Exhibit 99.1
GRANITE CONSTRUCTION REPORTS FIRST QUARTER 2005 RESULTS
WATSONVILLE, Calif., April 27 /PRNewswire-FirstCall/ -- Granite
Construction Incorporated (NYSE: GVA) today announced a net loss of
$8.3 million, or $0.20 per diluted share for the first quarter ended March 31,
2005. This compares with a net loss of $9.1 million or $0.23 per share for
the same period last year. Included in the first quarter 2004 results was a
gain on the sale of certain assets related to the Company's ready-mix concrete
business in Utah of approximately $10.0 million pre-tax (approximately
$6.0 million after-tax).
"While most of our business is generally performing well, we did not get
the year off to as good of a start as we had anticipated. However, our first
quarter profitability from our operating divisions improved significantly
compared to a year ago, which we believe is attributable to the work we have
done to improve operating performance throughout the company," said
William G. Dorey, Granite President and Chief Executive Officer. "While we
realize we still have work to do, we have made significant progress over the
last twelve months. We anticipate strong demand for our services in virtually
all of our markets and we remain optimistic that both of our divisions will
perform well in 2005."
Operating Results
For the first quarter of 2005, total Company revenue increased 25% to a
first quarter record $420.9 million compared with $337.0 million a year ago.
Total gross profit as a percent of revenue for the quarter increased to 6.4%
compared with 3.2% for the same period last year.
Total Company backlog at March 31, 2005 was $2.6 billion compared with
$2.0 billion at March 31, 2004. New awards for the first quarter 2005 include
a $178.0 million joint venture design-build toll road construction project in
Texas, a $104.4 million share of a joint venture design-build subway station
renovation project in New York, and a $34.8 million pumping station project in
Arkansas.
Results by Segment
Heavy Construction Division (HCD) revenue for the quarter totaled
$202.0 million versus $170.1 million for the same period last year. HCD gross
profit as a percent of revenue increased in the quarter to 3.5% compared with
a negative 2.1% for the quarter ended March 31, 2004. Operating loss for HCD
totaled $1.3 million compared with a loss of $11.3 million in the first
quarter 2004. Improved results for the division were partially offset by
margin deterioration on five out of approximately 45 large projects. The
unanticipated changes in the estimated costs to complete these projects
accounted for approximately $11.5 million in additional costs for the quarter.
HCD backlog increased $463.5 million to $2.0 billion compared with $1.6
billion at March 31, 2004.
Commenting on HCD's results, Dorey stated, "We continue to focus
considerable attention on bidding discipline, project execution and
forecasting of our HCD projects. Due to the nature and duration of many of
our HCD projects, it is important to appreciate that it takes time for the
improvements and changes we have been making to affect the division's
financial performance. With that being said, we expect that the progress we
have made to date will result in bottom line improvement from HCD this year."
Branch Division revenue for the quarter totaled $219.0 million, an
increase of $52.0 million or 31% over the same period in 2004. Branch
Division gross profit as a percent of revenue increased for the first quarter
2005 to 9.0% compared with 8.5% in the first quarter 2004. Operating loss for
the Branch Division totaled $1.1 million for the quarter compared with a loss
of $5.6 million a year ago. Backlog for the Branch Division increased 22% for
the quarter to $582.8 million compared with $478.6 million at March 31, 2004.
"The branches are beneficiaries of a strong private sector market in the
West where we continue to see demand for commercial and residential site
development work. In addition, we are witnessing an active public sector
bidding environment in Arizona, Nevada, Utah and the Northwest. Given no
significant change in these market conditions, the Branch Division has the
opportunity to perform at or above the impressive level they achieved in
2004," Dorey stated.
First Quarter Conference Call Information
The Company will host a conference call on Thursday, April 28, 2005, at
11:00 a.m. Eastern time. Investors and other interested parties may access the
call live by dialing 913-981-4912. A live Webcast will also be available via
the Internet at www.graniteconstruction.com. The conference call will be
recorded and available for replay approximately two hours after the call
through May 5, 2005. In the U.S. and Canada, dial 888-203-1112. For
international listeners, dial 719-457-0820. The pass code for the recording is
2460042. An audio archive of the call will also be available on the Company's
website.
