 3, 2021. RUPOs increase with awards from new contracts or additions on existing contracts and decrease as work is performed and revenue is recognized on existing contracts. RUPOs may also decrease when projects are canceled or modified in scope. We include a contract within our RUPOs when the contract is awarded and an agreement on contract terms has been reached. We expect to satisfy our RUPOs as of October 3, 2021 over the following periods: Amount (in thousands) Within 12 months $ 2,031,377 Beyond 1,436,456 Total $ 3,467,833 Although RUPOs reflect business that is considered to be firm, cancellations, deferrals or scope adjustments may occur. RUPOs are adjusted to reflect any known project cancellations, revisions to project scope and cost, foreign currency exchange fluctuations and project deferrals, as appropriate. Our operations and maintenance contracts can generally be terminated by the clients without a substantive financial penalty. Therefore, the remaining performance obligations on such contracts are limited to the notice period required for the termination (usually 30, 60, or 90 days). |
Stock Repurchase and Dividends
Stock Repurchase and Dividends | 12 Months Ended |
Oct. 03, 2021 | |
Stock Repurchase And Dividends [Abstract] | |
Stock Repurchase and Dividends | Stock Repurchase and Dividends On January 27, 2020, the Board of D irectors authorized a $200 million stock repurchase program, which was included in our remaining authorization balance of $207.8 million as of fiscal 2020 year-end. In fiscal 2021, we repurchased and settled 479,369 shares with an average price of $125.16 per share for a total cost of $60.0 million in the open market. As of October 3, 2021, we had a remaining balance of $147.8 million available under repurchase program. The following table presents dividends declared and paid in fiscal 2021 and 2020: Declare Date Dividend Paid Per Share Record Date Payment Date Dividends Paid November 9, 2020 $ 0.17 November 30, 2020 December 11, 2020 $ 9,198 January 25, 2021 $ 0.17 February 10, 2021 February 26, 2021 9,212 April 26, 2021 $ 0.20 May 12, 2021 May 28, 2021 10,831 July 26, 2021 $ 0.20 August 20, 2021 September 3, 2021 10,800 Total dividends paid as of October 3, 2021 $ 40,041 November 11, 2019 $ 0.15 December 2, 2019 December 13, 2019 $ 8,190 January 27, 2020 $ 0.15 February 12, 2020 February 28, 2020 8,225 April 27, 2020 $ 0.17 May 13, 2020 May 29, 2020 9,175 July 27, 2020 $ 0.17 August 21, 2020 September 4, 2020 9,153 Total dividends paid as of September 27, 2020 $ 34,743 Subsequent Events. On October 5, 2021, the Board of Directors authorized a new stock repurchase program under which we could repurchase up to $400 million of our common stock in addition to the $147.8 million remaining under the previous stock repurchase program at October 3, 2021. On November 15, 2021, the Board of Directors also declared a quarterly cash dividend of $0.20 per share payable on December 20, 2021 to stockholders of record as of the close of business on December 2, 2021. |
Acquisitions
Acquisitions | 12 Months Ended |
Oct. 03, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions In fiscal 2021, we acquired Coanda Research and Development Corporation ("CRD"), The Kaizen Company (“KZN”), IBRA-RMAC Automation Solutions (“IRM”), and the partnership interests of Hoare Lea, LLP and Subsidiaries ("HLE"). CRD is based in Burnaby, British Columbia and provides world-class expertise in computational fluid dynamics and utilizes industry-leading capabilities to solve complex engineering science problems for commercial customers, across a broad range of industries. KZN is based in Washington, DC and provides international development advisory and management consulting services offering a suite of innovative tools that support advanced solutions in health, education, governance, peace and stability, and sustainable economic growth. IRM is based in San Diego, California, and provides digital water transformation consulting services and an innovative suite of tools to address complex water system modernization challenges. HLE is a leader in sustainable engineering design based in Bristol, United Kingdom. It was established in 1862 and is an award-winning high-end consultancy firm in the United Kingdom, with more than 900 employees, providing innovative solutions to complex engineering and design challenges for sustainable infrastructure and high performance buildings. CRD and HLE are part of our CIG segment, and KZN and IRM are part of our GSG segment. The total fair value of the purchase price for these acquisitions was $151.7 million. This amount is comprised of $101.4 million in initial cash payments made to the sellers, and $50.3 million for the estimated fair value of contingent earn-out obligations, with a maximum of $74.0 million, based upon the achievement of specified operating income targets in each of the three In fiscal 2020, we acquired Segue Technologies, Inc. ("SEG"), a leading information technology management consulting firm based in Arlington, Virginia, and BlueWater Federal Solutions, Inc. ("BWF"), a leading information technology management consulting firm based in Chantilly, Virginia. Both of these acquisitions are part of our GSG segment. The total fair value of the purchase price for these two acquisitions w as $88.6 million . This amount was comprised of $71.4 million in initial cash payments made to the seller s, $0.7 million of payabl es related to estimated post-closing adjustments for net assets acquired, and $16.5 million for the estimated fair value of contingent earn-out obligations, with a maximum of $28.0 million, based upon the achievement of specified operating income targets in each of the three years following the acquisitions. In fiscal 2019, we acquired eGlobalTech ("EGT") and WYG plc (“WYG”). EGT is a high-end information technology solutions, cloud migration, cybersecurity, and management consulting firm based in Arlington, Virginia. WYG employs approximately 1,600 staff primarily in the United Kingdom and Europe, delivering consulting and engineering solutions for complex projects across key service areas including planning, water and environment, transport, infrastructure, the built environment, architecture, urban design, surveying, asset management, program management, and international development. Both of these acquisitions are part of our GSG segment. The total fair value of the purchase price for these two acquisitions was $103.3 million. This amount was comprised of a $24.7 million promissory note issued to the sellers (which was subsequently paid in full in the third quarter of fiscal 2019), cash payments of $54.2 million to the sellers, $3.3 million of payables related to estimated post-closing adjustments for net assets acquired, and $21.1 million for the estimated fair value of contingent earn-out obligations, with a maximum of $25.0 million, based upon the achievement of specified operating income targets in each of the three years following the acquisitions. In addition, we assumed net debt of $11.5 million, which was subsequently paid in full in the fourth quarter of fiscal 2019 and incurred $10.4 million in acquisition and integration costs. Goodwill additions resulting from the above business combinations are primarily attributable to the existing workforce of the acquired companies and the synergies expected to arise after the acquisitions. The fiscal 2021 goodwill additions represent the significant technical expertise residing in embedded workforces that are sought out by clients and the long-standing reputation of HLE. The goodwill additions related to our fiscal 2020 goodwill additions represent the value of a workforce with distinct expertise in the high-end information technology field, in the areas of data analytics, modeling and simulation, cloud, and agile software development. In addition, these acquired capabilities, when combined with our exis ting global consulting and engineering business, result in opportunities that allow us to provide services under contracts that could not have been pursued individually by either us or the acquired compan ies. T he results of these acquisitions were included in our consolidated financial statements from their respective closing dates. These acquisitions were not considered material, individually or in the aggregate, to our consolidated financial statements. As a result, no pro forma information has been provided. Backlog, client relations and trade name intangible assets include the fair value of existing contracts and the underlying customer relationships with lives ranging from one three Most of our acquisition agreements include contingent earn-out agreements, which are generally based on the achievement of future operating income thresholds. The contingent earn-out arrangements are based on our valuations of the acquired companies and reduce the risk of overpaying for acquisitions if the projected financial results are not achieved. The fair values of any earn-out arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates. For each transaction, we estimate the fair value of contingent earn-out payments as part of the initial purchase price and record the estimated fair value of contingent consideration as a liability in “Current contingent earn-out liabilities” and “Long-term contingent earn-out liabilities” on the consolidated balance sheets. We consider several factors when determining that contingent earn-out liabilities are part of the purchase price, including the following: (1) the valuation of our acquisitions is not supported solely by the initial consideration paid, and the contingent earn-out formula is a critical and material component of the valuation approach to determining the purchase price; and (2) the former owners of acquired companies that remain as key employees receive compensation other than contingent earn-out payments at a reasonable level compared with the compensation of our other key employees. The contingent earn-out payments are not affected by employment termination. We measure our contingent earn-out liabilities at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy. We use a probability-weighted discounted income approach as a valuation technique to convert future estimated cash flows to a single present value amount. The significant unobservable inputs used in the fair value measurements are operating income projections over the earn-out period (generally two We review and re-assess the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could differ materially from the initial estimates. Changes in the estimated fair value of our contingent earn-out liabilities related to the time component of the present value calculation are reported in interest expense. Adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in operating income. In each quarter during fiscal 2021, we evaluated our estimates for contingent consideration liabilities for the remaining earn-out periods for each individual acquisition, which included a review of their financial results to-date, the status of ongoing projects in their RUPOs, and the inventory of prospective new contract awards. In addition, we considered the potential impact of the global economic disruption due to the COVID-19 pandemic on our operating income projections over the various earn-out periods. In fiscal 2021, we recorded adjustments to our contingent earn-out liabilities and reported a net gain in operating income of $3.3 million, substantially all in the fourth quarter. These adjustments resulted from the updated valuations of the contingent consideration liabilities, which reflect updated projections of acquired companies' financial performance during their respective earn-out periods. In fiscal 2020, we recorded adjustments to our contingent earn-out liabilities and reported related net gains in operating income of $15.0 million, substantially all in the fourth quarter. These gains primarily resulted from updated valuations of the contingent consideration liabilities for Norman, Disney and Young ("NDY"), EGT, and SEG. The acquisition agreement for NDY included a contingent earn-out agreement based on the achievement of operating income thresholds (in Australian dollars) in each of the first three years beginning on the acquisition date, which was in the second quarter of fiscal 2018. The maximum earn-out obligation over the three-year earn-out period was A$25 million (A$7.4 million in year one, and A$8.8 million each in years two and three). These amounts could be earned primarily on a pro-rata basis for operating income within a predetermined range in each year. NDY was required to meet a minimum operating income threshold in each year to earn any contingent consideration. The determination of the fair value of the purchase price for NDY on the acquisition date included our estimate of the fair value of the related contingent earn-out obligation. The initial valuation was primarily based on probability-weighted internal estimates of NDY's operating income during each earn-out period. Based on these estimates, we calculated an initial fair value at the acquisition date of A$9.4 million for NDY's contingent earn-out liability in the second quarter of fiscal 2018. In determining that NDY would earn 38% of the maximum potential earn-out, we considered several factors including NDY's recent historical revenue and operating income levels and growth rates. We also considered the recent trend in NDY's backlog level. NDY's actual financial performance in the first two earn-out periods exceeded our original estimates at the acquisition date. As a result, we increased the related contingent consideration liability and recognized losses of $2.1 million (A$3.0 million) an d $5.4 million (A$7.9 million) in fis cal 2018 and 2019, respectively. In the fourth quarter of fiscal 2020, we evaluated our estimate of NDY’s contingent consideration liability for the third and final earn-out period. This assessment included a review of NDY’s actual and forecasted results for the third earn-out period, which included an evaluation of the status of ongoing projects in NDY’s backlog, and the inventory of prospective new contract awards and the impact of the COVID-19 pandemic on the Australian economy and NDY's operations. As a result of this assessment, we concluded that NDY’s operating income in the third earn-out period would be lower than previously estimated, and we reduced NDY’s contingent earn-out liability to $1.8 million (A$2.6 million), which resulted in a gain of $3.7 million (A$5.2 million). The acquisition agreement for EGT included a contingent earn-out agreement based on the achievement of operating income thresholds in each of the first three years beginning on the acquisition date, which was in the second quarter of fiscal 2019. The maximum earn-out obligation over the three-year earn-out period was $25 million ($8.5 million in year one, $9.0 million in year two, and $7.5 million in year three). In each of the first two earn-out years, EGT was to receive a portion of the contingent consideration if EGT achieved a minimum operating income threshold. The remaining contingent consideration could be earned primarily on a pro-rata basis for operating income within a predetermined range in each year. EGT was required to meet a minimum operating income threshold in each year to earn any of this contingent consideration. The determination of the fair value of the purchase price for EGT on the acquisition date included our estimate of the fair value of the related contingent earn-out obligation. The initial valuation was primarily based on probability-weighted internal estimates of EGT's operating income during each earn-out period. Based on these estimates, we calculated an initial fair value at the acquisition date of $21.1 million for EGT's contingent earn-out liability in the second quarter of fiscal 2019. In determining that EGT would earn 84% of the maximum potential earn-out, we considered several factors including EGT's recent historical revenue and operating income levels and growth rates. We also considered the recent trend in EGT's backlog level and the prospects for the U.S. federal information technology market. In the third quarter of fiscal 2020, EGT achieved and was paid the maximum earn-out obligation for the first earn-out period. Subsequently, we evaluated our estimate of EGT’s contingent consideration liability for the second and third earn-out periods. This assessment included a review of EGT’s actual and forecasted results for the second and third earn-out periods, which included an evaluation of the status of ongoing projects in EGT’s backlog, and the inventory of prospective new contract awards. As a result of this assessment, we concluded that EGT's operating income in the second and third earn-out period would be lower than previously estimated. Accordingly, in the fourth quarter of fiscal 2020, we reduced EGT’s contingent earn-out liability to $7.5 million, which resulted in a gain of $4.7 million. The acquisition agreement for SEG included a contingent earn-out agreement based on the achievement of operating income thresholds in each of the first three years beginning on the acquisition date, which was in the second quarter of fiscal 2020. The maximum earn-out obligation over the three-year earn-out period was $20 million ($5.0 million, $7.0 million and $8.0 million for years one, two and three, respectively). SEG was to receive a portion of the contingent consideration if SEG achieved a minimum operating income threshold in each year of the earn-out period. The remaining contingent consideration could be earned primarily on a pro-rata basis for operating income within a predetermined range in each year. SEG was required to meet a minimum operating income threshold in each year to earn any of this contingent consideration. The determination of the fair value of the purchase price for SEG on the acquisition date included our estimate of the fair value of the related contingent earn-out obligation. The initial valuation was primarily based on probability-weighted internal estimates of SEG's operating income during each earn-out period. Based on these estimates, we calculated an initial fair value at the acquisition date of $11.3 million for SEG's contingent earn-out liability in the second quarter of fiscal 2020. In determining that SEG would earn 57% of the maximum potential earn-out, we considered several factors including SEG's recent historical revenue and operating income levels and growth rates. We also considered the recent trend in SEG's backlog level and the prospects for the U.S. federal information technology market. SEG’s actual financial performance in the first earn-out period on a year to date basis was below our original expectation at the acquisition date. As a result, in the fourth quarter of fiscal 2020, we evaluated our estimate of SEG’s contingent consideration liability for all earn-out periods. This assessment included a review of SEG’s financial results in the first earn-out period, the status of ongoing projects in SEG’s backlog, the inventory of prospective new contract awards, and future synergies with other Tetra Tech operating units. As a result of this assessment, we concluded that SEG’s operating income in all earn-out periods would be lower than originally anticipated. Accordingly, in the fourth quarter of fiscal 2020, we reduced the SEG contingent earn-out liability to $8.1 million, which resulted in a gain of $3.4 million. In fiscal 2019, we recorded adjustments to our contingent earn-out liabilities and reported a related net loss of $1.1 million in operating income. These adjustments resulted from the updated valuations of the contingent consideration liabilities, which reflect updated projections of acquired companies' financial performance during their respective earn-out periods. At October 3, 2021, there was a total potential max imum of $105.4 million of outstanding contingent consideration related to acquisitions. Of this amount, $59.3 million was estimated as the fair value and a ccrued on our consolidated balance sheet. If the global economic disruption due to the COVID-19 pandemic is prolonged, we could have more significant reductions in our contingent earn-out liabilities and related gains in operating income in future periods. The following table summarizes the changes in the carrying value of estimated contingent earn-out liabilities: Fiscal Year Ended October 3, September 27, September 29, (in thousands) Beginning balance $ 32,617 $ 52,992 $ 35,290 Acquisition date fair value of contingent earn-out liabilities 50,235 16,581 27,704 Change in fair value of contingent earn-out liabilities 992 1,162 1,489 Re-measurement of contingent earn-out liabilities (3,273) (14,971) 1,085 Foreign exchange impact (596) (247) (558) Earn-out payments: Reported as cash used in operating activities (427) — — Reported as cash used in financing activities (20,251) (22,900) (12,018) Ending balance $ 59,297 $ 32,617 $ 52,992 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Oct. 03, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The following table summarizes the changes in the carrying value of goodwill: GSG CIG Total (in thousands) Balance at September 29, 2019 $ 441,802 $ 483,018 $ 924,820 Acquisitions 74,882 5,294 80,176 Impairment — (15,800) (15,800) Translation and other (369) 4,671 4,302 Balance at September 27, 2020 516,315 477,183 993,498 Acquisitions 15,112 75,479 90,591 Translation and other 7,006 17,483 24,489 Balance at October 3, 2021 $ 538,433 $ 570,145 $ 1,108,578 Our goodwill was impacted by the final valuations of our acquisitions, and the foreign currency translation related to the goodwill balances of our foreign subsid iaries with functional currencies that are different than our reporting currency. The goodwill additions relate to our fiscal 2021 acquisitions. The purchase price allocations for our fiscal 2021 acquisitions of CRD, IRM, KZN and HLE are preliminary and subject to adjustment based upon the final determinations of the net assets acquired and information to perform th e final valuations. We per form our