Exhibit 99.1
GRANITE CONSTRUCTION INCORPORATED REPORTS FIRST QUARTER 2006 RESULTS
WATSONVILLE, Calif., April 26 /PRNewswire-FirstCall/ -- Granite Construction
Incorporated (NYSE: GVA) today announced a net loss of $1.4 million, or $0.03
per diluted share for the first quarter ended March 31, 2006. This compares with
a net loss of $8.3 million or $0.20 per share for the same period last year.
William G. Dorey, president and chief executive officer, said, "I am pleased
to report that the momentum that fueled the Branch Division's strong finish in
2005 has carried over into 2006. Despite very wet weather in March in a number
of our West-coast markets, our branch business is off to a great start. The
branches continue to capitalize on healthy public and private sector markets and
a strong demand for our construction materials throughout the West. With regard
to our Heavy Construction Division (HCD), we are disappointed that they did not
contribute to our first quarter bottom line results as we had expected. We
remain focused on the potential of our large project business and continue to
work diligently to improve the gross margins on this work."
Total Company Operating Results - Quarter
The operating loss for the quarter was $3.8 million compared with $11.9
million for the first quarter ended March 31, 2005. Included in the first
quarter 2006 results is a gain of approximately $2.3 million from the sale of an
investment property as well as a higher level of equipment sales than in the
prior period. Revenue for the first quarter 2006 totaled $496.0 million compared
with $420.9 million a year ago. Total gross profit as a percent of revenue
increased 1.7% to 8.1%. Backlog at March 31, 2006 totaled $2.5 billion compared
with $2.6 billion at March 31, 2005.
Operating Results by Division - Quarter
Branch Division operating income for the quarter increased to $18.8 million
compared with an operating loss of $1.1 million a year ago. Revenue for the
division totaled $251.1 million, an increase of $32.4 million or 15% over the
same period in 2005. Backlog increased 51% to $877.5 million compared with
$582.8 million at March 31, 2005. Branch Division gross profit as a percent of
revenue was 17.4% compared with 9.0% for the first quarter 2005. The increase in
gross margin reflects approximately $7.0 million from the settlement of
outstanding issues on two projects as well as higher profit margins for both
construction and construction materials.
HCD operating loss for the quarter was $12.1 million compared with a loss of
$1.3 million in the first quarter 2005. The loss primarily reflects the
recognition of significant increases in the estimated costs to complete six
large projects. HCD revenue for the quarter totaled $244.8 million versus $202.0
million for the same period last year. Backlog was $1.7 billion at March 31,
2006 compared with $2.0 billion at March 31, 2005. HCD incurred a loss at the
gross margin level of 1.2% of revenue compared with a profit of 3.5% of revenue
for the first quarter 2005.
Outlook
Commenting on the Company's outlook, "Given the current prospects for our
Branch Division, and assuming no significant downturn in market conditions, we
expect the 2006 operating income for the division to meet or exceed the record
level reached in 2005. Despite a disappointing start, we continue to expect
incremental improvement from HCD in 2006," said Dorey.
Financial Results
The financial information in this announcement reflects the Company's
preliminary results subject to completion of the quarterly review. The final
quarterly financial results will appear in Granite's Form 10-Q, which will be
filed on or before May 10, 2006.
Conference Call
Granite will conduct a conference call tomorrow, April 27, 2006, at
11:00 a.m. ET/ 8:00 a.m. PT to discuss the results for the quarter. The
conference call will be Webcast live and can be accessed at
http://www.graniteconstruction.com/investor-relations.
Company Description
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, within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which represents our management's
beliefs and assumptions concerning future events 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, as well as the timing thereof, 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. You should also understand that many important factors in
addition to those discussed, referred to or incorporated by reference in this
press release, could cause our results to differ materially from those expressed
in the forward looking statements. In light of these risks and uncertainties, it
is important to be aware that the forward looking events discussed in this
release may not occur. We undertake 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 "Risk Factors" 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
COMPARATIVE FINANCIAL SUMMARY
(Unaudited - In Thousands, Except Per Share Data)
Three Months Ended Year Ended
March 31, Variance
---------------------------- ----------------------------
2006 2005 Amount Percent
------------ ------------ ------------ ------------
Revenue
Construction $ 434,338 $ 374,713 $ 59,625 15.9
Material sales $ 61,630 $ 46,221 $ 15,409 33.3
