-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TZfx+GNKuEkxM6BzGS2sYGtLMZeBQzh/JXhPoFBwnBZF+ROvSJFom8Pm+ozvFcqs 822++ML5y8mehsLnzrFlTA== 0001275287-06-003863.txt : 20060727 0001275287-06-003863.hdr.sgml : 20060727 20060726200940 ACCESSION NUMBER: 0001275287-06-003863 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060726 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060727 DATE AS OF CHANGE: 20060726 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: 06982699 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 gc6547.txt FORM 8-K ================================================================================ 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) July 26, 2006 GRANITE CONSTRUCTION INCORPORATED (Exact name of registrant as specified in its charter) ---------- Delaware 1-12911 77-0239383 ---------------------------- ------------ ------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) 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): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On July 26, 2006, Granite Construction Incorporated (the "Company") issued a press release with respect to its earnings for the quarter ended June 30, 2006, a copy of which is attached as Exhibit 99.1. The information set forth is furnished pursuant to Item 2.02, "Results of Operations and Financial Condition" and shall not be deemed "filed" for purpose of Section 18 of the Securities Exchange Act of 1934, nor shall the information, including the Exhibit, be deemed incorporated by reference in any filing of the Company, except as shall be expressly set forth by specific reference in such filing. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS (d) Exhibits. The following exhibits are attached hereto and furnished herewith: Exhibit Number Exhibit Title - ----------- ----------------------------------------------------------------- 99.1 Press Release of Registrant, dated July 26, 2006, its second quarter financial results 2 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: July 26, 2006 By: /s/ William E. Barton ----------------------------- William E. Barton Senior Vice President and Chief Financial Officer 3 INDEX TO EXHIBITS Exhibit Number Document - ----------- ----------------------------------------------------------------- 99.1 Press Release of Registrant, dated July 26, 2006, its second quarter financial results 4 EX-99.1 2 gc6547ex991.txt EXHIBIT 99.1 Exhibit 99.1 GRANITE CONSTRUCTION INCORPORATED REPORTS RECORD SECOND QUARTER 2006 RESULTS; TOTAL COMPANY OPERATING INCOME INCREASES 66% WATSONVILLE, Calif., July 26 /PRNewswire-FirstCall/ -- Granite Construction Incorporated (NYSE: GVA) today announced its results for the second quarter ended June 30, 2006. The Company reported net income for the quarter of $33.3 million, or $0.80 per diluted share. This compares with net income of $15.0 million, or $0.36 per diluted share for the same period last year. For the six-month period ended June 30, 2006, net income was $31.9 million or $0.77 per share on a diluted basis compared with $6.7 million or $0.16 per share for the same period in 2005. William G. Dorey, president and chief executive officer, said, "Our second quarter results are a product of a tremendous performance turned in by our Branch Division and their ability to capitalize on a very strong market in the West. Our building season in the West is clearly off to a record start with demand for our construction services and aggregate materials healthier than we have experienced in many years. This strong marketplace is supporting price increases for our aggregate materials as well as higher gross profit margins in our construction business." "While we were very pleased with our Branch Division results, as well as our overall company performance, the quarter was negatively impacted by disappointing financial results in our Heavy Construction Division (HCD). We believe there is considerable upside to this business and we remain committed to our strategy to improve the division's overall profitability," said Dorey. He added, "As a result of our second quarter performance, operating cash flow continues to improve, which is contributing to an already strong balance sheet. We continue to look for opportunities to expand our aggregate business and are pleased to have the financial capacity to support our growth goals." Operating Results - Quarter and Year-To-Date For the second quarter of 2006, total revenue increased 20% to $812.0 million compared with $676.7 million a year ago. Total gross profit as a percent of revenue for the second quarter 2006 increased to 11.5% compared with 11.3% for the same