Good morning, and thank you for joining the Tetra Tech Earnings Call. By now, you should have received a copy of the press release. If you have not, please contact the company's corporate office at 626-351-4664. As a reminder, Tetra Tech is also simulcasting this presentation with slides in the Investors section of its website at www.tetratech.com.

This call is being recorded at the request of Tetra Tech, and this broadcast is the copyright property of Tetra Tech. Any rebroadcast of this information in whole or part without the prior written permission of Tetra Tech is prohibited.

With us today from management are Dan Batrack, Chairman and Chief Executive Officer; and Steve Burdick, Chief Financial Officer. They will provide a brief overview of the results, and we'll open up the call for questions. I'd like to direct your attention to the safe harbor statement in today's presentation.

Today's discussion contains forward-looking statements about future growth and financial expectations. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties, including the risks described in Tetra Tech's periodic reports filed with the SEC.

Except as required by law, Tetra Tech takes no obligation to update its forward-looking statements. In addition, since management will be presenting some non-GAAP financial measures as references, the appropriate GAAP financial reconciliations are posted in the Investors section of Tetra Tech's website. [Operator Instructions].

With that, I would like to turn the call over to Dan Batrack. Please go ahead, Mr. Batrack..

Great. Thank you very much, Melissa, and good morning, and welcome to our fiscal year 2021 second quarter earnings conference call. I'd like to start with sharing with you that we had a strong second quarter delivering results ahead of our guidance for both revenue and for earnings.

Our leading with science approach focused on water, environment, sustainable infrastructure and renewable energy is well aligned with the priorities of our clients worldwide.

In the United States, the new administration is proceeding with implementing its policies and priorities associated with addressing climate change, environmental stewardship and the use of international development to support its foreign policy.

Currently, the Biden administration is in the process of filling 4000 government appointed positions, 1200 of which require senate approval. And all of these appointments are being put in place to implement and administer these priorities across all government agencies.

As these appointments are put into place, we expect opportunities to increase for us to leverage our contract capacity and industry leading expertise. I will now begin with an overview of our performance and customers followed by Steven Burdick, our Chief Financial Officer will provide a more detailed review of our financial and capital allocation.

I will then address our customer outlook and earnings guidance for the third quarter and for all of fiscal year 2021. We had a strong second quarter of 2021, exceeding our guidance for both revenue and earnings per share. Our operations generated a record second quarter earnings per share of $0.83, which was up 26% from last year.

Our net revenue was also an all time high for a second quarter for the company at $600 million up 3% from last year and that is comparing this year's pandemic affected quarter to last year's non-pandemic affected quarter. And our backlog ended the quarter at $3.15 billion up 5% from last year.

I would now like to provide an overview of our performance by our end customers. Our U.S. federal government and state and local revenues were both up year-on-year. State and local revenues were up organically 32% year-on-year driven by continued growth across our municipal water and our disaster response programs.

When adjusted for episodic disaster response work that we performed in the quarter, we still had a very strong 19% year-on-year growth rate for our municipal infrastructure programs. Work for our U.S. Federal clients was 31% of our net revenue in the quarter and was up 6% year-over-year. This growth was led by double digit increases in work for U.S.

civilian agencies and the Department of Defense. However, as we've spoken over the past several quarters, we continued to see delays in our USA projects due to travel restrictions associated with the pandemic globally. Our international net revenue was also 31% of our overall business down 5% from last year.

We saw our Canadian and our United Kingdom and Australian government work continuing to strengthen and saw additional growth in renewable energy work for Canadian regional utilities. However, growth in these areas was offset by slower recovery and work for our international commercial clients. For our U.S.

commercial net revenue, it represented 21% of our business in the quarter and was down 7% from the prior year, impacted by very difficult comparisons with strong pre-pandemic revenues that we had a year ago in fiscal year 2020.

While our regulatory driven programs and renewable energy revenues continue to grow we saw a slower recovery in discretionary work for our industrial clients and our high performance buildings practice. I'd now like to present our performance by segment or for two segments.

In second quarter both of our segments contributed to an expansion of our operating margin. The government services group or the GSG Segment was up 180 basis points year-over-year, delivering 13.3% margin for the quarter.