Total revenue $ 495,968 $ 420,934 $ 75,034 17.8
Cost of revenue
Construction $ 403,960 $ 354,381 $ (49,579) (14.0)
Material sales $ 51,773 $ 39,613 $ (12,160) (30.7)
Total cost of revenue $ 455,733 $ 393,994 $ (61,739) (15.7)
Gross profit $ 40,235 $ 26,940 $ 13,295 49.4
Gross profit as a
percent of revenue 8.1% 6.4% 1.7% --
General and administrative
expenses $ 48,256 $ 38,870 $ (9,386) (24.1)
G&A expenses as a percent
of revenue 9.7% 9.2% (0.5)% --
Gain on sales of property
and equipment $ 4,238 $ 26 $ 4,212 ****
Other income (expense)
Interest income $ 4,733 $ 2,159 $ 2,574 ****
Interest expense $ (1,395) $ (2,031) $ 636 31.3
Equity in loss of affiliates $ (77) $ (60) $ (17) (28.3)
Other, net $ (606) $ (73) $ (533) ****
Total other income
(expense) $ 2,655 $ (5) $ 2,660 ****
Loss before benefit from
income taxes and minority
interest $ (1,128) $ (11,909) $ 10,781 90.5
Minority interest $ (1,067) $ (50) $ (1,017) ****
Net loss $ (1,422) $ (8,267) $ 6,845 82.8
Net loss per share:
Basic $ (0.03) $ (0.20) $ 0.17 85.0
Diluted $ (0.03) $ (0.20) $ 0.17 85.0
Weighted average shares
of common stock:
Basic 40,739 40,485 254 0.6
Diluted 40,739 40,485 254 0.6
**** 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,
2006 2005
------------ ------------
Assets
Current assets
Cash and cash equivalents $ 225,495 $ 199,881
Short-term marketable securities 57,613 68,540
Accounts receivable, net 439,400 476,453
Costs and estimated earnings in excess
of billings 28,812 43,660
Inventories 35,412 33,161
Real estate held for sale 50,189 46,889
Deferred income taxes 22,586 22,996
Equity in construction joint ventures 26,359 27,408
Other current assets 65,087 57,960
Total current assets 950,953 976,948
Property and equipment, net 393,312 397,111
Long-term marketable securities 42,932 32,960
Investment in affiliates 15,365 15,855
Other assets 46,879 49,356
Total assets $ 1,449,441 $ 1,472,230
Liabilities and Shareholders' Equity
Current liabilities
Current maturities of long-term debt $ 29,041 $ 26,888
Accounts payable 220,284 232,807
Billings in excess of costs and estimated
earnings 231,475 208,883
Accrued expenses and other current
liabilities 121,325 140,569
Total current liabilities 602,125 609,147
Long-term debt 110,903 124,415
Other long-term liabilities 53,670 46,556
Deferred income taxes 37,325 37,325
Minority interest in consolidated subsidiaries 30,822 33,227
Shareholders' 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 41,845,631
shares in 2006 and 41,682,010 shares
in 2005 418 417
Additional paid-in capital 86,007 80,619
Retained earnings 543,495 549,101
Accumulated other comprehensive income 2,206 1,602
Unearned compensation (17,530) (10,179)
Total shareholders' equity 614,596 621,560
Total liabilities and
shareholders' equity $ 1,449,441 $ 1,472,230
March 31, December 31,
Financial Position 2006 2005
- ------------------------------------------------- ------------ ------------
Working capital $ 348,828 $ 367,801
Current ratio 1.58 1.60
Debt to total capitalization 0.19 0.20
Total liabilities to equity ratio 1.36 1.37
GRANITE CONSTRUCTION INCORPORATED
REVENUE AND BACKLOG ANALYSIS
(Unaudited - Dollars In Thousands)
BY MARKET SECTOR
Revenue
-------------------------------------------------------------
Three Months Ended March 31, Variance
----------------------------- -----------------------------
2006 2005 Amount Percent
------------- ------------- ------------- -------------
Public Sector $ 352,960 $ 303,308 $ 49,652 16.4
Private Sector 81,378 71,405 9,973 14.0
Aggregate sales 61,630 46,221 15,409 33.3
$ 495,968 $ 420,934 $ 75,034 17.8
Backlog
-------------------------------------------------------------
March 31, Variance
----------------------------- -----------------------------
2006 2005 Amount Percent
------------- ------------- ------------- -------------
Public Sector $ 2,219,442 $ 2,358,702 $ (139,260) (5.9)
Private Sector 327,293 255,328 71,965 28.2
$ 2,546,735 $ 2,614,030 $ (67,295) (2.6)
BY GEOGRAPHIC AREA
Revenue
-------------------------------------------------------------
Three Months Ended March 31, Variance
----------------------------- -----------------------------
2006 2005 Amount Percent
------------- ------------- ------------- -------------
California $ 212,871 $ 140,582 $ 72,289 51.4
West (Excl. CA) 104,915 119,111 (14,196) (11.9)
Midwest 9,879 8,001 1,878 23.5
Northeast 65,083 63,737 1,346 2.1
South 103,220 89,503 13,717 15.3
$ 495,968 $ 420,934 $ 75,034 17.8
Backlog
-------------------------------------------------------------
March 31, Variance
----------------------------- -----------------------------
2006 2005 Amount Percent
------------- ------------- ------------- -------------
California $ 671,689 $ 608,352 $ 63,337 10.4
West (Excl. CA) 629,705 350,314 279,391 79.8
Midwest 36,145 112,437 (76,292) (67.9)
Northeast 381,578 631,730 (250,152) (39.6)
South 827,618 911,197 (83,579) (9.2)
$ 2,546,735 $ 2,614,030 $ (67,295) (2.6)
SOURCE Granite Construction
-0- 04/26/2006
/CONTACT: Jacque Underdown of Granite Construction Incorporated,
+1-831-761-4741/
/First Call Analyst: /
/FCMN Contact: debbie.peterson@gcinc.com /
/Web site: http://www.graniteconstruction.com/