period last year. Operating income increased to $48.2 million for the second quarter of 2006 compared with $29.0 million for the second quarter of 2005. Other income for the quarter ended June 30, 2006 was positively impacted by the gain of approximately $3.2 million from the sale of gold, which is a by-product of one of our aggregate mining operations and held for investment. Additionally, interest income significantly increased in the quarter as a result of higher average yield on a higher level of interest bearing investments. For the six-month period ended June 30, 2006, revenue for the Company totaled $1.3 billion compared with $1.1 billion for the same period last year. Total gross profit as a percent of revenue for the six months ended June 30, 2006 increased to 10.2% compared with 9.4% last year. Operating income for the six month period increased to $44.4 million compared with $17.1 million for the same period in 2005. Total Company backlog at June 30, 2006 remained flat at $2.5 billion compared to a year ago. New awards for the second quarter 2006 include a joint venture bridge project in Louisiana for $348 million, of which Granite's portion is $87 million. Also included in operating income for the three- and six-month periods ended June 30, 2006 are approximately $16.7 million and $15.5 million, respectively, related to the sales of certain real estate development assets associated with the Company's Granite Land Company subsidiary. Our minority partners' share of this income is approximately $8.0 million for both the three- and six-month periods ended June 30, 2006. Results by Segment HCD revenue for the quarter totaled $307.1 million versus $276.3 million for the same period last year. HCD backlog decreased $338.0 million to $1.5 billion compared with $1.9 billion for the same period last year. Gross margin as a percent of revenue was a loss of 3.7% compared with a profit of 5.5% in the prior period. This decrease reflects a net reduction of gross profit of approximately $27.1 million resulting from changes in estimates of project profitability compared with a net reduction of $11.0 million in the second quarter 2005. Largely as a product of these estimate changes in the second quarter 2006, operating loss for HCD totaled $18.9 million compared with operating income of $8.0 million for the same period in 2005. For the six-month period ended June 30, 2006, HCD revenue totaled $551.9 million compared with $478.2 million for the same period last year. Gross margin as a percent of revenue for the six months ended June 30, 2006 was a loss of 2.6% compared with a profit of 4.7% last year. Operating loss for HCD totaled $31.0 million for the six-month period compared with operating income of $6.7 million for the same period in 2005. Branch Division revenue for the quarter totaled $471.3 million, an increase of $71.1 million or 18% over the same period in 2005. Backlog for the Branch Division increased to $978.4 million compared with $647.9 million for the second quarter 2005. Gross profit as a percent of revenue increased for the second quarter 2006 to 18.4% compared with 15.4% for the second quarter 2005 due to an increase in profitability on our construction work and the sales of our construction materials. Branch Division operating income increased $31.0 million for the quarter to $61.5 million compared with $30.5 million for the second quarter last year. Second quarter 2005 operating results for the Branch Division include a $9.3 million provision for a legal judgment. For the six-month period ended June 30, 2006, Branch Division revenue totaled $722.4 million compared with $618.9 million for the same period last year. Gross profit as a percent of revenue for the six months ended June 30, 2006 increased to 18.1% compared with 13.2% last year. Operating income for the division increased to $80.3 million for the same period compared with $29.5 million in 2005. Outlook The Company anticipates that the current healthy public sector bidding environment for its Branch Division will continue through 2006 and will likely offset any impact from the slowdown in its residential site development business. Therefore, the Company now expects 2006 operating income for the Branch Division to exceed the record level reached in 2005. Given the performance through the end of the second quarter, the Company now expects 2006 operating results for HCD to be break even, provided several HCD projects reach the percentage of completion threshold needed for profit recognition. Second Quarter Conference Call Information The Company will host a conference call on Thursday, July 27, 2006, at 11:00 a.m. Eastern