Granite Reports First-Quarter 2013 Financial Results
-- First quarter revenues increased to $378.7 million , compared with $310.2
million in the first quarter of 2012, including $63.7 million associated
with the acquisition of Kenny Construction Company
-- Operating segment gross margins in line with last year
-- Balance sheet remains strong with $363.6 million in cash and marketable
securities
-- Backlog totaled $2.4 billion compared with $1.7 billion at year-end
"As expected, we had strong backlog growth in the quarter driven by significant large project awards," said
"Our integration of Kenny is progressing well, meeting our expectations, and reinforcing the continued execution of our strategic plan. We are working successfully to expand our presence into targeted end-markets such as power delivery, water and wastewater infrastructure and tunneling, all of which have attractive long-term fundamentals."
First-quarter 2013 Financial Results
-- Revenues for the quarter totaled $378.7 million , compared with $310.2
million in 2012. Revenues included $63.7 million from Kenny Construction
Company ("Kenny"), which Granite acquired on December 31, 2012 .
-- Gross profit margin was 7.9 percent compared with 8.0 percent in 2012.
-- Selling, general and administrative expenses ("SG&A") for the first
quarter were $57.7 million , compared with $45.1 million in 2012. Kenny
accounted for a significant portion of the increase.
-- Operating loss for the quarter was $26.0 million compared with $16.3
million in the prior year.
-- Total contract backlog at March 31, 2013 , was $2.4 billion compared with
$1.7 billion at December 31, 2012 and $2.1 billion at March 31, 2012 .
Backlog at March 31, 2013 included $733.0 million associated with our
portion of the Tappan Zee Bridge project in New York .
Construction
-- Construction revenues in the first quarter were $177.1 million compared
with $117.9 million a year ago. The increase reflects $53.3 million
associated with Kenny.
-- Gross profit margin was 7.5 percent as compared with 7.3 percent a year
ago. Included in the first quarter of 2013 was a $1.6 million
amortization charge for intangible assets (acquired backlog) associated
with the Kenny acquisition. There were no significant changes in project
profitability from revisions in estimates during the first quarter of
2013.
-- Large Project Construction revenues for the quarter were $171.7 million
compared with $163.9 million at March 31, 2012 .
-- Gross profit margin for the quarter was 13.2 percent compared with 13.6
percent for the same period last year. Changes in project profitability
from revisions in estimates during the first quarter of 2013 resulted in
a net increase of $9.2 million .
Construction Materials
-- Construction Materials revenue for the quarter totaled $29.8 million
compared with $25.6 million for the same period last year.
-- Gross loss on the sale of construction materials was $6.0 million ,
essentially unchanged from a year ago.
Outlook and Guidance
"In the short-term, certain markets of our vertically integrated business continue to face challenges as capacity exceeds demand for both our construction services and construction materials. While we will not see a turnaround overnight, the fundamentals of our business remain extremely solid and our future is very bright," Roberts said.
"As our 2013 guidance reflects, we anticipate growing the top line of our business by at least double digits. We also anticipate that Granite will continue to generate strong cash flow, allowing us to further implement our strategic long-term plan. Our solid
The Company's guidance for 2013 is as follows: Construction segment revenues are expected to total
Selling, general and administrative expenses are expected to be
Conference Call
Granite will conduct a conference call today,
About Granite
Through its offices and subsidiaries nationwide,
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
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)
--------------------------------------------------------------------------------
March 31, December March 31,
31,
2013 2012 2012
-------------------------------- - - ----------- - - ----------- - - -----------
ASSETS
Current assets
Cash and cash equivalents $ 260,773 $ 321,990 $ 226,226
Short-term marketable securities 44,841 56,088 70,444
Receivables, net 260,231 325,529 208,707
Costs and estimated earnings in
excess of billings 48,428 34,116 49,962
Inventories 66,291 59,785 67,782
Real estate held for development
and sale 50,303 50,223 58,363
Deferred income taxes 36,687 36,687 38,571
Equity in construction joint
ventures 171,265 105,805 91,951
Other current assets 37,401 31,834 34,882
-------------------------------- - - - --------- - - - --------- - - - ---------
Total current assets 976,220 1,022,057 846,888
Property and equipment, net 477,666 481,478 442,132
Long-term marketable securities 57,958 55,342 70,114
Investments in affiliates 30,742 30,799 30,972
Goodwill 53,593 55,419 9,900
Other noncurrent assets 82,531 84,392 69,949
-------------------------------- - - - --------- - - - --------- - - - ---------
Total assets $ 1,678,710 $ 1,729,487 $ 1,469,955
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LIABILITIES AND EQUITY
Current liabilities
Current maturities of long-term
debt $ 8,353 $ 8,353 $ 9,102
Current maturities of
non-recourse debt 4,132 10,707 19,765
Accounts payable 169,940 202,541 129,480
Billings in excess of costs and
estimated earnings 124,609 139,692 87,370
Accrued expenses and other
current liabilities 188,685 169,979 148,196
-------------------------------- - - - --------- - - - --------- - - - ---------
Total current liabilities 495,719 531,272 393,913
Long-term debt 270,148 270,148 208,501
Long-term non-recourse debt 7,628 922 1,371
Other long-term liabilities 49,231 47,124 50,011
Deferred income taxes 8,055 8,163 3,393
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
38,810,255 shares as of March
31, 2013 , 38,730,665 shares as
of December 31, 2012 and
38,621,370 shares as of March
31, 2012 388 387 386
Additional paid-in capital 118,265 117,422 110,432
Retained earnings 685,023 712,144 670,462
-------------------------------- - - - --------- - - - --------- - - - ---------
Total Granite Construction
Incorporated shareholders'
equity 803,676 829,953 781,280
