Exhibit 99.1
Granite Reports Second-Quarter 2013 Financial Results
- Record company backlog of $2.8 billion; Large Project Construction contract backlog increased 59% year over year to a record $2.0 billion, and Construction contract backlog increased 16% year over year to $807.7 million
- Second quarter revenues increased to $550.2 million, compared with $539.6 million in the second quarter of 2012; gross profit margin of 9.3 percent down slightly from last year
- Revenue and profit performance driven primarily by project timing in Large Project Construction segment
WATSONVILLE, Calif.--(BUSINESS WIRE)--August 1, 2013--Granite Construction Incorporated (NYSE: GVA) today reported net income attributable to common shareholders of $2.7 million, or $0.07 per diluted share, for the second quarter of 2013 compared with $1.9 million, or $0.05 per diluted share, for the second quarter of 2012.
“Granite continues to focus on driving results through execution of our strategic initiatives both to grow and to diversify the business,” said James H. Roberts, Granite president and chief executive officer.
“The Large Projects business continues to perform as expected. Our record backlog includes the start-up of several new projects in the second half of 2013, which will recognize profit in 2014,” Roberts said. “While our vertically integrated business still faces market-driven, competitive headwinds, we are benefitting from synergies with our acquisition of Kenny.”
Second-quarter 2013 Financial Results
Total Company
- Revenues for the quarter totaled $550.2 million, compared with $539.6 million in 2012.
- Gross profit in the second quarter of 2013 was $51.2 million, compared with $51.9 million last year, with corresponding gross profit margins of 9.3 percent and 9.6 percent. Gross profit and gross profit margin in the quarter were driven by the competitive environment in the Construction segment and project timing in the Large Project Construction segment.
- Selling, general and administrative expenses for the second quarter were $46.5 million, compared with $40.8 million in 2012. Kenny Construction Company (Kenny) accounted for nearly all of the increase.
- Operating income for the quarter was $8.0 million compared with $14.1 million in the prior year.
- Total contract backlog at June 30, 2013, was $2.8 billion compared with $2.0 billion at June 30, 2012. Backlog booked during the second quarter included $426.2 million associated with the IH-35E project in Texas and the I-440 project in North Carolina.
Construction
- Construction revenues in the second quarter were $308.6 million compared with $245.1 million a year ago. Revenues from Kenny and certain Western markets outweighed weakness in California in the second quarter.
- Gross profit margin was 8.2 percent compared with 7.3 percent a year ago. Construction profit performance improved despite continued margin pressure from an intensely competitive environment in key markets in the West.
Large Project Construction
- Large Project Construction revenues in the second quarter were $181.4 million compared with $228.8 million in the same period last year, reflecting the timing of new projects.
- Gross profit margin for the quarter of 12.2 percent was in line with 12.3 percent last year.
Construction Materials
- Construction Materials revenue in the second quarter totaled $60.2 million compared with $63.3 million for the same period last year.
- Gross profit margin was 6.6 percent compared with 7.9 percent a year ago, driven by ongoing weakness in certain geographic locations.
Guidance
The Company reaffirms the 2013 guidance provided in the first quarter 2013 earnings press release with two adjustments: Large Project Construction segment revenues are expected to be in the range of $850 million to $950 million, and cash flow from operations is expected to be $70 million to $100 million for the year.
Conference Call
Granite will conduct a conference call today, August 1, 2013 at 8 a.m. Pacific Time/11 a.m. Eastern Time to discuss the results of the quarter ended June 30, 2013. Access to a live audio webcast is available at http://investor.graniteconstruction.com/index.cfm. The live conference call may be accessed by calling (877) 643-7158. The conference ID for the live call is 20529008. The call will be recorded and available for replay approximately two hours after the live audio webcast through August 8, 2013 by calling (855) 859-2056. The conference ID for the replay is also 20529008.
