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. 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 will then open up the call for questions. During the course of the conference call, Tetra Tech management may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements concerning future events and Tetra Tech’s future financial performance. These statements are only predictions and may differ materially from actual future events or results. Tetra Tech’s Form 10-K and 10-Q reports to Securities and Exchange Commission identify certain risk factors that could cause actual results to differ materially from the forward-looking statements. Tetra Tech undertakes no duty to update 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 Investor Relations section of Tetra Tech’s website. At this time, I would like to inform you that all participants are in a listen-only mode. At the request of the Company, we will open the conference up for questions and answers after the presentation. With that, I would now like to turn the call over to Dan Batrack. Please go ahead, Mr. Batrack.

Great. Thank you very much, Jennifer. And good morning and welcome to our first quarter of fiscal year 2017’s earnings conference call. While Steve Burdick, our Chief Financial Officer, will present the specifics of our financials, I’ll start this morning’s call with a brief overview of the Company and some of our key financials metrics for the first quarter. We had an excellent first quarter and start to the 2017 fiscal year, with our results exceeding the top end of our guidance for both, net revenue and for earnings per share. For the quarter, our revenue from ongoing operations was $661 million, which is up 22% from the prior year. Our net revenue, which is primarily our labor, is $488 million, which is a record first quarter for us, which is up 18% from the prior year. We generated an operating income of $43 million, which is up 9% from the prior year and an EBITA or operating income without amortization, $49 million, up 12% from last year. This performance generated a Q1 record diluted earnings per share of $0.49 for us and for our shareholders, which is up 17% from the prior year. And maybe most noteworthy and finally, our backlog was up 37% year-over-year at just under $2.5 billion, which IS another record high for us. Our results from the first quarter demonstrated Tetra Tech’s strong fundamentals and just amazing performance of our experienced management team. I think it’s just an excellent start to our first quarter. I’d now like to present some specifics of our performance and specifically performance by our two business segments. The water, environment, and infrastructure business group or the WEI group had a net revenue that was up 12% from the prior year with an excellent operating margin of 12.4%. WEI’s revenue and…

Thank you, Dan. Before presenting our financial results for the first quarter, I would like to point out that a full reconciliation of our ongoing operations, which Dan just spoke about, to our GAAP financials, which I will now discuss, can be found in the appendix of this presentation, as well as our first quarter earnings release. So, on a GAAP basis, gross revenue for the first quarter totaled about $669 million compared to $561 million in the previous time period, which is up 19% year-over-year. On a net revenue, we also improved, and that net revenues totaled about $490 million, up 16% year-over-year, exceeding the upper end of our guidance for the quarter. And as you just heard from Dan, these increases and our top line resulted from growth in both our state and local infrastructure, and our federal government business as well as from the acquisition of Coffey about a year ago. We also generated about $40 million in operating income, which is an increase of 21% over last year. This increase in operating income resulted from an improvement in our WEI segment margins for the quarter as well as the addition of Coffey in our RME segment. Diluted earnings per share were $0.46 for the first quarter, which is up 18% year-over-year. On an ongoing basis, our diluted EPS totaled about $0.49, exceeding our quarterly guidance range of $0.44 to $0.48 per share. Now, our ongoing EPS excludes about $0.03 from charges associated with the wind down of our RCM segment, and the losses associated with RCM were related to legal fees on outstanding claims and project completion costs. And so, we continue to anticipate that the wind down of RCM segment will be substantially complete in 2017. However, due to the fixed price nature of these…

