e8vk

0000950134-04-011331.txt : 20040805 0000950134-04-011331.hdr.sgml : 20040805 20040805060139 ACCESSION NUMBER: 0000950134-04-011331 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20040804 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040805 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GRANITE CONSTRUCTION INC CENTRAL INDEX KEY: 0000861459 STANDARD INDUSTRIAL CLASSIFICATION: HEAVY CONSTRUCTION OTHER THAN BUILDING CONST - CONTRACTORS [1600] IRS NUMBER: 770239383 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12911 FILM NUMBER: 04953042 BUSINESS ADDRESS: STREET 1: 585 WEST BEACH ST CITY: WATSONVILLE STATE: CA ZIP: 95076 BUSINESS PHONE: 8317241011 MAIL ADDRESS: STREET 1: 585 WEST BEACH ST CITY: WATSONVILLE STATE: CA ZIP: 95076 8-K 1 f00924e8vk.htm FORM 8-K e8vk

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) August 4, 2004

GRANITE CONSTRUCTION INCORPORATED

(Exact name of registrant as specified in its charter)


Delaware	1-12911	77-0239383
(State or other jurisdiction of	(Commission File Number)	(IRS Employer Identification No.)
incorporation)

585 West Beach Street
Watsonville, California 95076
(Address of principal executive offices) (Zip Code)

(831) 724-1011
Registrant’s telephone number, including area code

TABLE OF CONTENTS


	Item 12. Disclosure of Results of Operations and Financial Condition.
	Item 7. Financial Statement, Pro Forma Financial Information and Exhibits
SIGNATURES
INDEX TO EXHIBITS
EXHIBIT 20.1
EXHIBIT 20.2
EXHIBIT 20.3
EXHIBIT 20.4

Item 12. Disclosure of Results of Operations and Financial Condition.

On August 4, 2004 Granite Construction Incorporated announced its second quarter 2004 financial results. Granite announced improved operating results for the second quarter ended June 30, 2004. The Company reported net income of $13.8 million, or $0.34 per diluted share for the second quarter ended June 30, 2004. This compares with net income of $10.8 million or $0.26 per diluted share for the same period last year.

Operating Results

For the second quarter of 2004, total revenue increased 19.0% to $558.8 million compared with $469.4 million a year ago. Total backlog at June 30, 2004 totaled $2.04 billion compared with $1.93 billion at June 30, 2003. Total company revenue for the quarter ended June 30, 2004 and backlog at June 30, 2004 includes $25.6 million and $105.1 million, respectively, resulting from consolidating certain construction joint ventures as required by new accounting rules*.

Total gross profit as a percent of revenue for the second quarter 2004 decreased to 10.7% compared with 11.3% for the same period last year. Operating income increased 46.5% to $24.9 million for the second quarter of 2004 compared with $17.0 million for the second quarter 2003.

Results by Segment

Branch Division revenue for the quarter totaled $338.6 million, an increase of $59.1 million or 21.1% over the same period in 2003. Backlog for the Branch Division increased 23.1% in the second quarter 2004 to $660.1 million compared with $536.2 million for the second quarter 2003. Branch Division gross profit as a percent of revenue decreased for the second quarter 2004 to 12.3% compared with 13.7% for the second quarter 2003. However, primarily as a result of the increase in revenue, operating income for the Branch Division increased 20.6% for the quarter ending June 30, 2004 to $23.7 million from $19.6 million for the same period last year.

HCD revenue for the quarter totaled $220.1 million versus $189.9 million for the same period last year. HCD backlog decreased $17.1 million to $1.38 billion compared with $1.40 billion for the same period last year. HCD revenue for the quarter ended June 30, 2004 and backlog at June 30, 2004 includes $25.6 million and $105.1 million, respectively, as a result of consolidating certain construction joint ventures in the quarter as required by new accounting rules*. HCD gross profit as a percent of revenue increased in the quarter to 8.3% compared with 7.7% for the quarter ended June 30, 2003. The increase in gross profit is primarily due to profit recognized on three large projects that reached 25% completion during the quarter, partially offset by the recognition of approximately $5.4 million in additional costs attributable to unanticipated changes in estimated costs to complete one project. Until the 25 percent threshold is reached, the Company records revenues equal to costs incurred on a project, but not profit. Because of increased revenue and increased gross margin percentage, operating income for HCD increased 44.0% for the second quarter 2004 to $10.3 million compared with $7.2 million for the second quarter 2003.

