Attached files

file filename
8-K - GRANITE CONSTRUCTION INCORPORATED 8-K - GRANITE CONSTRUCTION INCgva-8k_20180808.htm

 

Exhibit 99.1

Granite Reports Second Quarter 2018 Results

 

Revenue increased to $807.1 million, up 5.8 percent year-over-year

 

Company gross profit up 7.8 percent year-over-year to $80.4 million

 

Company gross profit margin of 10.0 percent, up about 20 basis points year-over-year

 

All segments deliver year-over-year margin improvement; Construction Materials segment leads the way with gross profit up 32.6 percent year-over-year

 

Company backlog1 of $3.65 billion down 10.1 percent year-over-year; post-Q2 project wins total more than $875 million

 

Net loss of $8.4 million; adjusted2 net income of $17.9 million, up 26.4 percent year-over-year

 

Adjusted EBITDA3 increased to $50.9 million, up 26.5 percent year-over-year

 

 

WATSONVILLE, Calif. (August 8, 2018) - Granite Construction Incorporated (NYSE: GVA) today reported a net loss of $8.4 million for the quarter ended June 30, 2018, compared to a net income of $14.1 million in the second quarter of 2017. Loss per diluted share in the quarter was $(0.20), compared to income per diluted share of $0.35 in the prior-year period. Second quarter 2018 results include the impact of acquisition expenses of Layne Christensen Company, (“Layne”) and LiquiForce. Excluding the impact of these expenses, second quarter adjusted net income was $17.9 million, or $0.43 per diluted share, a 22.9 percent increase from $0.35 per share in 2017.

“After producing the best first-half revenue performance in our Company’s history and with adjusted EBITDA nearly tripling year-over-year through June, Granite teams remain focused on consistent execution, process improvement, and steady, strategic growth,” said Granite President and Chief Executive Officer (CEO) James H. Roberts. “Following the successful completion of two acquisitions in the second quarter, we greatly appreciate the support that our employees and shareholders provided in the execution of our strategic plan. We are quite pleased to expand Granite’s platforms for growth in this opportunistic environment.

“These strategic moves extend our reach, as we execute our strategy to diversify and grow across geographies in our core infrastructure markets, inclusive of the water, wastewater, and mining markets,” Roberts said. “State- and local-led program expansions, coupled with growing federal government investment, and continued private-sector strength are fueling the healthiest market conditions we have experienced in more than a decade. We are particularly encouraged that our core business continues to deliver on project pursuits as well as day-to-day execution. Following the close of the second quarter, we received notification of project wins that are not yet included in our backlog. These four project wins across four operating groups total more than $875 million, with these projects expected to enter our backlog in the second half of 2018 and early 2019.”

Second Quarter and Selected Year-To-Date 2018 Results

Total Company

 

Consolidated revenue increased 5.8 percent to $807.1 million in the second quarter, compared with $762.9 million in the prior-year period. On a year-to-date basis, consolidated revenue increased 11.3 percent to $1.37 billion in the first half of 2018.

 

Consolidated gross profit increased 7.8 percent to $80.4 million, compared with $74.6 million last year. On a year-to-date basis, gross profit increased 37.1 percent to $136.7 million in the first half of 2018.

 

Consolidated gross profit margin was 10.0 percent in the second quarter, compared with 9.8 percent in 2017. For the first half of 2018, profit margin was 10.0 percent compared with 8.1 percent last year.

 

Total Company backlog was $3.65 billion, down 10.1 percent year-over-year. We received notification of four project wins after the close of the second quarter. Quarter-end backlog does not include these projects,

 

 


 

 

which total more than $875 million, which are expected to enter backlog in the second half of 2018 and early 2019. Construction segment backlog increased 0.5 percent year-over-year to $1.27 billion. Large Project Construction segment backlog decreased 15.0 percent from last year to $2.38 billion

 

Second quarter selling, general & administrative expenses were $61.3 million, or 7.6 percent of revenue, compared to $51.4 million, or 6.7 percent of revenue, last year. For the first half of 2018, SG&A expenses were $122.6 million, or 8.9 percent of revenue, compared to $113.2 million, or 9.2 percent of revenue, last year.  

 

Our balance sheet remains strong with cash and marketable securities of $276.7 million as of June 30, 2018.  With the recent increase and extension of our credit facility to $500 million, our capital structure is well positioned to support the execution our strategic plan.

