Granite Construction: Granite Reports Second Quarter 2014 Results


The following excerpt is from the company's SEC filing.

WATSONVILLE, Calif.--(BUSINESS WIRE)--August 1, 2014--Granite Construction Incorporated (NYSE:GVA) today reported net income of $13.6 million for the quarter ended June 30, 2014, compared to revised1 net income of $1.4 million in the second quarter of 2013. Diluted earnings per share in the quarter were $0.34 compared to $0.04 in the prior-year period.

“We are encouraged by the steady growth we have experienced thus far in 2014 as our teams are successfully leveraging opportunities and recent positive trends in all parts of our business,” said Jame s H. Roberts, President and CEO of Granite Construction Incorporated. “Our opportunities to win new business and improve execution on our current work remain a top priority and focus going forward.”

“With a strong backlog of work and robust bidding activity, the outlook for continued growth remains positive,” Roberts continued. “We look to execute on the momentum we built in the first half of the year.”

“As expected, Construction Materials segment results are improving, and Large Project segment performance is on track to drive strong results in the second half of 2014,” Roberts said.

      (1)     Please refer to the description of fiscal year 2013 revisions in the Granite Construction Incorporated Quarterly Report on Form 10-Q. (2) Please refer to the description and non-GAAP reconciliation in the attached tables.

Granite will conduct a conference call today, Friday, August 1, 2014, at 8 a.m. Pacific Time/11 a.m. Eastern Time to discuss the results of the quarter ended June 30, 2014. 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; international callers may dial (914) 495-8565. The conference ID for the live call is 77717739. The call will be recorded and available for replay approximately two hours after the live audio webcast through August 9, 2014 by calling (855) 859-2056. The conference ID for the replay is also 77717739; international callers may dial (404) 537-3406.

Through its offices and subsidiaries nationwide, Granite Construction Incorporated (NYSE:GVA) is one of the nation’s leading infrastructure contractors and construction materials producers. Recognized as one of the top 25 largest construction companies in the U.S., Granite specializes in complex infrastructure projects, including transportation, industrial and federal contracting, and is a proven leader in alternative procurement project delivery. Granite is an award-winning firm in safety, quality and environmental stewardship, and has been honored as one of the World’s Most Ethical Companies by Ethisphere Institute for five years in a row. For more information, visit www.graniteconstruction.com. Granite is listed on the New York Stock Exchange and is part of the S&P MidCap 400 Index, the MSCI KLD 400 Social Index and the Russell 2000 Index. For more information, please visit our investor relations website at investor.graniteconstruction.com.

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, 2014 2013 2013                   As Revised ASSETS Current assets Cash and cash equivalents $ 146,458 $ 229,121 $ 247,833 Short-term marketable securities 27,898 49,968 21,271 Receivables, net 363,614 313,598 336,418 Costs and estimated earnings in excess of billings 76,228 33,306 62,426 Inventories 79,501 62,474 68,905 Real estate held for development and sale 11,761 12,478 50,696 Deferred income taxes 55,874 55,874 36,687 Equity in construction joint ventures 185,859 162,673 148,727 Other current assets       30,727       30,711       36,203 Total current assets 977,920 950,203 1,009,166 Property and equipment, net 426,700 436,859 470,893 Long-term marketable securities 84,234 67,234 55,225 Investments in affiliates 33,936 32,480 31,421 Goodwill 53,799 53,799 53,598 Other noncurrent assets       76,797       76,580       80,365 Total assets     $ 1,653,386     $ 1,617,155     $ 1,700,668 LIABILITIES AND EQUITY Current liabilities Current maturities of long-term debt $ 21 $ 21 $ 20 Current maturities of non-recourse debt 1,226 1,226 2,147 Accounts payable 210,777 160,706 188,124 Billings in excess of costs and estimated earnings 125,957 138,375 144,462 Accrued expenses and other current liabilities       187,348       197,242       200,758 Total current liabilities 525,329 497,570 535,511 Long-term debt 270,127 270,127 270,148 Long-term non-recourse debt 6,129 6,741 7,354 Other long-term liabilities 48,455 48,580 46,817 Deferred income taxes 9,803 7,793 8,055 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 39,131,647 shares as of June 30, 2014, 38,917,728 shares as of December 31, 2013 and 38,852,463 shares as of June 30, 2013 391 389 389 Additional paid-in capital 130,181 126,449 121,368 Retained earnings       637,905       655,102       681,311 Total Granite Construction Incorporated shareholders’ equity 768,477 781,940 803,068 Non-controlling interests       25,066       4,404       29,715 Total equity       793,543       786,344       832,783 Total liabilities and equity     $ 1,653,386     $ 1,617,155     $ 1,700,668  

