8-K 1 form_8-k.htm FORM 8-K form_8-k.htm
GRANITE LOGO
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 8-K
 
 
CURRENT REPORT
Pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
 
 
Date of Report (Date of earliest event reported) April 28, 2010
 
 
GRANITE CONSTRUCTION INCORPORATED
(Exact name of registrant as specified in its charter)
 
Delaware
  
1-12911
  
77-0239383
(State or other jurisdiction of incorporation)
  
(Commission File Number)
  
(IRS Employer Identification No.)
 
585 West Beach Street
Watsonville, California 95076
(Address of principal executive offices) (Zip Code)
 
 
(831) 724-1011
Registrant’s telephone number, including area code
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 
Item 8.01 Other Events
 
Introduction
 
On August 31, 2009, Granite Construction Incorporated (“Granite” or the “Company”) announced changes to its organizational structure designed to improve operating efficiencies and better position the Company for long-term growth. In conjunction with the restructure, the Company changed its reportable business segments to reflect its lines of business rather than its geographies, as it has been in recent history. Effective January 1, 2010 the Company’s new reportable segments are: Construction, Large Project Construction, Construction Materials and Real Estate. Additionally, the Company reclassified certain costs between cost of revenue and selling, general and administrative expense to better represent our direct cost of revenue. These reclassifications did not have a significant affect on our previously reported net operating results.
 
For investors who may want to consider the effects of the realignment and reclassifications in advance of the announcement of first quarter 2010 results, Granite is presenting unaudited financial information for the new reportable segments in the following tables. Specifically presented are segment net revenue, gross profit (loss), gross margin (loss) and consolidated selling, general and administrative expense for years ended 2009 and 2008 and for each of the quarterly periods in these years. Information on segment assets and related depreciation, depletion and amortization will be presented in the respective Form 10-Q and 10-K reports beginning with the Form 10-Q report for the three months ended March 31, 2010.
 
Former Reportable Segments

As indicated in Note 20, “Business Segment Information,” of the notes to Granite’s consolidated financial statements, set forth in Item 15 of Part IV of Granite’s Form 10-K for fiscal year ended December 31, 2009, the Company previously operated in three reportable business segments: Granite West, Granite East, and Granite Land Company.
 
Granite West’s revenues were generated in the western United States from construction projects and the sale of construction materials. Granite West projects tended to be smaller in nature and duration, however, they included some large, complex infrastructure projects. Granite East’s revenues were primarily generated in the eastern United States from large, complex infrastructure projects. Granite Land Company’s revenues were generated from real estate development projects and services.

Overview of New Reportable Segments
 
Construction

This segment performs various heavy civil construction projects with a large portion of the work focused on new construction and improvement of streets, roads, highways, bridges, site work and other infrastructure projects. Construction segment projects are typically bid-build projects completed within two years and have a contract value of less than $75 million.

Large Project Construction

This segment focuses on large, complex infrastructure projects which are long-term in nature. Large Project Construction projects include major highways, mass transit facilities, bridges, tunnels, waterway locks and dams, pipelines, canals and airport infrastructure.  This segment primarily includes bid-build, design-build and construction management/general contractor (CMGC) contracts, generally with contract values in excess of $75 million.

Construction Materials

This segment mines and processes aggregates and operates plants that produce construction materials for internal use and for sale to third parties.
 
Real Estate

This segment purchases, develops, operates, sells and invests in real estate related projects and provides real estate services for the Company’s operations.  
 