Noncontrolling interests 44,253 41,905 31,486
-------------------------------- - - - --------- - - - --------- - - - ---------
Total equity 847,929 871,858 812,766
-------------------------------- - - - --------- - - - --------- - - - ---------
Total liabilities and equity $ 1,678,710 $ 1,729,487 $ 1,469,955
-------------------------------- - - - --------- - - - --------- - - - ---------
GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - in thousands, except per share data)
---------------------------------------------------------- - - ----------- - - -----------
Three Months Ended March 31, 2013 2012
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Revenue
Construction $ 177,119 $ 117,946
Large Project Construction 171,714 163,928
Construction Materials 29,750 25,623
Real Estate 121 2,663
---------------------------------------------------------- - - - ------- - - - - ------- -
Total revenue 378,704 310,160
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Cost of revenue
Construction 163,918 109,366
Large Project Construction 148,993 141,679
Construction Materials 35,724 31,573
Real Estate 11 2,606
---------------------------------------------------------- - - - ------- - - - - ------- -
Total cost of revenue 348,646 285,224
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Gross profit 30,058 24,936
Selling, general and administrative expenses 57,659 45,090
Gain on restructuring 498 1,902
Gain on sales of property and equipment 1,087 1,917
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Operating loss (26,016 ) (16,335 )
Other (expense) income
Interest income 129 1,044
Interest expense (3,646 ) (3,182 )
Equity in loss of affiliates (423 ) (617 )
Other income, net 1,103 6,871
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Total other (expense) income (2,837 ) 4,116
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Loss before benefit from income taxes (28,853 ) (12,219 )
Benefit from income taxes (9,027 ) (3,532 )
---------------------------------------------------------- - - - ------- - - - - ------- -
Net loss (19,826 ) (8,687 )
Amount attributable to noncontrolling interests (2,156 ) (3,086 )
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Net loss attributable to Granite Construction Incorporated $ (21,982 ) $ (11,773 )
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Net loss per share attributable to common shareholders:
Basic $ (0.57 ) $ (0.31 )
Diluted $ (0.57 ) $ (0.31 )
Weighted average shares of common stock:
Basic 38,610 38,265
Diluted 38,610 38,265
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GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - in thousands)
--------------------------------------------------------------------------- - - ----------- - - -----------
Three Months Ended March 31, 2013 2012
--------------------------------------------------------------------------- - - - ------- - - - - ------- -
Operating activities
Net loss $ (19,826 ) $ (8,687 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, depletion and amortization 15,970 14,961
Gain on sales of property and equipment (1,087 ) (1,917 )
Stock-based compensation 5,386 4,196
Changes in assets and liabilities (55,096 ) (31,426 )
--------------------------------------------------------------------------- - - - ------- - - - - ------- -
Net cash used in operating activities (54,653 ) (22,873 )
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Investing activities
Purchases of marketable securities (14,975 ) (24,987 )
Maturities of marketable securities 20,000 15,000
Proceeds from sale of marketable securities 5,000 20,000
Additions to property and equipment (9,956 ) (9,225 )
Proceeds from sales of property and equipment 3,417 2,883
Other investing activities, net (57 ) (294 )
--------------------------------------------------------------------------- - - - ------- - - - - ------- -
Net cash provided by investing activities 3,429 3,377
--------------------------------------------------------------------------- - - - ------- - - - - ------- -
Financing activities
Long-term debt principal payments -- (2,500 )
Cash dividends paid (5,045 ) (5,021 )
Purchase of common stock (4,907 ) (3,837 )
Other financing activities, net (41 ) 90
--------------------------------------------------------------------------- - - - ------- - - - - ------- -
Net cash used in financing activities (9,993 ) (11,268 )
--------------------------------------------------------------------------- - - - ------- - - - - ------- -
Decrease in cash and cash equivalents (61,217 ) (30,764 )
Cash and cash equivalents at beginning of period 321,990 256,990
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Cash and cash equivalents at end of period $ 260,773 $ 226,226
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GRANITE CONSTRUCTION INCORPORATED
Business Segment Information
(Unaudited - dollars in thousands)
------------------------------------ - - ----------- - - ----------- - - ----------- - - ---------
Three Months Ended March 31,
Large Construction
Project
Construction Materials Real
Construction Estate
------------------------------------ - - ----------- - - ----------- - - ----------- - - ---------
2013
Revenue $ 177,119 $ 171,714 $ 29,750 $ 121
Gross profit (loss) 13,201 22,721 (5,974 ) 110
Gross profit as a percent of revenue 7.5 % 13.2 % (20.1 )% 90.9 %
2012
Revenue $ 117,946 $ 163,928 $ 25,623 $ 2,663
Gross profit (loss) 8,580 22,249 (5,950 ) 57
Gross profit as a percent of revenue 7.3 % 13.6 % (23.2 )% 2.1 %
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GRANITE CONSTRUCTION INCORPORATED
Contract Backlog by Segment
(Unaudited - dollars in thousands)
--------------------------- - - ----------- - - ------- - - ----------- - - ------- - - ----------- - - -------
Contract Backlog by Segment March 31, 2013 December 31, 2012 March 31, 2012
--------------------------- - - ----------------------- - - ----------------------- - - -----------------------
Construction $ 740,259 30.8 % $ 629,898 36.9 % $ 622,240 29.9 %
Large Project Construction 1,660,056 69.2 % 1,077,417 63.1 % 1,460,674 70.1 %
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Total $ 2,400,315 100.0 % $ 1,707,315 100.0 % $ 2,082,914 100.0 %
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Source: Granite Construction Incorporated 