GVA - Earnings call transcript Q2 2021 | Granite Construction Incorporated

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Operator

Good morning. My name is Matt and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Granite Construction Inc. 2021 Second Quarter Conference Call. This call is being recorded. now President to Barker. of is over the It Vice to Investor Instructions] my turn pleasure floor [Operator Relations, Mike

Mike Barker

We morning Investor Please with on Safe Presentations for today to you overview President be and begin Larkin and available I Officer, Vice Relations today’s Good pleased Lisa page of earnings Financial am will Curtis. and joining Executive and be that an and of our company’s President us. today website. Events Chief our CEO, note Kyle with here the thank language. presentation Harbor

recent Awarded activities, executives. are the forward-looking new today’s statements or press of company growth, call are to regarding future to and obligation of Act as materially our part Relations earnings forward-looking statements meaning The assumes adjusted include, measures performance, measures today could expectations included estimates during discussed of of made Projects, demand, Some today. Litigation loss our website. could Reconciliations required income XXXX. non-GAAP senior are on forward-looking These management company strategic company’s of not maybe earnings but discussion risk per except non-GAAP statements. adjusted no current by affect limited or for factors may from information, loss or EBITDA description judgment as to, by or available statements, releases and presentations, are adjusted adjusted CAP that net of statements and most with Investor results Reform whether EBITDA, best otherwise, and in margin, Committed are occurrences, update outlook, events refer Securities which and they Private differ guidance, of of include share. Actual results events, future reflecting law. the Certain a more from XX-K these the circumstances, time-to-time forward-looking plans, outcomes, Please complete These XX-Q the the filings and results. Granite’s and

the turn over Now, call Larkin. Kyle to I to would like

Kyle Larkin

calls allows doing transparent of XXX cultural control our of and analytics our to potential and data of choice, and and is way. honoring few and and and we each At innovation, technology lean of productivity enables just the results production, as ethical of and teams we We other way everyday builders core and the and investigation culture did we an the bring where since we out year, with retain respectful up our increased within change a drive we live are for of integrate have and excellence of our completed XD us core and and systems. and the not area and our is morning been contractor that that Granite, to will Underlying guide employees’ for we our These that and We technology work to best and ensure to everything technology commitments, improvement, values to improving have following our and enhancing and and all time, we where across this scheduling achieved focus year has the this zone our and thing identified a their and across set inclusion integrity commitment reality work. many discuss decisions our be our materials a do values accountable to the work. not we attract our a Granite’s company. other This the we the entire best of to all the quality two more for stakeholders. we and safety, beginning profitability modeling visualize our shareholders. projects we we speak willing visibility how a phase remote provided us a underpins I We and help welcome. value, traffic integrity in principles. intrusions is reinvigoration focus use employed second efficiencies producers refreshed core Acting is right clients bottom high areas To lives preventing use make as where in enhance years. in safety it’s technology excellence integrity the work with employees aspects Excellence are In of consistent to to to approach finally, save concerns areas provide on something a of be as how more these Through identify material excellence, design voicing company, There in the past do. culture we questions Committee augmented all focused operate is to into practices, the how We values, cultural to facilities in values. value The automate compromise. values phase. rolled what means our safety. right, not holding through And integrity value. better Good Acting they value value and at Granite. when all and and add issues. us and continuous integrity excellence our know accurate are our line on customers’ high-performance the to construction a now opinions, strive by of enhance our are to as I transform company. best use using innovation are generate we is up understanding strengthened clarified and of core daily Audit clients standards. which an drive culture examples sustainability in to We XXXX employees the our highest overview our through and core part with remaining right. core excellence Integrity in reinvigoration our Today, foundation two to our expect actions expectations

We support means are functions and efficiency competitive by enhance advantages throughout promote as we that methods our and lean. revisiting being operations

to in little things Granite. parts and are every teams ideas to goal empowering teams status and day to get by across I way streamline new right of Our to eliminating technologies the better am a promote doing country and our is all first innovating excellence driving our challenge the execution the through quo, in rework. who energized talk time the

made have good We already progress.

on renew we excellence. We will continue to emphasis innovate as our

Okay.