 

Second quarter adjusted EBITDA increased 26.5 percent year-over-year to $50.9 million, compared to $40.3 million in the second quarter of 2017. On a year-to-date basis, adjusted EBITDA nearly tripled to $60.2 million, compared to $20.3 million last year.

Second Quarter Segment Results

Construction

 

Construction revenue increased 0.7 percent to $432.2 million, compared with $429.3 million last year.

 

Gross profit increased 1.1 percent to $61.6 million, compared to $60.9 million last year.

 

Gross profit margin of 14.2 percent increased slightly from a year ago.

 

Solid execution drove second quarter profit performance, with business activity increasing steadily through the end of the quarter after a slow April start. Segment backlog finished at $1.27 billion, an increase of 0.5 percent year-over-year and 30.1 percent sequentially.

Large Project Construction

 

Large Project Construction revenue increased 7.7 percent to $273.9 million, compared with $254.5 million last year.

 

Gross profit increased to $1.3 million, compared to $0.5 million last year.

 

Gross profit margin was 0.5 percent, compared with 0.2 percent in 2017.

 

Revenue and profit performance was driven by an increase in ongoing, accelerated work on several under-performing, mature projects, which had an increased negative sequential impact on quarterly results as has been anticipated. The positive contribution of newer projects in our portfolio continued, but it had less positive impact on segment performance during the second quarter. Underperforming projects still represent a significant amount of expected 2018 segment revenue, which should have a declining, negative impact following the third quarter in 2018.

 

Segment backlog decreased 15.0 percent year-over-year and 8.7 percent sequentially to $2.38 billion. We continue to increase our gross profit margin, operating income, and cash flow expectations on all new work. Market opportunities remain robust, as we patiently re-shape our project portfolio, pursuing disciplined strategies in alignment with increased returns that balance project risk dynamics.

Construction Materials

 

Construction Materials revenue increased 27.5 percent to $100.9 million, compared with $79.2 million last year.

 

Gross profit of $17.5 million improved 32.6 percent from $13.2 million last year.

 

Gross profit margin improved nearly 70 basis points from last year to 17.3 percent.

 

The gross profit and margin improvement was attributable primarily to improved external demand across most markets.

 

 


 

Outlook and Guidance

"Today, our outlook reflects a broad opportunity set for steady funding, focused investment, and diverse growth opportunities, which are expected to drive top-line growth and solid bottom-line improvement in 2018 and beyond,” said Roberts. “Granite’s strategic growth plan is delivering results and positioning Granite stakeholders to benefit from significant, long-term economic value creation.”

The Company’s expectations for 2018, including acquisitions, are:

 

Mid- to high-teens consolidated revenue growth

 

Consolidated adjusted EBITDA margin of 7.0 percent to 8.0 percent

 

(1) Granite contract backlog is comprised of unearned revenue and other awards. For further information, please refer to Note 1 of “NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS” and to “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” in the Granite Construction Incorporated Form 10-Q for the quarterly period ended June 30, 2018, which is expected to be filed with the Securities and Exchange Commission on August 8, 2018.

(2)  Please refer to the description of adjusted net income and adjusted earnings per diluted share reconciliation (including acquisition-related costs and amortization of acquired tangible assets) in the attached tables.

(3)  Please refer to the description of EBITDA and adjusted EBITDA (including acquisition-related costs) in the attached tables.

 

Conference Call

Granite will conduct a conference call today, August 8, 2018, at 8 a.m. Pacific Time/11 a.m. Eastern Time to discuss the results of the quarter ended June 30, 2018. The Company invites investors to listen to a live audio webcast on its Investor Relations website, http://investor.graniteconstruction.com. An archive of the webcast will be available on the website approximately one hour after the call. The live call also is available by calling 1-877-328-5503; international callers may dial 1-412-317-5472. A replay will be available after the live call through August 15, 2018, by calling 1-877-344-7529, replay access code 10122695; international callers may dial 1-412-317-0088.

About Granite

Through its offices and subsidiaries nationwide, Granite Construction Incorporated (NYSE: GVA) is a full-suite provider in the transportation, water infrastructure and mineral exploration markets. Granite, America’s Infrastructure Company, 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 nine 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 www.graniteconstruction.com.

