<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
(Amendment No. 1)
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported) December 31, 1997
-----------------------------
Tetra Tech, Inc.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-19566 95-4148514
- -------------------------------------------------------------------------------
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
670 N. Rosemead Boulevard, Pasadena, California 91107-2190
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (626) 351-4664
---------------------------
Not Applicable
- -------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE>
The undersigned Registrant hereby amends the following item of its Current
Report on Form 8-K for the event of December 31, 1997:
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
(i) Independent Auditors' Report
(ii) NUS Environmental Statement of Net Assets as of
December 31, 1997
(iii) NUS Environmental Statement of Operations for the Year
Ended December 31, 1997
(iv) NUS Environmental Statement of Cash Flows for the Year
Ended December 31, 1997
(v) NUS Environmental Notes to Financial Statements for the
Year Ended December 31, 1997
(b) PRO FORMA FINANCIAL INFORMATION.
(i) Tetra Tech, Inc. and NUS Environmental - Unaudited Pro
Forma Condensed Consolidated Balance Sheet as of
December 28, 1997
(ii) Tetra Tech, Inc. and NUS Environmental - Unaudited Pro
Forma Condensed Consolidated Statement of Operations for
the Year Ended September 28, 1997
(iii) Tetra Tech, Inc. and NUS Environmental - Unaudited Pro
Forma Condensed Consolidated Statement of Operations for
the Three Months Ended December 28, 1997
(iv) Tetra Tech, Inc. and NUS Environmental - Notes to Unaudited
Pro Forma Condensed Consolidated Financial Statements
<PAGE>
(c) EXHIBITS.
23 Consent of Independent Auditors
27 Financial Data Schedule
<PAGE>
INDEPENDENT AUDITORS' REPORT
NUS Environmental:
We have audited the accompanying statement of net assets of NUS Environmental
(see Note 1) as of December 31, 1997, and the related statements of
operations and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of NUS Environmental at December 31, 1997,
and the results of its operations and its cash flows for the year ended
December 31, 1997 in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Los Angeles, California
March 13, 1998
<PAGE>
NUS ENVIRONMENTAL
STATEMENT OF NET ASSETS
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
1997
-----------
<S> <C>
ASSETS
CURRENT ASSETS:
Cash ......................................................... $ 2,000
Accounts receivable, less allowance for doubtful accounts of
$6,978,000 .............................................. 21,794,000
Unbilled receivables, less allowance for disallowed costs of
$6,990,000 .............................................. 9,937,000
Prepaid and other expenses ................................... 374,000
Deferred income taxes ........................................ 7,710,000
-----------
Total current assets ............................... 39,817,000
PROPERTY AND EQUIPMENT, Net ....................................... 890,000
-----------
TOTAL ASSETS ..................................................... $40,707,000
-----------
-----------
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES:
Accounts payable ............................................ $ 3,429,000
Accrued compensation ........................................ 2,900,000
Deferred revenue ............................................ 2,408,000
-----------
Total current liabilities ......................... 8,737,000
-----------
CONTINGENCIES (Note 7)
NET ASSETS ........................................................ 31,970,000
-----------
TOTAL LIABILITIES AND NET ASSETS .................................. $40,707,000
-----------
-----------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
NUS ENVIRONMENTAL
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
1997
-----------
<S> <C>
GROSS REVENUE ................................................ $92,296,000
Subcontractor costs ...................................... 21,419,000
-----------
NET REVENUE .................................................. 70,877,000
COST OF REVENUE .............................................. 61,941,000
-----------
GROSS PROFIT ................................................. 8,936,000
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ................. 6,621,000
-----------
INCOME BEFORE INCOME TAXES ................................... 2,315,000
INCOME TAXES ................................................. 926,000
-----------
NET INCOME ................................................... $ 1,389,000
-----------
-----------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
NUS ENVIRONMENTAL
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
1997
-----------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ................................................... $ 1,389,000
Reconciliation of net income to net cash provided by
operating activities:
Depreciation ............................................... 754,000
Provision for doubtful accounts ............................ 2,337,000
Deferred income taxes ...................................... (44,000)
Changes in assets and liabilities:
Accounts receivable ...................................... 4,033,000
Unbilled receivables ..................................... 4,066,000
Prepaid and other expenses ............................... 184,000
Accounts payable ......................................... 805,000
Accrued compensation ..................................... (582,000)
Deferred revenue ......................................... (1,646,000)
-----------
Net cash provided by operating activities .............. 11,296,000
-----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment ........................ (237,000)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions - Net ....................................... (11,057,000)
-----------
NET CHANGE IN CASH ............................................. 2,000
CASH, Beginning of year ........................................ --
-----------
CASH, End of year .............................................. $ 2,000
-----------
-----------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes ................................ $ 970,000
-----------
-----------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
NUS ENVIRONMENTAL
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1997
1. GENERAL
NUS Environmental ("NUS") is comprised of the environmental services
businesses of Halliburton Company's ("Halliburton") Brown & Root, Inc.
