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| 8-K - GRANITE CONSTRUCTION INCORPORATED 8-K - GRANITE CONSTRUCTION INC | a51214169.htm |
Exhibit 99.1
Granite Reports Third Quarter 2015 Results
- Total quarterly net income doubled to $30.8 million
- Total quarterly gross profit increased to $100.9 million; all segments contribute to 51.3 percent year-over-year growth
- Total quarterly revenue increased 4.4 percent to $751.4 million
- Total year-to-date gross profit increased 21.3 percent to $206.8 million, with gross profit margin of 11.9 percent, up 176.0 basis points from 2014
- Total contract backlog at all-time high of $3.1 billion
WATSONVILLE, Calif.--(BUSINESS WIRE)--November 2, 2015--Granite Construction Incorporated (NYSE:GVA) today reported net income of $30.8 million for the quarter ended September 30, 2015, compared to net income of $15.3 million in the third quarter of 2014. Earnings per share in the quarter were $0.77, compared to $0.38 in the prior-year period.
“Across geographies and across end markets, Granite’s businesses delivered significantly improved results in the third quarter, reflecting solid execution and an environment of steady, modest economic growth,” said James H. Roberts, President and Chief Executive Officer of Granite Construction Incorporated.
“Our teams continue to build on the progress we have made to leverage improving safety trends, consistent project execution, solid plant performance, and our commitment to Continuous Improvement,” Roberts said.
Third Quarter and Year-to-date 2015 Results
Total Company
- Revenue for the third quarter of 2015 increased 4.4 percent to $751.4 million compared with $719.8 million last year. On a year-to-date basis, revenue increased 3.3 percent to more than $1.7 billion.
- Gross profit in the third quarter increased 51.3 percent to $100.9 million compared with $66.7 million last year. Gross profit margin in the quarter was 13.4 percent compared with 9.3 percent in 2014. On a year-to-date basis, gross profit increased 21.3 percent to $206.8 million, with a resulting gross profit margin of 11.9 percent, up 176 basis points from the first nine months of 2014.
- Third quarter 2015 selling, general and administrative (SG&A) expenses increased 5.7 percent to $50.1 million. On a year-to-date basis, SG&A expenses increased 2.5 percent to $151.4 million.
Construction
- Construction revenue in the third quarter of 2015 decreased 4.5 percent to $427.0 million, compared with $447.1 million last year.
- Gross profit in the third quarter increased 31.8 percent to $64.3 million compared to $48.8 million last year. Gross profit margin of 15.1 percent, up from 10.9 percent a year ago, was driven by particular strength in certain parts of the West and across our Kenny businesses.
Large Project Construction
- Large Project Construction revenue in the third quarter of 2015 increased 21.0 percent to $217.1 million, compared with $179.4 million last year.
- Gross profit in the third quarter increased 297.5 percent to $22.6 million compared to $5.7 million last year. Gross profit margin totaled 10.4 percent compared with 3.2 percent in 2014, with quarterly performance driven by consistent execution on projects that were impacted by severe wet weather and slow startup in the first half of 2015.
Construction Materials
- Construction Materials revenue in the third quarter of 2015 increased 15.1 percent to $107.3 million, compared with $93.2 million last year.
- Gross profit in the third quarter increased 14.9 percent to $14.0 million compared to $12.2 million last year. Gross profit margin was 13.1 percent, in line with last year. Segment performance was driven by operational efficiencies and volume growth across geographies.
Outlook and Guidance
“In the Large Project Construction segment, the market remains robust and competitive. We were pleased to recover some ground in the third quarter from first-half weather and design challenges, as our project portfolio remains weighted toward early-stage projects,” Roberts said.
“Solid year-to-date performance from our Construction and Construction Materials businesses fuels our optimism, as we see state, local and private markets improving.
“Taxpayers and elected representatives in a growing number of states are making public transportation and infrastructure investment a priority, committing to increased, dedicated funding. Meanwhile, at the federal level, we remain in a seemingly interminable stall. Though the timing remains unclear, we are well positioned to benefit from the ultimate commitment for Federal infrastructure investment, as well as continued improvements in state-level participation,” said Roberts.