annual goodwill impairment review at the beginning of our fiscal fourth quarter. Our last review at June 28, 2021 (i.e. the first day of our fourth quarter in fiscal 2021), indicated that we had no impairment of goodwill, and all of our reporting units had estimated fair values that were in excess of their carrying values, including goodwill. We had no reporting units that had estimated fair values that exceeded their carrying values by less than 150%. We also regularly evaluate whether events and circumstances have occurred that may indicate a potential change in the recoverability of goodwill. We perform interim goodwill impairment reviews between our annual reviews if certain events and circumstances have occurred, such as a deterioration in general economic conditions; an increase in the competitive environment; a change in management, key personnel, strategy or customers; negative or declining cash flows; or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods. Although we believe that our estimates of fair value for these reporting units are reasonable, if financial performance for these reporting units falls significantly below our expectations or market prices for similar business decline, the goodwill for these reporting units could become impaired. On September 2, 2020, Australia announced that it had fallen into economic recession, defined as two consecutive quarters of negative growth, for the first time since 1991 including 7% negative growth in the quarter ending in June 2020. This prompted a strategic review of our Asia/Pacific ("ASP") reporting unit . As a result of the economic recession in Australia, our revenue growth and profit margin forecasts for the ASP reporting unit declined from the previous forecast used for our annual goodwill impairment review as of June 29, 2020. We also performed an interim goodwill impairment review of our ASP reporting unit in September 2020 and recorded a $15.8 million goodwill impairment charge. The impaired goodwill related to our acquisitions of Coffey International Limited and NDY. As a result of the impairment charge, the estimated fair value of our ASP reporting unit equaled its carrying value of $144.9 million, including $95.5 million of goodwill, at September 27, 2020. On September 28, 2020 (the first day of our fiscal 2021), we merged our former ASP reporting unit into our Client Account Management reporting unit. During the fourth quarter of fiscal 2019, we performed an interim goodwill impairment review of our Remediation and Field Services ("RFS") reporting unit and recorded a $7.8 million goodwill impairment charge. As a result of the impairment charge, the estimated fair value of the RFS reporting unit equaled its carrying value of $61 million at September 29, 2019, including the remaining $48.8 million of goodwill. The gross amounts of goodwill for GSG were $556.1 million and $534.0 million at fiscal 2021 and 2020 year-ends, respectively, excluding accumulated impairment of $17.7 million for each period. The gross amounts of goodwill for CIG were $691.6 million and $598.7 million at fiscal 2021 and 2020 year-ends, respectively, excluding accumulated impairment of $121.5 million for each period. The fo llowing tabl e presents the gross amount and accumulated amortization of our acquired identifiable intangible assets with finite useful lives included in "Intangible assets, net" on the consolidated balance sheets: Fiscal Year Ended October 3, 2021 September 27, 2020 Weighted- Gross Accumulated Net Gross Accumulated Net ($ in thousands) Client relations 7.3 $ 69,455 $ (43,984) $ 25,471 $ 60,775 $ (53,392) $ 7,383 Backlog 0.7 34,577 (30,670) 3,907 37,682 (32,761) 4,921 Technology and trade names 3.8 14,939 (6,327) 8,612 7,964 (6,325) 1,639 Total $ 118,971 $ (80,981) $ 37,990 $ 106,421 $ (92,478) $ 13,943 Amortization expense for the identifiable intangible assets for fiscal 2021, 2020 and 2019 was $11.5 million, $11.6 million and $11.6 million, respectively. Foreign currency translation adjustments were immaterial for fiscal 2021 and 2020. Estimated amortization expense for the succeeding five fiscal years and beyond is as foll ows: Amount (in thousands) 2022 $ 9,664 2023 7,591 2024 4,983 2025 4,348 2026 3,967 Beyond 7,437 Total $ 37,990 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Oct. 03, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consisted of the following: Fiscal Year Ended October 3, September 27, (in thousands) Equipment, furniture and fixtures $ 94,780 $ 90,942 Leasehold improvements 36,462 34,569 Total property and equipment 131,242 125,511 Accumulated depreciation (93,509) (90,004) Property and equipment, net $ 37,733 $ 35,507 |
Income Taxes
Income Taxes | 12 Months Ended |
Oct. 03, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income before income taxes, by geographic area, was as follows: Fiscal Year Ended October 3, September 27, September 29, (in thousands) Income before income taxes: United States $ 211,222 $ 209,443 $ 185,535 Foreign 55,648 18,548 (10,399) Total income before income taxes $ 266,870 $ 227,991 $ 175,136 Income tax expense consisted of the following: Fiscal Year Ended October 3, September 27, September 29, (in thousands) Current: Federal $ 41,056 $ 24,102 $ 30,051 State 9,893 6,872 8,923 Foreign 18,887 20,398 15,016 Total current income tax expense 69,836 51,372 53,990 Deferred: Federal (6,034) 2,187 (9,108) State (2,060) 870 (1,195) Foreign (27,703) (328) (27,312) Total deferred income tax (benefit) expense (35,797) 2,729 (37,615) Total income tax expense $ 34,039 $ 54,101 $ 16,375 Total income tax expense was different from the amount computed by applying the U.S. federal statutory rate to pre-tax income as follows: Fiscal Year Ended October 3, September 27, September 29, Tax at federal statutory rate 21.0% 21.0% 21.0% State taxes, net of federal benefit 2.3 2.7 3.3 Research and Development ("R&D") credits (2.6) (2.2) (4.7) Tax differential on foreign earnings 0.9 0.7 1.0 Non-taxable foreign interest income (1.0) (1.1) (1.7) Goodwill — 1.5 0.9 Stock compensation (3.3) (2.2) (2.4) Valuation allowance (9.3) 1.6 (13.5) Change in uncertain tax positions 1.7 0.4 2.4 Return to provision (3.7) 0.8 (0.2) Disallowed officer compensation 2.0 0.2 0.2 Cash repatriation 2.1 — — Unremitted earnings 1.0 — — Revaluation of deferred taxes — — (1.4) Deferred tax adjustments 0.8 (1.3) (0.4) Transition taxes on foreign earnings — — 1.4 Other 0.9 1.6 3.4 Total income tax expense 12.8% 23.7% 9.3% The effective tax rates for fiscal 2021, 2020 and 2019 were 12.8% , 23.7% and 9.3%, respectively. Our fiscal 2021 and 2019 effective tax rates reflect non-recurring net tax benefits of $21.6 million and $22.3 million, respectively, primarily consisting of valuation allowances in the United Kingdom and Australia that were released due to sufficient positive evidence being obtained in the respective years. The valuation allowances were primarily related to net operating loss and research and development credit carry-forwards and other temporary differences. We evaluated the positive evidence against any negative evidence and determined that it was more likely than not that the deferred tax assets would be realized. The primary factors used to assess the likelihood of realization were the past performance of the related entities and our forecast of future taxable income. The goodwill impairment charges in fiscal 2020 and 2019 and certain of the transaction charges in fiscal 2019 did not have related tax benefits. Also, income tax expense was reduced by $12.9 million, $8.3 million, $6.4 million of excess tax benefits on share-based payments in fiscal 2021, 2020, and 2019, respectively. Excluding the impact of the valuation allowance releases, non-deductible goodwill impairment charges and transaction costs, and the excess tax benefits on share-based payments our effective tax rates in fiscal 2021, 2020, and 2019 were 25.7%, 25.6%, and 24.6% respectively. We are currently under examination by the Internal Revenue Service for fiscal year 2018, the Canada Revenue Agency for fiscal years 2011 through 2016, and the California Franchise Tax Board for fiscal years 2014 through 2016. We are also subject to various other state audits. Temporary differences comprising the net deferred income tax asset shown on the accompanying consolidated balance sheets were as follows: Fiscal Year Ended October 3, September 27, (in thousands) Deferred Tax Assets: State taxes $ 1,342 $ 1,146 Reserves and contingent liabilities 6,662 6,262 Accounts receivable including the allowance for doubtful accounts 5,917 6,283 Accrued liabilities 41,657 28,223 Lease liabilities, operating leases 60,181 66,941 Stock-based compensation 3,560 5,905 Loss carry-forwards 54,825 43,475 Valuation allowance (13,040) (24,395) Total deferred tax assets 161,104 133,840 Deferred Tax Liabilities: Unbilled revenue (5,595) (14,451) Prepaid expense (8,136) (5,967) Right-of-use assets, operating leases (60,181) (66,941) Intangibles (40,121) (29,130) Undistributed earnings (3,136) — Property and equipment (85) (1,615) Total deferred tax liabilities (117,254) (118,104) Net deferred tax assets $ 43,850 $ 15,736 In the fourth quarter of fiscal 2021, we repatriated approximately $80 million from Canada and recognized a related tax expense of $5.6 million. At this time, we also determined that our remaining undistributed earnings in Canada of approximately $20.1 million are no longer being indefinitely reinvested and recorded an additional deferred tax liability/expense of $3.1 million. At October 3, 2021, undistributed earnings of our other foreign subsidiaries, primarily in Australia and the U.K. of approximately $50.9 million are expected to be indefinitely reinvested in t hese foreign countries. Accordingly, no provision for foreign withholding taxes has been made. Assuming the indefinitely reinvested foreign earnings were repatriated under the laws and rates applicable at October 3, 2021, the incremental taxes applicable to those earnings would not be material. At October 3, 2021, we had available unused state net operating loss ("NOL") carry forwards of $43.7 million that expire at various dates from 2024 to 2037; and available foreign NOL carry forwards of $165.5 million, of which $14.7 million expire at various dates from 2024 to 2041, and $150.8 million have no expiration date. In addition, we had foreign capital loss carryforwards of $21.5 million and foreign research and development credits of $3.9 million that do not have expiration dates. We have performed an assessment of positive and negative evidence regarding the realization of the deferred tax assets. This assessment included the evaluation of scheduled reversals of deferred tax liabilities, availability of carrybacks, cumulative losses in recent years, estimates of projected future taxable income, and tax planning strategies. Although realization is not assured, based on our assessment, we have concluded that it is more likely than not that the assets will be realized except for the deferred tax assets related to the loss carry-forwards for which a valuation allowance of $13.0 million has been provided. At October 3, 2021, we had $12.9 million of unrecognized tax benefits, all of which, if recognized, would affect our effective tax rate. It is reasonably possible that the amount of the unrecognized tax benefits with respect to certain of our unrecognized tax positions may significantly decrease in the next 12 months. These changes would be the result of ongoing examinations. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Fiscal Year Ended October 3, September 27, September 29, (in thousands) Beginning balance $ 9,228 $ 9,169 $ 8,328 Additions for current year tax positions 2,171 700 1,342 Additions for prior year tax positions 1,500 — 356 Reductions for prior year tax positions — (641) (100) Settlements — — (757) Ending balance $ 12,899 $ 9,228 $ 9,169 We recognize potential interest and penalties related to unrecognized tax benefits in income tax expense. During fiscal years 2021, 2020 and 2019, we accrued additional interest and penalties of $0.8 million, $0.8 million and $2.6 million, respectively, and recorded reductions in accrued interest and penalties of $0, $0 and $0.2 million, respectively, as a result of audit settlements and other prior-year adjustments. The amount of interest and penalties accrued at October 3, 2021, September 27, 2020 and September 29, 2019 was $5.2 million, $4.4 million and $3.6 million, respectively. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Oct. 03, 2021 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consisted of the following: Fiscal Year Ended October 3, September 27, (in thousands) Credit facilities $ 212,500 $ 291,659 Less: Current portion of long-term debt (12,500) (49,264) Long-term debt $ 200,000 $ 242,395 On July 30, 2018, we entered into a Second Amended and Restated Credit Agreement (“Amended Credit Agreement”) with a total borrowing capacity of $1 billion that will mature in July 2023. The Amended Credit Agreement is a $700 million senior secured, five-year facility that provides for a $250 million term loan facility (the “Amended Term Loan Facility”), a $450 million revolving credit facility (the “Amended Revolving Credit Facility”), and a $300 million accordion feature that allows us to increase the Amended Credit Agreement to $1 billion subject to lender approval. The Amended Credit Agreement allows us to, among other things, (i) refinance indebtedness under our Credit Agreement dated as of May 7, 2013; (ii) finance certain permitted open market repurchases of our common stock, permitted acquisitions, and cash dividends and distributions; and (iii) utilize the proceeds for working capital, capital expenditures and other general corporate purposes. The Amended Revolving Credit Facility includes a $100 million sublimit for the issuance of standby letters of credit, a $20 million sublimit for swingline loans, and a $200 million sublimit for multicurrency borrowings and letters of credit. The entire Amended Term Loan Facility was drawn on July 30, 2018. The Amended Term Loan Facility is subject to quarterly amortization of principal at 5% annually beginning December 31, 2018. We may borrow on the Amended Revolving Credit Facility, at our option, at either (a) a Eurocurrency rate plus a margin that ranges from 1.00% to 1.75% per annum, or (b) a base rate for loans in U.S. dollars (the highest of the U.S. federal funds rate plus 0.50% per annum, the bank’s prime rate or the Eurocurrency rate plus 1.00%) plus a margin that ranges from 0% to 0.75% per annum. In each case, the applicable margin is based on our Consolidated Leverage Ratio, calculated quarterly. The Amended Term Loan Facility is subject to the same interest rate provisions. The Amended Credit Agreement expires on July 30, 2023, or earlier at our discretion upon payment in full of loans and other obligations. At October 3, 2021, we had $212.5 million in outstanding borrowings under the Amended Credit Agreement, which was comprised of $212.5 million under the Amended Term Loan Facility and no borrowings outstanding under the Amended Revolving Credit Facility. The weighted-average interest rate of the outstanding borrowings during fiscal 2021 was 1.25%. In addition, we had $0.7 million in standby letters of credit under the Amended Credit Agreement. Our weighted-average interest rate on borrowings outstanding during fiscal 2021 under the Amended Credit Agreement, including the effects of interest rate swap agreements described in Note 14, “Derivative Financial Instruments” of the "Notes to Consolidated Financial Statements" included in Item 8, was 3.30%. At October 3, 2021, we had $449.3 million of available credit under the Amended Revolving Credit Facility, all of which could be borrowed without a violation of our debt covenants. The Amended Credit Agreement contains certain affirmative and restrictive covenants, and customary events of default. The financial covenants provide for a maximum Consolidated Leverage Ratio of 3.00 to 1.00 (total funded debt/EBITDA, as defined in the Amended Credit Agreement) and a minimum Consolidated Interest Coverage Ratio of 3.00 to 1.00 (EBITDA/Consolidated Interest Charges, as defined in the Amended Credit Agreement). Our obligations under the Amended Credit Agreement are guaranteed by certain of our domestic subsidiaries and are secured by first priority liens on (i) the equity interests of certain of our subsidiaries, including those subsidiaries that are guarantors or borrowers under the Amended Credit Agreement, and (ii) the accounts receivable, general intangibles and intercompany loans, and those of our subsidiaries that are guarantors or borrowers. At October 3, 2021, we were in compliance with these covenants with a consolidated leverage ratio of 0.87x and a consolidated interest coverage ratio of 26.38x. In addition to the Amended Credit Agreement, we maintain other credit facilities, which may be used for bank overdrafts, short-term cash advances and bank guarantees. At October 3, 2021, th ere were no amounts outstanding under these facilities and the aggregate amount of standby letters of credit outstanding was $53.4 million. As of October 3, 2021 we had no bank overdrafts related to our disbursement bank accounts. The following table presents scheduled maturities of our long-term debt: Amount (in thousands) 2022 12,500 2023 200,000 Total $ 212,500 |
Leases
Leases | 12 Months Ended |
Oct. 03, 2021 | |
Leases [Abstract] | |
Leases | Leases We adopted Leases (Topic 842), effective September 30, 2019 (the first day of our fiscal 2020) using the modified retrospective transition approach. Results for reporting periods beginning after the adoption date are presented under Topic 842, while prior period amounts are not adjusted and continue to be presented in accordance with our historical accounting under ASC 840. Our operating leases are primarily for corporate and project office spaces. To a much lesser extent, we have operating leases for vehicles and equipment. Our operating leases have remaining lease terms of one month to twelve years, some of which may include options to extend the leases for up to five years. We determine if an arrangement is a lease at inception. Operating leases are included in operating lease ROU assets and current and long-term op erating lease liabilities in the consolidated balance sheets. Our finance leases are primarily for certain IT equipment. The related ROU assets and lease liabilities were immaterial, and are included in "Property and equipment, net", "Other current liabilities" and "Other long-term liabilities", accordingly, in the consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, incremental borrowing rates are used based on the information available at commencement date in determining the present value of lease payments . The operating lease ROU asset at the commencement date also includes any lease payments made to the lessor at or before the commencement date and initial direct costs less lease incentives received. Lease te rms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. The components of lease costs are as follows: Fiscal Year Ended October 3, September 27, (in thousands) Operating lease cost $ 91,076 $ 87,348 Sublease income (106) (2,216) Other — 72 Total lease cost $ 90,970 $ 85,204 Supplemental cash flow information related to leases is as follows: Fiscal Year Ended October 3, September 27, (in thousands) Operating cash flows for operating leases $ 81,943 $ 80,289 Right-of-use assets obtained in exchange for new operating lease liabilities $ 72,076 $ 317,587 Supplemental balance sheet and other information related to leases are as follows: Fiscal Year Ended October 3, September 27, (in thousands) Operating leases: Right-of-use assets $ 215,422 $ 239,396 Lease liabilities: Current $ 67,452 $ 69,650 Long-term 174,285 191,955 Total operating lease liabilities $ 241,737 $ 261,605 Weighted-average remaining lease term: Operating leases 5 years 5 years Weighted-average discount rate: Operating leases 2.2 % 2.5 % As of October 3, 2021 , we do not have any material additional operating leases that have not yet commenced. A maturity analysis of the future undiscounted cash flows associated with our operating lease liabilities as of October 3, 2021 is as follows: Amount (in thousands) 2022 $ 71,913 2023 55,528 2024 40,512 2025 29,521 2026 19,643 Beyond 40,119 Total lease payments 257,236 Less: imputed interest (15,499) Total present value of lease liabilities $ 241,737 Rental expense for operating leases classified under ASC 840 for fiscal 2019 was $79.3 million, and was predominantly recorded within selling, general and administrative expenses. |