Business Outlook

“As the forces that drive our Branch business improve, our outlook for this area of our business is becoming more optimistic. Despite the uncertainty of both state transportation funding

and the Federal highway bill, all of our branch offices in the West are very busy bidding and building work. Although some locations are experiencing stronger markets than others, most of our branches expect that this improved level of activity is sustainable through the end of the construction season. While interest rates have risen slightly, the demand for residential and commercial site development work in the private sector continues to be a primary driver for a number of branches,” said William G. Dorey, Granite President and CEO.

“The pipeline of large projects available for bidding also remains full. Over the next six months, HCD’s potential bid list includes approximately $3.0 billion in highway, bridge and transit work across the U.S. and in Canada. Many of these opportunities would require our expertise in the design-build method of project delivery.”

Dorey added, “We continue to forecast that 2004 HCD operating income will be better than in 2003. Our ability to achieve this expectation is dependent on several factors, including reaching 25 percent completion on a large HCD project late this year. Although we are currently on schedule, and expect to stay on schedule, it is possible this project could reach 25 percent in early 2005 rather than late 2004.”

Although it is too early in the construction season to provide specific guidance on 2004 results, given the outlook for each of the operating divisions discussed in this release, the Company believes 2004 results will be in the higher end of the range currently available on First Call/Thomson, including the gain on sale of certain assets related to a ready-mix concrete business in the first quarter 2004 of approximately $10.0 million (pre-tax).

Second Quarter Conference Call Information:

Granite will host a conference call at 8:00 a.m. Pacific Time, 11:00 a.m. Eastern Time on Thursday, August 5, 2004 which will be live on the internet, and can be accessed at www.graniteconstruction.com or by calling (913) 981-5592. A replay of the call can be accessed on the Company’s website or by calling (888) 203-1112 for domestic U.S. and Canada or (719) 457-0820 for international callers, access code 588871. The replay will be available beginning at 11:00 a.m. Pacific Time on August 5, 2004 through 9:00 p.m. Pacific Time on August 19, 2004.

Item 7. Financial Statement, Pro Forma Financial Information and Exhibits

(a) Not applicable.

(b) Not applicable.

(c) Exhibits. The following exhibits are attached hereto and furnished herewith:


Exhibit
Number
20.1		Press Release of Registrant, dated August 4, 2004, its second quarter financial results

20.2		Condensed Consolidated Balance Sheets

20.3		Comparative Financial Summary

20.4		Revenue and Backlog Analysis

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

GRANITE CONSTRUCTION INCORPORATED

Date: August 4, 2004 By: /s/ William E. Barton
William E. Barton
Senior Vice President and Chief Financial Officer

INDEX TO EXHIBITS


Exhibit
Number		Document
20.1		Press Release of Registrant, dated August 4, 2004, its second quarter financial results

20.2		Condensed Consolidated Balance Sheets

20.3		Comparative Financial Summary

20.4		Revenue and Backlog Analysis

EX-20.1 2 f00924exv20w1.htm EXHIBIT 20.1 exv20w1

Exhibit 20.1

“FOR FURTHER INFORMATION CONTACT:
Jacque Underdown (831) 761-4741

FOR IMMEDIATE RELEASE

GRANITE CONSTRUCTION’S SECOND QUARTER
NET INCOME INCREASES 28%;
REPORTS OVERALL STRONG SECOND QUARTER 2004 RESULTS

Watsonville, California (August 4, 2004) Granite Construction Incorporated (NYSE:GVA) today announced improved operating results for the second quarter ended June 30, 2004. The Company reported net income of $13.8 million, or $0.34 per diluted share for the second quarter ended June 30, 2004. This compares with net income of $10.8 million or $0.26 per diluted share for the same period last year.

