Delaware (State or Other Jurisdiction of Incorporation) | 1-12911 (Commission File Number) | 77-0239383 (IRS Employer Identification No.) |
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)) |
Exhibit Number | Description |
99.1 | Press Release of the Company, dated: May 2, 2017 |
GRANITE CONSTRUCTION INCORPORATED | ||||
By: | /s/ Laurel J. Krzeminski | |||
Laurel J. Krzeminski | ||||
Executive Vice President and Chief Financial Officer | ||||
• | Revenue increased to $468.4 million, up 6.6 percent year-over-year |
• | Gross profit of $25.1 million; gross profit margin of 5.4 percent |
• | Total contract backlog at $3.4 billion, up 1.5 percent year-over-year |
• | Construction segment backlog at all-time high of $1.18 billion, up 17.5 percent year-over-year |
• | Severe rainfall in West slows business in first quarter |
▪ | First quarter consolidated revenue increased 6.6 percent to $468.4 million compared with $439.5 million in the first quarter of 2016. |
▪ | Gross profit decreased to $25.1 million compared with $39.2 million last year. |
▪ | Gross profit margin was 5.4 percent compared with 8.9 percent in 2016. |
▪ | Total Company backlog was $3.44 billion, up 1.5 percent year-over-year. Construction segment backlog increased 17.5 percent year-over-year to $1.18 billion. Large Project Construction segment backlog decreased 5.3 percent from last year to $2.26 billion. |
▪ | First quarter selling, general and administrative (SG&A) expenses increased to $61.8 million, with the increase split between selling and stock-based compensation expenses. |
▪ | Our balance sheet remains strong with cash and marketable securities of $297.3 million, as of March 31, 2017. |
▪ | Construction revenue increased 8.3 percent to $226.8 million, compared with $209.5 million last year. |
▪ | Gross profit increased 3.8 percent to $27.9 million compared to $26.9 million last year. |
▪ | Gross profit margin of 12.3 percent was down slightly from 12.9 percent a year ago. First quarter improvement in the desert Southwest and Kenny was offset by weather-impacted operations across the majority of the West. |
▪ | Large Project Construction revenue increased 5.9 percent to $207.0 million, compared with $195.4 million last year. |
▪ | Gross profit decreased to $2.6 million compared to $13.5 million last year, as net project write-downs in the first quarter were $13.0 million compared to $2.8 million in 2016. The write-downs were limited to five mature projects, including two nearing completion. |
▪ | Gross profit margin was 1.2 percent compared with 6.9 percent in 2016. |
▪ | We accelerated activity on certain mature projects that represented a significant amount of segment revenue in the quarter, as we continue to work to address under-performance from design, weather, project execution, and owner-related issues. |
▪ | Construction Materials revenue was flat compared to last year at $34.5 million. |
▪ | First quarter gross loss expanded to $5.4 million compared to a loss of $1.2 million last year. |
▪ | The gross loss increase from last year was attributable to exceptionally wet winter weather, which significantly hampered both aggregate and asphalt production. The lack of production resulted in less fixed-cost absorption in our seasonally weakest quarter. As a result of reduced production, excess capacity was expensed in the period, with the weather also driving higher aggregate per-unit production cost. |
▪ | Low-double digit consolidated revenue growth |
▪ | Consolidated EBITDA margin1 of 6.5% to 7.5% |
GRANITE CONSTRUCTION INCORPORATED | ||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||
(Unaudited - in thousands, except share and per share data) | ||||||||||||
March 31, 2017 | December 31, 2016 | March 31, 2016 | ||||||||||
ASSETS | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | $ | 169,501 | $ | 189,326 | $ | 198,298 | ||||||
Short-term marketable securities | 67,824 | 64,884 | 43,001 | |||||||||