Leases | Leases We adopted Leases (Topic 842), effective September 30, 2019 (the first day of our fiscal 2020) using the modified retrospective transition approach. Results for reporting periods beginning after the adoption date are presented under Topic 842, while prior period amounts are not adjusted and continue to be presented in accordance with our historical accounting under ASC 840. Our operating leases are primarily for corporate and project office spaces. To a much lesser extent, we have operating leases for vehicles and equipment. Our operating leases have remaining lease terms of one month to twelve years, some of which may include options to extend the leases for up to five years. We determine if an arrangement is a lease at inception. Operating leases are included in operating lease ROU assets and current and long-term op erating lease liabilities in the consolidated balance sheets. Our finance leases are primarily for certain IT equipment. The related ROU assets and lease liabilities were immaterial, and are included in "Property and equipment, net", "Other current liabilities" and "Other long-term liabilities", accordingly, in the consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, incremental borrowing rates are used based on the information available at commencement date in determining the present value of lease payments . The operating lease ROU asset at the commencement date also includes any lease payments made to the lessor at or before the commencement date and initial direct costs less lease incentives received. Lease te rms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. The components of lease costs are as follows: Fiscal Year Ended October 3, September 27, (in thousands) Operating lease cost $ 91,076 $ 87,348 Sublease income (106) (2,216) Other — 72 Total lease cost $ 90,970 $ 85,204 Supplemental cash flow information related to leases is as follows: Fiscal Year Ended October 3, September 27, (in thousands) Operating cash flows for operating leases $ 81,943 $ 80,289 Right-of-use assets obtained in exchange for new operating lease liabilities $ 72,076 $ 317,587 Supplemental balance sheet and other information related to leases are as follows: Fiscal Year Ended October 3, September 27, (in thousands) Operating leases: Right-of-use assets $ 215,422 $ 239,396 Lease liabilities: Current $ 67,452 $ 69,650 Long-term 174,285 191,955 Total operating lease liabilities $ 241,737 $ 261,605 Weighted-average remaining lease term: Operating leases 5 years 5 years Weighted-average discount rate: Operating leases 2.2 % 2.5 % As of October 3, 2021 , we do not have any material additional operating leases that have not yet commenced. A maturity analysis of the future undiscounted cash flows associated with our operating lease liabilities as of October 3, 2021 is as follows: Amount (in thousands) 2022 $ 71,913 2023 55,528 2024 40,512 2025 29,521 2026 19,643 Beyond 40,119 Total lease payments 257,236 Less: imputed interest (15,499) Total present value of lease liabilities $ 241,737 Rental expense for operating leases classified under ASC 840 for fiscal 2019 was $79.3 million, and was predominantly recorded within selling, general and administrative expenses. |
Stockholders' Equity and Stock
Stockholders' Equity and Stock Compensation Plans | 12 Months Ended |
Oct. 03, 2021 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity and Stock Compensation Plans | Stockholders' Equity and Stock Compensation Plans At October 3, 2021, we had the following stock-based compensation plans: • 2005 Equity Incentive Plan. Key employees and non-employee directors may be granted equity awards, including stock options, restricted stock and restricted stock units ("RSUs"). Options granted before March 6, 2006 vested at 25% on the first anniversary of the grant date, and the balance vests monthly thereafter, such that these options become fully vested no later than four years from the date of grant. These options expire no later than ten years from the date of grant. Options granted on and after March 6, 2006 vest at 25% on each anniversary of the grant date. These options expire no later than eight years from the grant date. RSUs granted to date vest at 25% on each anniversary of the grant date. • 2015 Equity Incentive Plan ("2015 EIP"). Key employees and non-employee directors may be granted equity awards, including stock options, performance share units ("PSUs") and RSUs. Shares issued with respect to awards granted under the 2015 EIP other than stock options or stock appreciation rights, which are referred to as "full value awards", are counted against the 2015 EIP's aggregate share limit as three shares for every share or unit actually issued. No awards have been made under the 2015 Equity Incentive Plan since the adoption of the 2018 Equity Incentive Plan on March 8, 2018 described below. • 2018 Equity Incentive Plan ("2018 EIP") . Key employees and non-employee directors may be granted equity awards, including stock options, PSUs and RSUs. Shares issued with respect to awards granted under the 2018 EIP other than stock options or stock appreciation rights, which are referred to as "full value awards", are counted against the 2018 EIP's aggregate share limit as one share for every share or unit issued. At October 3, 2021, there were 2.3 million shares available for future awards pursuant to the 2018 EIP. • Employee Stock Purchase Plan ("ESPP"). Purchase rights to purchase common stock are granted to our eligible full and part-time employees, and shares of common stock are issued upon exercise of the purchase rights. An aggregate of 487,023 shares may be issued pursuant to such exercise. The maximum amount that an employee can contribute during a purchase right period is $5,000. The exercise price of a purchase right is the lesser of 100% of the fair market value of a share of common stock on the first day of the purchase right period (the business day preceding January 1) or 85% of the fair market value on the last day of the purchase right period (December 15, or the business day preceding December 15 if December 15 is not a business day). The following table presents our stock-based compensation and related income tax benefits: Fiscal Year Ended October 3, September 27, September 29, (in thousands) Total stock-based compensation $ 23,067 $ 19,424 $ 17,618 Income tax benefit related to stock-based compensation (4,910) (4,318) (4,016) Stock-based compensation, net of tax benefit $ 18,157 $ 15,106 $ 13,602 We recognize the fair value of our stock-based awards as compensation expense on a straight-line basis over the requisite service period in which the award vests. Most of these amounts were included in selling, general and administrative expenses on our consolidated statements of income. Stock Options The following table presents our stock option activity for fiscal year ended October 3, 2021: Number of Weighted- Weighted- Aggregate Outstanding on September 27, 2020 539 $ 36.34 Exercised (324) 34.70 Forfeited (1) 40.80 Outstanding at October 3, 2021 214 $ 38.80 4.95 $ 24,149 Vested or expected to vest at October 3, 2021 214 $ 38.80 4.95 $ 24,149 Exercisable on October 3, 2021 179 $ 37.05 4.72 $ 20,600 The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between our closing stock price on the last trading day of fiscal 2021 and the exercise price, times the number of shares) t hat would have been rec eived by the in-the-money option holders if they had exercised their options on October 3, 2021. This amount will change based on the fair market value of our stock. At October 3, 2021, we expect to recognize $0.1 million of unrecognized compensation cost related to stock option grants over a weighted-average period of one year. No stock options were granted in fiscal 2021 and 2020. The aggregate intrinsic value of options exercised during fiscal 2021, 2020 and 2019 was $29.4 million, $22.4 million and $20.4 million, respectively. Net cash proceeds from the exercise of stock options were $11.3 million, $10.3 million and $11.8 million for fiscal 2021, 2020 and 2019, respectively. Our policy is to issue shares from our authorized shares upon the exercise of stock options. The actual income tax benefit realized from exercises of nonqualified stock options and disqualifying dispositions of qualified options for fiscal 2021, 2020 and 2019 was $12.9 million, $8.3 million and $6.4 million, respectively. RSU and PSU RSU awards are granted to our key employee and non-employee directors. The fair value of the RSU was determined at the date of grant using the market price of the underlying common stock as of the date of grant. All of the RSUs have time-based vesting over a four-year period, except that RSUs awarded to directors vest after one year. The total compensation cost of the awards is then amortized over their applicable vesting period on a straight-line basis. PSU awards are granted to our executive officers and non-employee directors. All of the PSUs are performance-based and vest, if at all, after the conclusion of the three-year performance period. The number of PSUs that ultimately vest is based on 50% growth in our EPS and 50% on our relative total shareholder return over the vesting period. For these performance- based awards, our expected performance is reviewed to estimate the percentage of shares that will vest. The total compensation cost of the awards is then amortized over their applicable vesting period on a straight-line basis. A summary of the RSU and PSU activity under our stock plans is as follows: RSU PSU Number of Weighted- Number of Weighted- Nonvested balance at September 30, 2018 488 $ 39.56 323 $ 44.27 Granted 179 66.26 90 80.41 Vested (180) 36.95 (108) 31.63 Adjustment (1) — — 79 31.63 Forfeited (17) 48.56 — — Nonvested balance at September 29, 2019 470 50.42 384 53.67 Granted 168 83.92 74 99.85 Vested (178) 46.87 (162) 47.28 Adjustment (1) — — 64 48.36 Forfeited (16) 65.43 (5) 83.98 Nonvested balance at September 27, 2020 444 63.93 355 64.83 Granted 118 122.02 58 153.03 Vested (167) 59.64 (193) 57.40 Adjustment (1) — — 99 57.40 Forfeited (14) 77.74 (1) 74.05 Nonvested balance at October 3, 2021 381 $ 83.30 318 $ 82.96 (1) For fiscal 2019, includes a payout adjustment of 79,465 PSUs due to the actual performance level achieved for PSUs granted in fiscal 2016 that vested during fiscal 2019. For fiscal 2020 includes a payout adjustment of 63,643 PSUs due to the actual performance level achieved for PSUs granted in fiscal 2017 that vested during fiscal 2020. For fiscal 2021 includes a payout adjustment of 99,214 PSUs due to the actual performance level achieved for PSUs granted in fiscal 2018 that vested during fiscal 2021. During fiscal 2021, 2020 and 2019, we awarded 117,934, 167,525 and 179,478 shares of RSUs, respectively, to our key employees and non-employee directors. The weighted-average grant-date fair value of RSUs granted during fiscal 2021, 2020 and 2019 was $122.02, $83.92 and $66.26, respectively. At October 3, 2021, there were 380,631 RSUs outstanding. RSU forfeitures result from employment terminations prior to vesting. Forfeited shares return to the pool of authorized shares available for award. We use historical data as a basis to estimate the probability of forfeitures related to RSUs and the ESPP Plan. During fiscal 2021, 2020 and 2019, we awarded 57,542, 74,011 and 89,816 shares of PSUs, respectively, to our executive officers and non-employee directors. The weighted-average grant-date fair value of PSUs granted during fiscal 2021, 2020 and 2019 was $153.03, $99.85 and $80.41, respectively. The stock-based compensation expense related to RSUs and PSUs for fiscal 2021, 2020 and 2019 was $20.9 million, $17.7 million and $15.4 million, respectively, and was included in total stock-based compensation expense. At October 3, 2021, there was $31.6 million of unrecognized stock-based compensation costs related to nonvested RSUs and PSUs that will be substantially recognized by the end of fiscal 2023. ESPP The following table summarizes shares purchased, weighted-average purchase price, and cash received for shares purchased under the ESPP: Fiscal Year Ended October 3, September 27, September 29, (in thousands, except for purchase price) Shares purchased 124 168 148 Weighted-average purchase price per share $ 86.16 $ 51.77 $ 46.38 Cash received from exercise of purchase rights $ 10,705 $ 8,715 $ 6,844 The grant date fair value of each award granted under the ESPP was estimated using the Black-Scholes option pricing model with the following assumptions: Fiscal Year Ended October 3, September 27, September 29, Dividend yield 1.0% 1.0% 1.0% Expected stock price volatility 47.9% 26.5% 26.7% Risk-free rate of return, annual 0.1% 1.6% 2.6% Expected life (in years) 1 1 1 For fiscal 2021, 2020 and 2019, we based our expected stock price volatility on historical volatility behavior and current implied volatility behavior. The risk-free rate of return was based on constant maturity rates provided by the U.S. Treasury. The expected life was based on the ESPP terms and conditions. Stock-based compensation expense for fiscal 2021, 2020 and 2019 included $2.0 million, $1.2 million and $0.9 million, respectively, related to the ESPP. The unrecognized stock-based compensation costs for awards granted under the ESPP at fiscal 2021 and 2020 year-ends were $0.5 million and $0.3 million, respectively. At October 3, 2021, ESPP participants had accumulated $10.8 million to purchase our common stock. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Oct. 03, 2021 | |
Retirement Benefits [Abstract] | |
Retirement Plans | Retirement Plans We have defined contribution plans in various countries where we have employees. This primarily includes 401(k) plans in the United States. For fiscal 2021, 2020 and 2019, employer contributions to the U.S. plans were $26.9 million, $25.0 million and $23.3 million, respectively. Additionally, we have established a non-qualified deferred compensation plan for certain key employees and non-employee directors. These eligible employees and non-employee directors may elect to defer the receipt of salary, incentive payments, restricted stock, PSU and RSU awards, and non-employee director fees. The plan is accounted for in accordance with applicable authoritative guidance on accounting for deferred compensation arrangements where amounts earned are held in a rabbi trust and invested. Employee deferrals are deposited into a rabbi trust, and the funds are generally invested in individual variable life insurance contracts that we own and are specifically designed to informally fund savings plans of this nature. At October 3, 2021 and September 27, 2020, the consolidated balance sheets reflect assets of $41.4 million and $35.1 million, respectively, related to the deferred compensation plan in "Other long-term assets," and liabilities of $41.1 million and $35.0 million, respectively, related to the deferred compensation plan in "Other long-term liabilities." The net gains and losses related to the deferred compensation plan are reported as part of “Selling, general and administrative expenses” in our consolidated statements of income . These related net gains and losses were immaterial for fiscal 2021, 2020 and 2019. In connection with the acquisition of HLE in fiscal 2021, we assumed a defined benefit pension plan (the “Plan”), which HLE operates for all qualifying employees. The assets of the Plan are held in a separate trustee administered fund. The Plan was closed to new entrants in August 2003, except for current employees who had not attained the age of 24 at that date. The Plan was closed to future accrual on December 31, 2009. Under the agreed schedule of contributions, HLE will make no further contributions, and is to pay the expenses of administering the plan. The change in the defined benefit obligation, the change in fair value of plan assets, and the amounts recognized in the Consolidated Statement of Income, the Consolidated Statement of Comprehensive Income and the Consolidated Statements of Shareholders’ Equity for the period from July 26, 2021 (acquisition date of HLE) to October 3, 2021 were immaterial. The Plan's funded status at October 3, 2021 was as follows: Fair value of plan assets $ 65,836 Benefit obligation (64,830) Net surplus $ 1,006 The net surplus is reflected in other long-term assets on our consolidated balance sheet at October 3, 2021. The fair values of the plan assets are substantially categorized within Level 2 of the fair value hierarchy. As of October 3, 2021, the fair values of the plan assets by major asset categories were as follows (in 000’s): Equities $ 13,646 Mutual funds 33,826 Liability driven investment funds 17,653 Cash/other 711 Fair value of plan assets $ 65,836 We seek a competitive rate of return relative to an appropriate level of risk depending on the funded status and obligations of each plan and typically employ both active and passive investment management strategies. The risk in our practices include diversification across asset classes and investment styles and periodic rebalancing toward asset allocation targets. The target asset allocation selected for each plan reflects a risk/return profile that we believe is appropriate relative to each plan’s liability structure and return goals. Principal assumptions used for the benefit obligation in the valuation at October 3, 2021 are as follows: Discount rate 2.00% Rate of inflation 2.85% to 3.50% |
Earnings per Share
Earnings per Share | 12 Months Ended |
Oct. 03, 2021 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per ShareThe following table sets forth the number of weighted-average shares used to compute basic and diluted EPS: Fiscal Year Ended October 3, September 27, September 29, (in thousands, except per share data) Net income attributable to Tetra Tech $ 232,810 $ 173,859 $ 158,668 Weighted-average common shares outstanding – basic 54,078 54,235 54,986 Effect of diluted stock options and unvested restricted stock 597 787 950 Weighted-average common stock outstanding – diluted 54,675 55,022 55,936 Earnings per share attributable to Tetra Tech: Basic $ 4.31 $ 3.21 $ 2.89 Diluted $ 4.26 $ 3.16 $ 2.84 |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Oct. 03, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments We often use certain interest rate derivative contracts to hedge interest rate exposures on our variable rate debt. Also, we may enter into foreign currency derivative contracts with financial institutions to reduce the risk that cash flows and earnings could adversely be affected by foreign currency exchange rate fluctuations. Our hedging program is not designated for trading or speculative purposes. We recognize derivative instruments as either assets or liabilities on the accompanying consolidated balance sheets at fair value. We record changes in the fair value (i.e., gains or losses) of the derivatives that have been designated as cash flow hedges in our consolidated balance sheets as accumulated other comprehensive income, and in our consolidated statements of income for those derivatives designated as fair value hedges. The derivative contracts to hedge interest exposure are categorized within Level 2 of the fair value hierarchy. In fiscal 2018, we entered into five interest rate swap agreements that we designated as cash flow hedges to fix the interest rates on the borrowings under our term loan facility. As of October 3, 2021, the notional principal of our outstanding interest swap agreements was $212.5 million ($42.5 million each.) The interest rate swaps have a fixed interest rate of 2.79% and expire in July 2023 for all five agreements. At October 3, 2021 and September 27, 2020, the fair value of the effective portion of our interest rate swap agreements designated as cash flow hedges before tax effect was $(9.4) million and $(15.5) million, respectively, of which we expect to reclassify $5.4 million from accumulated other comprehensive loss to interest expense within the next 12 months. The fair values of our outstanding derivatives designated as hedging instruments were as foll ows: Fair Value of Derivative Balance Sheet Location October 3, September 27, (in thousands) Interest rate swap agreements Other current liabilities $ 9,394 $ 15,512 Changes in the fair value of the interest rate swap agreements are presented on the consolidated statements of comprehensive income as follows: Fiscal Year Ended October 3, 2021 September 27, 2020 September 29, 2019 (in thousands) (Loss) gain recognized in other comprehensive income, net of tax Interest rate swap agreements 6,117 (4,638) (12,125) |
Reclassifications Out of Accumu
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Oct. 03, 2021 | |
Equity [Abstract] | |
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | Reclassifications Out of Accumulated Other Comprehensive Income (Loss) The accumulated balances and reporting period activities for fiscal 2021, 2020 and 2019 related to reclassifications out of accumulated other comprehensive income are summarized as follows: Foreign Gain (Loss) Accumulated (in thousands) Balances at September 30, 2018 $ (128,602) $ 1,252 $ (127,350) Other comprehensive loss before reclassifications (21,109) (11,247) (32,356) Amounts reclassified from accumulated other comprehensive income Interest rate contracts, net of tax (1) — (878) (878) Net current-period other comprehensive loss (21,109) (12,125) (33,234) Balances at September 29, 2019 $ (149,711) $ (10,873) $ (160,584) Other comprehensive income (loss) before reclassifications 3,436 (599) 2,837 Amounts reclassified from accumulated other comprehensive income Interest rate contracts, net of tax (1) — (4,039) (4,039) Net current-period other comprehensive income (loss) 3,436 (4,638) (1,202) Balances at September 27, 2020 $ (146,275) $ (15,511) $ (161,786) Other comprehensive income before reclassifications 30,641 12,175 42,816 Amounts reclassified from accumulated other comprehensive income Interest rate contracts, net of tax (1) — (6,058) (6,058) Net current-period other comprehensive income 30,641 6,117 36,758 Balances at October 3, 2021 $ (115,634) $ (9,394) $ (125,028) (1) This accumulated other comprehensive component is reclassified to "Interest expense" in our consolidated statements of income. See Note 14, "Derivative Financial Instruments", for more information. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Oct. 03, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Derivative Instruments. Our derivative instruments are categorized within Level 2 of the fair value hierarchy. For additional information about our derivative financial instruments (see Note 2, "Basis of Presentation and Preparation" and Note 14, "Derivative Financial Instruments"). Contingent Consideration. We measure our contingent earn-out liabilities at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy. (see Note 2, "Basis of Presentation and Preparation" and Note 5, "Acquisitions" for further information). Debt. The fair value of long-term debt was determined using the present value of future cash flows based on the borrowing rates currently available for debt with similar terms and maturities (Level 2 measurement). The carrying value of our long-term debt approximated fair value at October 3, 2021 and September 27, 2020. At October 3, 2021, we had borrowings of $212.5 million outstanding under our Amended Credit Agreement, which were used to fund our business acquisitions, working capital needs, stock repurchases, dividends, capital expenditures and contingent earn-outs. Defined Benefit Pension Plan . The fair values of the plan assets are primarily categorized within Level 2 of the fair value hierarchy. For additional information about our defined benefit pension plan (see Note 12, "Retirement Plans "). |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Oct. 03, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We are subject to certain claims and lawsuits typically filed against the consulting and engineering profession, alleging primarily professional errors or omissions. We carry professional liability insurance, subject to certain deductibles and policy limits, against such claims. However, in some actions, parties are seeking damages that exceed our insurance coverage or for which we are not insured. While management does not believe that the resolution of these claims will have a material adverse effect, individually or in aggregate, on our financial position, results of operations or cash flows, management acknowledges the uncertainty surrounding the ultimate resolution of these matters. On July 15, 2019, following an initial January 14, 2019 filing, the Civil Division of the United States Attorney's Office filed an amended complaint in intervention in three qui tam actions filed against our subsidiary, Tetra Tech EC, Inc. ("TtEC"), in the U.S. District Court for the Northern District of California. The complaint alleges False Claims Act violations and breach of contract related to TtEC's contracts to perform environmental remediation services at the former Hunters Point Naval Shipyard in San Francisco, California. TtEC disputes the claims and will defend this matter vigorously. We are currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any. |
