WATSONVILLE, Calif.--(BUSINESS WIRE)--Granite Construction Incorporated (NYSE: GVA) today reported a net loss of $97.8 million ($2.09 per diluted share) for the quarter ended June 30, 2019, compared to a net loss of $8.4 million ($0.20 per diluted share) for the quarter ended June 30, 2018. On a year-to-date basis, net loss was $132.4 million, ($2.83 per diluted share) compared to a net loss of $19.8 million ($0.49 per diluted share) last year. The 2019 figures include non-cash after-tax charges of $106.7 million ($2.28 per diluted share).
“As previously announced, our second quarter results were impacted by non-cash charges related to four legacy, unconsolidated Heavy Civil joint venture projects, and we are taking additional action to de-risk the business and improve the stability and trajectory of our results,” said James H. Roberts, President and Chief Executive Officer at Granite Construction Incorporated. “We remain very encouraged by the strong underlying performance of our overall portfolio, with our construction, materials, and water businesses delivering solid second quarter results despite wet weather that continued through May. We have a robust project pipeline ahead for 2019 and beyond, with CAP at a record $4.9 billion. We remain confident that our end-market focused businesses and strategy will create significant value in the second half of 2019 and beyond for our stakeholders.”
Second quarter 2019 and 2018 results include after-tax, acquisition-related expenses of $12.0 million and $26.5 million, respectively2. Excluding the impact of acquisition-related expenses, second quarter 2019 adjusted net loss was $85.8 million3 and 2018 adjusted net income was $18.2 million3, with adjusted loss per diluted share of $1.833 and adjusted income per diluted share $0.443, respectively.
Selling, general & administrative (“SG&A”) expenses were $70.0 million for the three months ended June 30, 2019, compared to $61.3 million last year. For the first six months of 2019, SG&A expenses were $151.2 million, compared to $122.6 million during the same prior-year period. The increase is primarily attributable to businesses acquired in 2018.
Including non-cash charges in the current quarter, adjusted EBITDA3 was $(84.3) million, compared to $50.9 million last year. On a year-to-date basis, adjusted EBITDA3 totaled $(93.6) million, compared to $60.2 million last year.
Cash and marketable securities total $206.0 million as of June 30, 2019 reflecting Granite’s disciplined cash management and operational strength. This, in addition to Granite’s diverse business portfolio, positions the Company to navigate the current situation while maintaining a strong balance sheet.
The Company’s effective tax rate in the second quarter was 25.3 percent.
Second Quarter and Year-To-Date 2019 Segment Results
Transportation
- Second quarter 2019 revenue was $404.0 million, compared to $502.7 million in last year’s quarter. This quarter’s results included a revenue reduction of $114.2 million due to increased project costs on four legacy, unconsolidated Heavy Civil joint venture projects, and corresponding reductions in project percent completion. Year-to-date 2019 revenue decreased 13.9 percent to $742.2 million (including $114.2 million negative impact), compared to $861.9 million last year. Revenue was also impacted by inclement weather that continued across the country through May.
- Including charges of $143.7 million on four legacy, unconsolidated Heavy Civil joint venture projects, second quarter 2019 gross loss was $99.9 million, compared to gross profit of $36.0 million last year. Year-to-date gross loss was $78.6 million, compared to a gross profit of $67.4 million last year. The pre-tax charges are related to 1) increased project completion costs, which were exacerbated by schedule delays and execution of a significant amount of disputed work, and 2) a recent unfavorable court ruling on a project dispute.
- Segment CAP totaled nearly $4.0 billion as of June 30, 2019, including $1.1 billion of construction management/general contractor (CMGC) and alternative procurement projects.
Water
- Second quarter 2019 revenue was $112.8 million compared to $51.6 million in last year’s quarter. Year-to-date 2019 revenue was $212.1 million, compared to $91.7 million last year. The revenue increases were primarily related to 2018 acquisitions, though operations were impacted by inclement weather experienced across our operations through May.
- Second quarter 2019 gross profit was $11.3 million compared to $5.5 million last year, with gross profit margin slightly lower at 10.0 percent. Year-to-date gross profit was $19.4 million, compared to $17.0 million last year. Year-to-date gross profit margin was 9.1 percent, down from 18.6 percent in 2018, which included non-recurring emergency work.
- Segment CAP totaled $318.1 million as of June 30, 2019.