Great. Thank you very, Steve. I’d now like to provide you an overview of our markets and our growth outlook for the remainder of this fiscal year. Our overarching approach here is to lead with science and grow high-end consulting and engineering services to provide us with a high-value, high-margin business that differentiates us in the marketplace. Now, we are forecasting growth across all four of our client sectors which are U.S. federal, U.S. state and local, our U.S. commercial work and finally international. Now, we expect our fastest growing sector to be with the U.S. state and local clients here in the United States with growth rates between 7% to 12%. State and local could exceed this high-end of this range, especially if infrastructure stimulus spending incentives are actually put into place this year. We expect our U.S. federal work to be about a quarter of our business and it should grow at a rate of between 5% to 10% for the year. Federal growth could also exceed the high-end of this estimate with the potential for near-term increases in the 2017 Department of Defense budgets and associated military expansion and facility restructuring expected under this Trump administration. Now, Tetra Tech’s international revenue is primarily generated in Canada, United Kingdom, Australia and Asia Pacific region. And I’m very pleased to welcome today, and in fact the announcement that came out yesterday that we closed this week with the acquisition of Eco Logical Australia to our team. Eco Logical is a environmental firm that has a very highly staffed company of 160 individuals that are going to join our local operation in expanding both our water and environmental services in Australia and the Asia Pacific region. Now, overall, I expect our international revenues to grow in between 5% and 10%…

[Operator Instructions] The first question comes from Tahira Afzal from KeyBanc.

Thank you very much. Hi, Dan and team, and congrats on the good quarter.

Thank you, Tahira.

So, Dan, first question is, if I look at that 4% to 8% growth rate for the top line, are the drivers if you look at them, fairly project-specific as in work that might already be in your backlog and it’s more timing related or is it more just you’re trying to sort of gauge the macroeconomic outlook in sense into those; so what would be the more important driver?

Well, I think that for fiscal year 2017, most of the drivers are in place in our backlog now. Our backlog because of the definition that we have, it provides high visibility in the near-term quarters. And in fact, the backlog that we have, approximately 80% to 85% will actually be expended in the next four quarters or within the next one year. So, we have excellent visibility for this year. So, what gives us confidence for performance now is not only the backlog that we have, but actually how it’s grown. So, I would say that that is number one. But, number two, I would not dismiss at all the actual opportunities that have grown our contract capacity. Our contract capacity as company has actually grown by 25% to 30%, actually in line with our backlog growth. We’re up at about a $14 billion contract capacity, and that’s without even having converted that into orders. So, I would say, if you really want to talk about the macro drivers, which is additional funding, and you can see it actually in our contract capacity. And that’s not even talking about the things that we actually see coming down with respect to opportunities, which are solicitations and request for proposals and other opportunities from our clients, not all of which is competitive. Many of these we actually are the institutional memory and institutional incumbents on these sites, and a lot of this work is extensions to what we’re working on today and will be sole sourced. So, I would say for 2017, it’s our backlog that gives us confidence and the growth rate, but longer term, both the contract capacity and the opportunity is coming on the pipe.

Got it, okay. Dan, that was actually pretty helpful. And I guess just a follow-up question on the stimulus side, we had another stimulus back in 2008, 2009. How would you compare the two in terms of structure? And I know it’s a little early to say. But, any comments or color would be helpful on how to do it different from a potential scope and timing point of view?

Well, I’m actually thrilled [ph] you asked that. That’s the first time I’ve actually heard that question through this forecasting and this new stimulus or this new infrastructure spending. We were here; we did all that through the 2008-2009 stimulus commitment of just under $1 trillion, I guess little over $800 billion. And most of those dollars were spent for employment. They were spent at the municipal and some instances other areas with respect to maintenance, they talked about shovel-ready projects which meant that they were smaller, diverse projects that actually helped bring the unemployment rate down from which it climbed very quickly to high rates and actually helped stabilize municipal employment rates. This is actually quite different. This time, there has actually been a list of 50 priority projects, which are specific projects that are very large infrastructure items. They include projects that are right in our wheelhouse or some areas that we’re technical leaders in United States. We think that about 20% of the work that’s being identified for specific projects are for areas that we’re actually top rated in the United States. And those areas like water resource management, water shed management, desalination plants, flood control, specific barriers, locks and dams, navigation channels up to Mississippi and other areas of the country. So, this is very different; this doesn’t form shovel-ready general projects. This is actually specific large-scale projects that will specifically benefit leaders in work that requires larger firms with more technical capability and a longer history, and I think that’s right what we are. So I think they are actually quite different.