Operating In our Transportation. continuation by quarter by of be the Civil the and first Transportation and Heavy quarter, and works groups The old results solid the saw by as includes our ORP. with through a led of segments, the of results our performance core second get business strong operating driver or the segment starting risk gross execution Northwest it revenue businesses primary our of into and Group our Let’s California continues we to profit. portfolio

job are will the Within the Lisa teams ORP, forward. great projects further, currently moving doing a as discuss our

their ORP not within higher fit reminder, is do a our to current which segment, the due strategy risk our projects Transportation nature. of comprised As

related projects strategy. non-sponsored no pursuing are longer to partners design-build projects under As criteria. to in venture Operating inherent ORP. duration, significantly longer within the mega our projects. Civil The than I joint are our stated Group different and have no pursue new are design, and acceptable previously, mega risks in The Heavy we size projects continues risk projects these They

projects as priced projects CMGC procurement are well such pursuing and the projects where bid build and projects complex best the now design-build value less into We are well as bid. understood risks as smaller,

vertically our compared We of model have are of pursuing a groups by strong, Transportation as our in to the competitive where advantage. with cap that as California recognized year-over-year also integrated quarter increases worked billion XX% vertically ended has quarter year. believe projects second to the led during integrated we leveraging prior $X.X increase the we for vertically integrated a businesses quarter. cap groups an and Group the revenue our of for well Both

an continue local to to of excellent state job teams with projects secure working our do expertise. Our suited to municipalities and

average to California. in XXXX through XXXX. average an are XXXX for of through well spending X business annual in billion SB billion $X.X the positioned to $X we of believe annual With our expected We an of XXXX grow increase to from to continue

we funding, continue debates Congress discussions to infrastructure monitor in For Washington as the infrastructure bill. and

A that completed until pursuing. third late of strengthen agreement While believe and building likely will further the state we the impact fourth funding be of an term, and there markets be serve another need we environments are starting and and the end federal in quarter, only a resolution are FAST be for near in not opportunities meaningful hopeful quarter. Act XXXX the will current local in at resulting in at XXXX the the are levels, deal bill The to we mid beyond. into our continuing many felt to are the with environment the most to then will robust reached

segment including the quarter. it an of project quarter provides $XXX year-over-year busy Dam million, services from the the the quarter year. the Water into second expected active This market million Group, there million Mineral to the Infrastructure the water segment, in should fall. sign the maintenance of and is climate covering pandemic-related further and opportunities in Western and with to market the across vertically of Water Heavy shows water this as in Segment and West has continues addition Turning that Water The the cap which Act draft XXXX. our from if of $XXX very division is XXX% segment Hurse legislation, of as are teams increase remainder will or the conditions a most is states. This supply as The division at this decline. for Wastewater Water cap stands schedule Mineral Resources Drinking the Operating groups the of the U.S., been in for we business and Group, Services Services our no $XXX the has the Whether integrated and of drought recovered pursuing. Leon of result during the be the relief through Water for largely Civil completed. such and end are of strong continue The of Group, drought environment summer The Water to the second positive many

mineral Moving to the to This expertise recovery for and end where on focus by segment the end quarter. both capabilities increase Water private as in strong with material of to of integrated reclamation renewable continue the mining XX%, as we mineral markets such industry, was both segment, second that the Water the spur horizontal a technology to exploration cap volume drive in sales. to public broad well the and execute include public government, energy the center within a projects private In in across compared increase The clients California will the and external in markets quarter Specialty a is Specialty future, competitive our and of the as owners. have on such are activity work been cap the civil second this quarter In grow volume in greatest in first demand as this private we quarter, Guam, The down with to companies the development energy line cap began second markets over led solar both with with private exploration largely the of exploration, in XXXX, Group. prior the year by increased in business commodity In ended site U.S. driving the projects, $X for work construction billion. projects quarter. such and including internal projects XX% increasing opportunities an the prices has work with shut the sources. vertically year-over-year In segment were themes growth increases mineral second military Mineral believe are This the U.S. and when with clients. as Services same the where for segment the business civil data and market. Materials mining period our we for aggregates expanding regardless increases public we and in and both the the across in quarter This ability impressive strong team’s XXXX. construction leading leveraging our segment, highlights segment our of These locations continued Specialty and by driving team’s renewable our of advantage country’s continue groups construction asphalt the in projects from within way.

the aggregate increased Our in investments us California the year asphalt in respond new demand. to and helped to position last in plants

our be the make at conservation energy more In driving months. through there continue in technologies and addition, water see to initiatives. to innovative facilities progress the invest exciting and as in our recycling to implemented improvements, innovation facilities to materials automation, It’s efficient we many is as possible in coming are projects