("Brown & Root") and Halliburton NUS Corporation ("Halliburton NUS")
subsidiaries. On December 31, 1997, Tetra Tech, Inc. purchased certain assets
of NUS from Brown & Root and Halliburton NUS. The final purchase price, as
adjusted, was $24,872,000.
NUS provides consulting engineering and design services for the
environmental remediation of contaminated air, water and soil conditions.
Customers include industrial clients as well as federal, state and local
governments, focused in the United States.
Substantially all of NUS's cash receipts are remitted to Halliburton and
substantially all of NUS's cash disbursements are funded by Halliburton. In
addition, Halliburton provides NUS with certain services, including corporate
management, legal, audit, employee benefit administration, treasury, tax and
other indirect administrative functions. As a result, the financial position
and operating results of NUS, as presented herein, may not be the same as it
would be if NUS was an independent entity.
The financial statements include only those assets, liabilities and
results of operations which relate to the business of NUS.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CONTRACT REVENUES AND COST - In the course of providing its services,
NUS routinely subcontracts for services such as laboratory testing, soil
cartage and other services and capabilities. These costs are passed through
to clients and, in accordance with industry practice, are included in NUS's
gross revenue. Because subcontractor services can change significantly from
project to project, changes in gross revenue may not be indicative of
business trends. Accordingly, NUS also reports net revenue, which is gross
revenue less the cost of subcontractor services. Contract revenues and
contract costs on both cost-type and fixed-price-type contracts are recorded
using the percentage-of-completion (cost-to-cost) method. Under this method,
contract revenues on long-term contracts are recognized in the ratio that
contract costs incurred bear to total estimated costs. Costs and income on
long-term contracts are subject to revision throughout the lives of the
contracts and any required adjustments are made in the period in which the
revisions become known. Losses on contracts are recorded in full as they are
identified.
General and administrative costs are expensed in the period incurred.
<PAGE>
Contract revenues under United States government contracts and
subcontracts accounted for 76% of net contract revenue for the year ended
December 31, 1997.
PROPERTY AND EQUIPMENT - Property and equipment are stated at cost and
are depreciated over their estimated useful lives using the straight-line
method. Generally, estimated useful lives range from three to ten years.
Leasehold improvements are amortized on a straight-line basis over the
shorter of their estimated useful lives or the remaining lease term.
Expenditures for maintenance and repairs are expensed as incurred.
RECEIVABLE VALUATION ALLOWANCES - Accounts receivable valuation
allowances include amounts to provide for doubtful accounts and for the
potential disallowance of billed or unbilled costs. Allowances to provide
for doubtful accounts have been determined through a review of specific
amounts determined to be uncollectible, plus a general allowance for other
amounts for which some potential loss has been determined to be possible
based on current events and circumstances.
INCOME TAXES - NUS is included in the federal and state consolidated tax
returns of Halliburton. NUS has recorded a provision for federal and state
taxes as though it filed separate tax returns with deferred tax benefits
recorded for expenses not currently deductible. Deferred tax assets and
liabilities have been recognized for differences between financial statement
and tax bases of assets and liabilities using presently enacted rates.