“Our second quarter 2004 reflects solid results turned in by both the Branch Division and Heavy Construction Division (HCD). Most of our branches are off to a good start this year. We are experiencing improved bidding success in the public sector and continued demand for our services from the private marketplace that is driving demand for our construction materials. In addition, we continue to focus our efforts on improving operational performance in both divisions,” said William G. Dorey, Granite President and CEO.

Operating Results
For the second quarter of 2004, total revenue increased 19.0% to $558.8 million compared with $469.4 million a year ago. Total backlog at June 30, 2004 totaled $2.04 billion compared with $1.93 billion at June 30, 2003. Total company revenue for the quarter ended June 30, 2004 and backlog at June 30, 2004 includes $25.6 million and $105.1 million, respectively, resulting from consolidating certain construction joint ventures as required by new accounting rules*.

Results by Segment
Branch Division revenue for the quarter totaled $338.6 million, an increase of $59.1 million or 21.1% over the same period in 2003. Backlog for the Branch Division increased 23.1% in the second quarter 2004 to $660.1 million compared with $536.2 million for the second quarter 2003. Branch Division gross profit as a percent of revenue decreased for the second quarter 2004 to 12.3% compared with 13.7% for the second quarter 2003. However, primarily as a result of the increase in revenue, operating income for the Branch Division increased 20.6% for the quarter ending June 30, 2004 to $23.7 million from $19.6 million for the same period last year.

Business Outlook
“As the forces that drive our Branch business improve, our outlook for this area of our business is becoming more optimistic. Despite the uncertainty of both state transportation funding and the Federal highway bill, all of our branch offices in the West are very busy bidding and building work. Although some locations are experiencing stronger markets than others, most of our branches expect that this improved level of activity is sustainable through the end of the construction season. While interest rates have risen slightly, the demand for residential and commercial site development work in the private sector continues to be a primary driver for a number of branches,” said Dorey.

Second Quarter Conference Call Information:
Granite will host a conference call at 8:00 a.m. Pacific Time, 11:00 a.m. Eastern Time on Thursday, August 5, 2004 which will be live on the internet, and can be accessed at www.graniteconstruction.com or by calling (913) 981-5592. A replay of the call can be accessed on the Company’s website or by calling (888) 203-1112 for domestic U.S. and Canada or (719)

457-0820 for international callers, access code 588871. The replay will be available beginning at 11:00 a.m. Pacific Time on August 5, 2004 through 9:00 p.m. Pacific Time on August 19, 2004.

Granite Construction Incorporated is a member of the S&P 400 Index and is the parent company of Granite Construction Company, one of the nation’s largest heavy civil contractors and construction materials producers. Granite Construction Company serves both public and private sector clients through its offices nationwide. For more information about Granite, please visit its website at www.graniteconstruction.com.

*Note: The Company has determined that certain of the construction joint ventures in which it participates are variable interest entities as defined by FIN No. 46 “Consolidation of Variable Interest Entities” issued by the Financial Accounting Standards Board. Accordingly, effective January 1, 2004, the Company has consolidated those joint ventures where it has determined that the Company is the primary beneficiary. There was no effect on the Company’s net income as a result of these consolidations for the three or six months ended June 30, 2004.

This press release contains forward-looking statements, such as statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding future events and the future results of Granite that are based on current expectations, estimates, forecasts, and projects as well as the beliefs and assumptions of Granite’s management. Words such as “outlook,” “believes,” “expects,” “appears,” “may,” “will,” “should,” or “anticipates,” or the negative thereof or comparable terminology, are intended to identify such forward-looking statements. These forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore actual results may differ materially and adversely from those expressed in any forward-looking statements. Specific risk factors include, without limitation, changes in the composition of applicable federal and state legislation appropriation committees; federal and state appropriation changes for infrastructure spending; the general state of the economy; job productivity; accuracy of project estimates; weather conditions; competition and pricing pressures; and state referendums and initiatives. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this news release. Granite undertakes no obligation to revise or update publicly any forward-looking statements for any reason.