As of cap our second was $X.X quarter, the billion. consolidated

our segments be as markets. public and both intelligence regional we Across customer contractor from our to within and Civil our strong Heavy owners. all the capitalize across private segment decrease increases choice cap the our to in pursue in Transportation integrated This from by cap diverse has continues Our vertically and offices, groups and continue the market to to leverage in cap our we local relationships segment Transportation in this continues end segment operating Operating grow, to offset in Specialty intended. cap is for of Group on our Water of relationships expertise footprint decrease the projects

the higher and the cap to Heavy Civil will risk in design-build that, company. the financial we to discuss to With to continue decrease of overall efforts risk it our the Operating results. Group over continues Lisa ORP, Lisa? our I as transform With profile decline the turn

Lisa Curtis

Thank second delivered the both quarter profit, with revenue fronts. and on gross results you, Kyle. Starting strong

XX%, plan million down to Second of revenue million, year-over-year $XX margin in In to XX% grew was gross segment, year-over-year $XXX with increasing operating Transportation the increases profit our million profit $XXX Northwest X% This quarter and a consolidated to Civil $XXX year-over-year XX%. as gross California than million to the revenue expected revenue with resulting a and profit in Group more portfolio. the we transform for Civil our Heavy offset to Operating decreases XX% Operating million, as de-risk of were in execute ORP the profit group Transportation losses quarter $XXX gross was increased shift by Group. Heavy gross keeps XXXX Gross in $XX ORP profit year project fewer to year. quarter discussed the $XXX our by from due in during the the quarter from on the second million the X% was million expected to prior primarily was in gross gross up of million increase project the second decreased $X.X period. of cap XXXX. profit margin same of to the from burn compared losses of in current million quarter million million meet pace in XXXX. ORP $XX to on $XXX during $XXX previously which us The

that within projects gains been remain challenging XXXX. As largely and and have, offset complex, have date, to a reminder, during the portfolio the there and fades

impactful same drought million profit that optimistic individually continue the solid and resulting for to the are will gross for gross Water for $X.X remainder This XX% profit States. continued were year. quarter. to for $XX a our on of amidst quarter demand in write-downs driven margin profit results they recovery in maintenance pandemic the while the In by United the quarter We million, second in the second X%. decrease for gross revenue team’s water increased Western conditions the not decreased material, strong projects, primarily performance year-over-year, to from of the X due COVID-XX was segment and our Water segment, period supply services X% the across

period ending Moving the to to the XX% is segment, $XXX that industry gross quarter work the decrease being profit disputed by to Specialty project. recovery of the exploration led project Heavy due constructed gross XX%. The margin to and second Civil tunnel increased development Specialty on disclosed mineral our a million, decreased a a over X% progress profit site ongoing $XX year-over-year by on revenue federal Group. previously quarter Operating with primarily is the within million of same mining

segment. related period the revenue California profit part to in into gross year-over-year quarter due the driven profit the in XXXX This largely Northwest period same Materials resulting profit in million, was a XX% over was with groups. California the $XXX the in by gross key oil across the a to gross in led the Group. to benefit prices. sales increase primarily XX% of segment are Gross increase both million. their The from continued to this $XX quarter. XX% of by Volumes year-over-year in increased from decreased second profit quarter the increase in decreasing margin performance received higher business, the Finally, margin strong volumes the same exceptional operating and Materials in

EBITDA. quarter, now the adjusted year-over-year financial million an Turning $XX completed has building, improvement the of on an on a segment’s for during sale office our removed increased by gain to EBITDA This of quarter year-over-year X% sale adjusted the asset increase to This the second metrics, included The million, and largely but was of is in the non-GAAP been in we on recognized EBITDA in part ongoing was our for gain resulting asset million. Transportation driven quarter. the sale execution of in EBITDA in including the margin from the adjacent project property second plan. of $XX optimization sale as adjusted quarter $XX EBITDA end At closed adjusted ORP.

net quarter income net million a improvement which of $XX same in an resulted $XX second Our million adjusted $XX prior the million, period the in for an adjusted of year. income from was