time. Investors and other interested parties may access the call live by dialing (877) 864-2735 in the U.S. and Canada. For international listeners, dial (706) 634-7039. The conference ID is 1673829. A live Webcast will also be available via the Internet at www.graniteconstruction.com. The conference call will be recorded and available for replay approximately two hours after the call through August 4, 2006. In the U.S. and Canada, dial (800) 642-1687. For international listeners, dial (706) 645-9291. An audio archive of the call will also be available on the Company's website. Granite, a member of the S&P 400 Midcap Index, the Domini 400 Social Index and the Russell 2000, is one of the nation's largest diversified heavy civil contractors and construction materials producers. Granite Construction serves public and private sector clients through its offices nationwide. For more information about the company, please visit their website at www.graniteconstruction.com. This press release contains forward-looking statements, such as statements related to the existence of bidding opportunities and economic conditions on the Company's future results. Additionally, forward-looking statements include statements that can be identified by the use of forward-looking terminology such as "believes," "expects," "appears," "may," "will," "should," "look for," or "anticipates," or the negative thereof or comparable terminology, or by discussions of strategy. All such forward-looking statements are subject to risks and uncertainties that could cause actual results of operations and financial condition and other events to differ materially from those expressed or implied in such 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 to conform the statement to actual results or changes in the Company's expectations. For further information regarding risks and uncertainties associated with Granite's business, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operation" and "Quantitative and Qualitative Disclosures About Market Risk" sections of Granite's SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting Granite's investor relations department at (831) 724-1011 or at Granite's website at www.graniteconstruction.com. GRANITE CONSTRUCTION INCORPORATED COMPARATIVE FINANCIAL SUMMARY (Unaudited - In Thousands, Except Per Share Data)
Three Months Ended June 30, Variance ----------------------------- ----------------------------- 2006 2005 Amount Percent ------------ ------------ ------------ ------------ Revenue Construction $ 703,486 $ 592,128 $ 111,358 18.8 Material sales $ 108,551 $ 84,576 $ 23,975 28.3 Total revenue $ 812,037 $ 676,704 $ 135,333 20.0 Cost of revenue Construction $ 638,253 $ 534,431 $ (103,822) (19.4) Material sales $ 80,674 $ 65,566 $ (15,108) (23.0) Total cost of revenue $ 718,927 $ 599,997 $ (118,930) (19.8) Gross profit $ 93,110 $ 76,707 $ 16,403 21.4 Gross profit as a percent of revenue 11.5% 11.3% 0.2% -- General and administrative expenses $ 48,935 $ 40,606 $ (8,329) (20.5) G&A expenses as a percent of revenue 6.0% 6.0% -- -- Provision for legal judgment -- $ 9,300 $ 9,300 100.0 Gain on sales of property and equipment $ 4,049 $ 2,189 $ 1,860 85.0 Other income (expense) Interest income $ 4,944 $ 1,968 $ 2,976 **** Interest expense $ (1,391) $ (1,636) $ 245 15.0 Equity in income (loss) of affiliates $ 828 $ (17) $ 845 **** Other, net $ 3,314 $ (651) $ 3,965 **** Total other income (expense) $ 7,695 $ (336) $ 8,031 **** Income before provision for income taxes and minority interest $ 55,919 $ 28,654 $ 27,265 95.2 Minority interest $ (5,585) $ (5,480) $ (105) (1.9) Net income $ 33,289 $ 14,954 $ 18,335 **** Net income per share: Basic $ 0.81 $ 0.37 $ 0.44 **** Diluted $ 0.80 $ 0.36 $ 0.44 **** Weighted average shares of common stock: Basic 40,896 40,638 258 0.6 Diluted 41,466 41,212 254 0.6
Six Months Ended June 30, Variance ----------------------------- ----------------------------- 2006 2005 Amount Percent ------------ ------------ ------------ ------------ Revenue Construction $ 1,137,824 $ 966,841 $ 170,983 17.7 Material sales $ 170,181 $ 130,797 $ 39,384 30.1 Total revenue $ 1,308,005 $ 1,097,638 $ 210,367 19.2 Cost of revenue Construction $ 1,042,213 $ 888,812 $ (153,401) (17.3) Material sales $ 132,447 $ 105,179 $ (27,268) (25.9) Total cost of revenue $ 1,174,660 $ 993,991 $ (180,669) (18.2) Gross profit $ 133,345 $ 103,647 $ 29,698 28.7 Gross profit as a percent of revenue 10.2% 9.4% 0.8% -- General and administrative expenses $ 97,191 $ 79,476 $ (17,715) (22.3) G&A expenses as a percent of revenue 7.4% 7.2% (0.2)% -- Provision for legal judgment -- $ 9,300 $ 9,300 100.0 Gain