2
 
The following tables present unaudited summarized segment information for the years ended December 31, 2009 and 2008 and for each of the quarterly periods in these years (dollars in thousands):
 
Prior Segments
    
New Segments
  
Year Ended
December 31, 2009
  
Total
    
Construction
    
Large Project Construction
  
Construction Materials
    
Real Estate
  
Total
  
Net revenue
                                    
Granite West
   $ 1,411,016     $ 1,096,729     $ 108,342     $ 205,945     $ -     $ 1,411,016  
Granite East
     550,189       55,014       495,175       -       -       550,189  
Granite Land Company
     2,274       -       -       -       2,274       2,274  
Net revenue
   $ 1,963,479     $ 1,151,743     $ 603,517     $ 205,945     $ 2,274     $ 1,963,479  
                                                 
Gross profit (loss)
                                                
Granite West
   $ 236,868     $ 202,598     $ 19,870     $ 14,400     $ -     $ 236,868  
Granite East
     110,823       10,106       100,717       -       -       110,823  
Granite Land Company
     (1,318 )     -       -       -       (1,318 )     (1,318 )
Gross profit (loss)
     346,373       212,704       120,587       14,400       (1,318 )     346,373  
Cost reclassification
     3,136       (3,217 )     (487 )     6,840       -       3,136  
Gross profit (loss) adjusted
   $ 349,509     $ 209,487     $ 120,100     $ 21,240     $ (1,318 )   $ 349,509  
                                                 
Gross margin (loss)
                                                
Granite West
     16.8 %     18.5 %     18.3 %     7.0 %     - %     16.8 %
Granite East
     20.1       18.4       20.3       -       -       20.1  
Granite Land Company
     (58.0 )     -       -       -       (58.0 )     (58.0 )
Gross margin (loss)
     17.6       18.5       20.0       7.0       (58.0 )     17.6  
Gross margin (loss) adjusted
     17.8 %     18.2 %     19.9 %     10.3 %     (58.0 )%     17.8 %
                                                 
Selling, general and administrative
                                                
Selling, general and administrative
                                   $ 224,910  
Cost reclassification
                                             3,136  
Selling, general and administrative adjusted
                                   $ 228,046  
 
3
 
Prior Segments
    
New Segments
  
Year Ended
December 31, 2008
  
Total
    
Construction
    
Large Project Construction
  
Construction Materials
    
Real Estate
  
Total
  
Net revenue
                                    
Granite West
   $ 1,970,196     $ 1,418,583     $ 198,498     $ 353,115     $ -     $ 1,970,196  
Granite East
     695,035       66,278       628,757       -       -       695,035  
Granite Land Company
     9,013       -       -       -       9,013       9,013  
Net revenue
   $ 2,674,244     $ 1,484,861     $ 827,255     $ 353,115     $ 9,013     $ 2,674,244  
                                                 
Gross profit (loss)
                                                
Granite West
   $ 348,818     $ 269,032     $ 37,917     $ 41,869     $ -     $ 348,818  
Granite East
     121,425       5,214       116,211       -       -       121,425  
Granite Land Company
     (1,523 )     -       -       -       (1,523 )     (1,523 )
Gross profit (loss)
     468,720       274,246       154,128       41,869       (1,523 )     468,720  
Cost reclassification
     3,229       (3,378 )     (557 )     7,164       -       3,229  
Gross profit (loss) adjusted
   $ 471,949     $ 270,868     $ 153,571     $ 49,033     $ (1,523 )   $ 471,949  
                                                 
Gross margin (loss)
                                                
Granite West
     17.7 %     19.0 %     19.1 %     11.9 %     - %     17.7 %
Granite East
     17.5       7.9       18.5       -       -       17.5  
Granite Land Company
     (16.9 )     -       -       -       (16.9 )     (16.9 )
Gross margin (loss)
     17.5       18.5       18.6       11.9       (16.9 )     17.5  
Gross margin (loss) adjusted
     17.6 %     18.2 %     18.6 %     13.9  %     (16.9 )%     17.6 %
                                                 
Selling, general and administrative
                                                
Selling, general and administrative
                                   $ 257,532  
Cost reclassification
                                             3,229  
Selling, general and administrative adjusted
                                   $ 260,761  
 