Specialty
- Second quarter 2019 revenue was $175.1 million, compared to $151.8 million in last year’s quarter. Year-to-date 2019 revenue was $315.8 million, compared to $270.3 million last year. The revenue increases were primarily related to the acquisition of the Layne Christensen Company in June 2018.
- Second quarter 2019 gross profit was $22.2 million compared to $21.5 million last year, with gross profit margin of 12.7 percent down from 14.1 percent last year. Year-to-date gross profit was $37.1 million, compared to $37.2 million last year, with gross profit margin of 11.7 percent, down from 13.8 percent in 2018. The margin was adversely impacted by project delays and by a labor dispute, resolved late in the quarter, that temporarily disrupted a key customer’s operations.
- Segment CAP totaled $559.3 million as of June 30, 2019.
Materials
- Second quarter 2019 revenue was $97.6 million, compared to $100.9 million in last year’s quarter. Year-to-date 2019 revenue was $139.3 million, compared to $146.7 million last year. The decrease is attributable to inclement weather across the western United States through May.
- Second quarter 2019 gross profit was $14.0 million, compared to $17.5 million last year, with gross profit margin of 14.3 percent down from 17.3 percent in 2018. Year-to-date gross profit was $10.2 million, compared to $15.0 million last year, with gross profit margin of 7.4 percent, down from 10.2 percent in 2018 as wet weather persisted all the way through May, slowing plant productivity.
Outlook and Guidance
On July 29, 2019, Granite announced that it has accelerated its strategic review of the Heavy Civil operating group with a clear objective to expedite the Company’s plan to reduce risk and exposure to the large, complex projects business. “This next step in de-risking our portfolio is critical on our path to produce predictable, consistent results,” Roberts said. “This action, coupled with a robust economic environment in our core business, creates profitable growth opportunities across geographies and end markets. Importantly, we just celebrated the one-year anniversary of the Layne Christensen acquisition and the completion of their systems conversion. This allows our companies to operate on one platform, providing increased efficiencies as we enter the back half of 2019.”
Roberts concluded, “Although our second quarter results reflected near-term challenges, we are energized to leverage the Company’s immense skill sets and broad capabilities and capitalize on a market that is both healthy and opportunistic. Now is the time to unlock the earnings power of our Company.”
The Company’s expectations for 2019 are:
• High single-digit consolidated revenue growth
• Adjusted EBITDA margin of 4.0 percent to 5.0 percent, including the impact of the charges
(1) Committed and Awarded Projects (“CAP”) is comprised of unearned revenue and other awards, as well as CMGC and alternative procurement projects.
(2) Acquisition-related expenses include acquisition, integration, acquired intangible amortization expenses, acquisition-related depreciation and synergy costs.
(3) Adjusted net income (loss), adjusted diluted income (loss) per share, earnings before interest, taxes, depreciation, and amortization (“EBITDA”), adjusted EBITDA, and adjusted EBITDA margin are non-GAAP measures. Please refer to the description and reconciliation of non-GAAP measures in the attached tables.
Conference Call
Granite will conduct a conference call today, August 2, 2019, at 5:00 a.m. Pacific Time/8:00 a.m. Eastern Time to discuss the results of the quarter ended June 30, 2019. The Company invites investors to listen to a live audio webcast on its Investor Relations website, https://investor.graniteconstruction.com. The live call is available by calling 1-800-353-6461; international callers may dial 1-334-323-0501. An archive of the webcast will be available on the website approximately one hour after the call. A replay will be available after the live call through August 9, 2019, by calling 1-888-203-1112, replay access code 8102255; international callers may dial 1-719-457-0820.
About Granite
Through its offices and subsidiaries nationwide, Granite Construction Incorporated (NYSE: GVA) is a full-suite provider in the transportation, water infrastructure and mineral exploration markets. Granite is America’s Infrastructure Company as well as an award-winning firm in safety, quality and environmental stewardship. The Company has been honored as one of the World’s Most Ethical Companies by Ethisphere Institute for ten consecutive years. Granite is listed on the New York Stock Exchange and is part of the S&P MidCap 400 Index, the MSCI KLD 400 Social Index and the Russell 2000 Index. For more information, visit www.graniteconstruction.com and connect with Granite on LinkedIn, Twitter, Facebook and Instagram.