 

 


 

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)

 

 

 

June 30,

2018

 

 

December 31,

2017

 

 

June 30,

2017

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

195,515

 

 

$

233,711

 

 

$

178,068

 

Short-term marketable securities

 

 

20,014

 

 

 

67,775

 

 

 

47,821

 

Receivables, net

 

 

492,718

 

 

 

479,791

 

 

 

484,245

 

Contract assets

 

 

265,190

 

 

 

 

 

 

 

Costs and estimated earnings in excess of billings

 

 

 

 

 

103,965

 

 

 

99,883

 

Inventories

 

 

96,024

 

 

 

62,497

 

 

 

65,495

 

Equity in construction joint ventures

 

 

252,467

 

 

 

247,826

 

 

 

230,448

 

Other current assets

 

 

49,100

 

 

 

36,513

 

 

 

43,597

 

Total current assets

 

 

1,371,028

 

 

 

1,232,078

 

 

 

1,149,557

 

Property and equipment, net

 

 

595,787

 

 

 

407,418

 

 

 

414,079

 

Long-term marketable securities

 

 

61,191

 

 

 

65,015

 

 

 

59,990

 

Investments in affiliates

 

 

99,495

 

 

 

38,469

 

 

 

37,170

 

Goodwill

 

 

246,881

 

 

 

53,799

 

 

 

53,799

 

Deferred income taxes, net

 

 

25,135

 

 

 

 

 

 

 

Other noncurrent assets

 

 

156,808

 

 

 

75,199

 

 

 

88,550

 

Total assets

 

$

2,556,325

 

 

$

1,871,978

 

 

$

1,803,145

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Current maturities of long-term debt

 

$

207,982

 

 

$

46,048

 

 

$

14,796

 

Accounts payable

 

 

303,885

 

 

 

237,673

 

 

 

252,527

 

Contract liabilities

 

 

91,864

 

 

 

 

 

 

 

Billings in excess of costs and estimated earnings

 

 

 

 

 

135,146

 

 

 

114,180

 

Accrued expenses and other current liabilities

 

 

293,959

 

 

 

236,407

 

 

 

231,048

 

Total current liabilities

 

 

897,690

 

 

 

655,274

 

 

 

612,551

 

Long-term debt

 

 

280,710

 

 

 

178,453

 

 

 

227,114

 

Deferred income taxes, net

 

 

5,759

 

 

 

1,361

 

 

 

5,420

 

Other long-term liabilities

 

 

71,180

 

 

 

44,085

 

 

 

47,983

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

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: 45,688,582 shares as of June 30, 2018, 39,871,314 shares as of December 31, 2017 and 39,837,295 shares as of June 30, 2017

 

 

457

 

 

 

399

 

 

 

398

 

Additional paid-in capital

 

 

516,680

 

 

 

160,376

 

 

 

155,476

 

Accumulated other comprehensive income

 

 

1,022

 

 

 

634

 

 

 

71

 

Retained earnings

 

 

737,417

 

 

 

783,699

 

 

 

715,451

 

Total Granite Construction Incorporated shareholders’ equity

 

 

1,255,576

 

 

 

945,108

 

 

 

871,396

 

Non-controlling interests

 

 

45,410

 

 

 

47,697

 

 

 

38,681

 

Total equity

 

 

1,300,986

 

 

 

992,805

 

 

 

910,077

 

Total liabilities and equity

 

$

2,556,325

 

 

$

1,871,978

 

 

$

1,803,145

 

 

 

 


 

GRANITE CONSTRUCTION INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited - in thousands, except per share data)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction

 

$

432,225

 

 

$

429,269

 

 

$

701,468

 

 

$

656,118

 

Large Project Construction

 

 

273,946

 

 

 

254,463

 

 

 

522,360

 

 

 

461,496

 

Construction Materials

 

 

100,948

 

 

 

79,181

 

 

 

146,670

 

 

 

113,699

 

Total revenue

 

 

807,119

 

 

 

762,913

 

 

 

1,370,498

 

 

 

1,231,313

 

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction

 

 

370,674

 

 

 

368,369

 

 

 

601,521

 

 

 

567,889

 

Large Project Construction

 

 

272,608

 

 

 

253,974

 

 

 

500,656

 

 

 

458,452

 

Construction Materials

 

 

83,468

 

 

 

66,000

 

 

 

131,669

 

 

 

105,276

 

Total cost of revenue

 

 

726,750

 

 

 

688,343

 

 

 

1,233,846

 

 

 

1,131,617

 

Gross profit

 

 

80,369

 

 

 

74,570

 

 

 

136,652

 

 

 

99,696

 

Selling, general and administrative expenses

 

 

61,316

 

 

 

51,388

 

 

 

122,568

 

 

 

113,225

 

Acquisition and integration expenses

 

 

26,287

 

 

 

 

 

 

34,696

 

 

 

 

Gain on sales of property and equipment

 