As income from property on with of quarter. adjusted has the excluded EBITDA, the adjusted sale net this gain been

price XXXX the per earnings are convertible our dilution share our of stipulated related The our conversion price time accounting and $XX.XX. to second first reached as notes diluted of above showing average we share the quarter marks

our the of to notes. convertible into a reminder, the at a end when impacts equity convertible the As entered mitigate purchased XXXX, derivative simultaneously October instrument of issued notes we we from dilution

derivative the until to is we the $XX.XX. not mitigation Because factoring dilution above the no price is derivative. currently able share our are GAAP, there U.S. dilution in under of However, when recognize actual average

potential reductions diluted periods periods. of and million and million both the for outstanding shares from and average X removed dilution potential year-to-date were X.X the respectively. weighted have The our shares in the shares X adjusted quarter We X-month

balance cash down of Now, $XXX sequentially at quarter, to which prior million our the for as million quarter. in and and the period same turning liquidity, end very to and is marketable securities compared first year $XXX strong the million in the second up cash remains of $XXX the

period $XX property balance current million received sale. the cash from Our includes office

months with season ramping construction being Our projects seasonal summer the business busiest the in and up is our second quarter. with

the cash As this I year. second with during our dynamic cash, outflow am with expected, into the saw an although half pleased we going of quarter position of the second

on provide litigation Now, the brief settlement. me let a shareholder update

yet We the not approval as court of the therefore, and portion have preliminary have, received second our of of not quarter. paid settlement the end

such, we for the million receivable the I CapEx to expenses of $XXX year, insurance $XX the in annual the expected of primary As the million increasing liability $XXX expectation increase an million in of CapEx settlement balance accrued covered recently for the year. million to the amount on provided awarded $XXX settlement $XXX with remains sheet million. million. At project. portion to to of tunnel relates the driver of The the this am beginning of is insurance that $XX offsetting by in the

was total period. million or the for year revenue under same in to the $XX of or SG&A just Our $XX quarter X.X% revenue million X% of compared prior

the quarter, to season approximately of SG&A million in the EBITDA with to fourth the of I efficiency the second of performance through with majority guidance of of for X.X% still our work ORP year. the weather am administrative We full across adverse margin. with our X.X% coupled on X% to are X.X% still departments quarter, as our but for us, full our $XXX adjusted our expected I focused in we construction in year for improving our revenue cap, fiscal front expense pleased am of reiterating meet potential

back for quarter. that, reassess the third the We Kyle it turn guidance With I remarks. will closing over will to following

Kyle Larkin

Thanks, Lisa.

by progress points. mid-teens highlighted Let me a towards following the segments close making We strong gross solid in ORP all with execution had the second we quarter margins. are and in

types cap contractor demonstrates civil It moving the the we markets, horizontal second into are and illustrates end a of year. provide value diversified We geographies customers. with how half of our our and as across strength pleased

but also structure. in our expertise leveraging will grow the vertically relationships, markets end to We of other continue business integrated by and transportation,

the we Our sheet cash head be and year. into optimistic second continue the public markets balance finally, in turn about infrastructure was for look bill private of questions. we back of to the in will completed. strong And we as strength to and now economy funding Operator, remains the environment you greater when the Federal the I market. it And the for expansion half our

Operator

first Davidson. question with will Brent ahead. Our go Please [Operator Thielman from Instructions] come D.A.

Brent Thielman

Thank you. Good morning.

Kyle Larkin

Brent. morning Good

Lisa Curtis

Good morning Brent.

Brent Thielman

on as think of picking but work, wanted up continue Kyle, get are you old you remainder looks I as levels working holds it off it just that I the year a move you mean ORP. to obviously these through thoughts cap. your through sort at lot the to like burn Do work? of the of we

Kyle Larkin

Yes, great Brent. question,

from Heavy And were we you Heavy cap decrease Group. have perspective pursuing changed was kind that the a seen, in Group’s terms Civil a as so what as that doing cap profile really of and Civil in we something intentionally saw, were and within the risk transportation, probably we of we

anticipated. So, we up on cap hard other vertically then side is transportation. that And was businesses working our saw within pick integrated to the really what

end. are cap their I $XXX-and-so-million about think on they up on

improvement in So, business. vertically integrated seeing the we are nice

ORP through transportation as in all drop we of Transportation Group, But a in focused a We the we our the Heavy within are because Civil segments. just that not pursuing but we projects, just reminder, are burning within are really as seeing planned. segment,