GRANITE CONSTRUCTION INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited - in thousands, except per share data)       Three Months Ended     Six Months Ended June 30,     June 30,     2013     2013       2014     As Revised     2014     As Revised Revenue Construction $ 269,220 $ 308,602 $ 426,261 $ 485,720 Large Project Construction 244,328 181,557 431,663 353,271 Construction Materials 72,322 60,185 107,771 89,936 Real Estate       —         4         22         125   Total revenue       585,870         550,348         965,717         929,052   Cost of revenue Construction 244,393 284,532 392,289 448,451 Large Project Construction 193,536 159,986 365,080 308,979 Construction Materials 65,524 56,231 104,526 91,957 Real Estate       2         3         —         13   Total cost of revenue       503,455         500,752         861,895         849,400   Gross profit 82,415 49,596 103,822 79,652 Selling, general and administrative expenses 51,098 46,789 100,346 103,950 Gain on sales of property and equipment       2,993         3,306         3,886         4,394   Operating income (loss) 34,310 6,113 7,362 (19,904 ) Other income (expense) Interest income 413 380 893 508 Interest expense (4,339 ) (3,700 ) (7,937 ) (7,345 ) Equity in income of affiliates 410 698 1,202 275 Other income (expense), net       1,697         (495 )       1,645         608   Total other expense       (1,819 )       (3,117 )       (4,197 )       (5,954 ) Income (loss) before provision for (benefit from) income taxes 32,491 2,996 3,165 (25,858 ) Provision for (benefit from) income taxes       10,284         1,214         2,220         (7,813 ) Net income (loss) 22,207 1,782 945 (18,045 ) Amount attributable to non-controlling interests       (8,566 )       (363 )       (7,858 )       (2,518 ) Net income (loss) attributable to Granite Construction Incorporated     $ 13,641       $ 1,419       $ (6,913 )     $ (20,563 )   Net income (loss) per share attributable to common shareholders: Basic $ 0.35 $ 0.04 $ (0.18 ) $ (0.53 ) Diluted $ 0.34 $ 0.04 $ (0.18 ) $ (0.53 ) Weighted average shares of common stock: Basic 39,115 38,829 39,033 38,720 Diluted       39,807         39,769         39,033         38,720    

GRANITE CONSTRUCTION INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited - in thousands)                       2013 Six Months Ended June 30,     2014     As Revised Operating activities Net income (loss) $ 945 $ (18,045 ) Adjustments to reconcile net income (loss) to net cash used in operating activities: Gain on restructuring, net - (497 ) Depreciation, depletion and amortization 31,878 34,362 Gain on sales of property and equipment (3,886 ) (4,394 ) Change in deferred income taxes 1,613 - Stock-based compensation 6,585 8,101 Equity in net income from unconsolidated joint ventures (25,724 ) (31,201 ) Contributions to unconsolidated construction joint ventures (13,797 ) (16,209 ) Distributions from unconsolidated construction joint ventures 16,528 42,486 Changes in assets and liabilities       (86,530 )       (66,251 ) Net cash used in operating activities       (72,388 )       (51,648 ) Investing activities Purchases of marketable securities (34,991 ) (14,975 ) Maturities of marketable securities 25,000 43,000 Proceeds from sale of marketable securities 15,000 5,000 Purchases of property and equipment (20,091 ) (19,422 ) Proceeds from sales of property and equipment 5,838 8,481 Other investing activities, net - (4,621 ) Other investing activities, net       47         163   Net cash (used in) provided by investing activities       (9,197 )       17,626   Financing activities Long-term debt principal payments (613 ) (10,594 ) Cash dividends paid (10,142 ) (10,078 ) Purchase of common stock (4,369 ) (5,022 ) Contributions from non-controlling partners 13,442 6,001 Distributions to noncontrolling partners (686 ) (21,142 ) Other financing activities, net       1,290         700   Net cash used in financing activities       (1,078 )       (40,135 ) Decrease in cash and cash equivalents (82,663 ) (74,157 ) Cash and cash equivalents at beginning of period       229,121         321,990   Cash and cash equivalents at end of period     $ 146,458       $ 247,833    