4
 
Prior Segments
    
New Segments
  
Three Months Ended
March 31, 2009
  
Total
    
Construction
    
Large Project Construction
  
Construction Materials
    
Real Estate
  
Total
  
Net revenue
                                    
Granite West
   $ 197,049     $ 149,769     $ 17,434     $ 29,846     $ -     $ 197,049  
Granite East
     149,906       18,280       131,626       -       -       149,906  
Granite Land Company
     417       -       -       -       417       417  
Net revenue
   $ 347,372     $ 168,049     $ 149,060     $ 29,846     $ 417     $ 347,372  
                                                 
Gross profit (loss)
                                                
Granite West
   $ 32,939     $ 32,568     $ 2,708     $ (2,337 )   $ -     $ 32,939  
Granite East
     34,864       3,754       31,110       -       -       34,864  
Granite Land Company
     210       -       -       -       210       210  
Gross profit (loss)
     68,013       36,322       33,818       (2,337 )     210       68,013  
Cost reclassification
     723       (1,146 )     (154 )     2,023       -       723  
Gross profit (loss) adjusted
   $ 68,736     $ 35,176     $ 33,664     $ (314 )   $ 210     $ 68,736  
                                                 
Gross margin (loss)
                                                
Granite West
     16.7 %     21.7 %     15.5 %     (7.8 )%     - %     16.7 %
Granite East
     23.3       20.5       23.6       -       -       23.3  
Granite Land Company
     50.4       -       -       -       50.4       50.4  
Gross margin (loss)
     19.6       21.6       22.7       (7.8 )     50.4       19.6  
Gross margin (loss) adjusted
     19.8 %     20.9  %     22.6 %     (1.1 )%     50.4 %     19.8 %
                                                 
Selling, general and administrative
                                                
Selling, general and administrative
                                   $ 53,632  
Cost reclassification
                                             723  
Selling, general and administrative adjusted
                                   $ 54,355  
 
5
 
Prior Segments
    
New Segments
  
Three Months Ended
March 31, 2008
  
Total
    
Construction
    
Large Project Construction
  
Construction Materials
    
Real Estate
    
Total
  
Net revenue
                                    
Granite West
   $ 240,002     $ 155,211     $ 33,237     $ 51,554     $ -     $ 240,002  
Granite East
     214,125       11,731       202,394       -       -       214,125  
Granite Land Company
     673       -       -       -       673       673  
Net revenue
   $ 454,800     $ 166,942     $ 235,631     $ 51,554     $ 673     $ 454,800  
                                                 
Gross profit (loss)
                                                
Granite West
   $ 39,629     $ 33,834     $ 3,297     $ 2,498     $ -     $ 39,629  
Granite East
     58,596       371       58,225       -       -       58,596  
Granite Land Company
     469       -       -       -       469       469  
Gross profit (loss)
     98,694       34,205       61,522       2,498       469       98,694  
Cost reclassification
     (190 )     (1,065 )     (163 )     1,038       -       (190 )
Gross profit (loss) adjusted
   $ 98,504     $ 33,140     $ 61,359     $ 3,536     $ 469     $ 98,504  
                                                 
Gross margin
                                                
Granite West
     16.5 %     21.8 %     9.9 %     4.8 %     - %     16.5 %
Granite East
     27.4       3.2       28.8       -       -       27.4  
Granite Land Company
     69.7       -       -       -       69.7       69.7  
Gross margin
     21.7       20.5       26.1       4.8       69.7       21.7  
Gross margin adjusted
     21.7 %     19.9  %     26.0  %     6.9  %     69.7 %     21.7 %
                                                 
Selling, general and administrative
                                                
  Selling, general and administrative
                                   $ 60,651  
  Cost reclassification
                                             (190 )
  Selling, general and administrative adjusted
                                   $ 60,461  
 