The margin increase was driven by high end, high value data analytics and design services and significant municipal growth that drove strong utilization across the GSG operations. The commercial international group or the CIG segment was up 50 basis points year-over-year resulting in a 10.4% margin for the quarter.

This is particularly notable in the quarter that is impacted by the seasonal winter slowdowns in our Canadian operations, which very much limit their contribution to margin performance and the second quarter of each year during the months of January, February and March, deep winter months up North.

Overall CIG's high end consulting continue to perform very well, especially for our environmental and renewable energy services work. Our backlog for the quarter was up 5% year-on-year ending the quarter at $3.15 billion. In the United States this quarter was marked by the transition of the U.S.

Federal Government's new administration and the initial steps toward new alignment of procurement to the administration's priorities; climate, water, environment, and international development. Holding contract capacity that aligns with the administration's priority programs is essential to funding our future work.

This quarter, we added strategic contracts for the U.S. Army Corps of Engineers for dam safety and flood risk reduction, providing almost $100 million in contract capacity for high end services to analyze dams, manage flood risk, and address climate change mitigation.

We won single award contracts that added $51 million in contract capacity for international development work that will support the transition of countries to lower carbon and higher efficiency renewable energy economies.

We won a new Air Force program for engineering design services with a $2 billion ceiling that provides a vehicle for our delivery of high end sustainable and resilient defense infrastructure designs.

And we received new task orders from the federal government to support critical programs for some of our key clients with the United States Environmental Protection Agency, Federal Aviation Administration, and many international development agencies.

Now at this point, I'd now like to turn the presentation over to Steven Burdick to present the details of our financials for the quarter state.

Steve?.

Yes. Thank you, Dan. So I would like to now review the GAAP financial results for the second quarter of fiscal 2021, as well as our financial conditions as of the first half of the year. Overall, our revenue and net revenue came in better than expected when compared to our second quarter guidance. The fiscal 2021 second quarter revenue was $755 million.

And the second quarter net revenue amounted to $600 million was in excess of the top end of our guidance range of $565 million to $595 million. Both our revenue and net revenue were up 3% over last year.

So when we compare our second quarter of this year to second quarter of last year, our revenue net revenue was positively impacted by the water and environmental services provided to our federal and state local clients partially offset by the impact to our commercial and international activities from COVID-19 restrictions.

Similarly, our operating margin and earnings per share improved. Our earnings per share of $0.83 came in better than the top end of our Q2 guidance range of $0.73 to $0.78 and better than the second quarter of last year. The higher EPS was due to an improvement in operating income, which came in at $61 million quarter.

Our higher operating income was driven by an increase in our margin over the last year by 114 basis points. And this operating income was a result of improvements in both our CIG segment, which realized a higher margin of 10.4% and GSG, which realized an even better margin of 13.3%.

So all the revenue, property and income and EPS have improved we also remain focused on generating positive cash flows. So cash flows for the generated from operations for the second quarter totaled $124 million.

This is a $23 million improvement over last year, driven by both higher net income and continued improvement in our working capital this year. This working capital improvement also benefited from a decrease in our day sales outstanding or DSO.

Our DSO decreased to 65 days as of the second quarter and this is an improvement of six days from last year and sequential improvement of two days from last quarter. Our net debt amounts to $42 million.

This is an improvement of $169 million compared to last year, even as we use cash for strategic acquisitions, stock buybacks over the last 12 months of about $66 million and dividends over the last 12 months of about $37 million.

Our long term capital allocation strategy calls for a balance of investing in the growth of our business, managing the balance sheet, and providing returns to our shareholders. In over the last trailing 12 months cash from operations generated $337 million which is over $6 per share.

During the second quarter, we continue to benefit from this cash position by providing significant returns to our shareholders through both dividends and share buybacks. So regarding the dividend program, during this past quarter, we paid out $9.2 million in dividends.

And I want to announce that our board of directors approved our 28 consecutive dividend, which will be paid in the month of May at a rate of $0.20 per share. This is a $0.03 increase and an 18% increase from last year. Furthermore, we utilize $15 million in the quarter on our stock buyback program.

