false 0000861459 0000861459 2022-10-25 2022-10-25
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): October 25, 2022
 
GRANITE CONSTRUCTION INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
 
Delaware
(State or Other Jurisdiction
of Incorporation)
1-12911
(Commission
File Number)
77-0239383
(IRS Employer
Identification No.)
 
585 West Beach Street
Watsonville, California 95076
(Address of Principal Executive Offices) (Zip Code)
 
Registrant’s telephone number, including area code: (831) 724-1011
 
 
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 Instructions 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))
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 par value
GVA
New York Stock Exchange
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
 
 
 
Item 2.02.
  Results of Operations and Financial Condition.
 
Granite Construction Incorporated (the “Company,” “Granite,” “our,” or “we”) previously announced our decision to retain the Water Resources and Mineral Services businesses that were previously classified as held for sale and reported in discontinued operations. The financial results for these businesses will be reported within the Mountain operating group's continuing operations and their assets and liabilities will no longer be classified as held for sale as of September 30, 2022. The results of Inliner, our trenchless and pipe rehabilitation services business, which was sold on March 16, 2022 will also now be reported within the Mountain operating group's continuing operations through the date of sale. These changes will be presented beginning in Granite’s Form 10-Q for the quarter ended September 30, 2022, and prior periods will be revised. 
 
For investors who may want to consider the effects of the above noted changes in advance of the announcement of the third quarter results, Granite is furnishing certain unaudited summarized financial information in the tables below. These tables provide investors with historical segment financial information for each of the previously reported fiscal years ended 2021 and 2020, and the previously reported quarters in fiscal years 2022 and 2021. Information on segment assets and related depreciation, depletion and amortization will be presented in the respective reports on Form 10-K and Form 10-Q, beginning with the Form 10-Q for the quarter ended September 30, 2022.
 
This information does not restate Granite’s previously reported consolidated financial statements for any period. It does not change Granite’s previously reported consolidated total assets, liabilities or shareholders’ equity or its reported consolidated net income or earnings per share, nor does it reflect any subsequent information or events, other than as required to reflect the change in discontinued operations as described above. The updated information should be read in conjunction with our previously filed reports on Form 10-K and Form 10-Q.
 
The information set forth herein is furnished pursuant to Item 2.02, “Results of Operations and Financial Condition” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall the information be deemed incorporated by reference in any filing of the Company, except as shall be expressly set forth by specific reference in such filing.
 
Forward-looking Statements
 
Any statements contained in this report that are not based on historical facts, including statements regarding future events, occurrences, opportunities, circumstances, activities, performance, growth, demand, strategic plans, shareholder value, outcomes, outlook, Committed and Awarded Projects (“CAP”) 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,” "guidance" 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, opportunities, circumstances, activities, performance, growth, demand, strategic plans, shareholder value, outcomes, outlook, CAP 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 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 report and, except as required by law; we undertake no obligation to revise or update any forward-looking statements for any reason.
 
 
 
 
The following tables present unaudited summarized segment information for each of the previously reported 2022 and 2021 quarterly periods and the years ended 2021 and 2020. All dollar amounts are in thousands.
 
Three Months Ended June 30, 2022
    
Continuing Operations
      
Previously Discontinued Operations
    
Total
  
Revenue
                        
Construction
   $ 632,260     $ 85,554     $ 717,814  
Materials
     136,026       -       136,026  
Total revenue
   $ 768,286     $ 85,554     $ 853,840  
Cost of revenue (1)
                        
Construction
   $ 571,094     $ 70,386     $ 641,480  
Materials
     118,712       -       118,712  
Total cost of revenue
   $ 689,806     $ 70,386     $ 760,192  
Gross profit
                        
Construction
   $ 61,166     $ 15,168     $ 76,334  
Materials
     17,314       -       17,314  
Gross profit
   $ 78,480     $ 15,168     $ 93,648  
Gross margin
                        
Construction
     9.7
%
     17.7
%
     10.6
%
Materials
     12.7       -       12.7  
Gross margin
     10.2
%
     17.7
%
     11.0
%
(1) Cost of revenue excludes depreciation and amortization that would have been recognized if the previously discontinued operations had been continually classified as held and used. A cumulative catch-up adjustment was recorded in the three months ended September 30, 2022 in connection with the decision to retain the Water Resources and Mineral Services businesses. $3.4 million of the adjustment was attributable to cost of revenue for the three months ended June 30, 2022.
 