 

(1,505

)

 

 

(807

)

 

 

(2,048

)

 

 

(1,077

)

Operating (loss) income

 

 

(5,729

)

 

 

23,989

 

 

 

(18,564

)

 

 

(12,452

)

Other (income) expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

(1,173

)

 

 

(1,164

)

 

 

(2,694

)

 

 

(2,215

)

Interest expense

 

 

3,203

 

 

 

2,694

 

 

 

5,638

 

 

 

5,437

 

Equity in income of affiliates

 

 

(3,534

)

 

 

(1,259

)

 

 

(3,758

)

 

 

(2,175

)

Other income, net

 

 

(940

)

 

 

(642

)

 

 

(672

)

 

 

(1,512

)

Total other income

 

 

(2,444

)

 

 

(371

)

 

 

(1,486

)

 

 

(465

)

(Loss) income before provision for (benefit from) income taxes

 

 

(3,285

)

 

 

24,360

 

 

 

(17,078

)

 

 

(11,987

)

Provision for (benefit from) income taxes

 

 

2,796

 

 

 

8,088

 

 

 

(1,335

)

 

 

(4,408

)

Net (loss) income

 

 

(6,081

)

 

 

16,272

 

 

 

(15,743

)

 

 

(7,579

)

Amount attributable to non-controlling interests

 

 

(2,304

)

 

 

(2,139

)

 

 

(4,065

)

 

 

(2,078

)

Net (loss) income attributable to Granite Construction Incorporated

 

$

(8,385

)

 

$

14,133

 

 

$

(19,808

)

 

$

(9,657

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per share attributable to common shareholders (see Note 15)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.20

)

 

$

0.35

 

 

$

(0.49

)

 

$

(0.24

)

Diluted

 

$

(0.20

)

 

$

0.35

 

 

$

(0.49

)

 

$

(0.24

)

Weighted average shares of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

41,044

 

 

 

39,827

 

 

 

40,074

 

 

 

39,738

 

Diluted

 

 

41,044

 

 

 

40,393

 

 

 

40,074

 

 

 

39,738

 

Dividends per common share

 

$

0.13

 

 

$

0.13

 

 

$

0.26

 

 

$

0.26

 

 

 

 


 

GRANITE CONSTRUCTION INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited - in thousands)

 

Six Months Ended June 30,

 

2018

 

 

2017

 

Operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(15,743

)

 

$

(7,579

)

Adjustments to reconcile net loss to net cash (used in) provided by

   operating activities:

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

43,547

 

 

 

31,148

 

Gain on sales of property and equipment, net

 

 

(2,048

)

 

 

(1,077

)

Stock-based compensation

 

 

10,193

 

 

 

11,224

 

Equity in net loss from unconsolidated joint ventures

 

 

13,418

 

 

 

8,249

 

Changes in assets and liabilities:

 

 

(124,812

)

 

 

(19,279

)

Net cash (used in) provided by operating activities

 

 

(75,445

)

 

 

22,686

 

Investing activities

 

 

 

 

 

 

 

 

Purchases of marketable securities

 

 

(9,952

)

 

 

(49,816

)

Maturities of marketable securities

 

 

60,000

 

 

 

70,000

 

Purchases of property and equipment

 

 

(36,471

)

 

 

(37,518

)

Proceeds from sales of property and equipment

 

 

2,704

 

 

 

2,585

 

Cash paid to purchase businesses, net of cash and restricted cash acquired

 

 

(55,030

)

 

 

 

Other investing activities, net

 

 

269

 

 

 

23

 

Net cash used in investing activities

 

 

(38,480

)

 

 

(14,726

)

Financing activities

 

 

 

 

 

 

 

 

Proceeds from long term debt

 

 

105,250

 

 

 

 

Long-term debt principal repayments

 

 

(1,250

)

 

 

(2,500

)

Cash dividends paid

 

 

(10,389

)

 

 

(10,327

)

Repurchases of common stock

 

 

(6,165

)

 

 

(6,568

)

Distributions to non-controlling partners

 

 

(6,400

)

 

 

 

Other financing activities, net

 

 

429

 

 

 

177

 

Net cash provided by (used in) financing activities

 

 

81,475

 

 

 

(19,218

)

Net decrease in cash, cash equivalents and restricted cash

 

 

(32,450

)

 

 

(11,258

)

Cash and cash equivalents at beginning of period

 

 

233,711

 

 

 

189,326

 

Cash, cash equivalents and restricted cash of $5,746 at end of period

 