So as of the end of the second quarter, we have about $178 million remaining under our previously approved stock buyback program. And just as important as successfully implementing our capital allocation strategy is ensuring we have a strong balance sheet and ample liquidity.

We have both in terms of our balance sheet at the end of Q2 with a current leverage of point two times and an available liquidity of over $800 million in the form of cash on hand and funds available under our credit facilities.

As a result, Tetra Tech in a very good financial position such that we will continue to provide returns to our shareholders while investing in technical capabilities and strategic growth areas, both organically and through acquisitions with top tier firms such as Coanda and IBRA-RMAC who have joined the company, and that Dan will discuss later in this presentation.

I'm pleased to share these financial results for the same quarter. I want to thank you for your support. And I'll now hand the call back over to Dan..

Great. Thank you very much Steve. I'd now like to provide our outlook and growth projections for our four clients sectors for the second half of fiscal year 2021.

We see strong growth rates across the board at about 10% collectively with strengthening business outlook and favorable comparisons with the pandemic affected impacts on the second half of last year. In the United States, our federal, state and local markets are expected to grow at a 10% rate driven by robust budgets for differentiated services.

We expect growth to be led by the need for sustainable water supplies, environmental restoration programs, and high end data analytics and digital transformation for our federal and local clients.

Our ability to leverage our more than $20 billion in federal contract capacity, as well as contracts with more than 500 different municipalities is key to our ability to grow as these clients allocate their unprecedented levels of funding. We expect our U.S.

Commercial work to grow at about a 7% year-on-year rate driven by our differentiated services and renewable energy and our environmental program supports. We expect our renewable energy revenues to grow at a time double digit rate primarily for the emerging offshore wind programs and other high end renewable energy transformation services.

And finally our international work is expected to grow at the fastest rate among our four end client sectors at about 12% year-over-year. We expect broad based growth across Canada, United Kingdom and Australia for both the commercial and government sectors.

All three regions have strengthening economic conditions and we see work beginning to increase as their various infrastructure stimulus programs are being put into place.

Overall, the United States federal government is beginning to adjust priorities to align with the new administration, including goals to mitigate climate change, support water programs, protect the environment, and advance the adoption of renewable energy.

The administration with the support of the Democratic Congress recently signed just last month, the $1.9 trillion American Rescue Plan act. The ARP includes $350 billion for state and local governments that will be distributed across the country to support COVID-19 related relief and as included in the act, water and sewer programs.

We've highlighted in our presentation some of these allocations to key sunbelt regions, totaling over $50 billion in support for just the states of Florida, Texas and California.

With wide latitude on how to spend these funds, state and local governments now have the ability to accelerate water related capital spending, address previously unfunded water priority programs and initiate a transition to a digital and higher efficiency water infrastructure throughout the regions.

This additional funding could prove to be a long term catalyst for the differentiated water services we provide across our client base of over 500 municipalities in the United States. To support our future growth and to deliver high end services for our clients, I'm very pleased to welcome two new firms to the company since our last quarterly call.

And both of these firms exemplified leading with science and bring additional world class talent and technical resources to the company. First Coanda brings high end expertise in computational fluid dynamics, providing our commercial clients with a unique ability to partner with us to conceptualize, model and test new designs.

IBRA-RMAC brings to Tetra Tech additional high end digital water transformation experts and additional tools that expand our Tetra Tech Delta or complete the suite of technical tools to solve problems for our clients.

This expertise is in high demand and collective team can now address some of the most complex digital water transformation efforts with industry leading solutions. Since joining the company these firms' technical experts have rapidly engaged with the broader Tetra Tech Community to provide their expertise to our clients worldwide.

Just a week ago, in fact, a week ago today on April 22, was Earth Day. And we here at Tetra Tech released our sustainability program report. This year we reported both on the past decade of progress that we've made and we announced our new goals for the next decade.

Since the inception of our program back in 2010 we achieve 20 different goals many well beyond our original aspirations, including the reduction of GHG, or greenhouse gas emissions from our operations by 78%. And we very proudly announced our new goal for the next decade as a company to be climate positive and carbon negative.