on sales of property and equipment $ 8,287 $ 2,215 $ 6,072 **** Other income (expense) Interest income $ 9,677 $ 4,127 $ 5,550 **** Interest expense $ (2,786) $ (3,667) $ 881 24.0 Equity in income (loss) of affiliates $ 751 $ (77) $ 828 **** Other, net $ 2,708 $ (724) $ 3,432 **** Total other income (expense) $ 10,350 $ (341) $ 10,691 **** Income before provision for income taxes and minority interest $ 54,791 $ 16,745 $ 38,046 **** Minority interest $ (6,652) $ (5,530) $ (1,122) (20.3) Net income $ 31,867 $ 6,687 $ 25,180 **** Net income per share: Basic $ 0.78 $ 0.16 $ 0.62 **** Diluted $ 0.77 $ 0.16 $ 0.61 **** Weighted average shares of common stock: Basic 40,818 40,562 256 0.6 Diluted 41,378 41,118 260 0.6
**** Represents percentages greater than 100% GRANITE CONSTRUCTION INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited - In thousands, except share and per share data)
June 30, December 31, 2006 2005 ------------ ------------ Assets Current assets Cash and cash equivalents $ 304,976 $ 199,881 Short-term marketable securities 74,775 68,540 Accounts receivable, net 530,882 476,453 Costs and estimated earnings in excess of billings 32,882 43,660 Inventories 39,532 33,161 Real estate held for sale 42,572 46,889 Deferred income taxes 22,830 22,996 Equity in construction joint ventures 31,641 27,408 Other current assets 47,373 57,960 Total current assets 1,127,463 976,948 Property and equipment, net 419,757 397,111 Long-term marketable securities 47,688 32,960 Investment in affiliates 16,076 15,855 Other assets 46,313 49,356 Total assets $ 1,657,297 $ 1,472,230 Liabilities and Shareholders' Equity Current liabilities Current maturities of long-term debt $ 29,424 $ 26,888 Accounts payable 309,199 232,807 Billings in excess of costs and estimated earnings 278,499 208,883 Accrued expenses and other current liabilities 178,989 140,569 Total current liabilities 796,111 609,147 Long-term debt 105,757 124,415 Other long-term liabilities 53,885 46,556 Deferred income taxes 37,325 37,325 Minority interest in consolidated subsidiaries 18,741 33,227 Shareholders' 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 41,836,889 shares in 2006 and 41,682,010 shares in 2005 418 417 Additional paid-in capital 70,636 80,619 Retained earnings 572,601 549,101 Accumulated other comprehensive income 1,823 1,602 Unearned compensation -- (10,179) Total shareholders' equity 645,478 621,560 Total liabilities and shareholders' equity $ 1,657,297 $ 1,472,230
June 30, December 31, Financial Position 2006 2005 - ------------------------------------------------------------ ------------ ------------ Working capital $ 331,352 $ 367,801 Current ratio 1.42 1.60 Debt to total capitalization 0.17 0.20 Total liabilities to equity ratio 1.57 1.37
GRANITE CONSTRUCTION INCORPORATED REVENUE AND BACKLOG ANALYSIS (Unaudited - Dollars In Thousands) BY MARKET SECTOR Revenue
Three Months Ended June 30, Variance --------------------------- --------------------------- 2006 2005 Amount Percent ------------ ------------ ------------ ------------ Public Sector $ 554,059 $ 466,509 $ 87,550 18.8 Private Sector 115,778 125,363 (9,585) (7.6) Aggregate sales 108,551 84,575 23,976 28.3 Other 33,649 257 33,392 **** $ 812,037 $ 676,704 $ 135,333 20.0
Backlog
June 30, Variance --------------------------- --------------------------- 2006 2005 Amount Percent ------------ ------------ ------------ ------------ Public Sector $ 2,175,021 $ 2,250,792 $ (75,771) (3.4) Private Sector 317,845 249,515 68,330 27.4 $ 2,492,866 $ 2,500,307 $ (7,441) (0.3)
BY GEOGRAPHIC AREA Revenue
Three Months Ended June 30, Variance --------------------------- --------------------------- 2006 2005 Amount Percent ------------ ------------ ------------ ------------ California $ 333,215 $ 259,449 $ 73,766 28.4 West (Excl. CA) 246,901 208,847 38,054 18.2 Midwest 19,162 28,457 (9,295) (32.7) Northeast 75,575 77,700 (2,125) (2.7) South 137,184 102,251 34,933 34.2 $ 812,037 $ 676,704 $ 135,333 20.0
Backlog
June 30, Variance --------------------------- --------------------------- 2006 2005 Amount Percent ------------ ------------ ------------ ------------ California $ 655,071 $ 576,783 $ 78,288 13.6 West (Excl. CA) 723,387 380,632 342,755 90.0 Midwest 17,134 85,915 (68,781) (80.1) Northeast 312,105 636,723 (324,618) (51.0) South 785,169 820,254 (35,085) (4.3) $ 2,492,866 $ 2,500,307 $ (7,441) (0.3)
**** Represents percentages greater than 100% SOURCE Granite Construction Incorporated -0- 07/26/2006 /CONTACT: Investor Relations, Jacque Underdown, +1-831-761-4741, or Jacque.Underdown@gcinc.com/ /Web site: http://www.graniteconstruction.com/ -----END PRIVACY-ENHANCED MESSAGE-----