Granite, a member of the S&P 400 Midcap Index, the Domini 400 Social Index
and the Russell 2000, is one of the nation's largest diversified heavy civil
contractors and construction materials producers. Granite Construction serves
public and private sector clients through its offices nationwide. For more
information about the company, please visit their website at
www.graniteconstruction.com.
This press release contains forward-looking statements, such as statements
related to the existence of bidding opportunities and economic conditions on
the Company's future results. Additionally, forward-looking statements include
statements that can be identified by the use of forward-looking terminology
such as "believes," "expects," "appears," "may," "will," "should," "look for,"
or "anticipates," or the negative thereof or comparable terminology, or by
discussions of strategy. All such forward-looking statements are subject to
risks and uncertainties that could cause actual results of operations and
financial condition and other events to differ materially from those expressed
or implied in such forward-looking statements. Specific risk factors include,
without limitation, changes in the composition of applicable federal and state
legislation appropriation committees; federal and state appropriation changes
for infrastructure spending; the general state of the economy; job
productivity; accuracy of project estimates; weather conditions; competition
and pricing pressures; and state referendums and initiatives. You should not
place undue reliance on these forward-looking statements, which speak only as
of the date of this news release. Granite undertakes no obligation to revise
or update publicly any forward-looking statements to conform the statement to
actual results or changes in the Company's expectations.
For further information regarding risks and uncertainties associated with
Granite's business, please refer to the "Management's Discussion and Analysis
of Financial Condition and Results of Operation" and "Quantitative and
Qualitative Disclosures About Market Risk" sections of Granite's SEC filings,
including, but not limited to, its annual report on Form 10-K and quarterly
reports on Form 10-Q, copies of which may be obtained by contacting Granite's
investor relations department at (831) 724-1011 or at Granite's website at
www.graniteconstruction.com.
GRANITE CONSTRUCTION INCORPORATED
REVENUE AND BACKLOG ANALYSIS
(Unaudited - Dollars In Thousands)
BY MARKET SECTOR
Revenue
-----------------------------------------
Three Months Ended
March 31, Variance
-------------------- -------------------
2005 2004 Amount Percent
--------- --------- -------- --------
Contracts
Federal $ 9,301 $ 12,304 $ (3,003) (24.4)
State 127,457 126,495 962 0.8
Local 166,550 108,204 58,346 53.9
Total public sector 303,308 247,003 56,305 22.8
Private sector 71,404 50,349 21,055 41.8
Aggregate sales 46,222 39,666 6,556 16.5
$ 420,934 $ 337,018 $ 83,916 24.9
Backlog
-------------------------------------------
March 31, Variance
----------------------- -------------------
2005 2004 Amount Percent
----------- ---------- --------- --------
Contracts
Federal $ 100,633 $ 122,960 $ (22,327) (18.2)
State 1,015,432 780,550 234,882 30.1
Local 1,242,637 976,396 266,241 27.3
Total public sector 2,358,702 1,879,906 478,796 25.5
Private sector 255,328 166,461 88,867 53.4
Aggregate sales -- -- -- --
$ 2,614,030 $2,046,367 $ 567,663 27.7
BY GEOGRAPHIC AREA
Three Months Ended
March 31, Variance
---------------------- -------------------
2005 2004 Amount Percent
---------- ---------- --------- --------
California $ 140,582 $ 114,317 $ 26,265 23.0
West (Excl. CA) 119,111 74,453 44,658 60.0
Midwest 8,001 18,651 (10,650) (57.1)
Northeast 63,737 53,315 10,422 19.5
South 89,503 76,282 13,221 17.3
$ 420,934 $ 337,018 $ 83,916 24.9
March 31, Variance
---------------------- -------------------
2005 2004 Amount Percent
---------- ---------- --------- --------
California $ 608,352 $ 235,753 $ 372,599 ****