Our next question comes from Bobby Burleson with Canaccord.

Just switching gears to the commercial side of the business. I’m wondering what kind of short cycle work you guys have there, other than oil and gas with industrial customers?

Most of the work that we do for our industrial customers in commercial side is actually long multi-year repeat work where clients that we’ve worked for many, many, many years. Most of them we hold master service agreements or basic ordering agreements or long-term framework contracts. These are typically revenues and projects that are multi-year. Now, what I would say is we have contracts that actually may be for, I’ll give an example, a $20 million project but what would be embodied in our backlog now might be $2 million or $4 million or $5 million, a small part of it. And so, we do expect that the rest of these projects are actually incrementally funded. That is very characteristic of industrial clients; you’ll retain a project, but they will incrementally fund it and not fund it entire year. It gives them a bit more flexibility. So, I think that we actually have longer duration work, longer duration relationships with these clients. And I would say, the oil and gas has even been somewhat long, I mean we measure it in two to three years; and in the case of Canada, we’re actually coming to the completion of a longer project. But we actually had quite a bit of visibility as to this ramp down and what the timing was going to be. So, we don’t have a lot of very short, very large duration projects that would represent a clip on any one quarter.

Okay. And in terms of environmental cleanup opportunities, was there anything in 2016, kind of larger, more discretionary projects that customers had that may have slipped into 2017 where you’re starting to get better visibility on now?

No, we actually saw some of our projects, and as I mentioned that oil and gas did decline. And actually, I’ll provide some specifics to that, because I think it helps put some context in our U.S. commercial work declining at 6%. Our U.S. oil and gas work actually declined at a rate of about 25% in Q1, quarter-over-quarter. So, that gives you indication of how much the rest of our commercial work, including large environmental projects, actually increased across the country and really across all of the different client sectors within U.S. commercial. So, it was really very singularly U.S. oil and gas. We did anticipate it was going to drop, and we actually saw a slightly larger number than that in Canada, primarily associated with the single pipeline project. But, I think it actually pertains very well for the strength across all of the other clients that you saw minus 6%. If we hadn’t had strength across the other end markets in our commercial clients, you would have seen minus 20%, 25% and that isn’t the case. So, I do like to provide a bit of detail on that to actually show that we have strength across all these other areas. And any type of movement in oil and gas could drive that from a minus number to a plus number really fast. So, no projects that got pushed out to the right to 2017. And in fact, some of these were upfront studies that are actually going to ramp up into design projects like very large sediment assessment and remediation projects that we’re moving to design; some very large cleanups of some superfund sites for commercial clients that we have out here in the west. And these are projects measured in anywhere from $10 million to $15 million in size. So, they are not insignificant.

Great. And just one last quick one if I may, in terms of the construction side of industry-wide, the capacity limitations that we’re sharing a lot about and in terms of being able to execute a large federal infrastructure spending plan, what are your thoughts on capacity for the industry? And can you kind of contrast the scalability of your business versus kind of legacy fixed price construction’s scalability to address gigantic opportunity for infrastructure?

That’s a really good question. I’ve read and have heard comments on capacity constraints on construction. I will just tell what we’re seeing on the frontline. We do team with design build projects. We’re the designer; we’re perimeter; we’re the value engineering partner with some of the largest constructors here in the U.S. We do partner with folks that do that. And I will tell you, pricing is still the primary determining factor. And if it was constraints on resources due construction, pricing wouldn’t be the issue, it would be availability, and that has not been the case. We have not seen a flip in margins; we haven’t seen a flip in pricing being a less of a determinant factor on the construction side. I think that that is all forecasted to be a constraint. But I will tell on the frontline, working on projects and proposals for our clients, there still is excess construction capacity. And so, we all hope that becomes an issue. But, I don’t see that in 2017, maybe something further down the road. With respect to our ability to actually participate in this work, now that we have removed some of the internal self performance capability within construction, we have longstanding relationships with some of the largest constructors. We are part of design build teams. If you’re constructors out there, we think we’re the absolute best partner because we can find cleaner, faster, cheaper ways to get through the permitting process, and maybe the government will help and accelerate that. We know exactly how that can be a leverage to make the projects be completed at a lower level. And our value engineering and technical approach, which is really a fundamental lead with science, how can we get it done, exceeding the technical specifications at a lower price, we’re the best partner for that. So, we think our performance, our delivery makes us the best partner on the design build. So, we think we actually have a huge number of constructors that we can bring big value to. And so that isn’t going to inhibit our participating with respect to not having construction in-house; it’s actually the partners that will together with ourselves that will see some benefit of these opportunities.