Reportable Segments
Reportable Segments | 12 Months Ended |
Oct. 03, 2021 | |
Segment Reporting [Abstract] | |
Reportable Segments | Reportable Segments We manage ou r operations under two reportable segments. Our GSG reportable segment primarily includes activities with U.S. government clients (federal, state and local) and all activities with development agencies worldwide. Our CIG reportable segment primarily includes activities with U.S. commercial clients and international clients other than development agencies. Additionally, we continue to report the results of the wind-down of our non-core construction activities in the RCM reportable segment. Our reportable segments are described as follows: GSG: GSG provides consulting and engineering services primarily to U.S. government clients (federal, state and local) and development agencies worldwide. GSG supports U.S. government civilian and defense agencies with services in water, environment, sustainable infrastructure, information technology, and disaster management. GSG also provides engineering design services for U.S. municipal and commercial clients, especially in water infrastructure, solid waste, and high-end sustainable infrastructure designs. GSG also leads our support for development agencies worldwide, especially in the United States, United Kingdom, and Australia. CIG: CIG primarily provides consulting and engineering services to U.S. commercial clients, and international clients that include both commercial and government sectors. CIG supports commercial clients across the Fortune 500, energy utilities, industrial, manufacturing, aerospace, and resource management markets. CIG also provides infrastructure and related environmental, engineering and project management services to commercial and local government clients across Canada, in Asia Pacific (primarily Australia and New Zealand), the United Kingdom, as well as Brazil and Chile. RCM: We continued to report the results of the wind-down of our non-core construction activities in the RCM reportable segment for fiscal 2021. As of October 3, 2021, there was no remaining backlog for RCM as all projects were complete. Management evaluates the performance of these reportable segments based upon their respective segment operating income before the effect of amortization expense related to acquisitions, and other unallocated corporate expenses. We account for inter-segment revenues and transfers as if they were to third parties; that is, by applying a negotiated fee onto the costs of the services performed. All significant intercompany balances and transactions are eliminated in consolidation. The following tables present summarized financial information of our reportable segments: Reportable Segments Fiscal Year Ended October 3, September 27, September 29, 2019 (in thousands) Revenue GSG $ 1,942,958 $ 1,778,922 $ 1,820,671 CIG 1,325,668 1,266,059 1,342,509 RCM 613 198 (1,542) Elimination of inter-segment revenue (55,726) (50,288) (54,290) Total revenue $ 3,213,513 $ 2,994,891 $ 3,107,348 Income from operations GSG $ 195,297 $ 168,669 $ 185,263 CIG 131,720 114,022 79,633 RCM — — (5,933) Corporate (1) (48,316) (41,600) (70,201) Total income from operations $ 278,701 $ 241,091 $ 188,762 (1) Includes goodwill and intangible assets impairment charges, amortization of intangibles, other costs and other income not allocable to segments. The intangible asset amortization expense for fiscal 2021, 2020 and 2019 w as $11.5 million, $11.6 million and $11.6 million, respectively. Additionally, Corporate results included income (loss) for fair value adjustments to contingent consideration liabilities of $3.3 million, $15.0 million and $(1.1) million for fiscal 2021, 2020 and 2019, respectively. Corporate results in fiscal, 2020 and 2019 also included $15.8 million and $7.8 million goodwill impairment charges, respectively. See Note 6 - "Goodwill and Intangible Assets" for more information. Balance at October 3, September 27, (in thousands) Total Assets GSG $ 604,366 $ 649,417 CIG 572,607 479,238 RCM 11,360 14,258 Corporate (1) 1,388,229 1,235,645 Total assets $ 2,576,562 $ 2,378,558 (1) Corporate assets consist of intercompany eliminations and assets not allocated to our reportable segments including goodwill, intangible assets, deferred income taxes and certain other assets. Geographic Information Fiscal Year Ended Revenue: October 3, September 27, September 29, 2019 (in thousands) United States $ 2,256,086 $ 2,107,459 $ 2,247,780 Foreign countries (1) 957,427 887,432 859,568 Total $ 3,213,513 $ 2,994,891 $ 3,107,348 Balance at Long-lived assets (2) : October 3, September 27, (in thousands) United States $ 215,689 $ 230,933 Foreign countries (1) 87,771 108,348 Total $ 303,460 $ 339,281 (1) Includes revenue and long-lived assets from our foreign operations, primarily in Canada, Australia and the United Kingdom, and revenue generated from non-U.S. clients. (2) Excludes goodwill, intangible assets and deferred income taxes. Fiscal 2022 Reportable Segments |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Oct. 03, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions We often provide services to unconsolidated joint ventures. Our revenue related to services we provided to unconsolidated joint ventures for fiscal 2021, 2020 and 2019 was $95.5 million, $88.2 million and $99.1 million, respectively. Our related reimbursable costs for fiscal 2021, 2020 and 2019 were $92.4 million, $86.4 million and $98.5 million, respectively. Our consolidated balance sheets also included the following amounts related to these services: Balance at October 3, 2021 September 27, 2020 (in thousands) Accounts receivable, net $ 19,082 $ 20,884 Contract assets 5,092 3,261 Contract liabilities 3,026 478 |
Quarterly Financial Information
Quarterly Financial Information - Unaudited | 12 Months Ended |
Oct. 03, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information - Unaudited | Quarterly Financial Information – Unaudited In the opinion of management, the followin g unaudited quarte rly data for the fiscal years ended October 3, 2021 and September 27, 2020 reflect all adjustments necessary for a fair statement of the results of operations. In the fourth quarter of fiscal 2021 we recognized a non-recurring net tax benefit of $21.6 million primarily consisting of valuation allowances in the United Kingdom that were released due to sufficient positive evidence being obtained. In the second quarter of fiscal 2020, we incurred incremental costs totaling $8.2 million to address the COVID-19 pandemic. In the fourth quarter of fiscal 2020, we recorded adjustments to our contingent earn-out liabilities and reported related net gains in operating income of $13.5 million. Additionally, we recorded a $15.8 million goodwill impairment charge related to the ASP reporting unit, which is in our CIG segment. We sold non-core equipment related to the disposal of our Canadian turn-key pipeline activities throughout fiscal 2020 which resulted in gains of $0.8 million, $2.2 million, $4.5 million, and $1.0 million in the first, second, third, and fourth quarters of fiscal 2020, respectively. First Second Third Fourth (in thousands, except per share data) Fiscal Year 2021 Revenue $ 765,104 $ 754,764 $ 801,633 $ 892,012 Income from operations 66,252 60,807 69,807 81,836 Net income attributable to Tetra Tech 52,436 45,517 51,903 82,954 Earnings per share attributable to Tetra Tech: Basic $ 0.97 $ 0.84 $ 0.96 $ 1.54 Diluted $ 0.96 $ 0.83 $ 0.95 $ 1.52 Weighted-average common shares outstanding: Basic 53,927 54,187 54,117 54,019 Diluted 54,637 54,736 54,666 54,597 Fiscal Year 2020 Revenue $ 797,623 $ 734,133 $ 709,771 $ 753,364 Income from operations 63,302 47,530 63,525 66,735 Net income attributable to Tetra Tech 47,310 36,397 45,497 44,654 Earnings per share attributable to Tetra Tech: Basic $ 0.87 $ 0.67 $ 0.84 $ 0.83 Diluted $ 0.85 $ 0.66 $ 0.83 $ 0.82 Weighted-average common shares outstanding: Basic 54,560 54,699 53,985 53,841 Diluted 55,438 55,463 54,692 54,603 |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | 12 Months Ended |
Oct. 03, 2021 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS AND RESERVES For the Fiscal Years Ended September 29, 2019, September 27, 2020 and October 3, 2021 (in thousands) Balance at Charged to Deductions (2) Other (3) Balance at Allowance for doubtful accounts (1) : Fiscal 2019 $ 5,188 $ 7,242 $ (1,868) — $ 10,562 Fiscal 2020 10,562 1,472 (4,887) — 7,147 Fiscal 2021 7,147 (4,130) 195 1,140 4,352 Income tax valuation allowance: Fiscal 2019 $ 21,479 $ 255 $ (23,714) $ 22,523 $ 20,543 Fiscal 2020 20,543 3,852 — — 24,395 Fiscal 2021 24,395 13,698 (26,059) 1,006 13,040 (1) Reflects updated presentation of allowance for doubtful accounts to include expected credit losses in anticipation of our adoption of ASU 2016-13 in the first quarter of fiscal 2021. (2) Primarily represents write-offs of uncollectible amounts, net of recoveries for the allowance for doubtful accounts. The income tax valuation amount represents the release of valuation allowances in the United Kingdom and Canada in fiscal 2021 and Australia in fiscal 2019. (3) Includes loss in foreign jurisdictions, currency adjustments, and valuation allowance adjustments related to net operating loss carry-forwards. |
Basis of Presentation and Pre_2
Basis of Presentation and Preparation (Policies) | 12 Months Ended |
Oct. 03, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation and Presentation | Principles of Consolidation and Presentation. The consolidated financial statements include our accounts and those of joint ventures of which we are the primary beneficiary. All significant intercompany balances and transactions have been eliminated in consolidation. |
Fiscal Year | Fiscal Year. We report results of operations based on 52/53-week periods ending on the Sunday nearest September 30. Fiscal 2021 contained 53 weeks, and fiscal 2020 and 2019 each contained 52 weeks. |
Use of Estimates | Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires us to make estimates and assumptions. These estimates and assumptions affect the amounts reported in our consolidated financial statements and accompanying notes. Although such estimates and assumptions are based on management's best knowledge of current events and actions we may take in the future, actual results could differ materially from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents. Cash and cash equivalents include highly liquid investments with original maturities of 90 days or less. We classify cash and cash equivalents as restricted when we are unable to freely use such cash and cash equivalents for our general operating purposes. Restricted cash balances are reported within our "Prepaid expenses and other current assets" on the consolidated balance sheets. Occasionally, we have book overdrafts which represent checks issued in excess of funds on deposit in our bank accounts that have not yet been paid by the applicable bank at the balance sheet date. Bank overdrafts occur when a bank honors disbursements in excess of funds on deposit in our bank accounts. We classify book and bank overdrafts as |
Insurance Matters, Litigation and Contingencies | Insurance Matters, Litigation and Contingencies. In the normal course of business, we are subject to certain contractual guarantees and litigation. In addition, we maintain insurance coverage for various aspects of our business and operations. We record in our consolidated balance sheets amounts representing our estimated liability for these legal and insurance obligations. Any adjustments to these liabilities are recorded in our consolidated statements of income. |
Accounts Receivable - Net | Accounts Receivable – Net. Net accounts receivable consists of billed and unbilled accounts receivable, and allowances for doubtful accounts. Billed accounts receivable represent amounts billed to clients that have not been collected. Unbilled accounts receivable, which represent an unconditional right to payment subject only to the passage of time, include unbilled amounts typically resulting from revenue recognized but not yet billed pursuant to contract terms or billed after the period end date. Most of our unbilled receivables at October 3, 2021 are expected to be billed and collected within 12 months. Unbilled accounts receivable also include amounts related to requests for equitable adjustment to contracts that provide for price redetermination. These amounts are recorded only when they can be reliably estimated and realization is probabl |
Contract Assets and Contract Liabilities and Revenue | Contract Assets and Contract Liabilities. Contract assets represent revenue recognized in excess of the amounts for which we have the contractual right to bill our customers. Contract retentions, included in contract assets, represent amounts withheld by clients until certain conditions are met or the project is completed, which may extend beyond one year. Contract We recognize revenue over time as the related performance obligation is satisfied by transferring control of a promised good or service to our customers. Progress toward complete satisfaction of the performance obligation is primarily measured using a cost-to-cost measure of progress method. The cost input is based primarily on contract cost incurred to date compared to total estimated contract cost. This measure includes forecasts based on the best information available and reflects our judgement to faithfully depict the value of the services transferred to the customer. For certain on-call engineering or consulting and similar contracts, we recognize revenue in the amount which we have the right to invoice the customer if that amount corresponds directly with the value of our performance completed to date. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost measure of progress method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs indicates a loss, a provision for the entire estimated loss on the contract is made in the period in which the loss becomes evident. We invoice customers based on the contractual terms of each contract. However, the timing of revenue recognition may differ from the timing of invoice issuance. Contract assets represent revenue recognized in excess of the amounts for which we have the contractual right to bill our customers. Such amounts are recoverable from customers based upon various measures of performance, including achievement of certain milestones or completion of a contract. In addition, many of our time and materials arrangements are billed in arrears pursuant to contract terms that are standard within the industry, resulting in contract assets and/or unbilled receivables being recorded, as revenue is recognized in advance of billings. Contract retentions, included in contract assets, represent amounts withheld by clients until certain conditions are met or the project is completed, which may extend beyond one year. Our RUPOs represent a measure of the total dollar value of work to be performed on contracts awarded and in progress. We h ad $3.5 billion of RUP Os as of October 3, 2021. RUPOs increase with awards from new contracts or additions on existing contracts and decrease as work is performed and revenue is recognized on existing contracts. RUPOs may also decrease when projects are canceled or modified in scope. We include a contract within our RUPOs when the contract is awarded and an agreement on contract terms has been reached. |
Prepaid and Other Current Assets | Prepaid and other current assets. Prepaid assets consist primarily of payments for insurance and software costs and are amortized over the estimated period of benefit. Other current assets include primarily sales/services and use tax receivables from our U.S and foreign operations. |
Property and Equipment | Property and Equipment. Property and equipment are recorded at cost and d three |
Long-Lived Assets | Long-Lived Assets. We evaluate the recoverability of our long-lived assets when the facts and circumstances suggest that the assets may be impaired. This assessment is performed based on the estimated undiscounted cash flows compared to the carrying value of the assets. If the future cash flows (undiscounted and without interest charges) are less than the carrying value, a write-down would be recorded to reduce the related asset to its estimated fair value. |
Leases | Leases. We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use ("ROU") assets, and current and long-term operating lease liabilities in the consolidated balance sheets. Our finance leases are reported in "Other long-term assets", "Other current liabilities", and "Other long-term liabilities" on our consolidated balance sheet. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, incremental borrowing rates are used based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset at the commencement date also includes any lease payments made to the lessor at or before the commencement date and initial direct costs less lease incentives received. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. We recognize a liability for contra ct termination costs associated with an exit activity for costs that will continue to be incurred under a lease for its remaining term without economic benefit to us, initially measured at its fair value at the cease-use date. The fair value is determined based on the remaining lease rentals, adjusted for the effects of any prepaid or deferred items recognized under the lease, and reduced by estimated sublease rentals. |
Business Combinations | Business Combinations. The cost of an acquired company is assigned to the tangible and intangible assets purchased and the liabilities assumed based on their fair values at the date of acquisition. The determination of fair values of these assets and liabilities requires us to make estimates and use valuation techniques when a market value is not readily available. Any excess of purchase price over the fair value of net tangible and intangible assets acquired is allocated to goodwill. Goodwill typically represents the value paid for the assembled workforce and enhancement of our service offerings. Transaction costs associated with business combinations are expensed as incurred. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets. Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in a business acquisition. Following an acquisition, we perform an analysis to value the acquired company's tangible and identifiable intangible assets and liabilities. With respect to identifiable intangible assets, we consider backlog, non-compete agreements, client relations, trade names, patents and other assets. We amortize our intangible assets based on the period over which the contractual or economic benefits of the intangible assets are expected to be realized. We assess the recoverability of the unamortized balance of our intangible assets when indicators of impairment are present based on expected future profitability and undiscounted expected cash flows and their contribution to our overall operations. Should the review indicate that the carrying value is not fully recoverable, the excess of the carrying value over the fair value of the intangible assets would be recognized as an impairment loss. We test our goodwill for impairment on an annual basis, and more frequently when an event occurs, or circumstances indicate that the carrying value of the asset may not be recoverable. We believe the methodology that we use to review impairment of goodwill, which includes a significant amount of judgment and estimates, provides us with a reasonable basis to determine whether impairment has occurred. However, many of the factors employed in determining whether our goodwill is impaired are outside of our control and it is reasonably likely that assumptions and estimates will change in future periods. These changes could result in future impairments. We perform our annual goodwill impairment review at the beginning of our fiscal fourth quarter. Our last annual review was performed at June 28, 2021 (i.e., the first day of our fiscal fourth quarter). In addition, we regularly evaluate whether events and circumstances have occurred that may indicate a potential change in recoverability of goodwill. We perform interim goodwill impairment reviews between our annual reviews if certain events and circumstances have occurred, including a deterioration in general economic conditions, an increased competitive environment, a change in management, key personnel, strategy or customers, negative or declining cash flows, or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods. We assess goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a component. Our operating segments are the same as our reportable segments and our reporting units for goodwill impairment testing are the components one level below our reportable segments. These components constitute a business for which discrete financial information is available and where segment management regularly reviews the operating results of that component. We aggregate components within an operating segment that have similar economic characteristics. |
