Granite Construction (GVA) 8-K Granite Reports First-Quarter 2009 Financial Results

Exhibit 99.1

Granite Reports First-Quarter 2009 Financial Results

• Granite East is on track to provide consistent profitability in 2009 and beyond.
• Gross margin percentage in Granite West remains unchanged at 17 percent.
• General and administrative expenses decreased $7.0 million.
• Strong balance sheet with $412.8 million in cash and short-term marketable securities.
• Capital structure is conservative, with 27 percent debt to total capital.

WATSONVILLE, Calif.--(BUSINESS WIRE)--May 4, 2009--Granite Construction Incorporated (NYSE: GVA) today reported net income of $8.9 million for the first quarter of 2009 compared with $13.1 million for the first quarter of 2008. Diluted earnings per share for the first quarter of 2009 were $0.23 compared with $0.34 for the first quarter of 2008.

“Our business continues to perform well despite today’s economic challenges,” said William G. Dorey, Granite president and chief executive officer. “Overall I am extremely pleased with the way our teams across the country are executing on our diverse portfolio of work.”

First-quarter 2009 Financial Results

Total Company

• Total revenue for the quarter ended March 31, 2009 was $347.4 million compared with $454.8 million in 2008.
• Gross profit as a percentage of revenue for the quarter decreased to 20 percent compared with 22 percent in 2008.
• Gross loss on the sale of construction materials was $2.3 million in 2009 compared with a gross profit of $2.5 million in 2008. The company’s construction materials business continues to be affected by lower sales volume.
• General and administrative expenses decreased $7.0 million to $53.6 million or 15 percent of revenue compared with $60.7 million or 13 percent of revenue in 2008.
• Operating income for the quarter was $16.9 million compared with $38.4 million in the prior year.
• Other income for the quarter was $1.9 million compared with $9.3 million last year. The decrease was due to lower investment interest income as well as a reduction in the gain on the sale of gold, a by-product of one of our aggregate facilities. In 2009, the gain from gold sales was $4.4 million compared with $9.3 million in the first quarter of 2008.
• Net income attributable to noncontrolling interest in joint ventures was $5.1 million compared with $22.5 million in 2008. The decrease was related to the settlement of a significant claim associated with a completed large joint-venture project in Southern California which was recognized in the first quarter of 2008.
• At March 31, 2009, cash and short-term marketable securities totaled $412.8 million, including $120.7 million of cash and cash equivalents from the company’s consolidated joint ventures.
• Total contract backlog at March 31, 2009, was $1.6 billion compared with $1.9 billion at March 31, 2008. Not included in contract backlog at March 31, 2009, is the company’s 34 percent share of the $1.3 billion contract for the Houston Metro Light Rail project awarded in the second quarter of 2009. The award will be recorded in contract backlog incrementally as Notices to Proceed are received.

Granite West

• Revenue for the first quarter totaled $197.0 million compared with $240.0 million for the same period in 2008. Granite West continues to experience a competitive bidding environment as well as a reduction in the demand for construction materials.
• Gross profit as a percentage of revenue for the quarter was unchanged at 17 percent as a result of higher construction gross profit offset by a loss from materials sales during the quarter.
• Operating income for the quarter increased $2.0 million to $6.7 million compared with $4.8 million for the first quarter of last year.

Granite East

• Revenue for the first quarter totaled $149.9 million compared with $214.1 million for the same period in 2008.
• Gross profit as a percentage of revenue for the quarter was 23 percent compared with 27 percent in the same period last year.
• Operating income for the quarter decreased to $28.3 million compared with $52.1 million for the first quarter of 2008. Operating results in both the first quarter of 2008 and 2009 were positively affected by the recognition of project settlements related to outstanding issues. Results in 2009 include the $16.0 million settlement associated with a large project in the Northeast. Results in 2008 include the $28.6 million settlement related to a large project in Southern California.

Outlook

“We are off to a good start in 2009,” said Dorey. “In Granite West our public works bidding environment is becoming very active, in part due to stimulus-funded projects out to bid. We do, however, anticipate a challenging year in the West as the competitive climate continues to impact our hit ratio and our margin expectations. This is particularly true in the smaller, traditional branch work as well as our construction materials business. We are fortunate to have the experience and the financial wherewithal to bid on larger, more complex projects that often do not draw the same level of competitiveness due to their increased complexity and bonding requirements. We believe it is the larger projects that present the most encouraging opportunities for revenue and margin growth during this business cycle.

“We expect Granite East to continue to deliver gross margins in the mid-teens while building a strong backlog of work. Our bidding pipeline remains full, and we are excited about the opportunities for this business. We are tracking more than $4 billion worth of various infrastructure-related projects that are expected to bid between now and the end of 2009.