We initiated new reporting to quantify the environmental, social, and governance impact of Tetra Tech's project work, not just what we do within the company, but actually the impact of the projects we perform all around the world.

As part of this recording we will now track our project metrics associated with greenhouse gas emissions, water savings, renewable energy, and habitat and our goal to improve the lives of 1 billion people around the world.

And finally, we're committed to applying our leading with science approach to create the processes, procedures and solutions that will become the new standards in our industry and advanced climate positive actions worldwide. And now I'd like to present our guidance for the third quarter and for all of fiscal year 2021. Our guidance is as follows.

For the third quarter, our guidance ranges from $600 million to $650 million for net revenue with an associated earnings per share of $0.85 to $0.90.

For the entire year, we're raising our guidance for both revenue and for earnings per share with an updated guidance for revenue of $2.45 billion to $2.55 billion with an associated earnings per share of $3.60 to $3.70.

As in the past, some of these assumptions for our guidance both for the quarter and for the entire fiscal year do include the intangible amortization not been included as embedded in our guidance. It does include a 26% effective tax rate for the remainder of the year and that would be our estimated tax rate for Q3 and Q4.

We do have outstanding an estimated 54.6 million diluted shares and as in the past this guidance does not include any contributions that we would complete from here forward through the end of the year.

In summary, we had a strong second quarter setting new records for our second quarter revenues, operating income, earnings per share and cash generation. Our high end water environment, sustainable infrastructure and renewable energy services and our leading with science approaches in high demand globally and well aligned with the new U.S.

administration's priorities.

We are continuing to advance our high end science and digital transformation services with the recent addition of two excellent companies and a result of all of this that's taken place through the first half of the year, including our performance in Q1 and Q2, and the outlook for the remainder of the year I'm pleased to share with you that we're raising our annual guidance for both revenue and earnings per share.

And with that, Melissa, I'd like to open the call up for questions..

Thank you. The question and answer session will begin now. [Operator Instructions] Our first question comes from the line of Sean Eastman with KeyBanc Capital Markets. Please proceed with your question..

Hi, team, thanks for taking my questions. First one for me.

I am just curious when we look at the back half outlook sort of the weighted average growth outlook across all the end markets is in the double digits with all of them contributing positively and it would just be great to get a sense for how much of that is sort of easy comps versus the prior year and what is really sustainable going into the outer years? If you could help flash that out a little bit, that would be helpful?.

Yes, that's a good question. Let me start with where the easy comps are. So where the hill isn't so steep.

I would say that if you looked at what took place from really the third quarter, because of our first and second for the first calendar quarter of the year, took us through March with really little or no impact from the pandemic with our operations.

But I will say a second half which has begun here in the third quarter the comps got much easier for U.S. commercial work where we saw reductions quite quickly a year ago and we also saw internationally where many of the travel restrictions and commercial work had been impacted quite significantly.

So I would say in those two areas the comps actually are more favorable. I think you can begin to look sequentially though and it's building back from the impact of the third quarter of our last year and they're building in sequentially, I see them actually strengthening and have a really long positive outlook for continued growth.

So I think we do have at least for the next two quarters and the rest of this fiscal year a contribution from easier comps in both international which, of course is a 12% year-on-year growth estimate and our commercial. However, I would say in our state and local and our U.S. government, we saw very little impact.

And in fact, if you followed our financials, you saw that we grew both year-on-year and sequentially, both in state and local and our federal government and so there is not easier comp and in fact I would suggest that because of the strong growth we've had over the past several years in state and local, the comps are quite difficult and so when you see a 30% growth in state and local off of a all time high in our state and local, it actually makes it that much more impressive and robust with respect to not only our performance, but where we're going with us business.

I do see those, all of these end markets funding actually increasing. Certainly, it's self evident with respect to government, both at the national federal levels and the local levels where it's coming from.

But the additional investments from the strengthening economy have really affected most all of our end markets on our commercial in international work. So I do see them in the out years continuing an upward trend and being strong. So easier comps on U.S.

commercial and some international, but difficult comps is still double digit forecasts on federal and state and local..

Yes. That's really helpful. That makes a ton of sense.

