Granite Construction (GVA) 8-K Results of Operations and Financial Condition

Exhibit 99.1

NEWS RELEASE

Contact: Jacque Fourchy
                (831) 761-4741

GRANITE ANNOUNCES IMPROVED

FIRST-QUARTER 2011 FINANCIAL RESULTS

• Revenue increased 16 percent from a year ago

• SG&A decreased 22 percent in the quarter to $43.4 million

• Net loss of $9.0 million compared with net loss in Q1 2010 of $41.0 million

• $335 million in new awards through March 31, 2011

• Balance sheet remains strong, with $370.1 million in cash and marketable securities

WATSONVILLE, Calif.(May 4, 2011) — Granite Construction Incorporated (NYSE: GVA) today reported a net loss of $9.0 million, or $0.24 per diluted share, for the first quarter of 2011 compared with a net loss of $41.0 million, or $1.09 per diluted share, for the first quarter of 2010.

“During the first quarter, we began to see the progress we have made on our cost savings initiatives related to our Enterprise Improvement Plan,” said Granite President and Chief Executive Officer James H. Roberts. “We continue to execute on our plan to strengthen the organization by reducing our overall cost structure to allow us to operate more efficiently while also leveraging our core strengths and capabilities to grow the business and create shareholder value over the long-term.”

First-quarter 2011 Financial Results

Total Company

• Revenue totaled $256.7 million compared with $220.7 million in 2010, driven largely by an increase in Large Project revenue.

• Gross profit margin was 12 percent compared with 3 percent in 2010, driven primarily by a large project in the East reaching the profit recognition threshold.

• Operating loss for the quarter was $10.7 million compared with $45.1 million in the prior year.

• Selling, general and administrative expenses for the first quarter were $43.4 million compared with $55.3 million for the same period last year as a result of the Company’s Enterprise Improvement Project implemented in late 2010.

• Net income attributable to noncontrolling interests in joint ventures was $1.8 million compared with $3.2 million in 2010.

• Total contract backlog at March 31, 2011, was $2.0 billion compared with $1.9 billion at December 31, 2010, and $1.6 billion at March 31, 2010.

Construction

• Construction revenue for the quarter increased $11.5 million to $92.7 million due to a higher volume of work completed in the quarter compared to a year ago.

• Gross profit margin for the first quarter was 6 percent compared with 2 percent a year ago.

Large Project Construction

• Large Project Construction revenue for the quarter increased $31.5 million to $137.8 million reflecting continued progress on several projects including the Queens Bored Tunnels and Structures project in the East, the SR 520 project in Washington and the Mountain View Corridor project in Utah.

• Gross profit margin for the quarter increased to 23 percent compared with 9 percent for the same period last year. The increase reflects profitability associated with the Queens Bored Tunnel and Structures project reaching the percentage of completion threshold.

Construction Materials

• Construction Materials revenue for the quarter totaled $23.8 million compared with $26.2 million for the same period last year as the Company experienced reduced demand for asphalt materials.

• Gross loss on the sale of construction materials was $7.3 million in 2011 compared with $7.1 million in 2010.

Outlook

“Despite the ongoing competitive climate, we are pleased with our bid results for the first quarter as well as the upcoming volume of opportunities to bid work across the country,” said Roberts. “On the other hand, the ongoing delays associated with the federal highway bill and the budgetary pressures at the state and local levels are providing some uncertainty as we look further out.”

For 2011, Granite expects Construction segment revenue to be $1.0 billion to $1.2 billion with a corresponding gross profit margin between 9 percent and 11 percent. Large Project Construction segment revenue is expected to be $650 million to $850 million with a corresponding gross profit margin of between 13 percent and 15 percent. Construction Materials segment revenue is expected to be $170 million to $200 million with corresponding gross profit margin between 7 percent and 9 percent. In addition, net income attributable to non-controlling interest in joint ventures for the total company is expected to be $15 million to $20 million.

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Conference Call

Granite will conduct a conference call tomorrow, May 5, 2011, at 8 a.m. Pacific time/11 a.m. eastern time to discuss the results of the quarter ended March 31, 2011. Access to a live audio webcast is available atwww.graniteconstruction.com/investor-relations.The live conference call may be accessed by calling (877) 693-6483. The conference ID for the live call is 61211343. The call will be recorded and will be available for replay approximately two hours after the live audio webcast through May 25, 2011 by calling (800) 642-1687. The conference ID for the replay is also 61211343.