Contingent Consideration | Contingent Consideration. Most of our acquisition agreements include contingent earn-out arrangements, which are generally based on the achievement of future operating income thresholds. The contingent earn-out arrangements are based upon our valuations of the acquired companies and reduce the risk of overpaying for acquisitions if the projected financial results are not achieved. The fair values of these earn-out arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates. For each transaction, we estimate the fair value of contingent earn-out payments as part of the initial purchase price and record the estimated fair value of contingent consideration as a liability in "Current contingent earn-out liabilities" and "Long-term contingent earn-out liabilities" on the consolidated balance sheets. We consider several factors when determining that contingent earn-out liabilities are part of the purchase price, including the following: (1) the valuation of our acquisitions is not supported solely by the initial consideration paid, and the contingent earn-out formula is a critical and material component of the valuation approach to determining the purchase price; and (2) the former owners of acquired companies that remain as key employees receive compensation other than contingent earn-out payments at a reasonable level compared with the compensation of our other key employees. The contingent earn-out payments are not affected by employment termination. We measure our contingent earn-out liabilities at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy. We use a probability weighted discounted income approach as a valuation technique to convert future estimated cash flows to a single present value amount. The significant unobservable inputs used in the fair value measurements are operating income projections over the earn-out period (generally three We review and re-assess the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could differ materially from the initial estimates. Changes in the estimated fair value of our contingent earn-out liabilities related to the time component of the present value calculation are reported in interest expense. Adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in operating income. |
Other Current Liabilities | Other current liabilities. Other current liabilities consists primarily of accrued insurance, contingent liabilities, sales/services and use taxes due to our U.S. and foreign operations, other tax accruals and accrued professional fees. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments. We determine the fair values of our financial instruments, including short-term investments, debt instruments, derivative instruments and pension plan assets bas ed on inputs or assumptions that market participants would use in pricing an asset or a liability. We categorize our instruments using a valuation hierarchy for disclosure of the inputs used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. The classification of a financial asset or liability within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair values based on their short-term nature. The carrying amounts of our revolving credit facility approximates fair value because the interest rates are based upon variable reference rates. Certain other assets and liabilities, such as contingent earn-out liabilities and amounts related to cash-flow hedges, are required to be carried in our consolidated financial statements at fair value. Our fair value measurement methods may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Although we believe our valuation methods are appropriate and consistent with those used by other market participants, the use of different methodologies or assumptions to determine fair value could result in a different fair value measurement at the reporting date. |
Derivative Financial Instruments | Derivative Financial Instruments. We account for our derivative instruments as either assets or liabilities and carry them at fair value. For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated as cash flow hedges, the effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income (loss) in stockholders' equity and reclassified into income in the same period or periods during which the hedged transaction affects earnings. The ineffective portion of the gain or loss on the derivative instrument, if any, is recognized in current income. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. The net gain or loss on the effective portion of a derivative instrument that is designated as an economic hedge of the foreign currency translation exposure generated by the re-measurement of certain assets and liabilities denominated in a non-functional currency in a foreign operation is reported in the same manner as a foreign currency translation adjustment. Accordingly, any gains or losses related to these derivative instruments are recognized in current income. Derivatives that do not qualify as hedges are adjusted to fair value through current income. |
Deferred Compensation | Deferred Compensation. We maintain a non-qualified defined contribution supplemental retirement plan for certain key employees and non-employee directors that is accounted for in accordance with applicable authoritative guidance on accounting for deferred compensation arrangements where amounts earned are held in a rabbi trust and invested. Employee deferrals are deposited into a rabbi trust, and the funds are generally invested in individual variable life insurance contracts that we own and are specifically designed to informally fund savings plans of this nature. Our consolidated balance sheets reflect our investment in variable life insurance contracts in "Other long-term assets." Our obligation to participating employees is reflected in "Other long-term liabilities." The net gains and losses related to the deferred compensation plan are reported as part of “Selling, general and administrative expenses” in our consolidated statements of income |
Pension Plan | Pension Plan . In connection with a fiscal 2021 acquisition, we assumed a defined benefit pension plan. We calculate the market-related value of assets, which is used to determine the return-on-assets component of annual pension expense and the cumulative net unrecognized gain or loss subject to amortization. This calculation reflects our anticipated long-term rate of return and amortization of the difference between the actual return (including capital, dividends, and interest) and the expected return. Cumulative net unrecognized gains or losses that exceed 10% of the greater of the projected benefit obligation or the fair market related value of plan assets are subject to amortization. |
Income Taxes | Income Taxes. We file a consolidated U.S. federal income tax return. In addition, we file other returns that are required in the states, foreign jurisdictions and other jurisdictions in which we do business. We account for certain income and expense items differently for financial reporting and income tax purposes. Deferred tax assets and liabilities are computed for the difference between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to reverse. In determining the need for a valuation allowance, management reviews both positive and negative evidence, including current and historical results of operations, future income projections, scheduled reversals of deferred tax amounts, availability of carrybacks, and potential tax planning strategies. Based on our assessment, we have concluded that a portion of the deferred tax assets will not be realized. |
Concentration of Credit Risk | Concentration of Credit Risk. Financial instruments that subject us to credit risk consist primarily of cash and cash equivalents and net accounts receivable. In th e event that we have surplus cash, we place our temporary cash investments with lower ris |
Foreign Currency Translation | Foreign Currency Translation. We determine the functional currency of our foreign operating units based upon the primary currency in which they operate. These operating units maintain their accounting records in their local currency, primarily Canadian and Australian dollars, and British pounds. Where the functional currency is not the U.S. dollar, translation of assets and liabilities to U.S. dollars is based on exchange rates at the balance sheet date. Translation of revenue and expenses to U.S. dollars is based on the average rate during the period. Translation gains or losses are reported as a component of other comprehensive income (loss). Gains or losses from foreign currency transactions are included in income from operations. |
Recently Issued Accounting Pronouncements Adopted and Not Yet Adopted | Recently Issued Accounting Pronouncements Adopted in Fiscal 2021. In June 2016, the FASB issued updated guidance, Accounting Standards Update ("ASU") 2016-13, related to the measurement of credit losses for certain financial assets. This guidance replaced the previous incurred loss methodology with an expected credit loss methodology. It requires us to recognize an allowance equal to our current estimate of all contractual cash flows that we do not expect to collect. We adopted this guidance in the first quarter of fiscal 2021, and the adoption did not have a material impact on our consolidated financial statements. Our estimate considered relevant information about past events, current conditions, and reasonable and supportable forecasts impacting the collectability of the reported amounts. In August 2018, the FASB issued updated guidance modifying certain fair value measurement disclosures. The guidance contains additional disclosures to enable users of the financial statements to better understand the entity’s assumption used to develop significant unobservable inputs for Level 3 fair value measurements, but also eliminates the requirement for entities to disclose the amount of and reasons for transfers between Level 1 and Level 2 investments within the fair value hierarchy. We adopted this guidance in the first quarter of fiscal 2021, and the adoption did not have a material impact on our consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted. In December 2019, the FASB issued ASU 2019-12, which simplifies the accounting for income taxes by removing certain exceptions to general principles in Topic 740 and amending certain existing guidance for clarity. This guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2020 (first quarter of fiscal 2022 for us). Early adoption is permitted. We do not expect the adoption of this guidance to have an impact on our consolidated financial statements. In May 2020, the Securities and Exchange Commission issued guidance amending certain financial disclosures about acquired and disposed businesses. The amendments are designed to assist registrants in making more meaningful determinations of whether a subsidiary or an acquired or disposed business is significant, and to improve the related disclosure requirements. The guidance is effective for fiscal years beginning after December 31, 2020 (first quarter of fiscal 2022 for us). We do not expect the adoption of this guidance to have an impact on our consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, which requires the recognition and measurement of contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers. |
Revenue and Contract Balances (
Revenue and Contract Balances (Tables) | 12 Months Ended |
Oct. 03, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Summary of revenue disaggregated by client sector and contract type | The following tables present revenue disaggregated by client sector and contract type: Fiscal Year Ended October 3, September 27, September 29, 2019 (in thousands) Client Sector: U.S. state and local government $ 536,309 $ 439,019 $ 587,364 U.S. federal government (1) 1,081,608 993,835 941,102 U.S. commercial 638,169 674,605 719,314 International (2) 957,427 887,432 859,568 Total $ 3,213,513 $ 2,994,891 $ 3,107,348 Contract Type: Fixed-price $ 1,191,244 $ 1,078,432 $ 1,048,158 Time-and-materials 1,492,813 1,391,592 1,509,900 Cost-plus 529,456 524,867 549,290 Total $ 3,213,513 $ 2,994,891 $ 3,107,348 (1) Includes revenue generated under U.S. federal government contracts performed outside the United States. (2) Includes revenue generated from foreign operations, primarily in Canada, Australia, the United Kingdom, and revenue generated from non-U.S. clients. |
Summary of net contract assets/liabilities | Net contract liabilities consisted of the following: Balance at October 3, September 27, 2020 (in thousands) Contract assets (1) $ 103,784 $ 92,632 Contract liabilities 190,403 171,905 Net contract liabilities $ (86,619) $ (79,273) (1) Include s $12.2 million and $12.3 million of contract retentions as of October 3, 2021 and September 27, 2020, respectively. |
Components of net accounts receivable | Net accounts receivable consisted of the following: Balance at October 3, September 27, (in thousands) Billed $ 432,814 $ 402,818 Unbilled 240,536 253,364 Total accounts receivable 673,350 656,182 Allowance for doubtful accounts (4,352) (7,147) Total accounts receivable, net $ 668,998 $ 649,035 |
Remaining performance obligation, expected timing | We expect to satisfy our RUPOs as of October 3, 2021 over the following periods: Amount (in thousands) Within 12 months $ 2,031,377 Beyond 1,436,456 Total $ 3,467,833 |
Stock Repurchase and Dividends
Stock Repurchase and Dividends (Tables) | 12 Months Ended |
Oct. 03, 2021 | |
Stock Repurchase And Dividends [Abstract] | |
Summary of dividends declared and paid | The following table presents dividends declared and paid in fiscal 2021 and 2020: Declare Date Dividend Paid Per Share Record Date Payment Date Dividends Paid November 9, 2020 $ 0.17 November 30, 2020 December 11, 2020 $ 9,198 January 25, 2021 $ 0.17 February 10, 2021 February 26, 2021 9,212 April 26, 2021 $ 0.20 May 12, 2021 May 28, 2021 10,831 July 26, 2021 $ 0.20 August 20, 2021 September 3, 2021 10,800 Total dividends paid as of October 3, 2021 $ 40,041 November 11, 2019 $ 0.15 December 2, 2019 December 13, 2019 $ 8,190 January 27, 2020 $ 0.15 February 12, 2020 February 28, 2020 8,225 April 27, 2020 $ 0.17 May 13, 2020 May 29, 2020 9,175 July 27, 2020 $ 0.17 August 21, 2020 September 4, 2020 9,153 Total dividends paid as of September 27, 2020 $ 34,743 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Oct. 03, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Summary of changes in the carrying value of estimated contingent earn-out liabilities | The following table summarizes the changes in the carrying value of estimated contingent earn-out liabilities: Fiscal Year Ended October 3, September 27, September 29, (in thousands) Beginning balance $ 32,617 $ 52,992 $ 35,290 Acquisition date fair value of contingent earn-out liabilities 50,235 16,581 27,704 Change in fair value of contingent earn-out liabilities 992 1,162 1,489 Re-measurement of contingent earn-out liabilities (3,273) (14,971) 1,085 Foreign exchange impact (596) (247) (558) Earn-out payments: Reported as cash used in operating activities (427) — — Reported as cash used in financing activities (20,251) (22,900) (12,018) Ending balance $ 59,297 $ 32,617 $ 52,992 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Oct. 03, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of changes in carrying value of goodwill | The following table summarizes the changes in the carrying value of goodwill: GSG CIG Total (in thousands) Balance at September 29, 2019 $ 441,802 $ 483,018 $ 924,820 Acquisitions 74,882 5,294 80,176 Impairment — (15,800) (15,800) Translation and other (369) 4,671 4,302 Balance at September 27, 2020 516,315 477,183 993,498 Acquisitions 15,112 75,479 90,591 Translation and other 7,006 17,483 24,489 Balance at October 3, 2021 $ 538,433 $ 570,145 $ 1,108,578 |
Summary of acquired identifiable intangible assets with finite useful lives | The fo llowing tabl e presents the gross amount and accumulated amortization of our acquired identifiable intangible assets with finite useful lives included in "Intangible assets, net" on the consolidated balance sheets: Fiscal Year Ended October 3, 2021 September 27, 2020 Weighted- Gross Accumulated Net Gross Accumulated Net ($ in thousands) Client relations 7.3 $ 69,455 $ (43,984) $ 25,471 $ 60,775 $ (53,392) $ 7,383 Backlog 0.7 34,577 (30,670) 3,907 37,682 (32,761) 4,921 Technology and trade names 3.8 14,939 (6,327) 8,612 7,964 (6,325) 1,639 Total $ 118,971 $ (80,981) $ 37,990 $ 106,421 $ (92,478) $ 13,943 |
Estimated amortization expense for the succeeding five years and beyond | Estimated amortization expense for the succeeding five fiscal years and beyond is as foll ows: Amount (in thousands) 2022 $ 9,664 2023 7,591 2024 4,983 2025 4,348 2026 3,967 Beyond 7,437 Total $ 37,990 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Oct. 03, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of components of property and equipment | Property and equipment consisted of the following: Fiscal Year Ended October 3, September 27, (in thousands) Equipment, furniture and fixtures $ 94,780 $ 90,942 Leasehold improvements 36,462 34,569 Total property and equipment 131,242 125,511 Accumulated depreciation (93,509) (90,004) Property and equipment, net $ 37,733 $ 35,507 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Oct. 03, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of income before income taxes, by geographical area | Income before income taxes, by geographic area, was as follows: Fiscal Year Ended October 3, September 27, September 29, (in thousands) Income before income taxes: United States $ 211,222 $ 209,443 $ 185,535 Foreign 55,648 18,548 (10,399) Total income before income taxes $ 266,870 $ 227,991 $ 175,136 |
Schedule of components of income tax expense | Income tax expense consisted of the following: Fiscal Year Ended October 3, September 27, September 29, (in thousands) Current: Federal $ 41,056 $ 24,102 $ 30,051 State 9,893 6,872 8,923 Foreign 18,887 20,398 15,016 Total current income tax expense 69,836 51,372 53,990 Deferred: Federal (6,034) 2,187 (9,108) State (2,060) 870 (1,195) Foreign (27,703) (328) (27,312) Total deferred income tax (benefit) expense (35,797) 2,729 (37,615) Total income tax expense $ 34,039 $ 54,101 $ 16,375 |
Schedule of reconciliation of income tax rate | Total income tax expense was different from the amount computed by applying the U.S. federal statutory rate to pre-tax income as follows: Fiscal Year Ended October 3, September 27, September 29, Tax at federal statutory rate 21.0% 21.0% 21.0% State taxes, net of federal benefit 2.3 2.7 3.3 Research and Development ("R&D") credits (2.6) (2.2) (4.7) Tax differential on foreign earnings 0.9 0.7 1.0 Non-taxable foreign interest income (1.0) (1.1) (1.7) Goodwill — 1.5 0.9 Stock compensation (3.3) (2.2) (2.4) Valuation allowance (9.3) 1.6 (13.5) Change in uncertain tax positions 1.7 0.4 2.4 Return to provision (3.7) 0.8 (0.2) Disallowed officer compensation 2.0 0.2 0.2 Cash repatriation 2.1 — — Unremitted earnings 1.0 — — Revaluation of deferred taxes — — (1.4) Deferred tax adjustments 0.8 (1.3) (0.4) Transition taxes on foreign earnings — — 1.4 Other 0.9 1.6 3.4 Total income tax expense 12.8% 23.7% 9.3% |
Schedule of temporary differences comprising the net deferred income tax asset | Temporary differences comprising the net deferred income tax asset shown on the accompanying consolidated balance sheets were as follows: Fiscal Year Ended October 3, September 27, (in thousands) Deferred Tax Assets: State taxes $ 1,342 $ 1,146 Reserves and contingent liabilities 6,662 6,262 Accounts receivable including the allowance for doubtful accounts 5,917 6,283 Accrued liabilities 41,657 28,223 Lease liabilities, operating leases 60,181 66,941 Stock-based compensation 3,560 5,905 Loss carry-forwards 54,825 43,475 Valuation allowance (13,040) (24,395) Total deferred tax assets 161,104 133,840 Deferred Tax Liabilities: Unbilled revenue (5,595) (14,451) Prepaid expense (8,136) (5,967) Right-of-use assets, operating leases (60,181) (66,941) Intangibles (40,121) (29,130) Undistributed earnings (3,136) — Property and equipment (85) (1,615) Total deferred tax liabilities (117,254) (118,104) Net deferred tax assets $ 43,850 $ 15,736 |
Reconciliation of the beginning and ending amounts of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Fiscal Year Ended October 3, September 27, September 29, (in thousands) Beginning balance $ 9,228 $ 9,169 $ 8,328 Additions for current year tax positions 2,171 700 1,342 Additions for prior year tax positions 1,500 — 356 Reductions for prior year tax positions — (641) (100) Settlements — — (757) Ending balance $ 12,899 $ 9,228 $ 9,169 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Oct. 03, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt consisted of the following: Fiscal Year Ended October 3, September 27, (in thousands) Credit facilities $ 212,500 $ 291,659 Less: Current portion of long-term debt (12,500) (49,264) Long-term debt $ 200,000 $ 242,395 |
Schedule of maturities of long-term debt | The following table presents scheduled maturities of our long-term debt: Amount (in thousands) 2022 12,500 2023 200,000 Total $ 212,500 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Oct. 03, 2021 | |
Leases [Abstract] | |