“Our 2009 outlook includes revenue expectations for Granite West to be in the range of $1.6 billion to $1.9 billion with a corresponding gross profit margin percentage between 14 percent and 17 percent. Granite East 2009 revenue is expected to be in the range of $675.0 million to $775.0 million with a corresponding gross profit margin percentage between 13 percent and 15 percent. In addition, net income attributable to noncontrolling interest in joint ventures for the total company is expected to be approximately $25.0 million to $35.0 million.”

Conference Call

Granite will conduct a conference call tomorrow, May 5, 2009, at 11 a.m. ET (8 a.m. PT) to discuss the results of the first quarter ended March 31, 2009. Access to a live audio webcast is available at www.graniteconstruction.com/investor-relations. The live conference call may be accessed by calling (877) 693-6483 in the United States and (706) 758-5304 for international listeners. The conference ID for the call is 93595270. The call will be recorded and available for replay from approximately two hours after the live audio webcast through May 19, 2009, by calling (800) 642-1687 or (706) 645-9291. The conference ID for the recording is 93595270.

About Granite

Granite Construction Incorporated is a member of the S&P 400 Midcap Index, the Domini 400 Social Index, and the Russell 2000. Granite Construction Company, a wholly owned subsidiary, is one of the nation’s largest diversified heavy civil contractors and construction materials producers. Granite Construction Company serves public- and private-sector clients through its offices and subsidiaries nationwide. For more information about Granite, please visit its Web site at www.graniteconstruction.com.

Forward-looking Statements

This press release contains statements that are not based on historical facts and which may be forward-looking in nature. Under the Private Securities Litigation Reform Act of 1995, a “safe harbor” may be provided to Granite for certain of these forward-looking statements. Words such as outlook, believes, expects, appears, may, will, should, anticipates, and the negatives thereof or comparable terminology are intended to identify these forward-looking statements. These forward-looking statements are estimates reflecting the best judgment of Granite’s senior management and are based on its current expectations and projections concerning future events, many of which are outside Granite’s control and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those risks described in Granite’s Annual Report under “Item 1A. Risk Factors.” Except as required by law, Granite undertakes no obligation to revise or update any forward-looking statements for any reason. As a result, the reader is cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release.

GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited - In Thousands, Except Per Share Data)
			Three Months Ended
			March 31,
				2009			2008
	Revenue
		Construction	$	317,109		$	402,573
		Material sales		29,846			51,554
		Real estate		417			673
		Total revenue		347,372			454,800
	Cost of revenue
		Construction		246,969			306,846
		Material sales		32,183			49,056
		Real estate		207			204
��		Total cost of revenue		279,359			356,106
	Gross profit			68,013			98,694
	General and administrative expenses			53,632			60,651
	Gain on sales of property and equipment			2,521			401
	Operating income			16,902			38,444
	Other income (expense)
		Interest income		2,061			6,055
		Interest expense		(3,488	)		(4,510	)
		Equity in loss of affiliates		(444	)		(707	)
		Other income, net		3,785			8,463
		Total other income		1,914			9,301
	Income before provision for income taxes			18,816			47,745
	Provision for income taxes			4,829			12,127
	Net income			13,987			35,618
	Amount attributable to noncontrolling interest			(5,067	)		(22,495	)
	Net income attributable to Granite Construction Inc.		$	8,920		$	13,123
	Net income per share attributable to common shareholders:
		Basic	$	0.23		$	0.34
		Diluted	$	0.23		$	0.34
	Weighted average shares of common stock:
		Basic		37,476			38,139
		Diluted		37,600			38,172

GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited - In thousands, except share and per share data)
	March 31,		December 31,			March 31,
		2009		2008			2008
Assets
Current assets
Cash and cash equivalents	$	390,483	$	460,843		$	266,427
Short-term marketable securities		22,276		38,320			79,997
Accounts receivable, net		233,867		314,733			320,526
Costs and estimated earnings in excess of billings		54,400		13,295			74,279
Inventories, net		59,254		55,223			61,432
Real estate held for development and sale		79,409		75,089			54,736
Deferred income taxes		43,484		43,637			44,728
Equity in construction joint ventures		44,423		44,681			39,893
Other current assets		52,488		56,742			62,559
Total current assets		980,084		1,102,563			1,004,577
Property and equipment, net		526,734		517,678			518,900
Long-term marketable securities		46,387		21,239			37,303
Investment in affiliates		21,768		19,996			25,713
Other noncurrent assets		79,534		81,979			72,149
Total assets	$	1,654,507	$	1,743,455		$	1,658,642
Liabilities and Equity
Current liabilities
Current maturities of long-term debt	$	34,218	$	39,692		$	34,071
Accounts payable		141,783		174,626			195,651
Billings in excess of costs and estimated earnings		190,540		227,364			218,935
Accrued expenses and other current liabilities		159,323		184,939			166,774
Total current liabilities		525,864		626,621			615,431
Long-term debt		251,351		250,687			257,442
Other long-term liabilities		45,836		43,604			45,479
Deferred income taxes		17,917		18,261			18,228
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 in 2009 and in 2008;
issued and outstanding 38,679,123 shares as of March 31, 2009, 38,266,791 shares
as of December 31, 2008 and 38,274,800 shares as of March 31, 2008		387		383			383
Additional paid-in capital		88,158		85,035			79,534
Retained earnings		686,129		682,237			587,881
Accumulated other comprehensive loss		-		(146	)		(693	)
Total Granite Construction Inc. shareholders' equity		774,674		767,509			667,105
Noncontrolling interest		38,865		36,773			54,957
Total equity		813,539		804,282			722,062
Total liabilities and equity	$	1,654,507	$	1,743,455		$	1,658,642
	March 31,		December 31,			March 31,
Financial Position		2009		2008			2008
Working capital	$	454,220	$	475,942		$	389,146
Current ratio		1.86		1.76			1.63
Debt to Granite Construction Inc. shareholders' equity capitalization		0.27		0.27			0.30
Total liabilities to Granite Construction Inc. shareholders' equity ratio		1.09		1.22			1.40

GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - In Thousands)
Three Months Ended March 31,					2009			2008
Operating activities
	Net income			$	13,987		$	35,618
	Adjustments to reconcile net income to net cash used in operating activities:
		Depreciation, depletion and amortization			20,623			21,172
		Gain on sales of property and equipment			(2,521	)		(401	)
		Change in deferred income taxes			(283	)		419
		Stock-based compensation			2,777			1,609
		Excess tax benefit on stock-based compensation			(413	)		(746	)
		Equity in loss of affiliates			444			707
		Acquisition of noncontrolling interest			-			(16,616	)
	Changes in assets and liabilities, net of the effects of acquisitions				(49,009	)		(65,307	)
			Net cash used in operating activities		(14,395	)		(23,545	)
Investing activities
	Purchases of marketable securities				(29,258	)		(9,179	)
	Maturities of marketable securities				15,610			21,500
	Release of funds for acquisition of noncontrolling interest				-			28,332
	Additions to property and equipment				(29,601	)		(30,735	)
	Proceeds from sales of property and equipment				3,741			3,517
	Acquisition of businesses				-			(14,022	)
	Contributions to affiliates				(2,219	)		-
	Other investing activities				148			676
			Net cash (used in) provided by investing activities		(41,579	)		89
Financing activities
	Proceeds from long-term debt				2,435			1,083
	Long-term debt principal payments				(7,282	)		(6,683	)
	Cash dividends paid				(4,975	)		(5,129	)
	Purchase of common stock				(2,017	)		(45,468	)
	Contributions from noncontrolling partners				157			4,640
	Distributions to noncontrolling partners				(3,153	)		(24	)
	Acquisition of noncontrolling interest				-			(11,716	)
	Excess tax benefit on stock-based compensation				413			746
	Other financing				36			-
			Net cash used in financing activities		(14,386	)		(62,551	)
Decrease in cash and cash equivalents					(70,360	)		(86,007	)
Cash and cash equivalents at beginning of period					460,843			352,434
Cash and cash equivalents at end of period				$	390,483		$	266,427

GRANITE CONSTRUCTION INCORPORATED
Business Segment Information
(Unaudited - In Thousands)
	Three Months Ended March 31,			Granite West			Granite East		Granite Land Company
	2009
	Revenue			$	197,049		$	149,906	$	417
	Gross profit			$	32,939		$	34,864	$	210
	Gross profit as a percent of revenue				16.7%			23.3%		50.4%
	Operating income (loss)			$	6,720		$	28,251	$	(698)
	Operating income (loss) as a percent of revenue				3.4%			18.8%		-167.4%
	2008
	Revenue			$	240,002		$	214,125	$	673
	Gross profit			$	39,629		$	58,596	$	469
	Gross profit as a percent of revenue				16.5%			27.4%		69.7%
	Operating income (loss)			$	4,763		$	52,136	$	(450)
	Operating income (loss) as a percent of revenue				2.0%			24.3%		-66.9%
GRANITE CONSTRUCTION INCORPORATED
Contract Backlog
(Unaudited - In Thousands)
Contract Backlog by Division		March 31, 2009					March 31, 2008
	Granite West	$	743,219		47.3	%	$	868,530		44.7	%
	Granite East		826,855		52.7	%		1,074,659		55.3	%
	Total	$	1,570,074		100.0	%	$	1,943,189		100.0	%

CONTACT:
Granite Construction Incorporated
Jacque Fourchy, 831-761-4714