About Granite

Granite is one of the nation’s leading infrastructure contractors and is member of the S&P 400 Midcap Index, the FTSE KLD 400 Social Index and the Russell 2000 Index. Through its wholly owned subsidiary, Granite is one of the nation’s largest diversified heavy civil contractors and construction materials producers serving public- and private-sector clients nationwide. In addition, Granite has one of the oldest and most robust ethics and compliance programs in the industry. The Company was recently recognized by the Ethisphere Institute as one of the World’s Most Ethical Companies for the second year in a row. For more information, please visit graniteconstruction.com.

Forward-looking Statements

Any statements contained in this news release that are not based on historical facts, including statements regarding future events, occurrences, circumstances, activities, performance, outcomes and results, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by words such as “future,” “outlook,” “assumes,” “believes,” “expects,” “estimates,” “anticipates,” “intends,” “plans,” “appears,” “may,” “will,” “should,” “could,” “would,” “continue,” and the negatives thereof or other comparable terminology or by the context in which they are made. These forward-looking statements are estimates reflecting the best judgment of senior management and reflect our current expectations regarding future events, occurrences, circumstances, activities, performance, outcomes and results. These expectations may or may not be realized. Some of these expectations may be based on beliefs, assumptions or estimates that may prove to be incorrect. In addition, our business and operations involve numerous risks and uncertainties, many of which are beyond of our control, which could result in our expectations not being realized or otherwise materially affect our business, financial condition, results of operations, cash flows and liquidity. Such risks and uncertainties include, but are not limited to, those described in greater detail in our filings with the Securities and Exchange Commission, particularly those specifically described in our Annual Report on Form 10-K under “Item 1A. Risk Factors.”

Due to the inherent risks and uncertainties associated with our forward-looking statements, the reader is cautioned not to place undue reliance on them. The reader is also cautioned that the forward-looking statements contained herein speak only as of the date of this news release and, except as required by law, we undertake no obligation to revise or update any forward-looking statements for any reason.

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GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited — in thousands, except share and per share data)

	March 31,		December 31,		March 31,
	2011		2010		2010
ASSETS
Current assets
Cash and cash equivalents	$	240,768	$	252,022	$	222,095
Short-term marketable securities		83,084		109,447		76,963
Receivables, net		170,441		243,986		197,658
Costs and estimated earnings in excess of billings		33,302		10,519		33,445
Inventories		56,899		51,018		49,483
Real estate held for development and sale		77,128		75,716		137,183
Deferred income taxes		52,583		53,877		31,150
Equity in construction joint ventures		78,773		74,716		71,693
Other current assets		44,059		42,555		56,033
Total current assets		837,037		913,856		875,703
Property and equipment, net		468,929		473,607		519,909
Long-term marketable securities		46,251		34,259		90,440
Investments in affiliates		28,893		31,410		30,823
Other noncurrent assets		83,478		82,401		80,371
Total assets	$	1,464,588	$	1,535,533	$	1,597,246
LIABILITIES AND EQUITY
Current liabilities
Current maturities of long-term debt	$	8,351	$	8,359	$	8,350
Current maturities of non-recourse debt		17,740		29,760		40,565
Accounts payable		94,688		129,700		100,102
Billings in excess of costs and estimated earnings		113,347		120,185		142,935
Accrued expenses and other current liabilities		144,584		150,773		156,374
Total current liabilities		378,710		438,777		448,326
Long-term debt		216,852		217,014		225,203
Long-term non-recourse debt		30,454		25,337		16,895
Other long-term liabilities		47,943		47,996		52,471
Deferred income taxes		11,048		10,774		27,217
Equity
Preferred stock, $0.01 par value, authorized 3,000,000 shares, none outstanding		—		—		—
Common stock, $0.01 par value, authorized 150,000,000 shares; issued and outstanding 38,634,470 shares as of March 31, 2011, 38,745,542 shares as of December 31, 2010 and 38,801,232 shares as of March 31, 2010		386		387		388
Additional paid-in capital		102,548		104,232		93,688
Retained earnings		642,354		656,412		689,634
Total Granite Construction Incorporated shareholders’ equity		745,288		761,031		783,710
Noncontrolling interests		34,293		34,604		43,424
Total equity		779,581		795,635		827,134
Total liabilities and equity	$	1,464,588	$	1,535,533	$	1,597,246

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GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited — in thousands, except per share data)