Your next question comes from Tate Sullivan with Sidoti.

Hi. Thank you. You kept your -- and it was great to hear, you kept your language consistent on your backlog, calling it a high-quality backlog, even though grew again, you got inflow of orders. Can you provide more context that makes you say that; I mean is it a faster backlog, is it a backlog with more follow on order opportunities? I mean, I take it just to imply the embedded margin, but is there more to that?

Well, it is more embedded margin. But, the embedded margin isn’t -- we aren’t bidding jobs that will just drive margin. That is in fact an outcome of that. We’re actually a bidding and adding work that is upfront, evaluation with respect to decisions to be made with what type of facility can be put in place. So, for example, if we have flooding in an area, you can put in barrier islands, you can put in a lock or dam, you can put in a levee, you can put it in a diversion reservoir. Those decisions are actually the highest value to our client, because if you can pick the right alternative that will save the client enormous amounts of money, get the project done quicker and actually be more resilient in the long-term, the clients actually are a little less sensitive on the price point, because a small dollar upfront can save enormous on the backend, and that’s what we’ve been adding. We’ve added more consulting orders; we’ve added more design orders. And if you actually looked over the past few years, you watched our construction and work that was at the bottom of the execution which is the construction or even the field oversight, that portion of our backlog is decreased dramatically and the frontend consulting and preliminary engineering has grown out. An artifact of that is it is higher margin, but it actually creates a huge differentiation. When you get in that early, you actually have a place on the project that will follow all the way through to completion and commissioning, whether or not it’s engineer or subsequently with the builder who actually is successful and winning in on a turnkey basis.

Okay. Thank you for that context too. And more of a specific question too is, there is recent press release about helping with environmental reviews with Department of Energy. Would that preclude you from doing work for companies actually applying for let’s say interstate pipelines through FERC?

No. We’ve actually worked for FERC for many, many years, and we actually provide assistance. We aren’t the ones making the file determination. So, it’s not Tetra Tech making the determination; we are not on the issuance of the permit. That is inherently a government decision, and we simply provide the technical support to them and it does not prevent us. And in fact, we think it’s a benefit, because we understand more closely what the specific requirements and priorities are of the different government agencies and actually leading together the agencies that are both at the local, the state and the federal level. And not just that Department of Energy and FERC, but also EPA and sometime PLM and sometimes Corps of Engineers. Actually having that multi-agency understanding of how it all fits together, so that it creates a high reliability of getting the permit and getting to work, that allows us to work both for an advisor to FERC but then also to the actual owner of the project.

Our next question comes from Andrew Wittmann with Robert Baird & Company.

I wanted to -- hope everybody get a little bit better sense of the organic growth rates in the business, federal. I guess maybe question is, it looks like international and U.S. commercial were the segments of the business which were down organically. Is that true? And then that was offset, slightly more than offset by U.S. federal, and state and local. I guess I wanted to confirm that. And then maybe one way of giving some more numerical commentary and that was asking how much revenue was contributed by Coffey in the quarter?