Summary of components of lease cost | The components of lease costs are as follows: Fiscal Year Ended October 3, September 27, (in thousands) Operating lease cost $ 91,076 $ 87,348 Sublease income (106) (2,216) Other — 72 Total lease cost $ 90,970 $ 85,204 Supplemental cash flow information related to leases is as follows: Fiscal Year Ended October 3, September 27, (in thousands) Operating cash flows for operating leases $ 81,943 $ 80,289 Right-of-use assets obtained in exchange for new operating lease liabilities $ 72,076 $ 317,587 |
Summary of supplemental balance sheet and other information | Supplemental balance sheet and other information related to leases are as follows: Fiscal Year Ended October 3, September 27, (in thousands) Operating leases: Right-of-use assets $ 215,422 $ 239,396 Lease liabilities: Current $ 67,452 $ 69,650 Long-term 174,285 191,955 Total operating lease liabilities $ 241,737 $ 261,605 Weighted-average remaining lease term: Operating leases 5 years 5 years Weighted-average discount rate: Operating leases 2.2 % 2.5 % |
Summary of maturity of future undiscounted cash flows associated with operating lease liabilities | A maturity analysis of the future undiscounted cash flows associated with our operating lease liabilities as of October 3, 2021 is as follows: Amount (in thousands) 2022 $ 71,913 2023 55,528 2024 40,512 2025 29,521 2026 19,643 Beyond 40,119 Total lease payments 257,236 Less: imputed interest (15,499) Total present value of lease liabilities $ 241,737 |
Stockholders' Equity and Stoc_2
Stockholders' Equity and Stock Compensation Plans (Tables) | 12 Months Ended |
Oct. 03, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of the stock-based compensation and related income tax benefits | The following table presents our stock-based compensation and related income tax benefits: Fiscal Year Ended October 3, September 27, September 29, (in thousands) Total stock-based compensation $ 23,067 $ 19,424 $ 17,618 Income tax benefit related to stock-based compensation (4,910) (4,318) (4,016) Stock-based compensation, net of tax benefit $ 18,157 $ 15,106 $ 13,602 |
Schedule of stock option activity | The following table presents our stock option activity for fiscal year ended October 3, 2021: Number of Weighted- Weighted- Aggregate Outstanding on September 27, 2020 539 $ 36.34 Exercised (324) 34.70 Forfeited (1) 40.80 Outstanding at October 3, 2021 214 $ 38.80 4.95 $ 24,149 Vested or expected to vest at October 3, 2021 214 $ 38.80 4.95 $ 24,149 Exercisable on October 3, 2021 179 $ 37.05 4.72 $ 20,600 |
Schedule of RSU and PSU activity | A summary of the RSU and PSU activity under our stock plans is as follows: RSU PSU Number of Weighted- Number of Weighted- Nonvested balance at September 30, 2018 488 $ 39.56 323 $ 44.27 Granted 179 66.26 90 80.41 Vested (180) 36.95 (108) 31.63 Adjustment (1) — — 79 31.63 Forfeited (17) 48.56 — — Nonvested balance at September 29, 2019 470 50.42 384 53.67 Granted 168 83.92 74 99.85 Vested (178) 46.87 (162) 47.28 Adjustment (1) — — 64 48.36 Forfeited (16) 65.43 (5) 83.98 Nonvested balance at September 27, 2020 444 63.93 355 64.83 Granted 118 122.02 58 153.03 Vested (167) 59.64 (193) 57.40 Adjustment (1) — — 99 57.40 Forfeited (14) 77.74 (1) 74.05 Nonvested balance at October 3, 2021 381 $ 83.30 318 $ 82.96 (1) For fiscal 2019, includes a payout adjustment of 79,465 PSUs due to the actual performance level achieved for PSUs granted in fiscal 2016 that vested during fiscal 2019. For fiscal 2020 includes a payout adjustment of 63,643 PSUs due to the actual performance level achieved for PSUs granted in fiscal 2017 that vested during fiscal 2020. For fiscal 2021 includes a payout adjustment of 99,214 PSUs due to the actual performance level achieved for PSUs granted in fiscal 2018 that vested during fiscal 2021. |
Summary of shares purchased, weighted-average purchase price, and cash received, for shares purchased under the ESPP | The following table summarizes shares purchased, weighted-average purchase price, and cash received for shares purchased under the ESPP: Fiscal Year Ended October 3, September 27, September 29, (in thousands, except for purchase price) Shares purchased 124 168 148 Weighted-average purchase price per share $ 86.16 $ 51.77 $ 46.38 Cash received from exercise of purchase rights $ 10,705 $ 8,715 $ 6,844 |
Schedule of the assumptions used in the Black-Scholes option pricing model in estimating the grant date fair value of each award granted under the ESPP | The grant date fair value of each award granted under the ESPP was estimated using the Black-Scholes option pricing model with the following assumptions: Fiscal Year Ended October 3, September 27, September 29, Dividend yield 1.0% 1.0% 1.0% Expected stock price volatility 47.9% 26.5% 26.7% Risk-free rate of return, annual 0.1% 1.6% 2.6% Expected life (in years) 1 1 1 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 12 Months Ended |
Oct. 03, 2021 | |
Retirement Benefits [Abstract] | |
Schedule of amounts recorded on the balance sheet | The Plan's funded status at October 3, 2021 was as follows: Fair value of plan assets $ 65,836 Benefit obligation (64,830) Net surplus $ 1,006 |
Fair value of plan assets by major asset category | As of October 3, 2021, the fair values of the plan assets by major asset categories were as follows (in 000’s): Equities $ 13,646 Mutual funds 33,826 Liability driven investment funds 17,653 Cash/other 711 Fair value of plan assets $ 65,836 |
Principle assumptions used for the benefit obligation valuation | Principal assumptions used for the benefit obligation in the valuation at October 3, 2021 are as follows: Discount rate 2.00% Rate of inflation 2.85% to 3.50% |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Oct. 03, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of number of weighted-average shares used to compute basic and diluted EPS | The following table sets forth the number of weighted-average shares used to compute basic and diluted EPS: Fiscal Year Ended October 3, September 27, September 29, (in thousands, except per share data) Net income attributable to Tetra Tech $ 232,810 $ 173,859 $ 158,668 Weighted-average common shares outstanding – basic 54,078 54,235 54,986 Effect of diluted stock options and unvested restricted stock 597 787 950 Weighted-average common stock outstanding – diluted 54,675 55,022 55,936 Earnings per share attributable to Tetra Tech: Basic $ 4.31 $ 3.21 $ 2.89 Diluted $ 4.26 $ 3.16 $ 2.84 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Oct. 03, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair values of the entity's outstanding derivatives designated as hedging instruments | The fair values of our outstanding derivatives designated as hedging instruments were as foll ows: Fair Value of Derivative Balance Sheet Location October 3, September 27, (in thousands) Interest rate swap agreements Other current liabilities $ 9,394 $ 15,512 |
Schedule of changes in the fair value of interest rate swap agreements presented on the consolidated statements of comprehensive income | Changes in the fair value of the interest rate swap agreements are presented on the consolidated statements of comprehensive income as follows: Fiscal Year Ended October 3, 2021 September 27, 2020 September 29, 2019 (in thousands) (Loss) gain recognized in other comprehensive income, net of tax Interest rate swap agreements 6,117 (4,638) (12,125) |
Reclassifications Out of Accu_2
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Oct. 03, 2021 | |
Equity [Abstract] | |
Summary of reclassifications out of accumulated other comprehensive income (loss) | The accumulated balances and reporting period activities for fiscal 2021, 2020 and 2019 related to reclassifications out of accumulated other comprehensive income are summarized as follows: Foreign Gain (Loss) Accumulated (in thousands) Balances at September 30, 2018 $ (128,602) $ 1,252 $ (127,350) Other comprehensive loss before reclassifications (21,109) (11,247) (32,356) Amounts reclassified from accumulated other comprehensive income Interest rate contracts, net of tax (1) — (878) (878) Net current-period other comprehensive loss (21,109) (12,125) (33,234) Balances at September 29, 2019 $ (149,711) $ (10,873) $ (160,584) Other comprehensive income (loss) before reclassifications 3,436 (599) 2,837 Amounts reclassified from accumulated other comprehensive income Interest rate contracts, net of tax (1) — (4,039) (4,039) Net current-period other comprehensive income (loss) 3,436 (4,638) (1,202) Balances at September 27, 2020 $ (146,275) $ (15,511) $ (161,786) Other comprehensive income before reclassifications 30,641 12,175 42,816 Amounts reclassified from accumulated other comprehensive income Interest rate contracts, net of tax (1) — (6,058) (6,058) Net current-period other comprehensive income 30,641 6,117 36,758 Balances at October 3, 2021 $ (115,634) $ (9,394) $ (125,028) (1) This accumulated other comprehensive component is reclassified to "Interest expense" in our consolidated statements of income. See Note 14, "Derivative Financial Instruments", for more information. |
Reportable Segments (Tables)
Reportable Segments (Tables) | 12 Months Ended |
Oct. 03, 2021 | |
Segment Reporting [Abstract] | |
Summarized financial information of reportable segments | The following tables present summarized financial information of our reportable segments: Reportable Segments Fiscal Year Ended October 3, September 27, September 29, 2019 (in thousands) Revenue GSG $ 1,942,958 $ 1,778,922 $ 1,820,671 CIG 1,325,668 1,266,059 1,342,509 RCM 613 198 (1,542) Elimination of inter-segment revenue (55,726) (50,288) (54,290) Total revenue $ 3,213,513 $ 2,994,891 $ 3,107,348 Income from operations GSG $ 195,297 $ 168,669 $ 185,263 CIG 131,720 114,022 79,633 RCM — — (5,933) Corporate (1) (48,316) (41,600) (70,201) Total income from operations $ 278,701 $ 241,091 $ 188,762 (1) Includes goodwill and intangible assets impairment charges, amortization of intangibles, other costs and other income not allocable to segments. The intangible asset amortization expense for fiscal 2021, 2020 and 2019 w as $11.5 million, $11.6 million and $11.6 million, respectively. Additionally, Corporate results included income (loss) for fair value adjustments to contingent consideration liabilities of $3.3 million, $15.0 million and $(1.1) million for fiscal 2021, 2020 and 2019, respectively. Corporate results in fiscal, 2020 and 2019 also included $15.8 million and $7.8 million goodwill impairment charges, respectively. See Note 6 - "Goodwill and Intangible Assets" for more information. Balance at October 3, September 27, (in thousands) Total Assets GSG $ 604,366 $ 649,417 CIG 572,607 479,238 RCM 11,360 14,258 Corporate (1) 1,388,229 1,235,645 Total assets $ 2,576,562 $ 2,378,558 (1) Corporate assets consist of intercompany eliminations and assets not allocated to our reportable segments including goodwill, intangible assets, deferred income taxes and certain other assets. |
Schedule of geographic information | Geographic Information Fiscal Year Ended Revenue: October 3, September 27, September 29, 2019 (in thousands) United States $ 2,256,086 $ 2,107,459 $ 2,247,780 Foreign countries (1) 957,427 887,432 859,568 Total $ 3,213,513 $ 2,994,891 $ 3,107,348 Balance at Long-lived assets (2) : October 3, September 27, (in thousands) United States $ 215,689 $ 230,933 Foreign countries (1) 87,771 108,348 Total $ 303,460 $ 339,281 (1) Includes revenue and long-lived assets from our foreign operations, primarily in Canada, Australia and the United Kingdom, and revenue generated from non-U.S. clients. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Oct. 03, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | Our consolidated balance sheets also included the following amounts related to these services: Balance at October 3, 2021 September 27, 2020 (in thousands) Accounts receivable, net $ 19,082 $ 20,884 Contract assets 5,092 3,261 Contract liabilities 3,026 478 |
Quarterly Financial Informati_2
Quarterly Financial Information - Unaudited (Tables) | 12 Months Ended |
Oct. 03, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of unaudited quarterly data | First Second Third Fourth (in thousands, except per share data) Fiscal Year 2021 Revenue $ 765,104 $ 754,764 $ 801,633 $ 892,012 Income from operations 66,252 60,807 69,807 81,836 Net income attributable to Tetra Tech 52,436 45,517 51,903 82,954 Earnings per share attributable to Tetra Tech: Basic $ 0.97 $ 0.84 $ 0.96 $ 1.54 Diluted $ 0.96 $ 0.83 $ 0.95 $ 1.52 Weighted-average common shares outstanding: Basic 53,927 54,187 54,117 54,019 Diluted 54,637 54,736 54,666 54,597 Fiscal Year 2020 Revenue $ 797,623 $ 734,133 $ 709,771 $ 753,364 Income from operations 63,302 47,530 63,525 66,735 Net income attributable to Tetra Tech 47,310 36,397 45,497 44,654 Earnings per share attributable to Tetra Tech: Basic $ 0.87 $ 0.67 $ 0.84 $ 0.83 Diluted $ 0.85 $ 0.66 $ 0.83 $ 0.82 Weighted-average common shares outstanding: Basic 54,560 54,699 53,985 53,841 Diluted 55,438 55,463 54,692 54,603 |
Description of Business (Detail
Description of Business (Details) | 12 Months Ended |
Oct. 03, 2021segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 2 |
Basis of Presentation and Pre_3
Basis of Presentation and Preparation - Cash and Cash Equivalents and Accounts Receivable (Details) | 12 Months Ended |
Oct. 03, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Maximum term of original maturity to classify instrument as cash equivalent | 90 days |
Period for billing and collecting unbilled receivables | 12 months |
Basis of Presentation and Pre_4
Basis of Presentation and Preparation - Property and Equipment (Details) - Equipment, furniture and fixtures | 12 Months Ended |
Oct. 03, 2021 | |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 7 years |
Basis of Presentation and Pre_5
Basis of Presentation and Preparation - Goodwill and Intangible Assets (Details) | 12 Months Ended |
Oct. 03, 2021level | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of levels below operating/reportable segments at which goodwill impairment testing is performed | 1 |
Basis of Presentation and Pre_6
Basis of Presentation and Preparation - Contingent Consideration, and Concentration of Credit Risk (Details) | 12 Months Ended |
Oct. 03, 2021Institution | |
Concentration of Credit Risk | |
Financial institutions, in any such number of which investment exposure is limited | 1 |
Accounts receivable due from various agencies of the U.S. federal government (as a percent) | 24.00% |
U.S. government | |
Concentration of Credit Risk | |
Revenue from customers (as a percent) | 50.00% |
U.S. commercial | |
Concentration of Credit Risk | |
Revenue from customers (as a percent) | 20.00% |
International | |
Concentration of Credit Risk | |
Revenue from customers (as a percent) | 30.00% |
Minimum | |
Contingent Consideration | |
Earn-out period | 3 years |
Maximum | |
Contingent Consideration | |
Earn-out period | 5 years |
Revenue and Contract Balances -
Revenue and Contract Balances - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 03, 2021 | Jun. 27, 2021 | Mar. 28, 2021 | Dec. 27, 2020 | Sep. 27, 2020 | Jun. 28, 2020 | Mar. 29, 2020 | Dec. 29, 2019 | Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 892,012 | $ 801,633 | $ 754,764 | $ 765,104 | $ 753,364 | $ 709,771 | $ 734,133 | $ 797,623 | $ 3,213,513 | $ 2,994,891 | $ 3,107,348 |
Fixed-price | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 1,191,244 | 1,078,432 | 1,048,158 | ||||||||
Time-and-materials | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 1,492,813 | 1,391,592 | 1,509,900 | ||||||||
Cost-plus | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 529,456 | 524,867 | 549,290 | ||||||||
U.S. state and local government | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 536,309 | 439,019 | 587,364 | ||||||||
U.S. federal government | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 1,081,608 | 993,835 | 941,102 | ||||||||
U.S. commercial | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 638,169 | 674,605 | 719,314 | ||||||||
International | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 957,427 | $ 887,432 | $ 859,568 |
Revenue and Contract Balances_2
Revenue and Contract Balances - Summary of Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands | Oct. 03, 2021 | Sep. 27, 2020 |
Disaggregation of Revenue [Line Items] | ||
Contract assets | $ 103,784 | $ 92,632 |
Contract liabilities | 190,403 | 171,905 |
Net contract liabilities | (86,619) | (79,273) |
Contract retentions | ||
Disaggregation of Revenue [Line Items] | ||
Contract assets | $ 12,200 | $ 12,300 |
Revenue and Contract Balances_3
Revenue and Contract Balances - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 03, 2021 | Sep. 27, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Contract liability revenue recognized during the period | $ 119,000 | $ 118,000 |
Net favorable operating income adjustments | 700 | 800 |
Liabilities for anticipated losses | 12,700 | 13,200 |
Estimated cost to complete the related contracts | $ 104,000 | 118,000 |
Period for billing and collecting unbilled receivables | 12 months | |
Unbilled accounts receivable related to claims and requests for equitable adjustment on contracts | $ 11,000 | 14,000 |
Remaining unsatisfied performance obligation | $ 3,467,833 | |
Remaining performance obligation, termination notice period one | 30 days | |
Remaining performance obligation, termination notice period two | 60 years | |
Remaining performance obligation, termination notice period three | 90 days | |
CIG | ||
Disaggregation of Revenue [Line Items] | ||
Gains (losses) due to change in contract value | $ (4,400) | $ 2,800 |
Revenue and Contract Balances_4
Revenue and Contract Balances - Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Oct. 03, 2021 | Sep. 27, 2020 |
Revenue from Contract with Customer [Abstract] | ||
Billed | $ 432,814 | $ 402,818 |
Unbilled | 240,536 | 253,364 |
Total accounts receivable | 673,350 | 656,182 |
Allowance for doubtful accounts | (4,352) | (7,147) |
Total accounts receivable, net | $ 668,998 | $ 649,035 |
Revenue and Contract Balances_5
Revenue and Contract Balances - Remaining Unsatisfied Performance Obligations (Details) $ in Thousands | Oct. 03, 2021USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining unsatisfied performance obligation | $ 3,467,833 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-04 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining unsatisfied performance obligation | $ 2,031,377 |
Remaining unsatisfied performance obligation, expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-03 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining unsatisfied performance obligation | $ 1,436,456 |
Remaining unsatisfied performance obligation, expected timing of satisfaction |
Stock Repurchase and Dividend_2
Stock Repurchase and Dividends - Narrative (Details) - USD ($) | Dec. 20, 2021 | Nov. 15, 2021 | Sep. 03, 2021 | May 28, 2021 | Feb. 26, 2021 | Dec. 11, 2020 | Sep. 04, 2020 | May 29, 2020 | Feb. 28, 2020 | Dec. 13, 2019 | Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | Oct. 05, 2021 | Jan. 27, 2020 |
Subsequent Event [Line Items] | |||||||||||||||
Remaining authorized repurchase amount | $ 147,800,000 | $ 207,800,000 | |||||||||||||
Shares repurchased (in shares) | 479,369 | ||||||||||||||
Average price per share (in dollars per share) | $ 125.16 | ||||||||||||||
Share repurchases total cost | $ 60,000,000 | ||||||||||||||
Cash dividends paid per share (in dollars per share) | $ 0.20 | $ 0.20 | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.15 | $ 0.15 | $ 0.74 | $ 0.64 | $ 0.54 | ||||
Forecast | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Cash dividends paid per share (in dollars per share) | $ 0.20 | ||||||||||||||
Subsequent Event | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Quarterly cash dividend declared (in dollars per share) | $ 0.20 | ||||||||||||||
January 2020 Stock Repurchase Program | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Maximum repurchase amount under stock repurchase program | $ 200,000,000 | ||||||||||||||
October 2021 Stock Repurchase Program | Subsequent Event | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Maximum repurchase amount under stock repurchase program | $ 400,000,000 |
Stock Repurchase and Dividend_3
Stock Repurchase and Dividends - Schedule of Dividends Declared and Paid (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 03, 2021 | May 28, 2021 | Feb. 26, 2021 | Dec. 11, 2020 | Sep. 04, 2020 | May 29, 2020 | Feb. 28, 2020 | Dec. 13, 2019 | Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 |
Stock Repurchase And Dividends [Abstract] | |||||||||||
Dividend paid per share (in dollars per share) | $ 0.20 | $ 0.20 | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.15 | $ 0.15 | $ 0.74 | $ 0.64 | $ 0.54 |
Dividends paid | $ 10,800 | $ 10,831 | $ 9,212 | $ 9,198 | $ 9,153 | $ 9,175 | $ 8,225 | $ 8,190 | $ 40,041 | $ 34,743 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||
Sep. 27, 2020USD ($) | Sep. 27, 2020AUD ($) | Mar. 29, 2020USD ($) | Mar. 31, 2019USD ($) | Apr. 01, 2018AUD ($) | Oct. 03, 2021USD ($)employee | Sep. 27, 2020USD ($)acquisition | Sep. 29, 2019USD ($)employeeacquisition | Sep. 29, 2019AUD ($)employeeacquisition | Sep. 30, 2018USD ($) | Sep. 30, 2018AUD ($) | Sep. 27, 2020AUD ($) | |
Business Acquisition [Line Items] | ||||||||||||
Contingent earn-out liability | $ 59,300 | |||||||||||
Acquisition and integration costs | $ 10,400 | |||||||||||
Fair value adjustments to contingent consideration liabilities | $ 3,273 | $ 14,971 | (1,085) | |||||||||
Minimum | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Earn-out period | 3 years | |||||||||||
Significant unobservable input, earn-out period | 2 years | |||||||||||
Maximum | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Earn-out period | 5 years | |||||||||||
Significant unobservable input, earn-out period | 3 years | |||||||||||
Existing customer contracts | Minimum | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Useful life of intangible assets | 1 year | |||||||||||
Existing customer contracts | Maximum | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Useful life of intangible assets | 10 years | |||||||||||