$

201,261

 

 

$

178,068

 

 

 

 

 


 

 

 

 

GRANITE CONSTRUCTION INCORPORATED

 

Business Segment Information

 

(Unaudited - dollars in thousands)

 

 

 

 

 

 

 

 

 

 

For the three months ended June 30,

 

 

For the six months ended June 30,

 

 

 

Construction

 

 

Large Project Construction

 

 

Construction Materials

 

 

Construction

 

 

Large Project Construction

 

 

Construction Materials

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

432,225

 

 

$

273,946

 

 

$

100,948

 

 

$

701,468

 

 

$

522,360

 

 

$

146,670

 

Gross profit

 

 

61,551

 

 

 

1,338

 

 

 

17,480

 

 

 

99,947

 

 

 

21,704

 

 

 

15,001

 

Gross profit as a percent of revenue

 

 

14.2

%

 

 

0.5

%

 

 

17.3

%

 

 

14.2

%

 

 

4.2

%

 

 

10.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

429,269

 

 

$

254,463

 

 

$

79,181

 

 

$

656,118

 

 

$

461,496

 

 

$

113,699

 

Gross profit

 

 

60,900

 

 

 

489

 

 

 

13,181

 

 

 

88,229

 

 

 

3,044

 

 

 

8,423

 

Gross profit as a percent of revenue

 

 

14.2

%

 

 

0.2

%

 

 

16.6

%

 

 

13.4

%

 

 

0.7

%

 

 

7.4

%

 

 

 


 

GRANITE CONSTRUCTION INCORPORATED

 

 

Unearned Revenue / Contract Backlog by Segment(1)

 

 

(Unaudited - dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unearned Revenue

 

June 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction

 

$

1,104,457

 

 

32.3

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Large Project Construction

 

 

2,311,883

 

 

67.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

3,416,340

 

 

100.0

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other(2)

 

June 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction

 

$

168,189

 

 

71.4

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Large Project Construction

 

 

67,393

 

 

28.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

235,582

 

 

100.0

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract Backlog(1)

 

June 30, 2018

 

 

March 31, 2018

 

 

June 30, 2017

 

 

Construction

 

$

1,272,646

 

 

34.8

 

%

$

978,288

 

 

27.3

 

%

$

1,266,504

 

 

31.2

 

%

Large Project Construction

 

 

2,379,276

 

 

65.2

 

 

 

2,607,379

 

 

72.7

 

 

 

2,797,894

 

 

68.8

 

 

Total

 

$

3,651,922

 

 

100.0

 

%

$

3,585,667

 

 

100.0

 

%

$

4,064,398

 

 

100.0

 

%

 

(1)Contract Backlog is calculated by adding Unearned Revenue and Other Awards.

(2)Other awards include unissued task orders and unexercised contract options to the extent their issuance or exercise is probable as well as contract awards to the extent we believe contract execution and funding is probable.

 

 


 

Non-GAAP Financial Information

The tables below contain financial information calculated other than in accordance with U.S. generally accepted accounting principles (“GAAP”). Specifically, management believes that non-GAAP financial measures such as EBITDA and consolidated EBITDA margin are useful in evaluating operating performance and are regularly used by securities analysts, institutional investors and other interested parties, and that such supplemental measures facilitate comparisons between companies that have different capital and financing structures and/or tax rates. We are also providing additional non-GAAP financial measures, including adjusted EBITDA, adjusted consolidated EBITDA margin, adjusted net income (loss) attributable to Granite Construction Incorporated and adjusted diluted earnings (loss) per share to indicate the impact of acquisition, integration and acquired intangible amortization expenses related to the acquisition of Layne Christensen Company and LiquiForce.

Management believes that these additional non-GAAP financial measures facilitate comparisons between securities analysts, institutional investors and other interested parties. 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. Items that may have a significant impact on the Company's financial position, results of operations and cash flows must be considered when assessing the Company's actual financial condition and performance regardless of whether these items are included in non-GAAP financial measures. 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.