The Company’s current expectations for 2015 remain:
- Mid-single digit consolidated revenue growth
- Consolidated EBITDA margin1 of 6% to 8%
Conference Call
Granite will conduct a conference call today, November 2, 2015, at 8 a.m. Pacific Time/11 a.m. Eastern Time to discuss the results of the quarter ended September 30, 2015. Access to a live audio webcast is available at http://investor.graniteconstruction.com/index.cfm. The live conference call may be accessed by calling 1-877-328-5503; international callers may dial 1-412-317-5472. The call will be available for replay approximately two hours after the live audio webcast through November 10, 2015 by calling 1-877-344-7529. The conference ID for the replay is also 10074408; international callers may dial 1-412-317-0088.
About Granite
Through its offices and subsidiaries nationwide, Granite Construction Incorporated (NYSE: GVA) is recognized as one of the largest diversified construction companies and construction materials producers in the U.S. Granite is an award-winning firm in safety, quality and environmental stewardship, and has been named one of the World's Most Ethical Companies for six consecutive years. 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, visit graniteconstruction.com.
1 Please refer to the description and non-GAAP reconciliation in the attached tables.
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) | |||||||||
| September 30, | December 31, | September 30, | |||||||
| 2015 | 2014 | 2014 | |||||||
| ASSETS | |||||||||
| Current assets | |||||||||
| Cash and cash equivalents | $ | 221,785 | $ | 255,961 | $ | 167,174 | |||
| Short-term marketable securities | 17,607 | 25,504 | 27,950 | ||||||
| Receivables, net | 456,688 | 310,934 | 417,628 | ||||||
| Costs and estimated earnings in excess of billings | 56,971 | 36,411 | 62,823 | ||||||
| Inventories | 60,289 | 68,920 | 74,605 | ||||||
| Real estate held for development and sale | 11,609 | 11,609 | 11,773 | ||||||
| Deferred income taxes | 39,272 | 53,231 | 55,874 | ||||||
| Equity in construction joint ventures | 219,652 | 184,575 | 181,259 | ||||||
| Other current assets | 18,863 | 23,033 | 21,743 | ||||||
| Total current assets | 1,102,736 | 970,178 | 1,020,829 | ||||||
| Property and equipment, net | 385,036 | 409,653 | 424,272 | ||||||
| Long-term marketable securities | 70,646 | 76,563 | 74,140 | ||||||
| Investments in affiliates | 33,077 | 32,361 | 34,177 | ||||||
| Goodwill | 53,799 | 53,799 | 53,799 | ||||||
| Other noncurrent assets | 73,412 | 77,940 | 75,826 | ||||||
| Total assets | $ | 1,718,706 | $ | 1,620,494 | $ | 1,683,043 | |||
| LIABILITIES AND EQUITY | |||||||||
| Current liabilities | |||||||||
| Current maturities of long-term debt | $ | 22 | $ | 21 | $ | 21 | |||
| Current maturities of non-recourse debt | 5,822 | 1,226 | 1,226 | ||||||
| Accounts payable | 196,885 | 151,935 | 205,493 | ||||||
| Billings in excess of costs and estimated earnings | 122,409 | 108,992 | 115,809 | ||||||
| Accrued expenses and other current liabilities | 224,101 | 200,652 | 221,618 | ||||||
| Total current liabilities | 549,239 | 462,826 | 544,167 | ||||||
| Long-term debt | 270,105 | 270,105 | 270,127 | ||||||
| Long-term non-recourse debt | — | 5,516 | 5,822 | ||||||
| Other long-term liabilities | 41,211 | 44,495 | 45,887 | ||||||
| Deferred income taxes | 21,646 | 20,446 | 9,977 | ||||||
| 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 39,380,053 shares as of September 30, 2015, 39,186,386 shares as of December 31, 2014 and 39,152,255 shares as of September 30, 2014 | 394 | 392 | 391 | ||||||
| Additional paid-in capital | 137,974 | 134,177 | 132,396 | ||||||
| Retained earnings | 675,927 | 659,816 | 648,017 | ||||||
| Total Granite Construction Incorporated shareholders’ equity | 814,295 | 794,385 | 780,804 | ||||||