6
 
Prior Segments
    
New Segments
  
Three Months Ended
June 30, 2009
  
Total
    
Construction
    
Large Project Construction
  
Construction Materials
    
Real Estate
  
Total
  
Net revenue
                                    
Granite West
   $ 348,304     $ 265,387     $ 25,602     $ 57,315     $ -     $ 348,304  
Granite East
     112,237       12,069       100,168       -       -       112,237  
Granite Land Company
     534       -       -       -       534       534  
Net revenue
   $ 461,075     $ 277,456     $ 125,770     $ 57,315     $ 534     $ 461,075  
                                                 
Gross profit (loss)
                                                
Granite West
   $ 62,882     $ 52,167     $ 2,680     $ 8,035     $ -     $ 62,882  
Granite East
     21,363       1,409       19,954       -       -       21,363  
Granite Land Company
     (1,000 )     -       -       -       (1,000 )     (1,000 )
Gross profit (loss)
     83,245       53,576       22,634       8,035       (1,000 )     83,245  
Cost reclassification
     650       (775 )     (123 )     1,548       -       650  
Gross profit (loss) adjusted
   $ 83,895     $ 52,801     $ 22,511     $ 9,583     $ (1,000 )   $ 83,895  
                                                 
Gross margin (loss)
                                                
Granite West
     18.1 %     19.7 %     10.5 %     14.0 %     - %     18.1 %
Granite East
     19.0       11.7       19.9       -       -       19.0  
Granite Land Company
     (187.3 )     -       -       -       (187.3 )     (187.3 )
Gross margin (loss)
     18.1       19.3       18.0       14.0       (187.3 )     18.1  
Gross margin (loss) adjusted
     18.2 %     19.0 %     17.9 %     16.7 %     (187.3 )%     18.2 %
                                                 
Selling, general and administrative
                                                
Selling, general and administrative
                                   $ 55,669  
Cost reclassification
                                             650  
Selling, general and administrative adjusted
                                   $ 56,319  
 
7
 
Prior Segments
    
New Segments
  
Three Months Ended
June 30, 2008
  
Total
    
Construction
    
Large Project Construction
  
Construction Materials
    
Real Estate
    
Total
  
Net revenue
                                    
Granite West
   $ 517,463     $ 337,338     $ 72,836     $ 107,289     $ -     $ 517,463  
Granite East
     170,769       16,865       153,904       -       -       170,769  
Granite Land Company
     6,100       -       -       -       6,100       6,100  
Net revenue
   $ 694,332     $ 354,203     $ 226,740     $ 107,289     $ 6,100     $ 694,332  
                                                 
Gross profit (loss)
                                                
Granite West
   $ 92,924     $ 61,985     $ 13,485     $ 17,454     $ -     $ 92,924  
Granite East
     18,757       (1,673 )     20,430       -       -       18,757  
Granite Land Company
     (2,655 )     -       -       -       (2,655 )     (2,655 )
Gross profit (loss)
     109,026       60,312       33,915       17,454       (2,655 )     109,026  
Cost reclassification
     1,062       (902 )     (144 )     2,108       -       1,062  
Gross profit (loss) adjusted
   $ 110,088     $ 59,410     $ 33,771     $ 19,562     $ (2,655 )   $ 110,088  
                                                 
Gross margin (loss)
                                                
Granite West
     18.0 %     18.4 %     18.5 %     16.3 %     - %     18.0 %
Granite East
     11.0       (9.9 )     13.3       -       -       11.0  
Granite Land Company
     (43.5 )     -       -       -       (43.5 )     (43.5 )
Gross margin (loss)
     15.7       17.0       15.0       16.3       (43.5 )     15.7  
Gross margin (loss) adjusted
     15.9 %     16.8 %     14.9 %     18.2 %     (43.5 )%     15.9 %
                                                 
Selling, general and administrative
                                                
Selling, general and administrative
                                   $ 65,760  
Cost reclassification
                                             1,062  
Selling, general and administrative adjusted
                                   $ 66,822  
 