Leon now that Heavy have that recent where an Civil up looking they transitioning is been, how typically Dam picked really the Hurse over us. really we to projects when example which encouraging just outside project is is of at for So, Group

question, our we nice of a There projects that is really good pipeline your cap. out are So, back I feel to really get think to about there.

same opportunities dollar bid we there are Group in the out in even still terms the years. at of that we of to still we today, So, have – number risk amount the we really Heavy profile in Civil our though pipeline projects of had look pursuing, that are we the prior when projects changed we

really the that a established. So, still of pipeline criteria there larger have that projects is fit risk we healthy within

cap. really feel in are we headed of So, good terms about we where

Brent Thielman

That’s helpful. you can expect what apologize expect I would you for that’s million for XXXX? $XXX still year And mentioned say Okay. Lisa, and much burn how you off there the but in ORP, this, to you if the this

Lisa Curtis

definitely. Yes,

the So of we year, far about, our we for the the remainder beginning the about that what thus talked we of that rate burn talked year. at kept have have

we million a So, year-to-date June. through burned little over $XXX have

the bit XXXX. of the burning will So, some-odd burning for our into have to $XX X% guidance margin. into remainder year and – million we And XXXX, majority $XXX about in at about we of million into to again, – again, $XXX that what what and the in little burn, we with or a million that talked have XXXX

Brent Thielman

then But sounds your expectations that Okay, get been of profitability to It as you second levels you you are year. work from up new we would get the are great. it I half some just water kind I have the there. for move like good it. know And business to love seems challenged to the of like expecting the into of back picking

So, of to align starting the it bigger-picture what’s water like some the for it? factors are seems because for expectation

Kyle Larkin

pullback certainly as There our the hit pandemic was as And business. well it Water of last municipalities a spending was Yes, for is. on I terms our well with hard. think segment drilling in year,

take hit business little XXXX. bit water the recovered. in since of a pandemic-related It’s we a So, saw

our out Hurse rest we in seen And well Dam, really drought And in again it’s are whether with as the drilling. well certainly are our our the think improvement conditions seeing water we West Leon that business, includes I shored spend business have the pipe cured-in-place then increased that business. well drilling the there. of and we nice that’s seeing up as

back So, improvement where at we were getting see really pre-pandemic. things to nice

Brent Thielman

far I can is just year of the into materials guidance the in to half sort guys prices, attached the that’s for second you the baked as see short-term? of profit Headwind margin. continue today, Okay. assume the that last then And one the as commodity should on

Kyle Larkin

Yes, we feel good. really

QX, year. I just business had It materials about last the feel nice But if we we in kind XX% down where might good We strong. margins business. QX in at were look at in think volumes you performance from our slightly be in of QX. that was really

And I a alignment nice have materials think we really And weather think moving QX forward and the things nice were think producing lot year, will of so We teams really in we in last selling be that at and job year. again with did where of have rest our the segment. in for QX. we done of a

we from a front in in perspective. a the challenges we are will could would year there finish going in might And QX see in QX. alignment wildcard, QX, weather said, certainly, but that’s not at we bit That So, where of be that be weather Last out year, had with really just were for materials, in of our caution entire to a XXXX, business. us. is XXXX. dry always we little that a I probably but some

Brent Thielman

Okay. Thank you for taking the question.

Kyle Larkin

you. Thank

Lisa Curtis

Brent. you, Thank

Operator

come Vertical will ahead. Research from question next Dudas Our Partners. Please go Michael with

Michael Dudas

Kyle Hi. Lisa. Good Mike, morning and

Kyle Larkin

morning. Good

Lisa Curtis

Good morning.

Michael Dudas

materials months on like the pricing? observations couple next XX side also, a there is things as And larger up maybe and a projects. XX months, concern the and over on So, more any months, pick projects XX

see a a lot how you Do planning seeing that? you a get are that? you or are that different markets How of lot in tightness for guys We certainly can materials. of of for sense

Kyle Larkin

the business question. margin I to materials So, the and really back if get materials

our been from to able cost standpoint, been on – side really a do. the pass a increases on diesel been That’s to something customers. have So, we that of supply guess I we from increases, able to the have oil

we diesel XXXX, into back go of kind you prices If drop. oil and saw prices

fixed, into to trying get that look pass our And we really of we on do able are that. a kind those on able and this of so and as year, little was to bit to a our pricing pickup been costs But things. end of to have customers we

seen cost our pretty We much in line increase with increases. price have

months XX increases going see that passed, sure and that the the opportunity the Mike, out, where meaningful not I be if we can months. we is bill further So that more visibility are something XX price would we Federal an I have certainly to in certainly, see down say am yet might road.