| Non-controlling interests | 22,210 | 22,721 | 26,259 | ||||||
| Total equity | 836,505 | 817,106 | 807,063 | ||||||
| Total liabilities and equity | $ | 1,718,706 | $ | 1,620,494 | $ | 1,683,043 | |||
| GRANITE CONSTRUCTION INCORPORATED | ||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||
| (Unaudited - in thousands, except per share data) | ||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||
| Revenue | ||||||||||||||||||
| Construction | $ | 427,018 | $ | 447,097 | $ | 921,143 | $ | 873,357 | ||||||||||
| Large Project Construction | 217,084 | 179,446 | 590,282 | 611,110 | ||||||||||||||
| Construction Materials | 107,274 | 93,221 | 229,442 | 201,014 | ||||||||||||||
| Total revenue | 751,376 | 719,764 | 1,740,867 | 1,685,481 | ||||||||||||||
| Cost of revenue | ||||||||||||||||||
| Construction | 362,720 | 398,295 | 795,108 | 790,584 | ||||||||||||||
| Large Project Construction | 194,512 | 173,767 | 535,166 | 538,846 | ||||||||||||||
| Construction Materials | 93,246 | 81,010 | 203,818 | 185,536 | ||||||||||||||
| Total cost of revenue | 650,478 | 653,072 | 1,534,092 | 1,514,966 | ||||||||||||||
| Gross profit | 100,898 | 66,692 | 206,775 | 170,515 | ||||||||||||||
| Selling, general and administrative expenses | 50,077 | 47,386 | 151,374 | 147,731 | ||||||||||||||
| Gain on sales of property and equipment | (804 | ) | (3,004 | ) | (2,090 | ) | (6,891 | ) | ||||||||||
| Operating income | 51,625 | 22,310 | 57,491 | 29,675 | ||||||||||||||
| Other (income) expense | ||||||||||||||||||
| Interest income | (591 | ) | (451 | ) | (1,561 | ) | (1,343 | ) | ||||||||||
| Interest expense | 3,485 | 2,488 | 10,966 | 10,426 | ||||||||||||||
| Equity in income of affiliates | (1,155 | ) | (1,109 | ) | (1,762 | ) | (2,310 | ) | ||||||||||
| Other expense (income), net | 27 | 1,196 | (1,409 | ) | (450 | ) | ||||||||||||
| Total other expense | 1,766 | 2,124 | 6,234 | 6,323 | ||||||||||||||
| Income before provision for income taxes | 49,859 | 20,186 | 51,257 | 23,352 | ||||||||||||||
| Provision for income taxes | 17,679 | 6,081 | 18,148 | 8,301 | ||||||||||||||
| Net income | 32,180 | 14,105 | 33,109 | 15,051 | ||||||||||||||
| Amount attributable to non-controlling interests | (1,421 | ) | 1,177 | (1,297 | ) | (6,681 | ) | |||||||||||
| Net income attributable to Granite Construction Incorporated | $ | 30,759 | $ | 15,282 | $ | 31,812 | $ | 8,370 | ||||||||||
| Net income per share attributable to common shareholders: | ||||||||||||||||||
| Basic | $ | 0.78 | $ | 0.39 | $ | 0.81 | $ | 0.21 | ||||||||||
| Diluted | $ | 0.77 | $ | 0.38 | $ | 0.80 | $ | 0.21 | ||||||||||
| Weighted average shares of common stock: | ||||||||||||||||||
| Basic | 39,378 | 39,150 | 39,317 | 39,073 | ||||||||||||||
| Diluted | 39,897 | 39,813 | 39,863 | 39,790 | ||||||||||||||
| GRANITE CONSTRUCTION INCORPORATED | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (Unaudited - in thousands) | ||||||||
| Nine Months Ended September 30, | 2015 | 2014 | ||||||
| Operating activities | ||||||||
| Net income | $ | 33,109 | $ | 15,051 | ||||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
| Depreciation, depletion and amortization | 48,517 | 49,968 | ||||||
| Gain on sales of property and equipment | (2,090 | ) | (6,891 | ) | ||||
| Change in deferred income taxes | 14,967 | 1,795 | ||||||
| Stock-based compensation | 6,962 | 8,933 | ||||||
| Equity in net income from unconsolidated joint ventures | (29,465 | ) | (27,001 | ) | ||||
| Changes in assets and liabilities | (80,129 | ) | (88,688 | ) | ||||
| Net cash used in operating activities | (8,129 | ) | (46,833 | ) | ||||
| Investing activities | ||||||||
| Purchases of marketable securities | (54,961 | ) | (49,975 | ) | ||||
| Maturities of marketable securities | 26,700 | 40,000 | ||||||
| Proceeds from called marketable securities | 45,000 | 25,000 | ||||||