Those are great questions. First of all, the two areas -- just to reiterate your question, the two areas that saw reduction organically in our end markets. One is U.S. commercial, I spoke of that; in fact, it was minus 6 with oil and gas; if you take oil and gas out, you actually saw it growing. So, I would say yes, all-in or as my comments were, in aggregate, we were down 6%. But if you just take the oil and gas and set it aside, it’s growing and it’s really growing across our industrials, through development, through our properties across the board. Internationally, if you take out Coffey, we did see a slight reduction, but it is again associated with oil and gas in Canada only and in fact, I’ll be even more specific; it’s in Canada and it’s just in Alberta. It’s really the pipeline work that we had up north; if you take that out, we actually saw that growing. Now, to go to quantify it, you see this in our filings. And I want to provide a bit of background before I provide the specific numbers. We are extremely aggressive at indoctrinating, incorporating and making our international acquisitions part of the family. They are -- Coffey, to be specific, its every bit as much Tetra Tech as people like myself have been here for over 30 years. They are part of the family; they are part of the leadership. And we actually are sending Tetra Tech people down there. We actually are contracting with that entity with our clients, our contracts and actually hoping that they use some or a lot of the $14 billion of the contract capacity we have. And I’ll tell you, as of today, that’s also true of Eco Logical Australia, they are every bit as much of the family and part of the fabric of this organization as anyone else. So, it does become difficult to parse out what did Coffey contribute, because we’ve signed contracts, executed work and actually put the new work into Coffey so when the revenues generated. So, if you review our Q, you will see the number approximately $69 million contributed for the Coffey collective organization to the Company year-over-year -- or that’s what would have been, it’s number for Q1. But I will identify about 20 of that was for contracts or proposals or work that we brought to the Coffey organization. So, if you wanted to use a number that would be somewhat representative; 50 would be a number that would be approximate. Again, it’s somewhat difficult to detangle this, because our job is to completely integrate it and make us one collective operating company that’s seamless to our clients, our customers and our contracts. But if you do want to parse it out, if you use 50, that would be about the right number and it’d be quite consistent with what we forecasted coming into the year.

That’s good and helpful commentary on that Dan. Thank you for parsing that out. I guess the follow-on question on that would be looking at the resulting margins from the change in your business mix. And in this question, I guess I would like to kind of understand by segment, segment by segment. WEI seems to have the growth in your businesses without the headwinds; state and local is heavy [ph] in there, I think there is a decent federal component there as well. But, it looks like RME is the portion that’s going to be seeing some other tail off in the oil and gas, almost exclusively I think. And so, as I understood it, the some of the oil and gas work that you were doing with higher margins, if that’s the case, can you give us a little bit of help here as to what we should be expecting as the relative margin performance for the Company, different segments this year?

You do have it right, I think you do understand our segments. Oil and gas is almost exclusively within our resource management and energy, energy being operative word there, so RME does embody our oil and gas work almost exclusively. It is why you’ve seen that margin a bit lower. And so, it is interesting, our revenue hasn’t been challenged as much as you might think in RME because we have growth in other areas, but we’re growing with lower margins, although it’s not bad, it’s double-digit, it’s 10, 11, 12. But, what we were taking out margins at are much higher. So, you’re seeing in the short term sort of at the bottom of the cycle, RME challenged on margins. You saw that they were in the 9s. We think that on a EBITA, if you take A out, I think we can get them up to -- a target would be up in the latter half of the year, up at around 12%. We’ve said 11 to 13, we think that we will achieve 12; and that’s without specific recovery in oil and gas. We think if that actually rebounds, and actually over a complete cycle, both the up cycle and a down cycle, RME should be two2 or 3 percentage points better than WEI. Because WEI is inherently government, 75% to 80% is government work, as you’ve identified state and local, federal. Most of the commercial work which is oil and gas, mining, all of the industrial clients are primarily in RME. So, currently, at the bottom of the cycle, and first quarter’s not indicative of the year, because it is holidays, winter time; it’s a bit lower than we do expect, 12% overall. But we think on an up cycle, it should be 2 or 3 points better than that at least.

Your next question comes from Ryan Cassil with Seaport Global Securities.

Good morning. This is Jacob on for Ryan. Within the U.S., did you guys see any changes in regional pockets of demand during the fourth quarter and then moving into the beginning of this year?