CONCENTRATION OF CREDIT RISK - Financial instruments which subject NUS
to credit risk consist primarily of accounts receivable. Approximately 41%
of accounts receivable is due from various agencies of the federal
government. NUS performs ongoing credit evaluations of its customers and
maintains an allowance for potential credit losses.
USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these
estimates.
<PAGE>
3. CONTRACT RECEIVABLE
Accounts receivable consist of the following at December 31, 1997:
<TABLE>
<CAPTION>
<S> <C>
Billed accounts receivable ....................... $28,772,000
-----------
Unbilled accounts receivable:
Billable amounts not invoiced.................... 13,788,000
Costs and fee retention billable upon audit
or contract completion ........................ 3,139,000
-----------
Total unbilled accounts receivable ................ 16,927,000
-----------
Allowance for doubtful accounts and
disallowed costs ................................ (13,968,000)
-----------
Total ............................................. $31,731,000
-----------
-----------
</TABLE>
Contracts with the U.S. federal government are subject to audit by the
government, primarily the Defense Contract Audit Agency (DCAA), which reviews
NUS's overhead rates, operating systems and cost proposals. During the
course of its audit, the DCAA may disallow costs if it determines that NUS
improperly accounted for such costs in a manner inconsistent with Cost
Accounting Standards.
4. LEASE COMMITMENTS
NUS leases 18 office facilities in the United States under operating
leases. Future minimum rental commitments under these operating leases consist
of the following at December 31, 1997:
<TABLE>
<CAPTION>
YEARS ENDING DECEMBER 31
------------------------
<S> <C>
1998............................................... $3,089,000
1999............................................... 2,322,000
2000............................................... 1,964,000
2001............................................... 1,292,000
2002............................................... 377,000
----------
Total.............................................. $9,044,000
----------
----------
</TABLE>
<PAGE>
5. INCOME TAXES
The provision (benefit) for income taxes consists of the following:
<TABLE>
<CAPTION>
1997
--------
<S> <C>
Currently payable.............................................. $970,000
Deferred....................................................... (44,000)
--------
Total.......................................................... $926,000
--------
--------
</TABLE>
The income tax benefit has been recorded using a 35% federal rate and a
state rate (net of federal benefit) of 5%. Temporary differences include
allowances for billed and unbilled receivables, as well as accruals not
currently deductible.
6. EMPLOYEE BENEFITS
Substantially all NUS employees are eligible to participate in a 401(k) tax
deferred savings plan. Employees, at their option, may contribute a portion of
their earnings to the plan. Contributions are restricted to amounts authorized
by Halliburton's board of directors. Contributions to the plan in respect of NUS
employees were approximately $1,026,000 in 1997.
7. CONTINGENCIES
NUS is subject to certain claims and lawsuits typically filed against the
engineering and consulting professions, primarily alleging professional errors
or omissions. NUS carries professional liability insurance, subject to certain
deductibles and policy limits against such claims. Management is of the opinion
that the resolution of these claims will not have a material adverse effect on
NUS's financial statements.
* * * * *
<PAGE>
TETRA TECH, INC. AND NUS ENVIRONMENTAL
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 28, 1997
<TABLE>
<CAPTION>
Historical (Note 1) Pro forma (Note 2)
--------------------------- ---------------------------
Tetra Tech, NUS
Inc. Environmental Adjustments Consolidated
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ................... $ 5,411,000 $ 2,000 $ (2,000) $ 5,411,000
Accounts receivable - net ................... 39,759,000 21,794,000 (9,994,000) 51,559,000
Unbilled receivables - net .................. 33,239,000 9,937,000 1,914,000 45,090,000
Prepaid and other current assets ............ 4,066,000 374,000 (99,000) 4,341,000
Deferred income taxes ....................... 867,000 7,710,000 (7,710,000) 867,000
------------ ------------ ------------ ------------
Total Current Assets ...................... 83,342,000 39,817,000 (15,891,000) 107,268,000