And maybe as we look out into fiscal 22, would the growth rates outlined around that second half outlook change at all? I mean different see the biggest growth drivers or the highest growth rates by reported end market shifts?.

Well, we are really staying away from commenting specifically in 2022. We've got a lot of different moving pieces here, not only the $1.9 trillion plan that was just passed here a month ago. But there is much discussion on infrastructure stimulus, and many other items.

So I think we'll provide indications for 2022 as we get closer to that, but certainly the trend would indicate that direction from what we're seeing at this point, but we'll provide more specifics and quantify that as we get toward the end of this year..

Thanks very much, Dan. Nice quarter..

Thank you very much Sean..

Thank you. Our next question comes from the line of Samuel England with Berenberg, please proceed with your question. .

Hi, guys, thanks for taking the questions.

And the first one, just given where the GSG margins have moved to is it making you reconsider any of your thoughts on what the longer term sustainable margin might be for that sector?.

Well, it's a good question. We did increase our what we considered our longer term meaningful, I should say, shorter to midterm margins for GSG. Previously we'd said 12% - 13% operating income with the growth of our data analytics and our IT transformation practice. We increase that from 12% to 13%, to 12.5% to 13.5%.

We think that as that grows and scale, it'll continue to grow and so I do think there is additional upside and margins will trend higher. Of course, we took a look at this quarter, which is the winter quarter, typically our softest quarter on margins. And we were approaching mid 13th.

So a question certainly may be, how is it that even in your most difficult quarter, you're at the top end of this. We will have outperformance based on quarterly contributions of higher revenue than we might normally see which drives utilization.

So while I would like to see the company increase and the GSG group increase at 180 basis points per quarter sequentially from now till we hit the much-much higher number, about half of that increase was attributable to higher utilization. So if you back part of that out, it puts us right about, puts us still ahead of what we had estimated.

So I don't want to indicate we're going to go up by 180 basis points each quarter year-over-year as a new benchmark. But I do think that overall GSG will trend up from even the numbers that we provided as ranges coming into this year..

Great. Thanks. That's really clear.

And then the next one, could you talk a bit about how the new administration's plans are affecting RFPs and new projects starts at state and local level? Is that a lot of sort of renewed confidence amongst the clients you're speaking to there?.

Yes there is. We've seen more confidence and by the way, confidence isn't just on speculation or anticipation of what will happen. There's a component of that. But as outlined in my prepared remarks and included on one of the slides on the prepared presentation the states are actually receiving real dollars and they're receiving it right now.

And there is been some very-very wide latitude as to where those dollars can be applied to. So for instance, COVID relief also includes sanitation, like clean water, and treatment of wastewater on the sanitation side in many of the different areas and including studies with respect to hygiene and industrial health protection.

So there is a lot of things that gives the states latitude for funds they're receiving right now. Now, of course, there's forecast of significant additional funding, that would move them to unprecedented levels. And that's, of course, providing them even additional positive outlook with respect to planning for new programs.

We have seen more RFPs but I wouldn't say at this point it has been directly related to the funding that's been released because this like many government agencies, things don't move instantly. And so this positive belt has really been taken for an extended amount of time.

I think that this is additional building that we'll see in out quarters and out years..

Right. Thanks very much. I'll pass it over..

Thank you Sam..

Thank you. Our next question comes from line of Andrew Wittmann with Baird. Please proceed with your question..

Great. Thanks for taking my questions this morning. I guess, on the U.S. aid business Dan, obviously, this has been a challenging area, you've mentioned. It can't get out to the side COVID, keeping it kind of home bound a little bit more than we'd like to be kind of just starting to reopen within U.S. and some of these international areas too.

I have to think that maybe or maybe I guess the question is their planning about getting back in the field? What does that timing look like and what are you hearing from your customer here?.

I think it's a couple of things, but one and most central you've just mentioned, which is the actual physical restrictions and not being able to travel to many of these local locations. You're right. We are seeing it easing. I think it's there is going to be a tipping point where it's not going to be just a linear incremental improvement.

I think it will improve and many will move much more quickly to open up their economies and their travel and others. So we do think that that, and of course, this is just our best estimate. But we think it will get better as we move toward our fourth quarter I call it the fall, or toward the end of the year.