EX-20.2 3 f00924exv20w2.htm EXHIBIT 20.2 exv20w2

Exhibit 20.2

GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited — In Thousands, Except Share and Per Share Data)


	June 30,			December 31,
	2004			2003
Assets
Current assets
Cash and cash equivalents	$	112,555		$	69,919
Short-term marketable securities		62,535			90,869
Accounts receivable, net		389,479			288,210
Costs and estimated earnings in excess of billings		55,682			31,189
Inventories		33,222			29,878
Deferred income taxes		22,144			22,421
Equity in construction joint ventures		19,901			42,250
Other current assets		45,601			43,915

Total current assets		741,119			618,651

Property and equipment, net		356,377			344,734

Long-term marketable securities		32,949			41,197

Investment in affiliates		12,974			18,295

Other assets		47,091			37,533

	$	1,190,510		$	1,060,410

Liabilities and Stockholders’ Equity
Current liabilities
Current maturities of long-term debt	$	10,482		$	8,182
Accounts payable		213,989			135,468
Billings in excess of costs and estimated earnings		128,257			99,337
Accrued expenses and other current liabilities		105,227			105,717

Total current liabilities		457,955			348,704

Long-term debt		131,592			126,708

Other long-term liabilities		27,550			24,938

Deferred income taxes		45,775			44,297

Minority interest in consolidated subsidiaries		25,905			10,872

Stockholders’ equity
Preferred stock, $0.01 par value, authorized 3,000,000 shares; none outstanding		—			-
Common stock, $0.01 par value, authorized 100,000,000 shares; issued and outstanding 41,609,521 shares in 2004 and 41,528,317 shares in 2003		416			415
Additional paid-in capital		75,812			73,651
Retained earnings		438,648			442,272
Accumulated other comprehensive income		604			76

		515,480			516,414
Unearned compensation		(13,747	)		(11,523	)

		501,733			504,891

	$	1,190,510		$	1,060,410

EX-20.3 4 f00924exv20w3.htm EXHIBIT 20.3 exv20w3

Exhibit 20.3

GRANITE CONSTRUCTION INCORPORATED
COMPARATIVE FINANCIAL SUMMARY
(Unaudited — In Thousands, Except Per Share Data)


	Three Months Ended												Six Months Ended
	June 30,						Variance						June 30,						Variance
Operations	2004			2003			Amount			Percent			2004			2003			Amount			Percent
Revenue	$	558,754		$	469,405		$	89,349			19.0		$	895,772		$	771,565		$	124,207			16.1
Gross profit	$	59,744		$	53,183		$	6,561			12.3		$	70,428		$	86,200		$	(15,772	)		(18.3	)
Gross profit as a percent of revenue		10.7	%		11.3	%		(0.6	%)		—			7.9	%		11.2	%		(3.3	%)		—
General and administrative expenses	$	35,914		$	36,395		$	481			1.3		$	72,458		$	72,945		$	487			0.7
G&A expenses as a percent of revenue		6.4	%		7.8	%		1.4	%		—			8.1	%		9.5	%		1.4	%		—
Gain on sales of property and equipment	$	1,109		$	232		$	877			*	***	$	14,439		$	528		$	13,911			*	***

Other income (expense)
Interest income	$	1,317		$	2,002		$	(685	)		(34.2	)	$	2,715		$	3,488		$	(773	)		(22.2	)
Interest expense	$	(1,859	)	$	(2,529	)	$	670			26.5		$	(3,599	)	$	(4,638	)	$	1,039			22.4
Equity in income of affiliates	$	2,766		$	110		$	2,656			*	***	$	2,873		$	18,125		$	(15,252	)		(84.1	)
Other, net	$	(7	)	$	1,951		$	(1,958	)		*	***	$	95		$	2,278		$	(2,183	)		(95.8	)

Total other income	$	2,217		$	1,534		$	683			(44.5	)	$	2,084		$	19,253		$	(17,169	)		(89.2	)

Income before provision for income taxes and minority interest	$	27,156		$	18,554		$	8,602			46.4		$	14,493		$	33,036		$	(18,543	)		(56.1	)
Minority interest	$	(4,111	)	$	(1,042	)	$	(3,069	)		*	***	$	(4,941	)	$	(265	)	$	(4,676	)		*	***
Net income	$	13,806		$	10,794		$	3,012			27.9		$	4,697		$	20,812		$	(16,115	)		(77.4	)