Three Months Ended March 31, 2022
  
Continuing Operations
    
Previously Discontinued Operations
    
Total
  
Revenue
                        
Construction
   $ 474,935     $ 99,991     $ 574,926  
Materials
     72,651       2,970       75,621  
Total revenue
   $ 547,586     $ 102,961     $ 650,547  
Cost of revenue (1)
                        
Construction
   $ 426,743     $ 85,788     $ 512,531  
Materials
     71,068       2,939       74,007  
Total cost of revenue
   $ 497,811     $ 88,727     $ 586,538  
Gross profit
                        
Construction
   $ 48,192     $ 14,203     $ 62,395  
Materials
     1,583       31       1,614  
Gross profit
   $ 49,775     $ 14,234     $ 64,009  
Gross margin
                        
Construction
     10.1
%
     14.2
%
     10.9
%
Materials
     2.2       1.0       2.1  
Gross margin
     9.1
%
     13.8
%
     9.8
%
(1) Cost of revenue excludes depreciation and amortization that would have been recognized if the previously discontinued operations had been continually classified as held and used. A cumulative catch-up adjustment was recorded in the three months ended September 30, 2022 in connection with the decision to retain the Water Resources and Mineral Services businesses. $3.5 million of the adjustment was attributable to cost of revenue for the three months ended March 31, 2022.
 
Three Months Ended December 31, 2021
  
Continuing Operations
    
Previously Discontinued Operations
    
Total
  
Revenue
                        
Construction
   $ 588,488     $ 117,853     $ 706,341  
Materials
     94,708       4,602       99,310  
Total revenue
   $ 683,196     $ 122,455     $ 805,651  
Cost of revenue
                        
Construction
   $ 551,357     $ 107,200     $ 658,557  
Materials
     80,187       4,461       84,648  
Total cost of revenue
   $ 631,544     $ 111,661     $ 743,205  
Gross profit
                        
Construction
   $ 37,131     $ 10,653     $ 47,784  
Materials
     14,521       141       14,662  
Gross profit
   $ 51,652     $ 10,794     $ 62,446  
Gross margin
                        
Construction
     6.3
%
     9.0
%
     6.8
%
Materials
     15.3       3.1       14.8  
Gross margin
     7.6
%
     8.8
%
     7.8
%
 
Three Months Ended September 30, 2021
  
Continuing Operations
    
Previously Discontinued Operations
    
Total
  
Revenue
                        
Construction
   $ 793,422     $ 131,032     $ 924,454  
Materials
     132,432       5,243       137,675  
Total revenue
   $ 925,854     $ 136,275     $ 1,062,129  
Cost of revenue
                        
Construction
   $ 711,239     $ 113,978     $ 825,217  
Materials
     112,655       4,322       116,977  
Total cost of revenue
   $ 823,894     $ 118,300     $ 942,194  
Gross profit
                        
Construction
   $ 82,183     $ 17,054     $ 99,237  
Materials
     19,777       921       20,698  
Gross profit
   $ 101,960     $ 17,975     $ 119,935  
Gross margin
                        
Construction
     10.4
%
     13.0
%
     10.7
%
Materials
     14.9       17.6       15.0  
Gross margin
     11.0
%
     13.2
%
     11.3
%
 
Three Months Ended June 30, 2021
  
Continuing Operations
    
Previously Discontinued Operations
    
Total
  
Revenue
                        
Construction
   $ 713,425     $ 125,513     $ 838,938  
Materials
     121,246       3,988       125,234  
Total revenue
   $ 834,671     $ 129,501     $ 964,172  
Cost of revenue
                        