Michael Dudas

of Are Turning to the mining given an Civil bookings, there – Heavy is in And some allocated some the might to in bookings? your be uptick they Utah you and exploration, maybe on metal activity you larger the business, specialty Nevada, of that certainly especially see potential prices where areas folks the about side where of side any on the size that projects? going going as are the thinking been has on interesting, well other in your are Arizona. are improved in risk-mitigated – pull sector private some as some capital, of to you

Kyle Larkin

in segment, cap the Specialty increase. can think see our you I

think strength just predominantly really type private the tells what think kind I that of of you of work. we is

an we we Group across all market that’s certainly the a on really But center And all-in-all, are participate. site data of development, today opportunity kind that Civil see doesn’t board. partner nice private an and necessarily increases really market really, internally. whole private across we of groups private almost as So, seeing businesses have Heavy groups opportunities opportunity market. in our to The market work the different opportunities strong in participate lot

Michael Dudas

I appreciate it. Thanks Kyle.

Kyle Larkin

you. Thank

Operator

from Group. Please will Our ahead. next go Research Thompson with come question Steven Ramsey

Steven Ramsey

Good morning everyone. Hey.

Lisa Curtis

Good morning.

Steven Ramsey

times? between currently you happening your and – finish that supply of start clearly, to good project on a home are the morning, residential Maybe extending maybe is in to or constraints, start times cap, seeing labor where due with in the side, start to either extended with set and

Kyle Larkin

bid, seeing I bid to of weeks. anything to would comes say, not it’s somewhere five are when a a weeks, Typically, will project weeks say take eight process, four out out between, ordinary. no, the we

price a award Typically provided to actually have proposal. is days, work. that’s pretty We XX consistent. or that XX a And start when there days we to

owners projects a But performing all actually changed us turn letting a little for really work can that to hasn’t Some quicker. whole from at bit the lot.

Lisa Curtis

comes the add the a pool. side that Western And our Steven, would I labor of lot states, that labor on from for Union

build to that work. the to have labor that And so stability helps from a need the perspective really we

Kyle Larkin

we our Yes. add And just a markets. will I are in lot that of

for in a time. been our have long markets We

with the So, we partners our out Union had relationships in strong West. really

We also the with been our company lot years. who for craft employees a of have have

the of continuity which opportunity front work out of have employees, they value. provides for projects work so types lots have our that we different And in which to ourselves, and of of

do have of we our so And add choice we craft craft longevity teams. for safety And in performance, are with that believe employer of terms our an we then workforce. our you

Steven Ramsey

first that that context I year? a signal the if exceeds $XXX well if volumes the the materials. million to got it’s this you mean in maybe vertically it the to further up magnitude pretty And strong of kind put results strong or great. XXXX about of burns revenue for to I $XXX Okay, integrated relative trying there. broad-based? wanted so million, then excluding cap? integrated I increase Curious division. then materials describe off just Can ask vertically for total is of this am specialty, strength cap into that ahead And that that foreshadow

Kyle Larkin

you So, question. is maybe an getting we question it’s vertically the is maybe market healthier is your understand is when growing at and going now and are increases; indicator our is? into aggregate make the really significant. a cap look continue, I back to integrated that And business, especially pace that the The volume what sure is, question

Steven Ramsey

of outsized integrated? level this is to to pin the versus growth then vertically kind And integrated, of down vertically for norm Exactly.