But the other thing we feel very positive about is the current administration just passed and is putting in the USAID Administrator.

So many of the policies and many of the priorities of the current administration, which is to add international development as a key tool for foreign policy which has actually improved the lives of the local citizens in order to address immigration, it's this administration is, it's not higher walls, it's creating more of a magnet in their home countries to make them want to stay.

And that is an absolute center piece for USAID, and certainly is one of the largest and we believe the largest with respect to sustainability, climate change, resiliency, engineering and advisory work governance work, we think that we can be a great assistance and helping further the policies for the U.S. administration in this area.

So yes, travel restrictions, easing is going to help. We think that's probably a bit later in the calendar year, maybe toward the fall. But we think the actual timing, and issuing additional projects and contracts and others is going to be accelerated with an administrator who's extremely experienced in the role and supporting the government.

So it's not a person new to this role as we've seen, perhaps, during the previous administration..

Is that what, is that outlook on USAID, is that what's baked into guidance or is that somewhat different from that?.

It's actually different from that. We've had the very tepid inclusion of the increase in USAID and in fact, we've seen our USAID as a headwind. We think it's going to move more with year-on-year comps to something flattish.

But if you took the USAID out of our, out of the calculation or calculus for our federal government growth and really focused on our civilian agencies and defense we really would focus, we really predict the second half would be closer to probably 12% to 13% or more growth rate. So ex-international aid, our U.S.

federal government work is actually growing quicker. And I think as we get to the end of this year and certainly into 2022, we think that'll not become a headwind. It'll not become neutral as we see it towards the end of this year, but it'll become a contributor..

Yes, for sure. Okay, that's helpful. And then just quickly here for you Steve. You kind of referred to it earlier that there's some disaster work in the quarter and you said kind of ex- disaster.

Steve can you just give us the total dollar amount on a disaster restoration work this quarter versus the prior year quarter just so we can understand the exact impact there as we put our models together..

Yes. It was 14 million in the quarter. .

And anything last year?.

Yes, it was about 4 million last year. So about a $10 million differential. .

Okay, super helpful. Thanks, guys. Have a good day..

Thank you. .

Thanks a lot Andrew..

Thank you. Our next question comes from line of Tate Sullivan with Maxim Group. Please proceed with your question..

Hi, thank you. Going back down to your comments on U.S.

commercial outlook, I think for the second half, you expected 7% and what was the growth on renewable energy? What was the growth rate that you mentioned, and you highlighted offshore wind?.

We've said as well into the double digits. So the areas that have been very strong has been renewable energy. And for us, the biggest portion of our renewable energy is focused around wind.

And most of that is actually offshore wind, which brings into play a lot of our marine work, offshore water quality, issues with respect to marine mammals, sub-bottom profiling, all of the things that would be required in advance to get the permits and evaluate the environmental impacts of potential development offshore.

So renewable in general is well over double digits. And the primary or the largest driver for us is wind and specifically offshore wind..

Okay, thank you. I missed that well into the double digits comment. And I think historically, that one when you talked about advanced data analytics work, you've highlighted some organic growth outlook in addition to the acquisitions or have years of mostly acquisition led growth in that space.

Can you talk a little about that opportunity please?.

Yes. Our advanced data analytics and IT transformation digital and IT transformation practice has been growing at about 2020. We call that a 20% organic growth rate and of course, has a much bigger practice. And we're pushing a bigger business entity there. We're still in the mid teens.

So sort of 15% - 16% organic growth rate and then that's been augmented by acquisitions that we have brought on and this continues to be one of the key areas that we're looking to continue to invest in both internally for organic growth, but also for acquisitions to bring in excellent partners that could utilize our access to additional federal government agencies to utilize master contract vehicles we have with all of our clients, commercial clients, state and local, all of the municipalities and the federal government.

So is it growing organically? It's actually the fastest growing organic area we have in the company..

Okay. Thank you very much..

Okay, Thanks Tate..

Thank you. Our next question comes from line of [indiscernible] with Stifel. Please proceed with your questions..