GRANITE CONSTRUCTION INCORPORATED BUSINESS SEGMENT INFORMATION (Unaudited - dollars in thousands)       Three Months Ended June 30,     Six Months Ended June 30,     Large Project     Construction         Large Project     Construction       Construction     Construction     Materials     Real Estate Construction     Construction     Materials     Real Estate   2014 Revenue $ 269,220 $ 244,328 $ 72,322 $ - $ 426,261 $ 431,663 $ 107,771 $ 22 Gross profit (loss) 24,827 50,792 6,798 (2 ) 33,972 66,583 3,245 22 Gross profit (loss) as a percent of revenue 9.2 % 20.8 % 9.4 % n/a 8.0 % 15.4 % 3.0 % 100.0 %   2013 As Revised Revenue $ 308,602 $ 181,557 $ 60,185 $ 4 $ 485,720 $ 353,271 $ 89,936 $ 125 Gross profit (loss) 24,070 21,571 3,954 1 37,269 44,292 (2,021 ) 112 Gross profit (loss) as a percent of revenue 7.8 % 11.9 % 6.6 % 25.0 % 7.7 % 12.5 % (2.2 )% 89.6 %                                                                                    

GRANITE CONSTRUCTION INCORPORATED CONTRACT BACKLOG BY SEGMENT (Unaudited - dollars in thousands)   Contract Backlog by Segment     June 30, 2014     March 31, 2014     June 30, 2013                         Construction $ 974,986 38.1 % $ 786,458 30.6 % $ 807,686 28.9 % Large Project Construction       1,586,879     61.9 %       1,783,254     69.4 %       1,990,201     71.1 %   Total     $ 2,561,865     100.0 %     $ 2,569,712     100.0 %     $ 2,797,887     100.0 %  

GRANITE CONSTRUCTION INCORPORATED EBITDA(1) (Unaudited - dollars in thousands)       Three Months     Six Months Ended June 30,     Ended June 30,       2014 Net income (loss) attributable to Granite Construction Incorporated $ 13,641 $ (6,913 ) Depreciation, depletion and amortization expense(2) 16,046 31,878 Provision for income taxes 10,284 2,220 Interest expense, net of interest income       3,926         7,044   EBITDA(1)     $ 43,897       $ 34,229   Consolidated EBITDA Margin       7.5 %       3.5 %  

Note: (1)We define EBITDA as GAAP net income (loss) attributable to Granite Construction Incorporated, adjusted for interest, taxes, depreciation, depletion and amortization. We believe this non-GAAP financial measure and the associated margin are useful in evaluating operating performance and are regularly used by security analysts, institutional investors and other interested parties in reviewing the Company. However, the reader is cautioned that any non-GAAP financial measures provided by the Company are provided in addition to, and not as alternatives for, the Company's reported results prepared in accordance with GAAP. The methods used by the Company to calculate its non-GAAP financial measures may differ significantly from methods used by other companies to compute similar measures. As a result, any non-GAAP financial measures provided by the Company may not be comparable to similar measures provided by other companies.   (2)Amount includes the sum of depreciation, depletion and amortization which are classified as Cost of Revenue and general and administrative expenses in the condensed consolidated statements of operations of Granite Construction Incorporated.

The above information was disclosed in a filing to the SEC. To see this filing in its entirety, click here. Granite Construction Incorporated next reports earnings on August 01, 2014.

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