Kyle Larkin

Well, norm. I don’t it’s the think necessarily outside

say pipeline the is that call project $XXX would say, we with smaller, projects think a But million, year-over-year. significantly up we I what in are of we that large kind they it’s what will or of bidding are anticipated. line I under

off XXXX. that’s year in pandemic Now coming a of

at a levels. bid back But be surprise. huge we are pre-pandemic shouldn’t that So,

not really that little I really VI funding, last are than others. up concerned more strong the that of still what lived state year the think were. has we within worries about businesses. were we a states states There in But are funding we some kind in seeing our to challenged are

a to that that expect pipeline we So, seen think is really more projects, I that We have of there long nice a continue. say we in time. would than

California about $X the X And I excited next their seeing in spending in so. also our around X increase or years we are billion we We to are really, over an guess, is market what years are where seeing California.

within annual the spend So, we really California nice seeing are market.

have think pursuing environment And so we we are we a that really today. healthy

Lisa Curtis

too, to in mind, cyclical. keep one our obviously And is thing Steven, that is business Yes.

construction And busiest our so entered just we have season.

and So, activity, has activity lettings as the Kyle mentioned, bidding actually award robust. been really

So, year proceed kind of busy we us. that the into the time to of as contributed start are increase. obviously rate bit a quicker little for has of to But then we a burn going

Steven Ramsey

for Excellent. Thank the you color.

Kyle Larkin

you. Thank

Lisa Curtis

you. Thank

Operator

Goldman go Instructions] Revich [Operator Jerry with will next come Please ahead. question Our from Sachs.

Jerry Revich

can the the are Yes. about track morning considering expected is this from revenue if Lisa, the everyone. you below year your be, half be back I like talk you I range of Hi, end low looks here? for good weighted outlook wondering how it SG&A target well to to think, am on year.

wanting about sure increase are just or the sequential looking this So, SG&A the you drivers function you just of for we that commitment make can on to talk in is of the year? that a deliver

Lisa Curtis

to is wanting definitely deliver on commitment element an Well, the this of there year.

So the off the SG&A typically is as to year progresses. and little mentioned, the we trends a higher start as of revenue year, percentage downward you

look we the the out at spending we to we of are ensure of for the SG&A spend, as we X.X%. continue are our But the mean, – that money have at there I is year. rest look year, as about no things want at we it particular a to we wisely. anomalies kind continue quarter, but the through trend expect or to our normal just we we that see rest of at spike, for And So

Jerry Revich

see. at the nice can the any terms out you region, am about Kyle, talk that’s jumps to bid that just pipeline wondering, way of in overall the terms then environment, differences anything And you looks and So, by of I in the in of the a part ago? that compared years to just this one are of And work footprint seeing you are versus couple types you the if you discipline on comment another? competitive cycle that of on could bidding in

Kyle Larkin

Sure. VI before, the really projects as of a on large And those projects we footprint. larger aren’t are as seeing, both projects as pipeline within well mentioned that side nice I our

are as pre-pandemic board, sure, strong especially since the to more environment now, there across which So, is year that is back, of now, I a mention just all we that of for want do pandemic, I within levels, really but really pipeline business couple we what seeing the mentioned the projects. of really times bid nice. Heavy with Group right still we Civil are our better saw parts a just last

say, bidding $XXX the to of, $XX are work million in We million. range

But pursuing is job this seems about interesting still that the average the around actually around build What’s build are really are design-build progressive the for today to of the are closely that is a we pursuing more remains design XX% is today, Our contracting of we method size within of on Bid pursuing see contracting million. value projects projects, Group that $XXX Civil work XX%. shift Heavy of the is only is really about big best which pipeline within that we a us. XX% method today. the

QX. have case competitive backlog were are that couple competitors that of true we QX burn bit, little happen. to to certainly little and QX burn the bit quarters and the and that through a I they QX pick we last looking have the bid are mentioned last And I the That on last our see So, lower environment. call with lettings seen and lot QX, typically, our across what that through a in sure and held of in then of competitors extended backlog pandemic and up the board, QX might in the the more for on excited QX. call that, that on a mentioned was in

extend. did it So,

are in to to I what things think are general. back kind used we of getting

on is side. I the so improvement think definitely And the market

Jerry Revich

discussion. Thanks. I the appreciate

Kyle Larkin

you. Thank

Lisa Curtis

Thank you.

Operator

concludes Kyle like back would Larkin I question-and-answer This session. to turn for the conference any closing remarks. our to over

Kyle Larkin

Okay. Well, questions. you thank for your

thank want every employees for on do for everything and always, all As you I for focus to day. your our continued safety of Granite

is you your And everyone soon. dedication success. with Granite’s and of very work We hard with in speaking continued interest Granite. Your for to look a that, forward cornerstone thank

Operator

The for today’s you presentation. conference has Thank now concluded. attending

You may now disconnect.

Granite Construction (GVA) 31 Jul 212021 Q2 Earnings call transcript