------------ ------------ ------------ ------------
PROPERTY AND EQUIPMENT - NET .................. 8,375,000 890,000 (57,000) 9,208,000
------------ ------------ ------------ ------------
INTANGIBLE ASSETS - NET ....................... 68,797,000 -- 3,085,000 71,882,000
OTHER ASSETS - NET ............................ 1,386,000 -- -- 1,386,000
------------ ------------ ------------ ------------
TOTAL ASSETS .................................. $161,900,000 $ 40,707,000 $(12,863,000) $189,744,000
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES:
Accounts payable ............................ $ 13,458,000 $ 3,429,000 $ (3,429,000) $ 13,458,000
Accrued compensation ........................ 8,366,000 2,900,000 (2,900,000) 8,366,000
Other current liabilities ................... 2,976,000 2,408,000 564,000 5,948,000
Income taxes payable ........................ 1,751,000 -- -- 1,751,000
Current portion of long-term
obligations ............................... 10,000,000 -- 14,872,000 24,872,000
------------ ------------ ------------ ------------
Total Current Liabilities ............. 36,551,000 8,737,000 9,107,000 54,395,000
------------ ------------ ------------ ------------
LONG-TERM OBLIGATIONS ......................... -- -- 10,000,000 10,000,000
------------ ------------ ------------ ------------
STOCKHOLDERS' EQUITY:
Preferred stock-authorized 2,000,000 shares
of $.01 par value; issued and outstanding
0 shares at December 28, 1997 ............. -- -- -- --
Common stock-authorized 30,000,000
shares of $.01 par value; issued and
outstanding 22,272,741 shares at
December 28, 1997 ......................... 223,000 -- -- 223,000
Additional paid-in capital .................. 77,143,000 -- -- 77,143,000
Retained earnings ........................... 47,983,000 31,970,000 (31,970,000) 47,983,000
------------ ------------ ------------ ------------
Total Stockholders' Equity .............. 125,349,000 31,970,000 (31,970,000) 125,349,000
------------ ------------ ------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY ........................ $161,900,000 $ 40,707,000 $(12,863,000) $189,744,000
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
See accompanying notes to the unaudited pro forma condensed consolidated
financial statements.
<PAGE>
TETRA TECH, INC. AND NUS ENVIRONMENTAL
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 28, 1997
<TABLE>
<CAPTION>
Historical (Note 1) Pro forma (Note 3)
--------------------------- ---------------------------
Tetra Tech, NUS
Inc. Environmental Adjustments Consolidated
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Gross Revenue ...................... $ 246,767,000 $ 92,296,000 $ -- $339,063,000
Subcontractor costs .............. 55,976,000 21,419,000 -- 77,395,000
------------- ------------ ------------ -------------
Net Revenue ........................ 190,791,000 70,877,000 -- 261,668,000
Cost of Net Revenue ................ 141,019,000 61,941,000 -- 202,960,000
------------- ------------ ------------ -------------
Gross Profit ....................... 49,772,000 8,936,000 -- 58,708,000
Selling, General and Administrative
Expenses ........................... 25,173,000 6,621,000 103,000 31,897,000
------------- ------------ ------------ -------------
Income From Operations ............. 24,599,000 2,315,000 (103,000) 26,811,000
Interest Expense ................... 320,000 -- 1,625,000 1,945,000
Interest Income .................... 300,000 -- -- 300,000
------------- ------------ ------------ -------------
Income Before Income Taxes ......... 24,579,000 2,315,000 (1,728,000) 25,166,000
Income Tax Expense ................. 10,323,000 926,000 (679,000) 10,570,000
------------- ------------ ------------ -------------
Net Income ......................... $ 14,256,000 $ 1,389,000 $(1,049,000) $ 14,596,000
------------- ------------ ------------ -------------
------------- ------------ ------------ -------------
Basic Earnings Per Share ........... $ 0.76 $ 0.78
------------- -------------
------------- -------------
Diluted Earnings Per Share ......... $ 0.72 $ 0.74
------------- -------------
------------- -------------
Weighted Average Common Shares
Outstanding:
Basic ......................... 18,697,000 18,697,000
------------- -------------
------------- -------------
Diluted ....................... 19,725,000 19,725,000
------------- -------------
------------- -------------
</TABLE>
See accompanying notes to the unaudited pro forma condensed consolidated
financial statements.
