WATSONVILLE, Calif.--(BUSINESS WIRE)--May 5, 2015--Granite Construction Incorporated (NYSE:GVA) today reported a net loss of $8.6 million for the quarter ended March 31, 2015, compared to a loss of $20.6 million in the first quarter of 2014. Losses per share in the quarter were $0.22, compared to $0.53 in the prior-year period.

“For some time, we have noted that recovery for our business would appear first in our Construction Materials segment. This solid performance is a good first step in 2015, and it reinforces our confidence in the continued execution of our Strategic Plan.” said James H. Roberts, President and CEO of Granite Construction Incorporated.

“Overall market activity remains stable and competitive. Continued backlog progression has Granite teams across the country focusing on growing our business, while remaining keenly aware of the need for improved execution in all of our segments.” Roberts said.

“A good start to the year, coupled with solid project execution, bodes well for improved results in 2015,” Roberts said. “As we discussed in February, we are committed to growing across geographies and end markets, despite the lack of a federal spending catalyst.

“It is well past the time for Congress to act swiftly and appropriately to pass a well-funded, long-term highway bill this year,” said Roberts. “While Congress delays their actions, we are actively ramping up the execution of our Strategic Plan.”

The Company’s current expectations for 2015 remain unchanged and are as follows:

(1) See Note 1 to the Condensed Consolidated Financial Statements filed on Form 10-Q on May, 5 2015. The effect of adopting the new accounting policy for customer contract claims was an increase in revenue and gross profit of $9.7 million for the three months ended March 31, 2015 with no customer contract claims recognized for the three months ended March 31, 2014. Gross profit associated with claims against non-customers continues to be recognized when settled. During the three months ended March 31, 2015, there were no claim settlements with non-customers. During the three months ended March 31, 2014, the gross profit impact from claim settlements with non-customers was $7.9 million.

(2) The Ethisphere® Institute is an independent center of research, best practices and thought leadership. Ethisphere evaluates and benchmarks compliance and governance programs and honors superior achievement through its World’s Most Ethical Companies® recognition program.

(3) Please refer to the description and non-GAAP reconciliation in the attached tables.

Granite will conduct a conference call today, May 5, 2015, at 8 a.m. Pacific Time/11 a.m. Eastern Time to discuss the results of the quarter ended March 31, 2015. Access to a live audio webcast is available at http://investor.graniteconstruction.com/index.cfm. The live conference call may be accessed by calling 1-866-807-9684; international callers may dial 1-412-317-5415. The call will be available for replay approximately two hours after the live audio webcast through May 13, 2015 by calling 1-877-344-7529. The conference ID for the replay is also 10064622; international callers may dial 1-412-317-0088.

Through its offices and subsidiaries nationwide, Granite Construction Incorporated (NYSE: GVA) is one of the nation’s largest infrastructure contractors and construction materials producers. Recognized as one of the top 25 largest construction companies in the U.S., Granite specializes in complex infrastructure projects, including transportation, industrial and federal contracting, and is a proven leader in alternative procurement project delivery. Granite 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 six years in a row. For more information, visit www.graniteconstruction.com. Granite is listed on the New York Stock Exchange under the ticker symbol GVA and is part of the S&P MidCap 400 Index, the MSCI KLD 400 Social Index and the Russell 2000 Index. For more information, please visit our investor relations website at investor.graniteconstruction.com.

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)

	March 31,		December 31,		March 31,
	2015		2014		2014
ASSETS
Current assets
Cash and cash equivalents	$	239,403	$	255,961	$	205,780
Short-term marketable securities		19,282		25,504		41,143
Receivables, net		271,328		310,934		245,281
Costs and estimated earnings in excess of billings		56,907		36,411		53,311
Inventories		64,636		68,920		77,407
Real estate held for development and sale		11,609		11,609		11,742
Deferred income taxes		53,231		53,231		55,874
Equity in construction joint ventures		197,570		184,575		168,045
Other current assets		26,613		23,033		40,142
Total current assets		940,579		970,178		898,725
Property and equipment, net		399,910		409,653		432,398
Long-term marketable securities		80,522		76,563		65,969
Investments in affiliates		32,031		32,361		33,336
Goodwill		53,799		53,799		53,799
Other noncurrent assets		76,687		77,940		76,944
Total assets	$	1,583,528	$	1,620,494	$	1,561,171
LIABILITIES AND EQUITY
Current liabilities
Current maturities of long-term debt	$	22	$	21	$	21
Current maturities of non-recourse debt		6,435		1,226		1,226
Accounts payable		121,013		151,935		141,241
Billings in excess of costs and estimated earnings		95,328		108,992		125,618
Accrued expenses and other current liabilities		225,255		200,652		193,307
Total current liabilities		448,053		462,826		461,413
Long-term debt		270,105		270,105		270,127
Long-term non-recourse debt		—		5,516		6,435
Other long-term liabilities		42,058		44,495		48,662
Deferred income taxes		20,615		20,446		9,803
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 39,342,647 shares as of March 31, 2015, 39,186,386 shares as of December 31, 2014 and 39,098,549 shares as of March 31, 2014		393		392		391
Additional paid-in capital		133,962		134,177		126,937
Retained earnings		645,931		659,816		629,443
Total Granite Construction Incorporated shareholders’ equity		780,286		794,385		756,771
Non-controlling interests		22,411		22,721		7,960
Total equity		802,697		817,106		764,731
Total liabilities and equity	$	1,583,528	$	1,620,494	$	1,561,171


GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - in thousands, except per share data)

Three Months Ended March 31,	2015			2014
Revenue
Construction	$	188,520		$	157,040
Large Project Construction		190,305			187,336
Construction Materials		41,424			35,471
Total revenue		420,249			379,847
Cost of revenue
Construction		166,845			147,896
Large Project Construction		172,534			171,543
Construction Materials		40,761			39,000
Total cost of revenue		380,140			358,439
Gross profit		40,109			21,408
Selling, general and administrative expenses		52,203			49,247
Gain on sales of property and equipment		(811	)		(894	)
Operating loss		(11,283	)		(26,945	)
Other (income) expense
Interest income		(442	)		(479	)
Interest expense		3,496			3,599
Equity in loss (income) of affiliates		63			(791	)
Other (income) expense, net		(1,284	)		51
Total other expense		1,833			2,380
Loss before benefit from income taxes		(13,116	)		(29,325	)
Benefit from income taxes		(4,506	)		(8,064	)
Net loss		(8,610	)		(21,261	)
Amount attributable to non-controlling interests		50			708
Net loss attributable to Granite Construction Incorporated	$	(8,560	)	$	(20,553	)

Net loss per share attributable to common shareholders:
Basic	$	(0.22	)	$	(0.53	)
Diluted	$	(0.22	)	$	(0.53	)
Weighted average shares of common stock:
Basic		39,215			38,951
Diluted		39,215			38,951

GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - in thousands)

Three Months Ended March 31,	2015			2014
Operating activities
Net loss	$	(8,610	)	$	(21,261	)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, depletion and amortization		15,627			15,832
Gain on sales of property and equipment		(811	)		(894	)
Change in deferred income taxes		(14	)		1,613
Stock-based compensation		3,163			4,095
Equity in net income from unconsolidated joint ventures		(11,271	)		(2,562	)
Changes in assets and liabilities		(5,002	)		(16,600	)
Net cash used in operating activities		(6,918	)		(19,777	)
Investing activities
Purchases of marketable securities		(9,988	)		(10,000	)
Maturities of marketable securities		10,000			5,000
Proceeds from called marketable securities		5,000			15,000
Purchases of property and equipment		(7,607	)		(10,375	)
Proceeds from sales of property and equipment		1,089			1,360
Other investing activities, net		383			39
Net cash (used in) provided by investing activities		(1,123	)		1,024
Financing activities
Cash dividends paid		(5,094	)		(5,083	)
Purchase of common stock		(3,191	)		(4,278	)
(Distributions to) contributions from non-controlling partners		(270	)		4,278
Other financing activities, net		38			495
Net cash used in financing activities		(8,517	)		(4,588	)
Decrease in cash and cash equivalents		(16,558	)		(23,341	)
Cash and cash equivalents at beginning of period		255,961			229,121
Cash and cash equivalents at end of period		239,403			205,780

GRANITE CONSTRUCTION INCORPORATED
Business Segment Information
(Unaudited - dollars in thousands)

Three Months Ended March 31,	Construction			Large Project Construction			Construction Materials

2015
Revenue	$	188,520		$	190,305		$	41,424
Gross profit		21,675			17,771			663
Gross profit as a percent of revenue		11.5	%		9.3	%		1.6	%

2014
Revenue	$	157,040		$	187,336		$	35,471
Gross profit (loss)		9,144			15,793			(3,529	)
Gross profit (loss) as a percent of revenue		5.8	%		8.4	%		(9.9	)%

GRANITE CONSTRUCTION INCORPORATED
EBITDA⁽¹⁾
(Unaudited - dollars in thousands)

Three Months Ended March 31,	2015			2014
Net loss attributable to Granite Construction Incorporated	$	(8,560	)	$	(20,553	)
Depreciation, depletion and amortization expense⁽²⁾		15,627			15,832
Benefit from income taxes		(4,506	)		(8,064	)
Interest expense, net of interest income		3,054			3,120
EBITDA⁽¹⁾	$	5,615		$	(9,665	)
Consolidated EBITDA Margin⁽³⁾		1.3	%		(2.5	)%

Note:
⁽¹⁾We define EBITDA as GAAP net loss 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 security 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 $420,249 and $379,847 for the periods ending March 31, 2015 and 2014, respectively.

GRANITE CONSTRUCTION INCORPORATED
Contract Backlog by Segment
(Unaudited - dollars in thousands)

Contract Backlog by Segment	March 31, 2015				December 31, 2014				March 31, 2014

Construction	$	749,261	25.5	%	$	712,967	26.2	%	$	786,458	30.6	%
Large Project Construction		2,187,888	74.5	%		2,005,906	73.8	%		1,783,254	69.4	%

Total	$	2,937,149	100.0	%	$	2,718,873	100.0	%	$	2,569,712	100.0	%