Technology and trade names | Minimum | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Useful life of intangible assets | 3 years | |||||||||||
Technology and trade names | Maximum | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Useful life of intangible assets | 5 years | |||||||||||
Hoare Lea | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Number of employees | employee | 900 | |||||||||||
Business acquisitions | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Fair value of acquisition purchase price | $ 151,700 | 88,600 | 103,300 | |||||||||
Initial cash payments | 101,400 | 71,400 | 54,200 | |||||||||
Contingent earn-out liability | $ 16,500 | 50,300 | 16,500 | 21,100 | ||||||||
Aggregate maximum of contingent consideration | 28,000 | $ 74,000 | $ 28,000 | $ 25,000 | ||||||||
Earn-out period | 3 years | 3 years | 3 years | |||||||||
Number of acquisitions | acquisition | 2 | 2 | 2 | |||||||||
Payables related to estimated post-closing adjustments | $ 700 | $ 3,300 | ||||||||||
Promissory note | 24,700 | |||||||||||
Net debt assumed | $ 11,500 | |||||||||||
Business acquisitions | Minimum | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Earn-out period | 3 years | |||||||||||
Business acquisitions | Maximum | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Earn-out period | 4 years | |||||||||||
WYG | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Number of employees | employee | 1,600 | 1,600 | ||||||||||
NDY | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Contingent earn-out liability | 1,800 | $ 9.4 | 1,800 | $ 2.6 | ||||||||
Aggregate maximum of contingent consideration | $ 25 | |||||||||||
Earn-out period | 3 years | |||||||||||
Fair value adjustments to contingent consideration liabilities | 3,700 | $ 5.2 | $ (5,400) | $ (7.9) | $ (2,100) | $ (3) | ||||||
Maximum contingent consideration, year one | $ 7.4 | |||||||||||
Maximum contingent consideration, year two | 8.8 | |||||||||||
Maximum contingent consideration, year three | $ 8.8 | |||||||||||
Percentage of maximum potential earn-out | 38.00% | |||||||||||
EGT | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Contingent earn-out liability | 7,500 | $ 21,100 | 7,500 | |||||||||
Aggregate maximum of contingent consideration | $ 25,000 | |||||||||||
Earn-out period | 3 years | |||||||||||
Fair value adjustments to contingent consideration liabilities | 4,700 | |||||||||||
Maximum contingent consideration, year one | $ 8,500 | |||||||||||
Maximum contingent consideration, year two | 9,000 | |||||||||||
Maximum contingent consideration, year three | $ 7,500 | |||||||||||
Percentage of maximum potential earn-out | 84.00% | |||||||||||
SEG | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Contingent earn-out liability | 8,100 | $ 11,300 | $ 8,100 | |||||||||
Aggregate maximum of contingent consideration | $ 20,000 | |||||||||||
Earn-out period | 3 years | |||||||||||
Fair value adjustments to contingent consideration liabilities | $ 3,400 | |||||||||||
Maximum contingent consideration, year one | $ 5,000 | |||||||||||
Maximum contingent consideration, year two | 7,000 | |||||||||||
Maximum contingent consideration, year three | $ 8,000 | |||||||||||
Percentage of maximum potential earn-out | 57.00% | |||||||||||
All acquisitions | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Aggregate maximum of contingent consideration | $ 105,400 |
Acquisitions - Changes in the C
Acquisitions - Changes in the Carrying Value of Estimated Contingent Earn-Out Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 27, 2020 | Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | |
Earn-out payments: | ||||
Reported as cash used in financing activities | $ (20,251) | $ (22,900) | $ (12,018) | |
Contingent consideration | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 32,617 | 52,992 | 35,290 | |
Acquisition date fair value of contingent earn-out liabilities | 50,235 | 16,581 | 27,704 | |
Earnings adjustment to contingent earn-out liabilities | $ (13,500) | |||
Foreign exchange impact | (596) | (247) | (558) | |
Earn-out payments: | ||||
Reported as cash used in operating activities | (427) | 0 | 0 | |
Reported as cash used in financing activities | (20,251) | (22,900) | (12,018) | |
Ending balance | $ 32,617 | 59,297 | 32,617 | 52,992 |
Interest expense | Contingent consideration | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Earnings adjustment to contingent earn-out liabilities | 992 | 1,162 | 1,489 | |
Operating income | Contingent consideration | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Earnings adjustment to contingent earn-out liabilities | $ (3,273) | $ (14,971) | $ 1,085 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Changes in Carrying Value of Goodwill (Details) - USD ($) | Jun. 28, 2021 | Sep. 27, 2020 | Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 |
Goodwill [Roll Forward] | |||||
Balance at beginning of the period | $ 993,498,000 | $ 924,820,000 | |||
Acquisitions | 90,591,000 | 80,176,000 | |||
Impairment | $ 0 | $ (15,800,000) | 0 | (15,800,000) | $ (7,755,000) |
Translation and other | 24,489,000 | 4,302,000 | |||
Balance at end of the period | 993,498,000 | 1,108,578,000 | 993,498,000 | 924,820,000 | |
GSG | |||||
Goodwill [Roll Forward] | |||||
Balance at beginning of the period | 516,315,000 | 441,802,000 | |||
Acquisitions | 15,112,000 | 74,882,000 | |||
Impairment | 0 | ||||
Translation and other | 7,006,000 | (369,000) | |||
Balance at end of the period | 516,315,000 | 538,433,000 | 516,315,000 | 441,802,000 | |
CIG | |||||
Goodwill [Roll Forward] | |||||
Balance at beginning of the period | 477,183,000 | 483,018,000 | |||
Acquisitions | 75,479,000 | 5,294,000 | |||
Impairment | (15,800,000) | ||||
Translation and other | 17,483,000 | 4,671,000 | |||
Balance at end of the period | $ 477,183,000 | $ 570,145,000 | $ 477,183,000 | $ 483,018,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Narrative (Details) - USD ($) | Jun. 28, 2021 | Sep. 27, 2020 | Sep. 27, 2020 | Jun. 30, 2020 | Sep. 29, 2019 | Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 |
Goodwill [Line Items] | ||||||||
Impairment of goodwill | $ 0 | $ 15,800,000 | $ 0 | $ 15,800,000 | $ 7,755,000 | |||
Percentage of excess of fair value over carrying value (less than) | 150.00% | |||||||
Carrying value | $ 2,378,558,000 | 2,378,558,000 | $ 2,576,562,000 | 2,378,558,000 | ||||
Goodwill | 993,498,000 | 993,498,000 | $ 924,820,000 | 1,108,578,000 | 993,498,000 | 924,820,000 | ||
Amortization expense for intangible assets | 11,500,000 | 11,600,000 | 11,600,000 | |||||
Australia | ||||||||
Goodwill [Line Items] | ||||||||
Percentage negative growth | 7.00% | |||||||
GSG | ||||||||
Goodwill [Line Items] | ||||||||
Impairment of goodwill | 0 | |||||||
Goodwill | 516,315,000 | 516,315,000 | 441,802,000 | 538,433,000 | 516,315,000 | 441,802,000 | ||
Gross amounts of goodwill | 534,000,000 | 534,000,000 | 556,100,000 | 534,000,000 | ||||
Accumulated impairment | 17,700,000 | 17,700,000 | 17,700,000 | 17,700,000 | ||||
CIG | ||||||||
Goodwill [Line Items] | ||||||||
Impairment of goodwill | 15,800,000 | |||||||
Goodwill | 477,183,000 | 477,183,000 | 483,018,000 | 570,145,000 | 477,183,000 | 483,018,000 | ||
Gross amounts of goodwill | 598,700,000 | 598,700,000 | 691,600,000 | 598,700,000 | ||||
Accumulated impairment | $ 121,500,000 | |||||||
ASP | ||||||||
Goodwill [Line Items] | ||||||||
Impairment of goodwill | 15,800,000 | |||||||
Carrying value | 144,900,000 | 144,900,000 | 144,900,000 | |||||
Goodwill | $ 95,500,000 | $ 95,500,000 | $ 95,500,000 | |||||
RFS | ||||||||
Goodwill [Line Items] | ||||||||
Impairment of goodwill | 7,800,000 | |||||||
Carrying value | 61,000,000 | 61,000,000 | ||||||
Goodwill | $ 48,800,000 | $ 48,800,000 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Gross Amount and Accumulated Amortization of Acquired Finite-lived Intangibles (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 03, 2021 | Sep. 27, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | $ 118,971 | $ 106,421 |
Accumulated Amortization | (80,981) | (92,478) |
Net Amount | $ 37,990 | 13,943 |
Client relations | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Remaining Life (in years) | 7 years 3 months 18 days | |
Gross Amount | $ 69,455 | 60,775 |
Accumulated Amortization | (43,984) | (53,392) |
Net Amount | $ 25,471 | 7,383 |
Backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Remaining Life (in years) | 8 months 12 days | |
Gross Amount | $ 34,577 | 37,682 |
Accumulated Amortization | (30,670) | (32,761) |
Net Amount | $ 3,907 | 4,921 |
Technology and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Remaining Life (in years) | 3 years 9 months 18 days | |
Gross Amount | $ 14,939 | 7,964 |
Accumulated Amortization | (6,327) | (6,325) |
Net Amount | $ 8,612 | $ 1,639 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Estimated Amortization Expense (Details) - USD ($) $ in Thousands | Oct. 03, 2021 | Sep. 27, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 | $ 9,664 | |
2023 | 7,591 | |
2024 | 4,983 | |
2025 | 4,348 | |
2026 | 3,967 | |
Beyond | 7,437 | |
Net Amount | $ 37,990 | $ 13,943 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 131,242 | $ 125,511 | |
Accumulated depreciation | (93,509) | (90,004) | |
Property and equipment, net | 37,733 | 35,507 | |
Depreciation expense related to property and equipment | 12,300 | 13,000 | $ 17,300 |
Equipment, furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 94,780 | 90,942 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 36,462 | $ 34,569 |
Income Taxes - Income Before In
Income Taxes - Income Before Income Taxes, by Geographical Area (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | |
Income before income taxes: | |||
United States | $ 211,222 | $ 209,443 | $ 185,535 |
Foreign | 55,648 | 18,548 | (10,399) |
Income before income tax expense | $ 266,870 | $ 227,991 | $ 175,136 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | |
Current: | |||
Federal | $ 41,056 | $ 24,102 | $ 30,051 |
State | 9,893 | 6,872 | 8,923 |
Foreign | 18,887 | 20,398 | 15,016 |
Total current income tax expense | 69,836 | 51,372 | 53,990 |
Deferred: | |||
Federal | (6,034) | 2,187 | (9,108) |
State | (2,060) | 870 | (1,195) |
Foreign | (27,703) | (328) | (27,312) |
Total deferred income tax (benefit) expense | (35,797) | 2,729 | (37,615) |
Total income tax expense | $ 34,039 | $ 54,101 | $ 16,375 |
Income Taxes - Income Tax Rate
Income Taxes - Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | |
Income Tax Disclosure [Abstract] | |||
Tax at federal statutory rate | 21.00% | 21.00% | 21.00% |
State taxes, net of federal benefit | 2.30% | 2.70% | 3.30% |
Research and Development ("R&D") credits | (2.60%) | (2.20%) | (4.70%) |
Tax differential on foreign earnings | 0.90% | 0.70% | 1.00% |
Non-taxable foreign interest income | (1.00%) | (1.10%) | (1.70%) |
Goodwill | 0.00% | 1.50% | 0.90% |
Stock compensation | (3.30%) | (2.20%) | (2.40%) |
Valuation allowance | (9.30%) | 1.60% | (13.50%) |
Change in uncertain tax positions | 1.70% | 0.40% | 2.40% |
Return to provision | (3.70%) | 0.80% | (0.20%) |
Disallowed officer compensation | 2.00% | 0.20% | 0.20% |
Cash repatriation | 2.10% | 0.00% | 0.00% |
Unremitted earnings | 1.00% | 0.00% | 0.00% |
Revaluation of deferred taxes | 0 | 0 | (0.014) |
Deferred tax adjustments | 0.80% | (1.30%) | (0.40%) |
Transition taxes on foreign earnings | 0 | 0 | 0.014 |
Other | 0.90% | 1.60% | 3.40% |
Total income tax expense | 12.80% | 23.70% | 9.30% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Oct. 03, 2021 | Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 | |
Operating Loss Carryforwards [Line Items] | |||||
Effective tax rate | 12.80% | 23.70% | 9.30% | ||
Reduction in income tax expense due to excess tax benefits on share-based payments | $ 12,900 | $ 8,300 | $ 6,400 | ||
Effective tax rates, excluding valuation allowance release, non-deductible goodwill impairment charge, transaction costs, and excess tax benefits on share-based payments | 25.70% | 25.60% | 24.60% | ||
Deferred tax liabilities for undistributed foreign earnings | $ 3,136 | $ 3,136 | $ 0 | ||
Undistributed earnings of foreign subsidiaries | 50,900 | 50,900 | |||
Valuation allowance | 13,040 | 13,040 | 24,395 | ||
Unrecognized tax benefits | 12,899 | 12,899 | 9,228 | $ 9,169 | $ 8,328 |
Accrual of additional interest and penalties | 800 | 800 | 2,600 | ||
Reduction in accrued interest and penalties | 0 | 0 | 200 | ||
Amount of interest and penalties accrued | 5,200 | 5,200 | 4,400 | $ 3,600 | |
Canada | |||||
Operating Loss Carryforwards [Line Items] | |||||
Foreign earnings repatriated | 80,000 | ||||
Tax expense related to repatriation of foreign earnings | 5,600 | ||||
Undistributed foreign earnings no longer indefinitely reinvested | 20,100 | 20,100 | |||
Deferred tax liabilities for undistributed foreign earnings | 3,100 | 3,100 | |||
Foreign | |||||
Operating Loss Carryforwards [Line Items] | |||||
Tax benefit primarily consisting of valuation allowances | 21,600 | 21,600 | $ 22,300 | ||
Net operating loss carry forwards which expire at various dates | 14,700 | 14,700 | |||
Net operating loss carryforwards | 165,500 | 165,500 | |||
Net operating loss carry forwards which have no expiration date | 150,800 | 150,800 | |||
Capital loss carryforwards | 21,500 | 21,500 | |||
Research and development credits | 3,900 | 3,900 | |||
State | |||||
Operating Loss Carryforwards [Line Items] | |||||
Net operating loss carry forwards which expire at various dates | $ 43,700 | $ 43,700 |
Income Taxes - Schedule of temp
Income Taxes - Schedule of temporary differences comprising the net deferred income tax liability (Details) - USD ($) $ in Thousands | Oct. 03, 2021 | Sep. 27, 2020 |
Deferred Tax Assets: | ||
State taxes | $ 1,342 | $ 1,146 |
Reserves and contingent liabilities | 6,662 | 6,262 |
Accounts receivable including the allowance for doubtful accounts | 5,917 | 6,283 |
Accrued liabilities | 41,657 | 28,223 |
Lease liabilities, operating leases | 60,181 | 66,941 |
Stock-based compensation | 3,560 | 5,905 |
Loss carry-forwards | 54,825 | 43,475 |
Valuation allowance | (13,040) | (24,395) |
Total deferred tax assets | 161,104 | 133,840 |
Deferred Tax Liabilities: | ||
Unbilled revenue | (5,595) | (14,451) |
Prepaid expense | (8,136) | (5,967) |
Right-of-use assets, operating leases | (60,181) | (66,941) |
Intangibles | (40,121) | (29,130) |
Undistributed earnings | (3,136) | 0 |
Property and equipment | (85) | (1,615) |
Total deferred tax liabilities | (117,254) | (118,104) |
Net deferred tax assets | $ 43,850 | $ 15,736 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | |
Reconciliation of unrecognized tax benefits [Roll Forward] | |||
Beginning balance | $ 9,228 | $ 9,169 | $ 8,328 |
Additions for current year tax positions | 2,171 | 700 | 1,342 |
Additions for prior year tax positions | 1,500 | 0 | 356 |
Reductions for prior year tax positions | 0 | (641) | (100) |
Settlements | 0 | 0 | (757) |
Ending balance | $ 12,899 | $ 9,228 | $ 9,169 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Oct. 03, 2021 | Sep. 27, 2020 |
Debt Disclosure [Abstract] | ||
Credit facilities | $ 212,500 | $ 291,659 |
Less: Current portion of long-term debt | (12,500) | (49,264) |
Long-term debt | $ 200,000 | $ 242,395 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) | Jul. 30, 2018 | Oct. 03, 2021 | Sep. 27, 2020 |
Debt Instrument [Line Items] | |||
Borrowings outstanding | $ 212,500,000 | $ 291,659,000 | |
Bank overdrafts | 0 | ||
Standby Letters of Credit | |||
Debt Instrument [Line Items] | |||
Letters of credit outstanding | 53,400,000 | ||
Amended Credit Agreement | |||
Debt Instrument [Line Items] | |||
Accordion feature, higher borrowing capacity option | $ 1,000,000,000 | ||
Maximum borrowing capacity | $ 700,000,000 | ||
Debt instrument term | 5 years | ||
Accordion feature, increase limit | $ 300,000,000 | ||
Annual principal payment, amortization percentage | 5.00% | ||
Amount outstanding under credit facility | $ 212,500,000 | ||
Weighted-average interest rate (as a percent) | 1.25% | ||
Weighted-average rate including the effects of interest rate swap agreement (as a percent) | 3.30% | ||
Debt covenant, maximum consolidated leverage ratio | 3 | ||
Debt covenant, minimum consolidated interest coverage ratio | 3 | ||
Consolidated leverage ratio | 0.87 | ||
Consolidated fixed charge coverage ratio | 26.38 | ||
Amended Credit Agreement | Federal Funds Effective Swap Rate | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.50% | ||
Amended Credit Agreement | Term Loan Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 250,000,000 | ||
Borrowings outstanding | $ 212,500,000 | ||
Amended Credit Agreement | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 450,000,000 | ||
Borrowings outstanding | 0 | ||
Amount available for borrowing under facility | 449,300,000 | ||
Amended Credit Agreement | Revolving Credit Facility | Eurodollar | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.00% | ||
Amended Credit Agreement | Revolving Credit Facility | Eurodollar | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.75% | ||
Amended Credit Agreement | Revolving Credit Facility | Prime Rate or Eurodollar Rate | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.00% | ||
Amended Credit Agreement | Revolving Credit Facility | Prime Rate or Eurodollar Rate | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.00% | ||
Amended Credit Agreement | Revolving Credit Facility | Prime Rate or Eurodollar Rate | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.75% | ||
Amended Credit Agreement | Standby Letters of Credit | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 100,000,000 | ||
Letters of credit outstanding | 700,000 | ||
Amended Credit Agreement | Swingline loan | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 20,000,000 | ||
Amended Credit Agreement | Multicurrency borrowings and letter of credit | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 200,000,000 | ||
Other credit facilities | |||
Debt Instrument [Line Items] | |||
Amount outstanding under credit facility | $ 0 |
Long-Term Debt - Scheduled Matu
Long-Term Debt - Scheduled Maturities of Long-Term Debt (Details) $ in Thousands | Oct. 03, 2021USD ($) |
Debt Disclosure [Abstract] | |
2022 | $ 12,500 |
2023 | 200,000 |
Credit facilities | $ 212,500 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 29, 2019 | Oct. 03, 2021 | |
Lessee, Lease, Description [Line Items] | ||
Renewal term (up to) | 5 years | |
Rental expense | $ 79.3 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 1 month | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 12 years |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 03, 2021 | Sep. 27, 2020 | |
Leases [Abstract] | ||
Operating lease cost | $ 91,076 | $ 87,348 |
Sublease income | (106) | (2,216) |
Other | 0 | 72 |
Total lease cost | $ 90,970 | $ 85,204 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 03, 2021 | Sep. 27, 2020 | |
Leases [Abstract] | ||
Operating cash flows for operating leases | $ 81,943 | $ 80,289 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 72,076 | $ 317,587 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet and Other Information (Details) - USD ($) $ in Thousands | Oct. 03, 2021 | Sep. 27, 2020 |
Operating leases: | ||
Right-of-use assets | $ 215,422 | $ 239,396 |
Lease liabilities: | ||
Current | 67,452 | 69,650 |
Long-term | 174,285 | 191,955 |
Total operating lease liabilities | $ 241,737 | $ 261,605 |
Weighted-average remaining lease term: | ||
Operating leases | 5 years | 5 years |
Weighted-average discount rate: | ||
Operating leases | 2.20% | 2.50% |
Leases - Maturity Analysis of t
Leases - Maturity Analysis of the Future Undiscounted Cash Flow of Operating Leases (Details) - USD ($) $ in Thousands | Oct. 03, 2021 | Sep. 27, 2020 |
Leases [Abstract] | ||
2022 | $ 71,913 | |
2023 | 55,528 | |
2024 | 40,512 | |
2025 | 29,521 | |
2026 | 19,643 | |
Beyond | 40,119 | |
Total lease payments | 257,236 | |
Less: imputed interest | (15,499) | |
Total present value of lease liabilities | $ 241,737 | $ 261,605 |
Stockholders' Equity and Stoc_3
Stockholders' Equity and Stock Compensation Plans - Narrative (Details) - USD ($) | 12 Months Ended | |||
Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options granted in the period (in shares) | 0 | 0 | ||
Stock options exercised | $ 11,250,000 | $ 10,334,000 | $ 11,751,000 | |
Stock-based compensation expense | 23,067,000 | 19,424,000 | 17,618,000 | |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized stock-based compensation cost | $ 100,000 | |||
Weighted-average period to recognize the unrecognized compensation cost | 1 year | |||
Aggregate intrinsic value of options exercised | $ 29,400,000 | 22,400,000 | 20,400,000 | |
Stock options exercised | 11,300,000 | 10,300,000 | 11,800,000 | |
Income tax benefit realized from exercises of nonqualified stock options and disqualifying dispositions of qualified options | $ 12,900,000 | $ 8,300,000 | $ 6,400,000 | |
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Awards granted (in shares) | 117,934 | 167,525 | 179,478 | |
Weighted-average grant date fair value (in dollars per share) | $ 122.02 | $ 83.92 | $ 66.26 | |
Awards outstanding (in shares) | 380,631 | 444,000 | 470,000 | 488,000 |
RSUs | Director | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 1 year | |||
PSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Percentage of shares that ultimately vest depending on growth in diluted earnings per share | 50.00% | |||
Percentage of shares that ultimately vest based on relative total shareholder return over the vesting period | 50.00% | |||
Awards granted (in shares) | 57,542 | 74,011 | 89,816 | |
Weighted-average grant date fair value (in dollars per share) | $ 153.03 | $ 99.85 | $ 80.41 | |
Awards outstanding (in shares) | 318,000 | 355,000 | 384,000 | 323,000 |
RSUs and PSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized stock-based compensation cost | $ 31,600,000 | |||
Stock-based compensation expense | $ 20,900,000 | $ 17,700,000 | $ 15,400,000 | |