<PAGE>
TETRA TECH, INC. AND NUS ENVIRONMENTAL
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 28, 1997
<TABLE>
<CAPTION>
Historical (Note 1) Pro forma (Note 3)
------------------------ -------------------------------
Tetra Tech, NUS
Inc. Environmental Adjustments Consolidated
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Gross Revenue .................................. $66,438,000 $21,330,000 $ -- $87,768,000
Subcontractor costs .......................... 12,774,000 4,906,000 -- 17,680,000
----------- ----------- ------------ -----------
Net Revenue .................................... 53,664,000 16,424,000 -- 70,088,000
Cost of Net Revenue ............................ 40,339,000 14,494,000 -- 54,833,000
----------- ----------- ------------ -----------
Gross Profit ................................... 13,325,000 1,930,000 -- 15,255,000
Selling, General and Administrative Expenses ... 6,146,000 1,565,000 26,000 7,737,000
----------- ----------- ------------ -----------
Income From Operations ......................... 7,179,000 365,000 (26,000) 7,518,000
Interest Expense ............................... 137,000 -- 162,000 299,000
Interest Income ................................ 65,000 -- -- 65,000
----------- ----------- ------------ -----------
Income Before Income Taxes ..................... 7,107,000 365,000 (188,000) 7,284,000
Income Tax Expense ............................. 3,056,000 146,000 (70,000) 3,132,000
----------- ----------- ------------ -----------
Net Income ..................................... $ 4,051,000 $ 219,000 $ (118,000) $ 4,152,000
----------- ----------- ------------ -----------
----------- ----------- ------------ -----------
Basic Earnings Per Share ....................... $ 0.19 $ 0.19
----------- -----------
----------- -----------
Diluted Earnings Per Share ..................... $ 0.18 $ 0.18
----------- -----------
----------- -----------
Weighted Average Common Shares
Outstanding:
Basic ................................ 21,774,000 21,774,000
----------- -----------
----------- -----------
Diluted .............................. 23,073,000 23,073,000
----------- -----------
----------- -----------
</TABLE>
See accompanying notes to the unaudited pro forma condensed consolidated
financial statements.
<PAGE>
TETRA TECH, INC. AND NUS ENVIRONMENTAL
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. PERIODS PRESENTED
On December 31, 1997, Tetra Tech, Inc. ("Tetra Tech") purchased certain
assets of the environmental services businesses of Halliburton Company's
Brown & Root, Inc. and Halliburton NUS Corporation (hereinafter referred to
as "NUS Environmental" or "NUS"). The final purchase price, as adjusted, was
$24,872,000.
The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of
December 28, 1997 has been prepared by combining the historical unaudited
balance sheets of Tetra Tech and NUS at December 28, 1997 and December 31,
1997, respectively, and has been adjusted to reflect events directly
attributable to the acquisition, as described in Note 2. PRO FORMA BALANCE
SHEET ADJUSTMENTS RELATED TO THE ACQUISITION. The Unaudited Pro Forma
Condensed Consolidated Statements of Operations have been prepared by
combining the historical statements of operations of Tetra Tech and NUS and
has been adjusted to assume the acquisition had taken place at the beginning
of the Tetra Tech's prior fiscal year, and the events directly attributable
to the acquisition, as described in Note 3. PRO FORMA STATEMENT OF
OPERATIONS ADJUSTMENTS RELATED TO THE ACQUISITION. The Unaudited Pro Forma
Condensed Consolidated Statement of Operations for the year ended September
28, 1997 has been prepared by combining Tetra Tech's historical audited
statement of operations for the year ended September 28, 1997 and NUS's
historical audited statement of operations for the year ended December 31,
1997. The Unaudited Pro Forma Condensed Consolidated Statement of Operations
for the three months ended December 28, 1997 has been prepared by combining
Tetra Tech's historical unaudited statement of operations for the three
months ended December 28, 1997 and NUS's historical unaudited statement of
operations for the three months ended December 31, 1997.