Forward-looking Statements
Any statements contained in this news release that are not based on historical facts, including statements regarding future events, occurrences, circumstances, activities, performance, growth, demand, strategic plans, outcomes, guidance, backlog, 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,” 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, growth, demand, strategic plans, outcomes, guidance, backlog, 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 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 |
||||||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||||||
(Unaudited - in thousands, except share and per share data) |
||||||||||||
|
|
June 30, |
|
December 31, |
|
June 30, |
||||||
2019 |
|
2018 |
|
2018 |
||||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
144,958 |
|
|
$ |
272,804 |
|
|
$ |
195,515 |
|
Short-term marketable securities |
|
|
41,037 |
|
|
|
30,002 |
|
|
|
20,014 |
|
Receivables, net |
|
|
551,958 |
|
|
|
473,246 |
|
|
|
492,718 |
|
Contract assets |
|
|
257,650 |
|
|
|
219,754 |
|
|
|
265,190 |
|
Inventories |
|
|
102,163 |
|
|
|
88,623 |
|
|
|
96,024 |
|
Equity in construction joint ventures |
|
|
241,786 |
|
|
|
282,229 |
|
|
|
252,467 |
|
Other current assets |
|
|
63,056 |
|
|
|
48,731 |
|
|
|
49,100 |
|
Total current assets |
|
|
1,402,608 |
|
|
|
1,415,389 |
|
|
|
1,371,028 |
|
Property and equipment, net |
|
|
557,118 |
|
|
|
549,688 |
|
|
|
595,787 |
|
Long-term marketable securities |
|
|
20,000 |
|
|
|
36,098 |
|
|
|
61,191 |
|
Investments in affiliates |
|
|
82,109 |
|
|
|
84,354 |
|
|
|
99,495 |
|
Goodwill |
|
|
264,107 |
|
|
|
259,471 |
|
|
|
246,881 |
|
Right of use assets |
|
|
73,439 |
|
|
|
— |
|
|
|
— |
|
Deferred income taxes, net |
|
|
36,055 |
|
|
|
2,918 |
|
|
|
25,135 |
|
Other noncurrent assets |
|
|
122,705 |
|
|
|
128,683 |
|
|
|
156,808 |
|
Total assets |
|
$ |
2,558,141 |
|
|
$ |
2,476,601 |
|
|
$ |
2,556,325 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Current maturities of long-term debt |
|
$ |
48,397 |
|
|
$ |
47,286 |
|
|
$ |
207,982 |
|
Accounts payable |
|
|
303,128 |
|
|
|
251,481 |
|
|
|
303,885 |
|
Contract liabilities |
|
|
119,289 |
|
|
|
105,449 |
|
|
|
91,864 |
|
Accrued expenses and other current liabilities |
|
|
339,047 |
|
|
|
273,626 |
|
|
|
293,959 |
|
Total current liabilities |
|
|
809,861 |
|
|
|
677,842 |
|
|
|
897,690 |
|
Long-term debt |
|
|
366,896 |
|
|
|
335,119 |
|
|
|
280,710 |
|
Lease liabilities |
|
|
60,868 |
|
|
|
— |
|
|
|
— |
|
Deferred income taxes, net |
|
|
4,680 |
|
|
|
4,317 |
|
|
|
5,759 |
|
Other long-term liabilities |
|
|
58,268 |
|
|
|
61,689 |
|
|
|
71,180 |
|
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: 46,838,199 shares as of June 30, 2019, 46,665,889 shares as of December 31, 2018 and 45,688,582 shares as of June 30, 2018 |
|
|
468 |
|
|
|
467 |
|
|
|
457 |
|
Additional paid-in capital |
|
|
568,264 |
|
|
|
564,559 |
|
|
|
516,680 |
|
Accumulated other comprehensive (loss) income |
|
|
(3,448 |
) |
|
|
(749 |
) |
|
|
1,022 |
|
Retained earnings |
|
|
642,124 |
|
|
|
787,356 |
|
|
|
737,417 |
|
Total Granite Construction Incorporated shareholders’ equity |
|
|
1,207,408 |
|
|
|
1,351,633 |
|
|
|
1,255,576 |
|
Non-controlling interests |