2015 EIP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
The number every share or unit issued counts against aggregate share limit (in shares) | 3 | |||
2018 EIP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Available for future awards (in shares) | 2,300,000 | |||
ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Available for future awards (in shares) | 487,023 | |||
Maximum amount that an employee can contribute during a purchase right period | $ 5,000 | |||
Exercise price as percentage of fair market value on the first day of purchase right period | 100.00% | |||
Exercise price as percentage of fair market value on the last day of purchase right period | 85.00% | |||
Unrecognized stock-based compensation cost | $ 500,000 | 300,000 | ||
Stock options exercised | 10,705,000 | 8,715,000 | 6,844,000 | |
Stock-based compensation expense | 2,000,000 | $ 1,200,000 | $ 900,000 | |
Accumulated amount by participants to purchase the entity's common stock | $ 10,800,000 | |||
Grant date prior to March 6, 2006 | 2005 EIP | Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Expiration period | 10 years | |||
Grant date prior to March 6, 2006 | 2005 EIP | Stock options | First anniversary of grant date and monthly thereafter | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of vesting rights after specified period | 25.00% | |||
Grant date on or after March 6, 2006 | 2005 EIP | Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expiration period | 8 years | |||
Grant date on or after March 6, 2006 | 2005 EIP | Stock options | Each anniversary of grant date | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of vesting rights after specified period | 25.00% | |||
Grant date on or after March 6, 2006 | 2005 EIP | RSUs | Each anniversary of grant date | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of vesting rights after specified period | 25.00% |
Stockholders' Equity and Stoc_4
Stockholders' Equity and Stock Compensation Plans - Stock-based Compensation and Income Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | |
Share-based Payment Arrangement [Abstract] | |||
Total stock-based compensation | $ 23,067 | $ 19,424 | $ 17,618 |
Income tax benefit related to stock-based compensation | (4,910) | (4,318) | (4,016) |
Stock-based compensation, net of tax benefit | $ 18,157 | $ 15,106 | $ 13,602 |
Stockholders' Equity and Stoc_5
Stockholders' Equity and Stock Compensation Plans - Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Oct. 03, 2021USD ($)$ / sharesshares | |
Number of Options | |
Outstanding at the beginning of the period (in shares) | shares | 539 |
Exercised (in shares) | shares | (324) |
Forfeited (in shares) | shares | (1) |
Outstanding at the end of the period (in shares) | shares | 214 |
Vested or expected to vest at the end of the period (in shares) | shares | 214 |
Exercisable at the end of the period (in shares) | shares | 179 |
Weighted- Average Exercise Price per Share | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 36.34 |
Exercised (in dollars per share) | $ / shares | 34.70 |
Forfeited (in dollars per share) | $ / shares | 40.80 |
Outstanding at the end of the period (in dollars per share) | $ / shares | 38.80 |
Vested or expected to vest (in dollars per share) | $ / shares | 38.80 |
Exercisable (in dollars per share) | $ / shares | $ 37.05 |
Weighted-Average Remaining Contractual Term | |
Outstanding | 4 years 11 months 12 days |
Vested or expected to vest | 4 years 11 months 12 days |
Exercisable | 4 years 8 months 19 days |
Aggregate Intrinsic Value | |
Outstanding | $ | $ 24,149 |
Vested or expected to vest | $ | 24,149 |
Exercisable | $ | $ 20,600 |
Stockholders' Equity and Stoc_6
Stockholders' Equity and Stock Compensation Plans - RSU and PSU Activity (Details) - $ / shares | 12 Months Ended | ||
Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | |
RSUs | |||
Number of Shares | |||
Nonvested balance at the beginning of the period (in shares) | 444,000 | 470,000 | 488,000 |
Granted (in shares) | 117,934 | 167,525 | 179,478 |
Vested (in shares) | (167,000) | (178,000) | (180,000) |
Forfeited (in shares) | (14,000) | (16,000) | (17,000) |
Nonvested balance at the end of the period (in shares) | 380,631 | 444,000 | 470,000 |
Weighted-Average Grant Date Fair Value | |||
Nonvested balance at the beginning of the period (in dollars per share) | $ 63.93 | $ 50.42 | $ 39.56 |
Granted (in dollars per share) | 122.02 | 83.92 | 66.26 |
Vested (in dollars per share) | 59.64 | 46.87 | 36.95 |
Forfeited (in dollars per share) | 77.74 | 65.43 | 48.56 |
Nonvested balance at the end of the period (in dollars per share) | $ 83.30 | $ 63.93 | $ 50.42 |
PSUs | |||
Number of Shares | |||
Nonvested balance at the beginning of the period (in shares) | 355,000 | 384,000 | 323,000 |
Granted (in shares) | 57,542 | 74,011 | 89,816 |
Vested (in shares) | (193,000) | (162,000) | (108,000) |
Adjustment (in shares) | 99,214 | 63,643 | 79,465 |
Forfeited (in shares) | (1,000) | (5,000) | 0 |
Nonvested balance at the end of the period (in shares) | 318,000 | 355,000 | 384,000 |
Weighted-Average Grant Date Fair Value | |||
Nonvested balance at the beginning of the period (in dollars per share) | $ 64.83 | $ 53.67 | $ 44.27 |
Granted (in dollars per share) | 153.03 | 99.85 | 80.41 |
Vested (in dollars per share) | 57.40 | 47.28 | 31.63 |
Adjustment (in dollars per share) | 57.40 | 48.36 | 31.63 |
Forfeited (in dollars per share) | 74.05 | 83.98 | 0 |
Nonvested balance at the end of the period (in dollars per share) | $ 82.96 | $ 64.83 | $ 53.67 |
Stockholders' Equity and Stoc_7
Stockholders' Equity and Stock Compensation Plans - ESPP Summary (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Cash received from exercise of purchase rights | $ 11,250 | $ 10,334 | $ 11,751 |
ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares purchased (in shares) | 124 | 168 | 148 |
Weighted-average purchase price per share (in dollars per share) | $ 86.16 | $ 51.77 | $ 46.38 |
Cash received from exercise of purchase rights | $ 10,705 | $ 8,715 | $ 6,844 |
Stockholders' Equity and Stoc_8
Stockholders' Equity and Stock Compensation Plans - ESPP Fair Value Assumptions (Details) - ESPP | 12 Months Ended | ||
Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend yield | 1.00% | 1.00% | 1.00% |
Expected stock price volatility | 47.90% | 26.50% | 26.70% |
Risk-free rate of return, annual | 0.10% | 1.60% | 2.60% |
Expected life (in years) | 1 year | 1 year | 1 year |
Retirement Plans - Narrative (D
Retirement Plans - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | |
Retirement Benefits [Abstract] | |||
Employer contributions to the plans | $ 26.9 | $ 25 | $ 23.3 |
Assets related to deferred compensation plans | 41.4 | 35.1 | |
Liabilities related to deferred compensation plans | $ 41.1 | $ 35 | |
Maximum age pension plan was open for new entrants | 24 years |
Retirement Plans - Amounts Reco
Retirement Plans - Amounts Recorded on the Balance Sheet (Details) $ in Thousands | Oct. 03, 2021USD ($) |
Retirement Benefits [Abstract] | |
Fair value of plan assets | $ 65,836 |
Benefit obligation | (64,830) |
Net surplus | $ 1,006 |
Retirement Plans - Fair Value o
Retirement Plans - Fair Value of Plan Assets by Main Asset Category (Details) $ in Thousands | Oct. 03, 2021USD ($) |
Defined Benefit Plan, Plan Assets, Category [Line Items] | |
Fair value of plan assets | $ 65,836 |
Equities | |
Defined Benefit Plan, Plan Assets, Category [Line Items] | |
Fair value of plan assets | 13,646 |
Mutual Fund | |
Defined Benefit Plan, Plan Assets, Category [Line Items] | |
Fair value of plan assets | 33,826 |
Liability driven investment funds | |
Defined Benefit Plan, Plan Assets, Category [Line Items] | |
Fair value of plan assets | 17,653 |
Cash/other | |
Defined Benefit Plan, Plan Assets, Category [Line Items] | |
Fair value of plan assets | $ 711 |
Retirement Plans - Assumptions
Retirement Plans - Assumptions used for Benefit Obligation Valuation (Details) - Pension Plan | Oct. 03, 2021 |
Defined Benefit Plan Disclosure [Line Items] | |
Discount rate | 2.00% |
Minimum | |
Defined Benefit Plan Disclosure [Line Items] | |
Rate of inflation | 2.85% |
Maximum | |
Defined Benefit Plan Disclosure [Line Items] | |
Rate of inflation | 3.50% |
Earnings per Share - Calculatio
Earnings per Share - Calculation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 03, 2021 | Jun. 27, 2021 | Mar. 28, 2021 | Dec. 27, 2020 | Sep. 27, 2020 | Jun. 28, 2020 | Mar. 29, 2020 | Dec. 29, 2019 | Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | |
Earnings Per Share [Abstract] | |||||||||||
Net income attributable to Tetra Tech | $ 82,954 | $ 51,903 | $ 45,517 | $ 52,436 | $ 44,654 | $ 45,497 | $ 36,397 | $ 47,310 | $ 232,810 | $ 173,859 | $ 158,668 |
Weighted-average common shares outstanding – basic (in shares) | 54,019 | 54,117 | 54,187 | 53,927 | 53,841 | 53,985 | 54,699 | 54,560 | 54,078 | 54,235 | 54,986 |
Effect of diluted stock options and unvested restricted stock (in shares) | 597 | 787 | 950 | ||||||||
Weighted-average common stock outstanding – diluted (in shares) | 54,597 | 54,666 | 54,736 | 54,637 | 54,603 | 54,692 | 55,463 | 55,438 | 54,675 | 55,022 | 55,936 |
Earnings per share attributable to Tetra Tech: | |||||||||||
Basic (in dollars per share) | $ 1.54 | $ 0.96 | $ 0.84 | $ 0.97 | $ 0.83 | $ 0.84 | $ 0.67 | $ 0.87 | $ 4.31 | $ 3.21 | $ 2.89 |
Diluted (in dollars per share) | $ 1.52 | $ 0.95 | $ 0.83 | $ 0.96 | $ 0.82 | $ 0.83 | $ 0.66 | $ 0.85 | $ 4.26 | $ 3.16 | $ 2.84 |
Earnings per Share - Antidiluti
Earnings per Share - Antidilutive Securities (Details) - shares | 12 Months Ended | ||
Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | |
Earnings Per Share [Abstract] | |||
Securities excluded from the calculation of dilutive potential common shares (in shares) | 0 | 0 | 0 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Narrative (Details) - Derivatives designated as hedging instruments | 12 Months Ended | ||
Oct. 03, 2021USD ($) | Sep. 30, 2018agreement | Sep. 27, 2020USD ($) | |
Interest rate swap agreements | Cash flow hedges | |||
Derivative [Line Items] | |||
Number of derivative agreements | agreement | 5 | ||
Notional Amount | $ 212,500,000 | ||
Fixed interest rate | 2.79% | ||
Fair value of interest rate swap agreements | $ (9,400,000) | $ (15,500,000) | |
Loss to be reclassified during next twelve months | $ 5,400,000 | ||
Period of reclassification from accumulated other comprehensive income to interest expense | 12 months | ||
Interest Rate Swap 1 | Cash flow hedges | |||
Derivative [Line Items] | |||
Notional Amount | $ 42,500,000 | ||
Interest Rate Swap 2 | Cash flow hedges | |||
Derivative [Line Items] | |||
Notional Amount | 42,500,000 | ||
Interest Rate Swap 3 | Cash flow hedges | |||
Derivative [Line Items] | |||
Notional Amount | 42,500,000 | ||
Interest Rate Swap 4 | Cash flow hedges | |||
Derivative [Line Items] | |||
Notional Amount | 42,500,000 | ||
Interest Rate Swap 5 | Cash flow hedges | |||
Derivative [Line Items] | |||
Notional Amount | 42,500,000 | ||
Foreign currency forward contracts and interest rate swap agreements | |||
Derivative [Line Items] | |||
Ineffective portion | 0 | ||
Amounts excluded from effectiveness testing | $ 0 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Fair Value of Outstanding Derivatives (Details) - USD ($) $ in Thousands | Oct. 03, 2021 | Sep. 27, 2020 |
Interest rate swap agreements | Derivatives designated as hedging instruments | Cash flow hedges | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Interest rate swap agreements | $ 9,394 | $ 15,512 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Changes in Fair Value of Interest Rate Swap Agreements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
(Loss) gain recognized in other comprehensive income, net of tax | $ 6,117 | $ (4,638) | |
(Loss) gain recognized in other comprehensive income, net of tax | $ (12,125) | ||
Interest rate swap agreements | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
(Loss) gain recognized in other comprehensive income, net of tax | $ 6,117 | $ (4,638) | |
(Loss) gain recognized in other comprehensive income, net of tax | $ (12,125) |
Reclassifications Out of Accu_3
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ 1,037,373 | $ 989,464 | $ 967,100 |
Amounts reclassified from accumulated other comprehensive income | |||
Other comprehensive income (loss), net of tax | 36,761 | (1,203) | (32,991) |
Ending balance | 1,234,291 | 1,037,373 | 989,464 |
Accumulated Other Comprehensive Income (Loss) | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (161,786) | (160,584) | (127,350) |
Other comprehensive income (loss) before reclassifications | 42,816 | 2,837 | (32,356) |
Amounts reclassified from accumulated other comprehensive income | |||
Interest rate contracts, net of tax | (6,058) | (4,039) | (878) |
Other comprehensive income (loss), net of tax | 36,758 | (1,202) | (33,234) |
Ending balance | (125,028) | (161,786) | (160,584) |
Foreign Currency Translation Adjustments | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (146,275) | (149,711) | (128,602) |
Other comprehensive income (loss) before reclassifications | 30,641 | 3,436 | (21,109) |
Amounts reclassified from accumulated other comprehensive income | |||
Other comprehensive income (loss), net of tax | 30,641 | 3,436 | (21,109) |
Ending balance | (115,634) | (146,275) | (149,711) |
Gain (Loss) on Derivative Instruments | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (10,873) | 1,252 | |
Other comprehensive income (loss) before reclassifications | (11,247) | ||
Amounts reclassified from accumulated other comprehensive income | |||
Interest rate contracts, net of tax | (878) | ||
Other comprehensive income (loss), net of tax | (12,125) | ||
Ending balance | $ (10,873) | ||
Gain (Loss) on Derivative Instruments | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (15,511) | ||
Other comprehensive income (loss) before reclassifications | 12,175 | (599) | |
Amounts reclassified from accumulated other comprehensive income | |||
Interest rate contracts, net of tax | (6,058) | (4,039) | |
Other comprehensive income (loss), net of tax | 6,117 | (4,638) | |
Ending balance | $ (9,394) | $ (15,511) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) $ in Millions | Oct. 03, 2021USD ($) |
Amended Credit Agreement | |
Debt Instrument [Line Items] | |
Amount outstanding under credit facility | $ 212.5 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Jul. 15, 2019action |
Commitments and Contingencies Disclosure [Abstract] | |
Number of qui tam actions | 3 |
Reportable Segments - Financial
Reportable Segments - Financial Information (Details) | Jun. 28, 2021USD ($) | Oct. 03, 2021USD ($) | Jun. 27, 2021USD ($) | Mar. 28, 2021USD ($) | Dec. 27, 2020USD ($) | Sep. 27, 2020USD ($) | Jun. 28, 2020USD ($) | Mar. 29, 2020USD ($) | Dec. 29, 2019USD ($) | Oct. 03, 2021USD ($)segment | Sep. 27, 2020USD ($) | Sep. 29, 2019USD ($) |
Financial information concerning reportable segments | ||||||||||||
Number of reportable segments | segment | 2 | |||||||||||
Revenue | $ 892,012,000 | $ 801,633,000 | $ 754,764,000 | $ 765,104,000 | $ 753,364,000 | $ 709,771,000 | $ 734,133,000 | $ 797,623,000 | $ 3,213,513,000 | $ 2,994,891,000 | $ 3,107,348,000 | |
Income from operations | 81,836,000 | $ 69,807,000 | $ 60,807,000 | $ 66,252,000 | 66,735,000 | $ 63,525,000 | $ 47,530,000 | $ 63,302,000 | 278,701,000 | 241,091,000 | 188,762,000 | |
Amortization expense for intangible assets | 11,500,000 | 11,600,000 | 11,600,000 | |||||||||
Fair value adjustments to contingent consideration liabilities | 3,273,000 | 14,971,000 | (1,085,000) | |||||||||
Impairment of goodwill | $ 0 | 15,800,000 | 0 | 15,800,000 | 7,755,000 | |||||||
Total assets | 2,576,562,000 | 2,378,558,000 | 2,576,562,000 | 2,378,558,000 | ||||||||
GSG | ||||||||||||
Financial information concerning reportable segments | ||||||||||||
Impairment of goodwill | 0 | |||||||||||
CIG | ||||||||||||
Financial information concerning reportable segments | ||||||||||||
Impairment of goodwill | 15,800,000 | |||||||||||
Operating segments | GSG | ||||||||||||
Financial information concerning reportable segments | ||||||||||||
Revenue | 1,942,958,000 | 1,778,922,000 | 1,820,671,000 | |||||||||
Income from operations | 195,297,000 | 168,669,000 | 185,263,000 | |||||||||
Total assets | 604,366,000 | 649,417,000 | 604,366,000 | 649,417,000 | ||||||||
Operating segments | CIG | ||||||||||||
Financial information concerning reportable segments | ||||||||||||
Revenue | 1,325,668,000 | 1,266,059,000 | 1,342,509,000 | |||||||||
Income from operations | 131,720,000 | 114,022,000 | 79,633,000 | |||||||||
Total assets | 572,607,000 | 479,238,000 | 572,607,000 | 479,238,000 | ||||||||
Operating segments | RCM | ||||||||||||
Financial information concerning reportable segments | ||||||||||||
Revenue | 613,000 | 198,000 | (1,542,000) | |||||||||
Income from operations | 0 | 0 | (5,933,000) | |||||||||
Total assets | 11,360,000 | 14,258,000 | 11,360,000 | 14,258,000 | ||||||||
Elimination of inter-segment revenue | ||||||||||||
Financial information concerning reportable segments | ||||||||||||
Revenue | (55,726,000) | (50,288,000) | (54,290,000) | |||||||||
Corporate | ||||||||||||
Financial information concerning reportable segments | ||||||||||||
Income from operations | (48,316,000) | (41,600,000) | $ (70,201,000) | |||||||||
Total assets | $ 1,388,229,000 | $ 1,235,645,000 | $ 1,388,229,000 | $ 1,235,645,000 |
Reportable Segments - Geographi
Reportable Segments - Geographic Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 03, 2021 | Jun. 27, 2021 | Mar. 28, 2021 | Dec. 27, 2020 | Sep. 27, 2020 | Jun. 28, 2020 | Mar. 29, 2020 | Dec. 29, 2019 | Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | |
Reportable Segments | |||||||||||
Revenue | $ 892,012 | $ 801,633 | $ 754,764 | $ 765,104 | $ 753,364 | $ 709,771 | $ 734,133 | $ 797,623 | $ 3,213,513 | $ 2,994,891 | $ 3,107,348 |
Long-lived assets | 303,460 | 339,281 | 303,460 | 339,281 | |||||||
United States | |||||||||||
Reportable Segments | |||||||||||
Revenue | 2,256,086 | 2,107,459 | 2,247,780 | ||||||||
Long-lived assets | 215,689 | 230,933 | 215,689 | 230,933 | |||||||
Foreign countries | |||||||||||
Reportable Segments | |||||||||||
Revenue | 957,427 | 887,432 | $ 859,568 | ||||||||
Long-lived assets | $ 87,771 | $ 108,348 | $ 87,771 | $ 108,348 |
Reportable Segments - Narrative
Reportable Segments - Narrative (Details) - Forecast $ in Millions | 3 Months Ended |
Jan. 02, 2022USD ($) | |
GSG | |
Reclassification [Line Items] | |
Annual revenue to be reclassed in the next fiscal quarter | $ (170) |
CIG | |
Reclassification [Line Items] | |
Annual revenue to be reclassed in the next fiscal quarter | $ 170 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | |
Related Party Transactions [Abstract] | |||
Related party revenues | $ 95,500 | $ 88,200 | $ 99,100 |
Related party expenses | 92,400 | 86,400 | $ 98,500 |
Accounts receivable, net | 19,082 | 20,884 | |
Contract assets | 5,092 | 3,261 | |
Contract liabilities | $ 3,026 | $ 478 |
Quarterly Financial Informati_3
Quarterly Financial Information - Unaudited - Narrative (Details) - USD ($) | Jun. 28, 2021 | Oct. 03, 2021 | Sep. 27, 2020 | Jun. 28, 2020 | Mar. 29, 2020 | Dec. 29, 2019 | Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 |
Business Acquisition [Line Items] | |||||||||
COVID-19 incremental costs | $ 8,200,000 | ||||||||
Impairment of goodwill | $ 0 | $ 15,800,000 | $ 0 | $ 15,800,000 | $ 7,755,000 | ||||
Gain on sale of property and equipment | 1,000,000 | $ 4,500,000 | $ 2,200,000 | $ 800,000 | |||||
Contingent consideration | |||||||||
Business Acquisition [Line Items] | |||||||||
Net gains in earnings for adjustments on contingent earn-out liabilities | $ 13,500,000 | ||||||||
Foreign | |||||||||
Business Acquisition [Line Items] | |||||||||
Tax benefit primarily consisting of valuation allowances | $ 21,600,000 | $ 21,600,000 | $ 22,300,000 |
Quarterly Financial Informati_4
Quarterly Financial Information - Unaudited - Summary of Quarterly Information (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 03, 2021 | Jun. 27, 2021 | Mar. 28, 2021 | Dec. 27, 2020 | Sep. 27, 2020 | Jun. 28, 2020 | Mar. 29, 2020 | Dec. 29, 2019 | Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 892,012 | $ 801,633 | $ 754,764 | $ 765,104 | $ 753,364 | $ 709,771 | $ 734,133 | $ 797,623 | $ 3,213,513 | $ 2,994,891 | $ 3,107,348 |
Income from operations | 81,836 | 69,807 | 60,807 | 66,252 | 66,735 | 63,525 | 47,530 | 63,302 | 278,701 | 241,091 | 188,762 |
Net income attributable to Tetra Tech | $ 82,954 | $ 51,903 | $ 45,517 | $ 52,436 | $ 44,654 | $ 45,497 | $ 36,397 | $ 47,310 | $ 232,810 | $ 173,859 | $ 158,668 |
Earnings per share attributable to Tetra Tech: | |||||||||||
Basic (in dollars per share) | $ 1.54 | $ 0.96 | $ 0.84 | $ 0.97 | $ 0.83 | $ 0.84 | $ 0.67 | $ 0.87 | $ 4.31 | $ 3.21 | $ 2.89 |
Diluted (in dollars per share) | $ 1.52 | $ 0.95 | $ 0.83 | $ 0.96 | $ 0.82 | $ 0.83 | $ 0.66 | $ 0.85 | $ 4.26 | $ 3.16 | $ 2.84 |
Weighted-average common shares outstanding: | |||||||||||
Basic (in shares) | 54,019 | 54,117 | 54,187 | 53,927 | 53,841 | 53,985 | 54,699 | 54,560 | 54,078 | 54,235 | 54,986 |
Diluted (in shares) | 54,597 | 54,666 | 54,736 | 54,637 | 54,603 | 54,692 | 55,463 | 55,438 | 54,675 | 55,022 | 55,936 |
SCHEDULE II - VALUATION AND Q_2
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 03, 2021 | Sep. 27, 2020 | Sep. 29, 2019 | |
Allowance for doubtful accounts | |||
Changes in valuation and qualifying accounts and reserves | |||
Balance at Beginning of Period | $ 7,147 | $ 10,562 | $ 5,188 |
Charged to Costs and Expenses | (4,130) | 1,472 | 7,242 |
Deductions | 195 | (4,887) | (1,868) |
Other | 1,140 | 0 | 0 |
Balance at End of Period | 4,352 | 7,147 | 10,562 |
Income tax valuation allowance | |||
Changes in valuation and qualifying accounts and reserves | |||
Balance at Beginning of Period | 24,395 | 20,543 | 21,479 |
Charged to Costs and Expenses | 13,698 | 3,852 | 255 |
Deductions | (26,059) | 0 | (23,714) |
Other | 1,006 | 0 | 22,523 |
Balance at End of Period | $ 13,040 | $ 24,395 | $ 20,543 |