| Purchases of property and equipment | (26,144 | ) | (37,471 | ) | ||||
| Proceeds from sales of property and equipment | 3,439 | 12,257 | ||||||
| Other investing activities, net | 598 | (1,109 | ) | |||||
| Net cash used in investing activities | (5,368 | ) | (11,298 | ) | ||||
| Financing activities | ||||||||
| Cash dividends paid | (15,326 | ) | (15,229 | ) | ||||
| Purchase of common stock | (3,325 | ) | (4,751 | ) | ||||
| (Distributions to) contributions from non-controlling partners, net | (1,740 | ) | 15,156 | |||||
| Other financing activities, net | (288 | ) | 1,008 | |||||
| Net cash used in financing activities | (20,679 | ) | (3,816 | ) | ||||
| Decrease in cash and cash equivalents | (34,176 | ) | (61,947 | ) | ||||
| Cash and cash equivalents at beginning of period | 255,961 | 229,121 | ||||||
| Cash and cash equivalents at end of period | $ | 221,785 | $ | 167,174 | ||||
| GRANITE CONSTRUCTION INCORPORATED | |||||||||||||||||||||||||
| Business Segment Information | |||||||||||||||||||||||||
| (Unaudited - dollars in thousands) | |||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||
| Construction |
Large Project Construction |
Construction Materials |
Construction |
Large Project Construction |
Construction Materials |
||||||||||||||||||||
| 2015 | |||||||||||||||||||||||||
| Revenue | $ | 427,018 | $ | 217,084 | $ | 107,274 | $ | 921,143 | $ | 590,282 | $ | 229,442 | |||||||||||||
| Gross profit | 64,298 | 22,572 | 14,028 | 126,035 | 55,116 | 25,624 | |||||||||||||||||||
| Gross profit as a percent of revenue | 15.1 | % | 10.4 | % | 13.1 | % | 13.7 | % | 9.3 | % | 11.2 | % | |||||||||||||
| 2014 | |||||||||||||||||||||||||
| Revenue | $ | 447,097 | $ | 179,446 | $ | 93,221 | $ | 873,357 | $ | 611,110 | $ | 201,014 | |||||||||||||
| Gross profit | 48,802 | 5,679 | 12,211 | 82,773 | 72,264 | 15,478 | |||||||||||||||||||
| Gross profit as a percent of revenue | 10.9 | % | 3.2 | % | 13.1 | % | 9.5 | % | 11.8 | % | 7.7 | % | |||||||||||||
| GRANITE CONSTRUCTION INCORPORATED | ||||||||||||||||||
| Contract Backlog by Segment | ||||||||||||||||||
| (Unaudited - dollars in thousands) | ||||||||||||||||||
| Contract Backlog by Segment | September 30, 2015 | June 30, 2015 | September 30, 2014 | |||||||||||||||
| Construction | $ | 866,567 | 28.1 | % | $ | 831,067 | 27.7 | % | $ | 817,365 | 27.5 | % | ||||||
| Large Project Construction | 2,222,085 | 71.9 | % | 2,169,736 | 72.3 | % | 2,154,289 | 72.5 | % | |||||||||
| Total | $ | 3,088,652 | 100.0 | % | $ | 3,000,803 | 100.0 | % | $ | 2,971,654 | 100.0 | % | ||||||
| GRANITE CONSTRUCTION INCORPORATED | |||||||||||||||||
| EBITDA(1) | |||||||||||||||||
| (Unaudited - dollars in thousands) | |||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||
| Net income attributable to Granite Construction Incorporated | $ | 30,759 | $ | 15,282 | $ | 31,812 | $ | 8,370 | |||||||||
| Depreciation, depletion and amortization expense(2) | 17,186 | 18,090 | 48,517 | 49,968 | |||||||||||||
| Provision for income taxes | 17,679 | 6,081 | 18,148 | 8,301 | |||||||||||||
| Interest expense, net of interest income | 2,894 | 2,037 | 9,405 | 9,083 | |||||||||||||
| EBITDA(1) | $ | 68,518 | $ | 41,490 | $ | 107,882 | $ | 75,722 | |||||||||
| Consolidated EBITDA Margin(3) | 9.1 | % | 5.8 | % | 6.2 | % | 4.5 | % | |||||||||
| 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 Selling, General and Administrative expenses in the condensed consolidated statements of operations of Granite Construction Incorporated. | |
| (3)Represents EBITDA divided by consolidated revenue. Consolidated revenue was $751,376 and $1,740,867 for three and nine months ended September 30, 2015, respectively and $719,764 and $1,685,481 for the three and nine months ended September 30, 2014, respectively. | |
CONTACT:
Granite Construction Incorporated
Ron Botoff, 831-728-7532