About Granite
Through its offices and subsidiaries nationwide, Granite Construction Incorporated (NYSE: GVA) is one of the nation’s largest infrastructure contractors and construction materials producers. Incorporated in 1922, Granite serves public- and private-sector clients on projects both small and large. Granite’s project teams represent some of the best in the industry serving owners in the transportation, power, federal, tunneling, underground, and industrial/mining and water resources markets. In 2013, the Company was recognized by the Ethisphere Institute as one of the World’s Most Ethical Companies for the fourth year in a row. For more information please visit www.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 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 and quarterly reports on Form 10-Q.
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.
GRANITE CONSTRUCTION INCORPORATED | |||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(Unaudited - in thousands, except share and per share data) | |||||||||
June 30, | December 31, | June 30, | |||||||
2013 | 2012 | 2012 | |||||||
ASSETS | |||||||||
Current assets | |||||||||
Cash and cash equivalents | $ | 247,833 | $ | 321,990 | $ | 237,951 | |||
Short-term marketable securities | 21,271 | 56,088 | 43,260 | ||||||
Receivables, net | 336,418 | 325,529 | 272,562 | ||||||
Costs and estimated earnings in excess of billings | 63,341 | 34,116 | 69,688 | ||||||
Inventories | 68,905 | 59,785 | 67,503 | ||||||
Real estate held for development and sale | 50,697 | 50,223 | 57,367 | ||||||
Deferred income taxes | 36,687 | 36,687 | 38,571 | ||||||
Equity in construction joint ventures | 148,727 | 105,805 | 107,821 | ||||||
Other current assets | 35,651 | 31,834 | 20,436 | ||||||
Total current assets | 1,009,530 | 1,022,057 | 915,159 | ||||||
Property and equipment, net | 471,265 | 481,478 | 439,664 | ||||||
Long-term marketable securities | 55,225 | 55,342 | 45,800 | ||||||
Investments in affiliates | 31,421 | 30,799 | 28,521 | ||||||
Goodwill | 53,598 | 55,419 | 9,900 | ||||||
Other noncurrent assets | 80,365 | 84,392 | 68,603 | ||||||
Total assets | $ | 1,701,404 | $ | 1,729,487 | $ | 1,507,647 | |||
LIABILITIES AND EQUITY | |||||||||
Current liabilities | |||||||||
Current maturities of long-term debt | $ | 20 | $ | 8,353 | $ | 9,102 | |||
Current maturities of non-recourse debt | 2,147 | 10,707 | 16,328 | ||||||
Accounts payable | 188,124 | 202,541 | 186,290 | ||||||
Billings in excess of costs and estimated earnings | 144,044 | 139,692 | 75,629 | ||||||
Accrued expenses and other current liabilities | 200,521 | 169,979 | 155,322 | ||||||
Total current liabilities | 534,856 | 531,272 | 442,671 | ||||||
Long-term debt | 270,148 | 270,148 | 200,168 | ||||||
Long-term non-recourse debt | 7,354 | 922 | 4,641 | ||||||
Other long-term liabilities | 46,817 | 47,124 | 47,393 | ||||||
Deferred income taxes | 8,055 | 8,163 | 3,644 | ||||||
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 38,852,463 shares as of June 30, 2013, 38,730,665 shares as of December 31, 2012 and 38,684,540 shares as of June 30, 2012 | 389 | 387 | 387 | ||||||
Additional paid-in capital | 121,368 | 117,422 | 112,815 | ||||||
Retained earnings | 682,610 | 712,144 | 667,278 | ||||||
Total Granite Construction Incorporated shareholders’ equity | 804,367 | 829,953 | 780,480 | ||||||
Noncontrolling interests | 29,807 | 41,905 | 28,650 | ||||||