Hi, this is Jaya on for [indiscernible] congrats on a great quarter..

Thank you..

I was hoping to get management's thoughts on the potential infrastructure stimulus bill and the republican counter proposal both of which included funding for water infrastructure and the Biden plan more specifically had funding for [indiscernible]. So like, how would you qualify the [indiscernible] market in the U.S.

if this funding does start to flow through? And what would that timeline look like for you?.

Well, I'll walk a little bit backwards as far as timeline. We've been very cautious and very hesitant to identify timelines. There is no doubt that we would observe that with the current administration Biden's administration with a democratic controlled senate and house. They have all the pieces to move forward with an infrastructure plan.

So we haven't really seen that in some time with any single administration. So it does make us feel more positive, that something you'd move forward because they have all of the judicial, the political and required support as far as just the judicial process.

And typically some thoughts are it would happen before the midterm elections, while they still with is no doubt of what they hold. So it's sort of just an observation. With respect to his contribution we have not included and I've mentioned this in previous calls, I'll reiterate it for this call.

We have not included contributions in any of our guidance either for the quarter or for the year of contributions from any infrastructure stimulus program. And so it would be a single -- would have the potential to be a significant incremental upside on really all of the metrics.

I have been and have we been watching very closely this week, both the proposed, the administration's proposed infrastructure stimulus and have been very interested and encouraged by the republicans if you want to call it competing, but alternative plan and watching both senators from both sides of the aisle come together on one of the components of the infrastructure which is the water component and see, in fact, support really from both parties.

And I believe that in the last two days it saw support from essentially senate, all the senators from both sides with exception of just two senators. So that's about as bipartisan as anything we've seen out of Congress in quite a while. And we're really glad to see it specifically for projects that we hold contracts that would support.

We have contract vehicles that have scope that could include going to work on those immediately and we think that from a technical standpoint, we're in an excellent position to support the administration's programs.

So I know that's a general with respect to when but we do have sort of a general timing and we're really hesitant to quantify it, other than it would be quite large the numbers range from republicans something over a trillion to the democrats at 2.2 trillion and of course they've talked about mods, modifications that could go even higher.

So I'll just leave it at it would be incrementally upside from anything that we have estimated in our guidance or forecasts of growth so far..

Okay, great. Thanks.

And as it relates to international work given some of the COVID related delays that you seen is there a backlog of work that can drive outsized growth as the travel to start to reopen 100% previously?.

Yes. I think it could. I just talked a few moments ago regarding, I think the single biggest area for us that would be helpful would be our international development and it's not just USA. So while they would move our U.S.

federal government growth rates up which I'd mentioned regarding the United States Agency for international development within the state department in the U.S., we are also a market leader for UK aid and the work that the United Kingdom provides internationally.

We're also a major service provider to Australian aid and we also support the World Bank and many other multilateral entities. So it's not just going to show up in our federal government, as travel restrictions ease, it could give us outsize growth both on U.S.

federal government, but also international as [indiscernible] international growth rates, that would be on the upside from the numbers we've provided before. So there is pent up requirements or I would call demand to provide the word and it's going to show up in more than just our U.S. federal government revenues..

Thank you. This will conclude the Q&A session. I'll now turn the conference back over to Dan Batrack to conclude..

Great. Thank you very much, Melissa. And thank all of you for joining us today. I think that we have a very strong outlook for the second half of the year.

We're looking forward to Q3 and Q4 and really moving into what appears to be a very bright future with focuses not just from our government clients but our commercial clients and international sectors all around the world on services that we have focused on not just in the past quarter or the past year or the past decade but the areas and the markets that the company was founded on.

And it's actually been a technical and thought leader since the 60s. And to see the markets coming to be in alignment with the areas of our expertise as a corporation feels really good. We don't need to change what the company does.

We need just need to take the expertise that we've developed and actually provide the solutions and the leadership on execution of these projects as we move forward. And I look forward to providing you an update of our performance in the third quarter in three months from now and I hope you all have a safe and healthy rest of the day.

We'll talk to you in three months. Bye..

Thank you. Ladies and gentlemen, this concludes our conference today. Thank you all for participating and have a nice day. All parties may now disconnect..