	Three Months Ended
	March 31,
	2011			2010
Revenue
Construction	$	92,692		$	81,186
Large project construction		137,820			106,325
Construction materials		23,798			26,164
Real estate		2,421			7,008
Total revenue		256,731			220,683
Cost of revenue
Construction		87,139			79,340
Large project construction		106,522			96,842
Construction materials		31,068			33,289
Real estate		2,014			5,498
Total cost of revenue		226,743			214,969
Gross profit		29,988			5,714
Selling, general and administrative expenses		43,372			55,292
Gain on sales of property and equipment		2,704			4,452
Operating loss		(10,680	)		(45,126	)
Other income (expense)
Interest income		1,244			939
Interest expense		(3,356	)		(3,734	)
Equity in loss of affiliates		(257	)		(319	)
Other income, net		570			2,897
Total other expense		(1,799	)		(217	)
Loss before benefit from income taxes		(12,479	)		(45,343	)
Benefit from income taxes		(5,223	)		(7,613	)
Net loss		(7,256	)		(37,730	)
Amount attributable to noncontrolling interests		(1,751	)		(3,224	)
Net loss attributable to Granite Construction Incorporated	$	(9,007	)	$	(40,954	)
Net loss per share attributable to common shareholders:
Basic (1)	$	(0.24	)	$	(1.09	)
Diluted (1)	$	(0.24	)	$	(1.09	)
Weighted average shares of common stock:
Basic		37,963			37,688
Diluted		37,963			37,688

Note:

(1) Computed using the two-class method, except when in a net loss position

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GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited — in thousands)

Three Months Ended March 31,	2011			2010
Operating activities
Net loss	$	(7,256	)	$	(37,730	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation, depletion and amortization		15,291			18,662
Gain on sales of property and equipment		(2,704	)		(4,452	)
Change in deferred income taxes		1,568			(119	)
Stock-based compensation		3,149			3,158
Gain on company owned life insurance		(550	)		(1,829	)
Changes in assets and liabilities, net of the effects of consolidations		(8,822	)		(2,044	)
Net cash provided by (used in) operating activities		676			(24,354	)
Investing activities
Purchases of marketable securities		(27,341	)		(47,511	)
Maturities of marketable securities		24,000			—
Proceeds from sale of marketable securities		14,268			—
Additions to property and equipment		(11,760	)		(14,712	)
Proceeds from sales of property and equipment		4,623			5,674
Purchase of private preferred stock		—			(6,400	)
Distributions from affiliates		1,325			—
Other investing activities, net		(104	)		(453	)
Net cash provided by (used in) investing activities		5,011			(63,402	)
Financing activities
Proceeds from long-term debt		906			53
Long-term debt principal payments		(7,235	)		(8,739	)
Cash dividends paid		(5,038	)		(5,023	)
Purchase of common stock		(3,515	)		(3,296	)
Distributions to noncontrolling partners, net		(2,062	)		(12,103	)
Other financing activities		3			3
Net cash used in financing activities		(16,941	)		(29,105	)
Decrease in cash and cash equivalents		(11,254	)		(116,861	)
Cash and cash equivalents at beginning of period		252,022			338,956
Cash and cash equivalents at end of period	$	240,768		$	222,095

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GRANITE CONSTRUCTION INCORPORATED

Business Segment Information
(Unaudited — dollars in thousands)

	Three Months Ended March 31,
				Large Project			Construction
	Construction			Construction			Materials			Real Estate
2011
Revenue	$	92,692		$	137,820		$	23,798		$	2,421
Gross profit (loss)	$	5,553		$	31,298		$	(7,270	)	$	407
Gross profit (loss) as a percent of revenue		6.0	%		22.7	%		-30.5	%		16.8	%
2010
Revenue	$	81,186		$	106,325		$	26,164		$	7,008
Gross profit (loss)	$	1,846		$	9,483		$	(7,125	)	$	1,510
Gross profit (loss) as a percent of revenue		2.3	%		8.9	%		-27.2	%		21.5	%

GRANITE CONSTRUCTION INCORPORATED

Contract Backlog by Segment
(Unaudited — dollars in thousands)

	March 31, 2011				December 31, 2010				March 31, 2010
Construction	$	696,055	34.7	%	$	465,271	24.5	%	$	487,751	30.9	%
Large Project Construction		1,307,622	65.3	%		1,433,899	75.5	%		1,091,251	69.1	%
Total	$	2,003,677	100.0	%	$	1,899,170	100.0	%	$	1,579,002	100.0	%

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