 

GRANITE CONSTRUCTION INCORPORATED

 

EBITDA(1, 5)

 

(Unaudited - dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30,

 

 

June 30,

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Net (loss) income attributable to Granite Construction Incorporated

$

(8,385

)

 

$

14,133

 

 

$

(19,808

)

 

$

(9,657

)

Depreciation, depletion and amortization expense(2)

 

28,036

 

 

 

16,499

 

 

 

43,547

 

 

 

31,148

 

Provision for (benefit from) income taxes

 

2,796

 

 

 

8,088

 

 

 

(1,335

)

 

 

(4,408

)

Interest expense, net of interest income

 

2,030

 

 

 

1,530

 

 

 

2,944

 

 

 

3,222

 

EBITDA

$

24,477

 

 

$

40,250

 

 

$

25,348

 

 

$

20,305

 

Consolidated EBITDA Margin(3)

 

3.0

%

 

 

5.3

%

 

 

1.8

%

 

 

1.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition and integration expenses(4)

$

26,438

 

 

$

 

 

$

34,847

 

 

$

 

Adjusted EBITDA(5)

$

50,915

 

 

$

40,250

 

 

$

60,195

 

 

$

20,305

 

Consolidated adjusted EBITDA margin

 

6.3

%

 

 

5.3

%

 

 

4.4

%

 

 

1.6

%

 

(1)We define EBITDA as GAAP net loss attributable to Granite Construction Incorporated, adjusted for interest, taxes, depreciation, depletion and amortization.

(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. $807,119 and $1,370,498 for three and six months ended June 30, 2018, respectively, and $762,913 and $1,231,313 for the three and six months ended June 30, 2017, respectively.

(4)Include expenses related to external transaction costs, professional fees, internal travel, and synergy costs associated with the acquisition and integration of Layne Christensen Company and LiquiForce.  Synergy costs include expenses incurred which will be eliminated as the integration of Layne and LiquiForce is completed.

(5)Adjusted EBITDA and Consolidated adjusted EBITDA margin reflect the impact of acquisition and integration expenses.

 


 

 


 

GRANITE CONSTRUCTION INCORPORATED

Adjusted Net Income (Loss) Reconciliation

(in thousands, except per share data)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

(Loss) income before provision for (benefit from) income taxes

 

$

(3,285

)

 

$

24,360

 

 

$

(17,078

)

 

$

(11,987

)

Acquisition and integration expenses(1)

 

 

26,438

 

 

 

 

 

 

34,847

 

 

 

 

Amortization expense on acquired intangible assets(2)

 

 

2,688

 

 

 

 

 

 

2,688

 

 

 

 

Adjusted income (loss) before provision for (benefit from) income taxes

 

$

25,841

 

 

$

24,360

 

 

$

20,457

 

 

$

(11,987

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for (benefit from) income taxes

 

$

2,796

 

 

$

8,088

 

 

$

(1,335

)

 

$

(4,408

)

Tax effect of the acquisition, integration expenses, and acquired intangible amortization expenses (3)

 

 

2,878

 

 

 

 

 

 

4,875

 

 

 

 

Adjusted provision for (benefit from) income taxes

 

$

5,674

 

 

$

8,088

 

 

$

3,540

 

 

$

(4,408

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income attributable to Granite Construction Incorporated

 

$

(8,385

)

 

$

14,133

 

 

$

(19,808

)

 

$

(9,657

)

Acquisition, integration, and acquired intangible amortization expenses, net of the tax effect

 

 

26,248

 

 

 

 

 

 

32,660

 

 

 

 

Adjusted net income (loss) attributable to Granite Construction Incorporated(4)

 

$

17,863

 

 

$

14,133

 

 

$

12,852

 

 

$

(9,657

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net (loss) income per share attributable to common shareholders

 

$

(0.20

)

 

$

0.35

 

 

$

(0.49

)

 

$

(0.24

)

Acquisition, integration, and acquired intangible amortization expenses

 

 

0.64

 

 

 

 

 

 

0.82

 

 

 

 

Adjusted diluted net income (loss) per share attributable to common shareholders(4)

 

$

0.43

 

 

$

0.35

 

 

$

0.32

 

 

$

(0.24

)

 

(1) Include expenses related to external transaction costs, professional fees, internal travel, and synergy costs associated with the acquisition and integration of Layne Christensen Company and LiquiForce.  Synergy costs include expenses incurred which will be eliminated as the integration of Layne and LiquiForce is completed.

(2)Amortization expense on acquired intangible assets related to the Layne and LiquiForce acquisitions.

(3)The tax effect of the acquisition, integration expenses, and acquired intangible amortization expenses was calculated using the Company’s estimated 2018 annual effective tax rate.

(4)Adjusted net income and diluted earnings per share reflect the impact of acquisition, integration expenses and acquired intangible amortization expenses.

 

 

 

 

Contact:

Investors

Ron Botoff, 831-728-7532

or

Media

Jacque Fourchy, 831-761-4741

Source: Granite Construction Incorporated