Total equity | 834,174 | 871,858 | 809,130 | ||||||
Total liabilities and equity | $ | 1,701,404 | $ | 1,729,487 | $ | 1,507,647 | |||
GRANITE CONSTRUCTION INCORPORATED | |||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||
(Unaudited - in thousands, except per share data) | |||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Revenue | |||||||||||||||||||
Construction | $ | 308,602 | $ | 245,113 | $ | 485,720 | $ | 363,059 | |||||||||||
Large Project Construction | 181,371 | 228,799 | 353,086 | 392,727 | |||||||||||||||
Construction Materials | 60,185 | 63,349 | 89,935 | 88,972 | |||||||||||||||
Real Estate | 4 | 2,354 | 125 | 5,017 | |||||||||||||||
Total revenue | 550,162 | 539,615 | 928,866 | 849,775 | |||||||||||||||
Cost of revenue | |||||||||||||||||||
Construction | 283,448 | 227,152 | 447,367 | 336,518 | |||||||||||||||
Large Project Construction | 159,283 | 200,560 | 308,278 | 342,239 | |||||||||||||||
Construction Materials | 56,231 | 58,349 | 91,955 | 89,922 | |||||||||||||||
Real Estate | 3 | 1,638 | 13 | 4,244 | |||||||||||||||
Total cost of revenue | 498,965 | 487,699 | 847,613 | 772,923 | |||||||||||||||
Gross profit | 51,197 | 51,916 | 81,253 | 76,852 | |||||||||||||||
Selling, general and administrative expenses | 46,454 | 40,806 | 104,112 | 85,882 | |||||||||||||||
Gain on restructuring | — | — | 497 | 1,888 | |||||||||||||||
Gain on sales of property and equipment | 3,306 | 2,954 | 4,394 | 4,871 | |||||||||||||||
Operating income (loss) | 8,049 | 14,064 | (17,968 | ) | (2,271 | ) | |||||||||||||
Other income (expense) | |||||||||||||||||||
Interest income | 380 | 611 | 508 | 1,655 | |||||||||||||||
Interest expense | (3,700 | ) | (2,827 | ) | (7,345 | ) | (6,009 | ) | |||||||||||
Equity in income (loss) of affiliates | 698 | (484 | ) | 275 | (1,101 | ) | |||||||||||||
Other (expense) income, net | (495 | ) | (5,018 | ) | 608 | 1,853 | |||||||||||||
Total other expense | (3,117 | ) | (7,718 | ) | (5,954 | ) | (3,602 | ) | |||||||||||
Income (loss) before provision for (benefit from) income taxes | 4,932 | 6,346 | (23,922 | ) | (5,873 | ) | |||||||||||||
Provision for (benefit from) income taxes | 1,766 | 1,859 | (7,261 | ) | (1,673 | ) | |||||||||||||
Net income (loss) | 3,166 | 4,487 | (16,661 | ) | (4,200 | ) | |||||||||||||
Amount attributable to noncontrolling interests | (448 | ) | (2,538 | ) | (2,603 | ) | (5,624 | ) | |||||||||||
Net income (loss) attributable to Granite Construction Incorporated | $ | 2,718 | $ | 1,949 | $ | (19,264 | ) | $ | (9,824 | ) | |||||||||
Net income (loss) per share attributable to common shareholders: | |||||||||||||||||||
Basic | $ | 0.07 | $ | 0.05 | $ | (0.50 | ) | $ | (0.26 | ) | |||||||||
Diluted | $ | 0.07 | $ | 0.05 | $ | (0.50 | ) | $ | (0.26 | ) | |||||||||
Weighted average shares of common stock: | |||||||||||||||||||
Basic | 38,829 | 38,471 | 38,720 | 38,368 | |||||||||||||||
Diluted | 39,769 | 39,151 | 38,720 | 38,368 | |||||||||||||||
GRANITE CONSTRUCTION INCORPORATED | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited - in thousands) | ||||||||
Six Months Ended June 30, | 2013 | 2012 | ||||||
Operating activities | ||||||||
Net loss | $ | (16,661 | ) | $ | (4,200 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation, depletion and amortization | 33,988 | 29,573 | ||||||
Non-cash restructuring, net | (497 | ) | (1,888 | ) | ||||
Other non-cash impairment charges | - | 2,752 | ||||||