Receivables, net | 351,091 | 419,345 | 307,483 | |||||||||
Costs and estimated earnings in excess of billings | 90,112 | 73,102 | 76,972 | |||||||||
Inventories | 58,781 | 55,245 | 59,444 | |||||||||
Equity in construction joint ventures | 235,683 | 247,182 | 240,480 | |||||||||
Other current assets | 54,542 | 39,908 | 37,100 | |||||||||
Total current assets | 1,027,534 | 1,088,992 | 962,778 | |||||||||
Property and equipment, net | 412,490 | 406,650 | 398,750 | |||||||||
Long-term marketable securities | 59,989 | 62,895 | 72,653 | |||||||||
Investments in affiliates | 36,410 | 35,668 | 34,619 | |||||||||
Goodwill | 53,799 | 53,799 | 53,799 | |||||||||
Deferred income taxes, net | — | — | 5,119 | |||||||||
Other noncurrent assets | 87,997 | 85,449 | 84,512 | |||||||||
Total assets | $ | 1,678,219 | $ | 1,733,453 | $ | 1,612,230 | ||||||
LIABILITIES AND EQUITY | ||||||||||||
Current liabilities | ||||||||||||
Current maturities of long-term debt | $ | 14,796 | $ | 14,796 | $ | 14,795 | ||||||
Accounts payable | 170,006 | 199,029 | 139,215 | |||||||||
Billings in excess of costs and estimated earnings | 91,527 | 97,522 | 89,188 | |||||||||
Accrued expenses and other current liabilities | 224,850 | 218,587 | 226,276 | |||||||||
Total current liabilities | 501,179 | 529,934 | 469,474 | |||||||||
Long-term debt | 228,306 | 229,498 | 243,099 | |||||||||
Deferred income taxes, net | 5,609 | 5,441 | — | |||||||||
Other long-term liabilities | 47,066 | 45,989 | 43,913 | |||||||||
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: 39,815,232 shares as of March 31, 2017, 39,621,140 shares as of December 31, 2016 and 39,563,620 shares as of March 31, 2016 | 398 | 396 | 396 | |||||||||
Additional paid-in capital | 152,805 | 150,337 | 144,916 | |||||||||
Accumulated other comprehensive loss | (257 | ) | (371 | ) | (1,569 | ) | ||||||
Retained earnings | 706,571 | 735,626 | 683,784 | |||||||||
Total Granite Construction Incorporated shareholders’ equity | 859,517 | 885,988 | 827,527 | |||||||||
Non-controlling interests | 36,542 | 36,603 | 28,217 | |||||||||
Total equity | 896,059 | 922,591 | 855,744 | |||||||||
Total liabilities and equity | $ | 1,678,219 | $ | 1,733,453 | $ | 1,612,230 |
GRANITE CONSTRUCTION INCORPORATED | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
(Unaudited - in thousands, except per share data) | |||||||
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Revenue | |||||||
Construction | $ | 226,849 | $ | 209,487 | |||
Large Project Construction | 207,033 | 195,449 | |||||
Construction Materials | 34,518 | 34,516 | |||||
Total revenue | 468,400 | 439,452 | |||||
Cost of revenue | |||||||
Construction | 198,900 | 182,554 | |||||
Large Project Construction | 204,478 | 181,944 | |||||
Construction Materials | 39,896 | 35,709 | |||||
Total cost of revenue | 443,274 | 400,207 | |||||
Gross profit | 25,126 | 39,245 | |||||
Selling, general and administrative expenses | 61,837 | 56,133 | |||||
Gain on sales of property and equipment | (270 | ) | (600 | ) | |||
Operating loss | (36,441 | ) | (16,288 | ) | |||
Other (income) expense | |||||||
Interest income | (1,051 | ) | (836 | ) | |||
Interest expense | 2,743 | 3,049 | |||||
Equity in income of affiliates | (916 | ) | (1,442 | ) | |||
Other income, net | (870 | ) | (1,372 | ) | |||
Total other income | (94 | ) | (601 | ) | |||
Loss before benefit from income taxes | (36,347 | ) | (15,687 | ) | |||
Benefit from income taxes | (12,496 | ) | (5,924 | ) | |||
Net loss | (23,851 | ) | (9,763 | ) | |||
Amount attributable to non-controlling interests | 61 | (678 | ) | ||||
Net loss attributable to Granite Construction Incorporated | $ | (23,790 | ) | $ | (10,441 | ) | |
Net loss per share attributable to common shareholders: | |||||||
Basic | $ | (0.60 | ) | $ | (0.26 | ) | |
Diluted | $ | (0.60 | ) | $ | (0.26 | ) | |
Weighted average shares of common stock | |||||||
Basic | 39,649 | 39,433 | |||||