8
 
Prior Segments
    
New Segments
  
Three Months Ended
September 30, 2009
  
Total
    
Construction
    
Large Project Construction
  
Construction Materials
    
Real Estate
  
Total
  
Net revenue
                                    
Granite West
   $ 564,089     $ 451,670     $ 40,892     $ 71,527     $ -     $ 564,089  
Granite East
     155,214       14,935       140,279       -       -       155,214  
Granite Land Company
     981       -       -       -       981       981  
Net revenue
   $ 720,284     $ 466,605     $ 181,171     $ 71,527     $ 981     $ 720,284  
                                                 
Gross profit (loss)
                                                
Granite West
   $ 85,499     $ 70,853     $ 7,647     $ 6,999     $ -     $ 85,499  
Granite East
     20,223       2,529       17,694       -       -       20,223  
Granite Land Company
     (550 )     -       -       -       (550 )     (550 )
Gross profit (loss)
     105,172       73,382       25,341       6,999       (550 )     105,172  
Cost reclassification
     485       (747 )     (120 )     1,352       -       485  
Gross profit (loss) adjusted
   $ 105,657     $ 72,635     $ 25,221     $ 8,351     $ (550 )   $ 105,657  
                                                 
Gross margin (loss)
                                                
Granite West
     15.2 %     15.7 %     18.7 %     9.8 %     - %     15.2 %
Granite East
     13.0       16.9       12.6       -       -       13.0  
Granite Land Company
     (56.1 )     -       -       -       (56.1 )     (56.1 )
Gross margin (loss)
     14.6       15.7       14.0       9.8       (56.1 )     14.6  
Gross margin (loss) adjusted
     14.7 %     15.6 %     13.9 %     11.7 %     (56.1 )%     14.7 %
                                                 
Selling, general and administrative
                                                
Selling, general and administrative
                                   $ 60,465  
Cost reclassification
                                             485  
Selling, general and administrative adjusted
                                   $ 60,950  
 
9
 
Prior Segments
    
New Segments
  
Three Months Ended
September 30, 2008
  
Total
    
Construction
    
Large Project Construction
  
Construction Materials
    
Real Estate
    
Total
  
Net revenue
                                    
Granite West
   $ 749,487     $ 558,499     $ 66,510     $ 124,478     $ -     $ 749,487  
Granite East
     146,932       11,550       135,382       -       -       146,932  
Granite Land Company
     1,369       -       -       -       1,369       1,369  
Net revenue
   $ 897,788     $ 570,049     $ 201,892     $ 124,478     $ 1,369     $ 897,788  
                                                 
Gross profit (loss)
                                                
Granite West
   $ 133,904     $ 101,022     $ 17,472     $ 15,410     $ -     $ 133,904  
Granite East
     9,916       (1,941 )     11,857       -       -       9,916  
Granite Land Company
     482       -       -       -       482       482  
Gross profit (loss)
     144,302       99,081       29,329       15,410       482       144,302  
Cost reclassification
     673       (716 )     (142 )     1,531       -       673  
Gross profit (loss) adjusted
   $ 144,975     $ 98,365     $ 29,187     $ 16,941     $ 482     $ 144,975  
                                                 
Gross margin (loss)
                                                
Granite West
     17.9 %     18.1 %     26.3 %     12.4 %     - %     17.9 %
Granite East
     6.7       (16.8 )     8.8       -       -       6.7  
Granite Land Company
     35.2       -       -       -       35.2       35.2  
Gross margin (loss)
     16.1       17.4       14.5       12.4       35.2       16.1  
Gross margin adjusted
     16.1 %     17.3 %     14.5 %     13.6 %     35.2 %     16.1 %
                                                 
Selling, general and administrative
                                                
Selling, general and administrative
                                   $ 71,933  
Cost reclassification
                                             673  
Selling, general and administrative adjusted
                                   $ 72,606  
 