2. PRO FORMA BALANCE SHEET ADJUSTMENTS RELATED TO THE ACQUISITION
The adjustments to the Unaudited Pro Forma Condensed Consolidated
Balance Sheets as of December 28, 1997 relate primarily to the exclusion of
the assets and liabilities not assumed or purchased by Tetra Tech. Other
adjustments have been made to reflect the intangible assets acquired and the
debt incurred related to the acquisition. Adjustments made to reflect the
assets, reserves and liabilities excluded in the acquisition include the
following adjustments to the specified captions:
Cash and equivalents ............................ $ (2,000)
Accounts receivable-net ......................... (9,994,000)
<PAGE>
Unbilled receivables-net ........................ 1,914,000
Prepaid and other current assets ................ (99,000)
Deferred income taxes-net ....................... (7,710,000)
Property and equipment-net ...................... (57,000)
Accounts payable ................................ (3,429,000)
Accrued compensation ............................ (2,900,000)
Other current liabilities ....................... 189,000
Adjustments made to reflect the intangible assets acquired and the debt
incurred related to the acquisition include the following adjustments to the
specified captions:
Intangible assets-net ........................... $3,085,000
Other current liabilities ....................... 375,000
Current portion of long-term debt ............... 14,872,000
Long-term obligations ........................... 10,000,000
The adjustment to Intangible assets-net relates to the difference
between the purchase price and the fair value of the net assets acquired.
The adjustment to Other current liabilities relates to the estimated direct
costs incurred in the acquisition. The adjustments to Current portion of
long-term debt and Long-term obligations relates to the borrowing of cash to
facilitate the acquisition.
3. PRO FORMA STATEMENT OF OPERATIONS ADJUSTMENTS RELATED TO THE ACQUISITION
For the Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the year ended September 28, 1997, the adjustment of $103,000
to Selling, General and Administrative Expenses relates to the estimated
amortization of goodwill related to the acquisition. The intangible assets
are amortized on a straight-line basis over 30 years. The adjustment of
$1,625,000 to Interest Expense relates to the estimated interest expense on
average borrowings of $25,000,000 on Tetra Tech's credit facility. Such
adjustment is based upon the average interest rates and terms of the credit
facility. The adjustment of $(679,000) to Income tax expense relates to
adjustments necessary to provide for income tax expense on consolidated
income before taxes at Tetra Tech's effective tax rate.
For the Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the three months ended December 28, 1997, the adjustment of
$26,000 to Selling, General and Administrative Expenses relates to the
estimated amortization of goodwill related to the acquisition. The
adjustment of $162,000 to Interest Expense relates to the estimated interest
expense on average borrowings of $10,000,000 on Tetra Tech's credit facility.
Such adjustment is based upon the average interest rates and terms of the
credit facility. The adjustment of $149,000 to Income Tax Expense relates to
adjustments necessary to provide for income tax expense on consolidated
income before taxes at Tetra Tech's effective tax rate.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: March 16, 1998
TETRA TECH, INC.
By: /s/ James M. Jaska
-----------------------------
James M. Jaska
Chief Financial Officer
<PAGE>
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement Nos.
33-46240, 33-47533, 33-80606, and 33-94706 on Form S-8 of Tetra Tech, Inc. of
our report dated March 13, 1998 appearing in this Form 8-K/A of Tetra Tech,
Inc.
DELOITTE & TOUCHE LLP
Los Angeles, California
March 13, 1998
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-04-1998
<PERIOD-END> DEC-28-1997
<CASH> 5,411
<SECURITIES> 0
<RECEIVABLES> 83,826
<ALLOWANCES> 10,828
<INVENTORY> 0
<CURRENT-ASSETS> 83,342
<PP&E> 18,698
<DEPRECIATION> 10,323
<TOTAL-ASSETS> 161,900
<CURRENT-LIABILITIES> 36,551
<BONDS> 0
0
0
<COMMON> 223
<OTHER-SE> 77,143
<TOTAL-LIABILITY-AND-EQUITY> 161,900
<SALES> 66,438
<TOTAL-REVENUES> 66,438
<CGS> 53,113
<TOTAL-COSTS> 53,113
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 137
<INCOME-PRETAX> 7,107
<INCOME-TAX> 3,056
<INCOME-CONTINUING> 4,051
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,051
<EPS-PRIMARY> 0.19
<EPS-DILUTED> 0.18
</TABLE>