Net income per share:
Basic	$	0.34		$	0.27		$	0.07			25.9		$	0.12		$	0.52		$	(0.40	)		(76.9	)
Diluted	$	0.34		$	0.26		$	0.08			30.8		$	0.11		$	0.51		$	(0.40	)		(78.4	)
Weighted average shares of common stock:
Basic		40,417			40,212			205			0.5			40,341			40,130			211			0.5
Diluted		41,018			40,802			216			0.5			40,919			40,657			262			0.6


	June 30,		Dec. 31,		Variance						June 30,				Variance
Financial Position	2004		2003		Amount			Percent			2004		2003		Amount		Percent
Working capital	$	283,164	$	269,947	$	13,217			4.9		$	283,164	$	216,846	$	66,318		30.6
Current ratio		1.62		1.77		(0.15	)		(8.5	)		1.62		1.59		0.03		1.9
Long-term debt	$	131,592	$	126,708	$	4,884			3.9		$	131,592	$	131,177	$	415		0.3
Total liabilities to equity ratio		1.37		1.10		0.27			24.5			1.37		1.21		0.16		13.2
Stockholders’ equity	$	501,733	$	504,891	$	(3,158	)		(0.6	)	$	501,733	$	469,655	$	32,078		6.8
Total assets	$	1,190,510	$	1,060,410	$	130,100			12.3		$	1,190,510	$	1,038,065	$	152,445		14.7
Book value per common share	$	12.06	$	12.16	$	(0.10	)		(0.8	)	$	12.06	$	11.30	$	0.76		6.7
Backlog	$	2,038,169	$	1,985,788	$	52,381			2.6		$	2,038,169	$	1,931,394	$	106,775		5.5

****

Represents percentages greater than 100%

EX-20.4 5 f00924exv20w4.htm EXHIBIT 20.4 exv20w4

Exhibit 20.4

GRANITE CONSTRUCTION INCORPORATED
REVENUE AND BACKLOG ANALYSIS
(Unaudited — Dollars In Thousands)

BY MARKET SECTOR


	Revenue									Backlog
	Three Months Ended June 30,				Variance					June 30,				Variance
	2004		2003		Amount		Percent			2004		2003		Amount			Percent
Contracts
Federal	$	37,801	$	12,882	$	24,919		*	***	$	113,384	$	88,997	$	24,387			27.4
State		201,802		193,043		8,759		4.5			711,242		847,726		(136,484	)		(16.1	)
Local		171,594		142,557		29,037		20.4			1,002,397		817,399		184,998			22.6

Total public sector		411,197		348,482		62,715		18.0			1,827,023		1,754,122		72,901			4.2
Private sector		76,521		54,917		21,604		39.3			211,146		177,272		33,874			19.1
Aggregate sales		71,036		66,006		5,030		7.6			—		—		—			—

	$	558,754	$	469,405	$	89,349		19.0		$	2,038,169	$	1,931,394	$	106,775			5.5

BY GEOGRAPHIC AREA


	Revenue								Backlog
	Three Months Ended June 30,				Variance				June 30,				Variance
	2004		2003		Amount		Percent		2004		2003		Amount			Percent
California	$	188,737	$	151,702	$	37,035		24.4	$	322,591	$	296,469	$	26,122			8.8
West (Excl. CA)		173,713		166,621		7,092		4.3		442,695		401,387		41,308			10.3
Midwest		17,457		14,830		2,627		17.7		32,507		65,186		(32,679	)		(50.1	)
Northeast		80,243		42,139		38,104		90.4		683,054		426,987		256,067			60.0
South		98,604		94,113		4,491		4.8		557,322		741,365		(184,043	)		(24.8	)

	$	558,754	$	469,405	$	89,349		19.0	$	2,038,169	$	1,931,394	$	106,775			5.5

****

Represents percentages greater than 100%

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	(a)		Not applicable.

	(b)		Not applicable.

	(c)		Exhibits. The following exhibits are attached hereto and furnished herewith:


	GRANITE CONSTRUCTION INCORPORATED
Date: August 4, 2004	By:	/s/ William E. Barton
		William E. Barton
		Senior Vice President and Chief Financial Officer