Diluted | 39,649 | 39,433 |
GRANITE CONSTRUCTION INCORPORATED | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited - in thousands) | ||||||||
Three Months Ended March 31, | 2017 | 2016 | ||||||
Operating activities | ||||||||
Net loss | $ | (23,851 | ) | $ | (9,763 | ) | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
Depreciation, depletion and amortization | 14,649 | 13,736 | ||||||
Gain on sales of property and equipment | (270 | ) | (600 | ) | ||||
Stock-based compensation | 8,913 | 5,985 | ||||||
Equity in net income from unconsolidated joint ventures | (1,456 | ) | (8,538 | ) | ||||
Changes in assets and liabilities: | 15,351 | (11,254 | ) | |||||
Net cash provided by (used in) operating activities | 13,336 | (10,434 | ) | |||||
Investing activities | ||||||||
Purchases of marketable securities | (29,910 | ) | (19,948 | ) | ||||
Maturities of marketable securities | 30,000 | 5,000 | ||||||
Proceeds from called marketable securities | — | 5,000 | ||||||
Purchases of property and equipment | (21,372 | ) | (24,565 | ) | ||||
Proceeds from sales of property and equipment | 1,060 | 772 | ||||||
Other investing activities, net | 67 | (274 | ) | |||||
Net cash used in investing activities | (20,155 | ) | (34,015 | ) | ||||
Financing activities | ||||||||
Long-term debt principal repayments | (1,250 | ) | (1,250 | ) | ||||
Cash dividends paid | (5,151 | ) | (5,124 | ) | ||||
Repurchases of common stock | (6,448 | ) | (4,459 | ) | ||||
Other financing activities, net | (157 | ) | 744 | |||||
Net cash used in financing activities | (13,006 | ) | (10,089 | ) | ||||
Decrease in cash and cash equivalents | (19,825 | ) | (54,538 | ) | ||||
Cash and cash equivalents at beginning of period | 189,326 | 252,836 | ||||||
Cash and cash equivalents at end of period | $ | 169,501 | $ | 198,298 |
GRANITE CONSTRUCTION INCORPORATED | |||||||||||||
Business Segment Information | |||||||||||||
(Unaudited - dollars in thousands) | |||||||||||||
Three Months Ended March 31, | Construction | Large Project Construction | Construction Materials | ||||||||||
2017 | |||||||||||||
Revenue | $ | 226,849 | $ | 207,033 | $ | 34,518 | |||||||
Gross profit (loss) | 27,949 | 2,555 | (5,378 | ) | |||||||||
Gross profit (loss) as a percent of revenue | 12.3 | % | 1.2 | % | (15.6 | )% | |||||||
2016 | |||||||||||||
Revenue | $ | 209,487 | $ | 195,449 | $ | 34,516 | |||||||
Gross profit (loss) | 26,933 | 13,505 | (1,193 | ) | |||||||||
Gross profit (loss) as a percent of revenue | 12.9 | % | 6.9 | % | (3.5 | )% |
GRANITE CONSTRUCTION INCORPORATED | |||||||||||||||||||||
Contract Backlog by Segment | |||||||||||||||||||||
(Unaudited - dollars in thousands) | |||||||||||||||||||||
Contract Backlog by Segment | March 31, 2017 | December 31, 2016 | March 31, 2016 | ||||||||||||||||||
Construction | $ | 1,175,474 | 34.2 | % | $ | 1,030,487 | 29.6 | % | $ | 999,980 | 29.5 | % | |||||||||
Large Project Construction | 2,259,721 | 65.8 | % | 2,453,918 | 70.4 | % | 2,386,019 | 70.5 | % | ||||||||||||
Total | $ | 3,435,195 | 100.0 | % | $ | 3,484,405 | 100.0 | % | $ | 3,385,999 | 100.0 | % | |||||||||
GRANITE CONSTRUCTION INCORPORATED | |||||||
EBITDA(1) | |||||||
(Unaudited - dollars in thousands) | |||||||
Three Months Ended March 31, | 2017 | 2016 | |||||
Net loss attributable to Granite Construction Incorporated | $ | (23,790 | ) | $ | (10,441 | ) | |
Depreciation, depletion and amortization expense(2) | 14,649 | 13,736 | |||||
Benefit from income taxes | (12,496 | ) | (5,924 | ) | |||
Interest expense, net of interest income | 1,692 | 2,213 | |||||
EBITDA | $ | (19,945 | ) | $ | (416 | ) | |
Consolidated EBITDA Margin(3) | (4.3 | )% | (0.1 | )% | |||
Note: | |||||||
(1)We define EBITDA as GAAP net income 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 securities 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 $468,400 for three months ended March 31, 2017, and $439,452 for the three months ended March 31, 2016. |