Gain on sales of property and equipment | (4,394 | ) | (4,871 | ) | ||||
Stock-based compensation | 8,101 | 6,492 | ||||||
Changes in assets and liabilities | (72,185 | ) | (62,482 | ) | ||||
Net cash used in operating activities | (51,648 | ) | (34,624 | ) | ||||
Investing activities | ||||||||
Purchases of marketable securities | (14,975 | ) | (39,945 | ) | ||||
Maturities of marketable securities | 43,000 | 65,100 | ||||||
Proceeds from sale of marketable securities | 5,000 | 35,000 | ||||||
Additions to property and equipment | (19,422 | ) | (19,855 | ) | ||||
Proceeds from sales of property and equipment | 8,481 | 6,078 | ||||||
Payment of Kenny post-closing adjustments | (4,621 | ) | - | |||||
Other investing activities, net | 163 | (978 | ) | |||||
Net cash provided by investing activities | 17,626 | 45,400 | ||||||
Financing activities | ||||||||
Long-term debt principal payments | (10,594 | ) | (10,834 | ) | ||||
Cash dividends paid | (10,078 | ) | (10,050 | ) | ||||
Purchase of common stock | (5,022 | ) | (4,054 | ) | ||||
Contributions from noncontrolling partners | 6,001 | - | ||||||
Distributions from noncontrolling partners | (21,142 | ) | (5,440 | ) | ||||
Other financing activities, net | 700 | 563 | ||||||
Net cash used in financing activities | (40,135 | ) | (29,815 | ) | ||||
Decrease in cash and cash equivalents | (74,157 | ) | (19,039 | ) | ||||
Cash and cash equivalents at beginning of period | 321,990 | 256,990 | ||||||
Cash and cash equivalents at end of period | $ | 247,833 | $ | 237,951 | ||||
GRANITE CONSTRUCTION INCORPORATED | ||||||||||||||||||||||||||||||||
Business Segment Information | ||||||||||||||||||||||||||||||||
(Unaudited - dollars in thousands) | ||||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
Construction | Large Project | Construction | Real Estate | Construction | Large Project | Construction | Real Estate | |||||||||||||||||||||||||
2013 | ||||||||||||||||||||||||||||||||
Revenue | $ | 308,602 | $ | 181,371 | $ | 60,185 | $ | 4 | $ | 485,720 | $ | 353,086 | $ | 89,935 | $ | 125 | ||||||||||||||||
Gross profit (loss) | 25,154 | 22,088 | 3,954 | 1 | 38,353 | 44,808 | (2,020 | ) | 112 | |||||||||||||||||||||||
Gross profit (loss) as a percent of revenue | 8.2 | % | 12.2 | % | 6.6 | % | 25.0 | % | 7.9 | % | 12.7 | % | (2.2 | )% | 89.6 | % | ||||||||||||||||
2012 | ||||||||||||||||||||||||||||||||
Revenue | $ | 245,113 | $ | 228,799 | $ | 63,349 | $ | 2,354 | $ | 363,059 | $ | 392,727 | $ | 88,972 | $ | 5,017 | ||||||||||||||||
Gross profit (loss) | 17,961 | 28,239 | 5,000 | 716 | 26,541 | 50,488 | (950 | ) | 773 | |||||||||||||||||||||||
Gross profit (loss) as a percent of revenue | 7.3 | % | 12.3 | % | 7.9 | % | 30.4 | % | 7.3 | % | 12.9 | % | (1.1 | )% | 15.4 | % | ||||||||||||||||
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GRANITE CONSTRUCTION INCORPORATED | ||||||||||||||||||
Contract Backlog by Segment | ||||||||||||||||||
(Unaudited - dollars in thousands) | ||||||||||||||||||
Contract Backlog by Segment | June 30, 2013 | March 31, 2013 | June 30, 2012 | |||||||||||||||
Construction | $ | 807,686 | 28.9 | % | $ | 740,259 | 30.8 | % | $ | 697,535 | 35.8 | % | ||||||
Large Project Construction | 1,989,156 | 71.1 | % | 1,660,056 | 69.2 | % | 1,252,828 | 64.2 | % | |||||||||
Total | $ | 2,796,842 | 100.0 | % | $ | 2,400,315 | 100.0 | % | $ | 1,950,363 | 100.0 | % |
CONTACT:
Granite Construction Incorporated
Ron Botoff, 831-728-7532