West (Excl. CA) 350,314 369,439 (19,125) (5.2)
Midwest 112,437 41,743 70,694 ****
Northeast 631,730 755,936 (124,206) (16.4)
South 911,197 643,496 267,701 41.6
$2,614,030 $2,046,367 $ 567,663 27.7
**** Represents percentages greater than 100%
GRANITE CONSTRUCTION INCORPORATED
COMPARATIVE FINANCIAL SUMMARY
(Unaudited - in Thousands, Except Per Share Data)
Three Months Ended
March 31, Variance
-------------------- --------------------
2005 2004 Amount Percent
--------- --------- --------- --------
Operations
Revenue $ 420,934 $ 337,018 $ 83,916 24.9
Gross profit $26,940 $ 10,684 $ 16,256 ****
Gross profit as a percent of
revenue 6.4% 3.2% 3.2% --
General and administrative
expenses $ 38,870 $ 36,544 $ (2,326) (6.4)
G&A expenses as a percent of
revenue 9.2% 10.8% 1.6% --
Gain on sales of property and
equipment $ 26 $ 13,330 $ (13,304) (99.8)
Other income (expense)
Interest income $ 2,159 $ 1,398 $ 761 54.4
Interest expense $ (2,031) $ (1,740) $ (291) (16.7)
Equity in (loss) income of
affiliates $ (60) $ 107 $ (167) ****
Other, net $ (73) $ 102 $ (175) ****
Total other expense $ (5) $ (133) $ 128 96.2
Loss before income taxes and
minority interest $ (11,909) $ (12,663) $ 754 6.0
Minority interest $ (50) $ (830) $ 780 94.0
Net loss $ (8,267) $ (9,109) $ 842 9.2
Net loss per share:
Basic $ (0.20) $ (0.23) $ 0.03 13.0
Diluted $ (0.20) $ (0.23) $ 0.03 13.0
Weighted average shares of
common stock:
Basic 40,485 40,266 219 0.5
Diluted 40,485 40,266 219 0.5
March 31, December 31, Variance
----------------------- ------------------
2005 2004 Amount Percent
---------- ----------- -------- --------
Financial Position
Working capital $ 324,000 $ 355,927 $(31,927) (9.0)
Current ratio 1.72 1.76 (0.04) (2.3)
Long-term debt $ 139,705 $ 148,503 $ (8,798) (5.9)
Total liabilities to equity ratio 1.30 1.32 (0.02) (1.5)
Stockholders' equity $ 536,849 $ 550,474 $(13,625) (2.5)
Total assets $1,233,228 $ 1,277,954 $(44,726) (3.5)
Book value per common share $ 12.87 $ 13.23 $ (0.36) (2.7)
Backlog $2,614,030 $ 2,437,994 $176,036 7.2
**** Represents percentages greater than 100%
GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited - In thousands, except share and per share data)
March 31, December 31,
2005 2004
------------ -------------
Assets
Current assets
Cash and cash equivalents $ 115,224 $ 161,627
Short-term marketable securities 75,460 102,237
Accounts receivable, net 380,762 357,842
Costs and estimated earnings in
excess of billings 53,266 54,384
Inventories 32,562 31,711
Deferred income taxes 21,070 21,012
Equity in construction joint
ventures 20,671 20,895
Other current assets 73,713 75,630
Total current assets 772,728 825,338
Property and equipment, net 380,342 376,197
Long-term marketable securities 20,612 13,828
Investment in affiliates 10,546 10,725
Other assets 49,000 51,866
$ 1,233,228 $ 1,277,954
Liabilities and Stockholders' Equity
Current liabilities
Current maturities of long-term debt $ 18,848 $ 15,861
Accounts payable 190,019 191,782
Billings in excess of costs and
estimated earnings 137,241 144,401
Accrued expenses and other current
liabilities 102,620 117,367
Total current liabilities 448,728 469,411
Long-term debt 139,705 148,503
Other long-term liabilities 41,806 40,641
Deferred income taxes 44,135 44,135
Minority interest in consolidated
subsidiaries 22,005 24,790
Stockholders' equity
Preferred stock, $0.01 par value,
authorized 3,000,000 shares; none
outstanding -- --
Common stock, $0.01 par value,
authorized 100,000,000 shares;
issued and outstanding 41,715,786
shares in 2005 and 41,612,319 shares
in 2004 417 416
Additional paid-in capital 79,732 76,766
Retained earnings 470,196 482,635
Accumulated other comprehensive income 1,263 1,475
551,608 561,292
Unearned compensation (14,759) (10,818)
536,849 550,474
$ 1,233,228 $ 1,277,954
SOURCE Granite Construction Incorporated
-0- 04/27/2005
/CONTACT: Jacque Underdown of Granite Construction, +1-831-761-4741/
/Web site: http://www.graniteconstruction.com /