No, no, we really didn’t. We saw really quite consistent. And I think we break that up into different areas. But, I think the areas that we saw the highest demand on the municipal side are typically the southern states, California, Arizona, Texas, Florida. We have seen some growth in state of New York and the Upper Midwest; Ohio, Michigan has actually been quite strong. So, it’s not one area, but we didn’t see it actually move across. What we saw is areas that were strong continue to build, and areas that were a bit smaller in population and funding actually come to life a little bit. But, I would say no particular shift in focus, either commercial, federal or local. The only big moving piece, and at the risk of being repetitive here, was oil and gas, and we saw that continue to bit of a headwind.

Okay. And then, if I could piggyback off of the earlier environmental question. It sounds like you guys have a good line of sight on the work in environmental because of your backlog. Given the change in the administration, do you guys have any different views on how future demand will play out in environmental?

It’s interesting that I think that some conventional perspective is that because of less enforcement, there may be a less environmental work; that’s sort of a linear connection. I think if you actually understand it a bit deeper, you may actually take a completely different perspective. So, if the administration is actually focused on redevelopment of inter-cities, urban development, putting big buildings up, big infrastructure, what is important, and this actually goes to individual liability, state and local liability, cities and individual corporate liability, they want to clean those properties up whether it’s the buildings or the properties so that there is no long-term liability to the future occupants residents of these new utilized properties. It’s often referred to as Brownfield redevelopment; brown as if it’s been impacted through industrial or other usage. And so, what we actually see is as you do more development on the inter cities, more building you actually accelerate and move up the environmental work. So, I would say that it’s actually -- if you think about, it’s actually the other way. And in fact, it actually may speed things up to get it done quicker, so start spending dollars over 10 years studying it, they may say get it done over two, so we can repurpose this property on a quicker basis environmentally. So, we don’t really see this fundamentally as an undermining of this opportunity, if anything is possible, it could be accelerated, especially at the state level.

Your next question comes from Noelle Dilts with Stifel.

I kind of wanted to circle back to your -- I think Andy’s question on sort of revenues and margins by segment for the year. It seems like, based on your second quarter guidance, you’re looking at -- it would seem to imply a stronger WEI margin than we’ve seen over the past few years. So, can you just give us some thoughts specifically on the quarter, and how you’re thinking about margins?

Well, with respect to WEI, we’ve actually seen the building of revenues. And I think as earlier questions were or identified that it’s been driven primarily with the U.S. federal government and state and local are the primary big growth areas. That is almost all or largely embodied in the WEI group, which was the government group. And so, our utilization rates are going up, and that translates directly into margin. And so, as you see that we had this year that you are going to see margins go up. And I’d say, we do have additional expansion there, so feel good at 12.4, but I think that could still go up another 100 basis points or more.

Okay. That’s kind of my questions, because usually you see a little bit of -- seems like a sequential decline and it seems like it might be a little bit less this year. Okay. And then, I wanted to just touch on your acquisition strategy. Maybe you could give us some thoughts on general markets that interest you and from a geographic perspective, are you looking at kind of sticking close to home in the U.S. or building out this Australian presence a little bit more; that would be helpful.

Well, I think that we -- I’ll start with Australia, I’ll start at the earliest time zones. We really do, we really are focused on growing out Australia and Asia Pacific presence. Coffey was an excellent acquisition, they’ve got excellent technical capability; it was mostly on structural soils work, a lot of geotechnical work, a lot for the mineral and mining resource business, which of course is Australia. But, we really believe that Coffey plus Tetra Tech could make us one of the leaders for their eastern population center, so Melbourne, Brisbane, Sydney really up where the population exists, and we are focused on that. Certainly, I know it’s been received well by the Coffey individuals that we’ve added Eco Logical Australia already for the environmental. We are going to add additional water capability for water treatment; it’d be the equivalent of the municipal. So, it’s cities and the states within Australia. So, do it for more of that. And we actually think we can bring value to the customers. It’s not about what it is internally, it’s what we can do for the customers. So that is high priority for us. Eco Logical is a small first, if you want to call it, down payment or step in it. But that’s the first of more to come. Here in the U.S., we are looking for not geographic expansion, although there is a couple of areas we could do better. But, we’re really looking for technical that will support state and locals at a broader level including commercial clients here in the U.S. and that’s around smart water and data analytics. It’s a huge priority for us; it is investment; it’s an incredibly fragmented market; it hasn’t been well defined. And we are looking to actually step into that breach and help define what the market is. And from a technical standpoint or lead with science, integration smart sensors, smart motors and domain expertise and water and water shed management to fill void. And so that’s a big area of investment that we’re looking. So, I would put that up at the highest level. And if I do want to speak to geography, I would say there is one area that if we are significantly underrepresented that we think is an area that we can bring value to clients, and that’s in the UK and Europe. And so that is an area that I would put in our area. So, geographically, Europe and UK; technical differentiation, U.S. with smart water; and as far as expansion and leverage of where we have a base business that we’re going to grow, Australia where we’re going have municipal and environmental.