10
 
Prior Segments
    
New Segments
  
Three Months Ended
December 31, 2009
  
Total
    
Construction
    
Large Project Construction
  
Construction Materials
    
Real Estate
  
Total
  
Net revenue
                                    
Granite West
   $ 301,574     $ 229,903     $ 24,414     $ 47,257     $ -     $ 301,574  
Granite East
     132,832       9,730       123,102       -       -       132,832  
Granite Land Company
     342       -       -       -       342       342  
Net revenue
   $ 434,748     $ 239,633     $ 147,516     $ 47,257     $ 342     $ 434,748  
                                                 
Gross profit (loss)
                                                
Granite West
   $ 55,548     $ 47,010     $ 6,835     $ 1,703     $ -     $ 55,548  
Granite East
     34,373       2,414       31,959       -       -       34,373  
Granite Land Company
     22       -       -       -       22       22  
Gross profit (loss)
     89,943       49,424       38,794       1,703       22       89,943  
Cost reclassification
     1,278       (549 )     (90 )     1,917       -       1,278  
Gross profit (loss) adjusted
   $ 91,221     $ 48,875     $ 38,704     $ 3,620     $ 22     $ 91,221  
                                                 
Gross margin
                                                
Granite West
     18.4 %     20.4 %     28.0 %     3.6 %     - %     18.4 %
Granite East
     25.9       24.8       26.0       -       -       25.9  
Granite Land Company
     6.4       -       -       -       6.4       6.4  
Gross margin
     20.7       20.6       26.3       3.6       6.4       20.7  
Gross margin adjusted
     21.0 %     20.4 %     26.2 %     7.7 %     6.4 %     21.0 %
                                                 
Selling, general and administrative
                                                
Selling, general and administrative
                                   $ 55,144  
Cost reclassification
                                             1,278  
Selling, general and administrative adjusted
                                   $ 56,422  
 
11
 
Prior Segments
    
New Segments
  
Three Months Ended
December 31, 2008
  
Total
    
Construction
    
Large Project Construction
  
Construction Materials
    
Real Estate
    
Total
  
Net revenue
                                    
Granite West
   $ 463,244     $ 367,535     $ 25,915     $ 69,794     $ -     $ 463,244  
Granite East
     163,209       26,132       137,077       -       -       163,209  
Granite Land Company
     871       -       -       -       871       871  
Net revenue
   $ 627,324     $ 393,667     $ 162,992     $ 69,794     $ 871     $ 627,324  
                                                 
Gross profit (loss)
                                                
Granite West
   $ 82,361     $ 72,191     $ 3,663     $ 6,507     $ -     $ 82,361  
Granite East
     34,156       8,457       25,699       -       -       34,156  
Granite Land Company
     181       -       -       -       181       181  
Gross profit (loss)
   $ 116,698     $ 80,648     $ 29,362     $ 6,507     $ 181     $ 116,698  
Cost reclassification
     1,684       (695 )     (108 )     2,487       -       1,684  
Gross profit (loss) adjusted
     118,382       79,953       29,254       8,994       181       118,382  
                                                 
Gross margin
                                                
Granite West
     17.8 %     19.6 %     14.1 %     9.3 %     - %     17.8 %
Granite East
     20.9       32.4       18.7       -       -       20.9  
Granite Land Company
     20.8       -       -       -       20.8       20.8  
Gross margin
     18.6       20.5       18.0       9.3       20.8       18.6  
Gross margin adjusted
     18.9 %     20.3 %     17.9 %     12.9 %     20.8 %     18.9 %
                                                 
Selling, general and administrative
                                                
Selling, general and administrative
                                   $ 59,188  
Cost reclassification
                                             1,684  
Selling, general and administrative adjusted
                                   $ 60,872  
 
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SIGNATURES
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
         
 
GRANITE CONSTRUCTION INCORPORATED
  
Date: April 28, 2010
By:
/s/ LeAnne M. Stewart
  
   
LeAnne M. Stewart
  
   
Senior Vice President and Chief Financial Officer
  
 
 
 
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