Construction
   $ 637,158     $ 107,331     $ 744,489  
Materials
     99,281       3,456       102,737  
Total cost of revenue
   $ 736,439     $ 110,787     $ 847,226  
Gross profit
                        
Construction
   $ 76,267     $ 18,182     $ 94,449  
Materials
     21,965       532       22,497  
Gross profit
   $ 98,232     $ 18,714     $ 116,946  
Gross margin
                        
Construction
     10.7
%
     14.5
%
     11.3
%
Materials
     18.1       13.3       18.0  
Gross margin
     11.8
%
     14.5
%
     12.1
%
 
Three Months Ended March 31, 2021
  
Continuing Operations
    
Previously Discontinued Operations
    
Total
  
Revenue
                        
Construction
   $ 506,971     $ 99,485     $ 606,456  
Materials
     59,361       4,096       63,457  
Total revenue
   $ 566,332     $ 103,581     $ 669,913  
Cost of revenue
                        
Construction
   $ 454,202     $ 90,497     $ 544,699  
Materials
     58,418       3,478       61,896  
Total cost of revenue
   $ 512,620     $ 93,975     $ 606,595  
Gross profit
                        
Construction
   $ 52,769     $ 8,988     $ 61,757  
Materials
     943       618       1,561  
Gross profit
   $ 53,712     $ 9,606     $ 63,318  
Gross margin
                        
Construction
     10.4
%
     9.0
%
     10.2
%
Materials
     1.6       15.1       2.5  
Gross margin
     9.5
%
     9.3
%
     9.5
%
 
Year Ended December 31, 2021
  
Continuing Operations
    
Previously Discontinued Operations
    
Total
  
Revenue
                        
Construction
   $ 2,602,306     $ 473,884     $ 3,076,190  
Materials
     407,747       17,928       425,675  
Total revenue
   $ 3,010,053     $ 491,812     $ 3,501,865  
Cost of revenue
                        
Construction
   $ 2,353,956     $ 419,006     $ 2,772,962  
Materials
     350,541       15,717       366,258  
Total cost of revenue
   $ 2,704,497     $ 434,723     $ 3,139,220  
Gross profit (loss)
                        
Construction
   $ 248,350     $ 54,878     $ 303,228  
Materials
     57,206       2,211       59,417  
Gross profit
   $ 305,556     $ 57,089     $ 362,645  
Gross margin (loss)
                        
Construction
     9.5
%
     11.6
%
     9.9
%
Materials
     14.0       12.3       14.0  
Gross margin
     10.2
%
     11.6
%
     10.4
%
 
Year Ended December 31, 2020
  
Continuing Operations
    
Previously Discontinued Operations
    
Total
  
Revenue
                        
Construction
   $ 2,764,094     $ 417,603     $ 3,181,697  
Materials
     364,785       15,977       380,762  
Total revenue
   $ 3,128,879     $ 433,580     $ 3,562,459  
Cost of revenue
                        
Construction
   $ 2,522,650     $ 378,878     $ 2,901,528  
Materials
     301,576       14,567       316,143  
Total cost of revenue
   $ 2,824,226     $ 393,445     $ 3,217,671  
Gross profit (loss)
                        
Construction
   $ 241,444     $ 38,725     $ 280,169  
Materials
     63,209       1,410       64,619  
Gross profit
   $ 304,653     $ 40,135     $ 344,788  
Gross margin (loss)
                        
Construction
     8.7
%
     9.3
%
     8.8
%
Materials
     17.3       8.8       17.0  
Gross margin
     9.7
%
     9.3
%
     9.7
%
 
 
 
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
     
     
 
By:
 /s/ Elizabeth L. Curtis
   
Elizabeth L. Curtis
    Executive Vice President and Chief Financial Officer
 
 
Date: October 25, 2022