Your next question comes from Ryan Connors with Boenning & Scattergood.

I had a question, I wanted to pick up this topic of potential policy shifts with the new administration and Congress, and the impact on your business, but from a little bit of a different angle. So, I’m curious if you can give us some prospective on being as anyone’s guess exactly which way things will go, how flexible do you feel that the organization is right now, both from -- in terms of both, technical capability and also in terms of relationships to pivot whatever way the markets go? For example, if we move to more of a speed-driven environmental regulatory climate, how easy is it for the organization to pivot to that sort of that market and sustain the positive momentum you’ve had on utilization rates? So, that’s just one example. But in general, how flexible do you think you’re to tackle whatever direction this goes without having to kind of retool your skill sets and/or your relationship base?

Well, that’s actually great question. I would say that if you wanted to ask me what I think one of the two differentiators are, the first thing I would say for Tetra Tech is the technical expertise that we bring to our end markets, but I would say right on the heels of that and in fact actually connected to it is entrepreneurial flexibility that we have embedded in this Company. But folks that actually work at the federal government and cleaning up a navel facility for contaminated settlements, are the same folks that actually work for an intercity and work for the Port of Seattle, which is the state and local client, cleaning up contaminated sediments on the seawall with respect to the by dock [ph] coming down the new tunnel diversion program going in, which is the same capability of expertise that we do for contaminated sediments off of a aluminum smelter along the Columbia River that has impacted sediments in loading and unloading areas or discharge points where they had marine discharge, some discharges. So, I’ll tell you, the capability to move these people between all of those different areas, what’s common is being the best experts in the world with respect to cleaning up, characterizing and leaving a clean environment with respect to contaminated sediments. That is actually completely transferable between commercial, state-local, and federal. The same is true with respect to green buildings. If it’s green, that’s zero, gold, platinum, we have that capability. And a building is a building, and the building’s energy envelop is what we’re experts in. And same is true with respect to renewable energy, whether it’s being done for the government for a base, state and local for portfolio mandates. So, I think that a great percentage of our staff are transferable to go to relationships, try to do this really quick. We have standing contracts at the DOD with almost all of the civil agencies at the federal level . We have over 350 offices I believe here in the United States; we’re in all of the states but one. And so, we have the relationships and in commercial, we’re really quite broad. So…

That’s helpful. I know we’re at an hour, so I’ll let you go. But thanks for that Dan.

Our final question comes from Tahira Afzal with KeyBanc.

Hey, I promise to keep it quick Dan. If you have to wager on the DOD uptick or energy coming back to help meet the upper end of your guidance or maybe exceed it, which one would you bet on?

Department of Defense for 2018 -- 2017. For this year, DOD.

Got it. Thanks a lot Dan.

Great. Thank you, Tahira. And actually thank every one of you for your questions, excellent questions, actually some of these have very insightful different perspectives including comparisons of the stimulus versus previous ones and others. I just want to thank all of you for your interest in Tetra Tech, all of you for your support. We’re working here very hard to make sure that we hit or exceed our guidance and expectations by our shareholders and analysts. And I look forward to speaking with every one of you next quarter. Thank you very much. Bye.

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