|
|
50,160 |
|
|
|
46,001 |
|
|
|
45,410 |
|
Total equity |
|
|
1,257,568 |
|
|
|
1,397,634 |
|
|
|
1,300,986 |
|
Total liabilities and equity |
|
$ |
2,558,141 |
|
|
$ |
2,476,601 |
|
|
$ |
2,556,325 |
|
GRANITE CONSTRUCTION INCORPORATED |
||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||
(Unaudited - in thousands, except per share data) |
||||||||||||||||
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation |
|
$ |
403,978 |
|
|
$ |
502,711 |
|
|
$ |
742,188 |
|
|
$ |
861,856 |
|
Water |
|
|
112,831 |
|
|
|
51,618 |
|
|
|
212,086 |
|
|
|
91,659 |
|
Specialty |
|
|
175,084 |
|
|
|
151,842 |
|
|
|
315,777 |
|
|
|
270,313 |
|
Materials |
|
|
97,647 |
|
|
|
100,948 |
|
|
|
139,290 |
|
|
|
146,670 |
|
Total revenue |
|
|
789,540 |
|
|
|
807,119 |
|
|
|
1,409,341 |
|
|
|
1,370,498 |
|
Cost of revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation |
|
|
503,857 |
|
|
|
466,748 |
|
|
|
820,817 |
|
|
|
794,431 |
|
Water |
|
|
101,568 |
|
|
|
46,168 |
|
|
|
192,704 |
|
|
|
74,645 |
|
Specialty |
|
|
152,874 |
|
|
|
130,366 |
|
|
|
278,700 |
|
|
|
233,101 |
|
Materials |
|
|
83,645 |
|
|
|
83,468 |
|
|
|
129,046 |
|
|
|
131,669 |
|
Total cost of revenue |
|
|
841,944 |
|
|
|
726,750 |
|
|
|
1,421,267 |
|
|
|
1,233,846 |
|
Gross (loss) profit |
|
|
(52,404 |
) |
|
|
80,369 |
|
|
|
(11,926 |
) |
|
|
136,652 |
|
Selling, general and administrative expenses |
|
|
69,998 |
|
|
|
61,316 |
|
|
|
151,153 |
|
|
|
122,568 |
|
Acquisition and integration expenses |
|
|
9,177 |
|
|
|
26,287 |
|
|
|
12,500 |
|
|
|
34,696 |
|
Gain on sales of property and equipment |
|
|
(4,935 |
) |
|
|
(1,505 |
) |
|
|
(6,835 |
) |
|
|
(2,048 |
) |
Operating loss |
|
|
(126,644 |
) |
|
|
(5,729 |
) |
|
|
(168,744 |
) |
|
|
(18,564 |
) |
Other (income) expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
(1,728 |
) |
|
|
(1,173 |
) |
|
|
(4,544 |
) |
|
|
(2,694 |
) |
Interest expense |
|
|
4,158 |
|
|
|
3,203 |
|
|
|
8,172 |
|
|
|
5,638 |
|
Equity in income of affiliates |
|
|
(2,594 |
) |
|
|
(3,534 |
) |
|
|
(3,884 |
) |
|
|
(3,758 |
) |
Other income, net |
|
|
(759 |
) |
|
|
(940 |
) |
|
|
(2,521 |
) |
|
|
(672 |
) |
Total other income |
|
|
(923 |
) |
|
|
(2,444 |
) |
|
|
(2,777 |
) |
|
|
(1,486 |
) |
Loss before (benefit from) provision for income taxes |
|
|
(125,721 |
) |
|
|
(3,285 |
) |
|
|
(165,967 |
) |
|
|
(17,078 |
) |
(Benefit from) provision for income taxes |
|
|
(31,760 |
) |
|
|
2,796 |
|
|
|
(40,925 |
) |
|
|
(1,335 |
) |
Net loss |
|
|
(93,961 |
) |
|
|
(6,081 |
) |
|
|
(125,042 |
) |
|
|
(15,743 |
) |
Amount attributable to non-controlling interests |
|
|
(3,875 |
) |
|
|
(2,304 |
) |
|
|
(7,368 |
) |
|
|
(4,065 |
) |
Net loss attributable to Granite Construction Incorporated |
|
$ |
(97,836 |
) |
|
$ |
(8,385 |
) |
|
$ |
(132,410 |
) |
|
$ |
(19,808 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share attributable to common shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(2.09 |
) |
|
$ |
(0.20 |
) |
|
$ |
(2.83 |
) |
|
$ |
(0.49 |
) |
Diluted |
|
$ |
(2.09 |
) |
|
$ |
(0.20 |
) |
|
$ |
(2.83 |
) |
|
$ |
(0.49 |
) |
Weighted average shares of common stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
46,824 |
|
|
|
41,044 |
|
|
|
46,762 |
|
|
|
40,074 |
|
Diluted |
|
|
46,824 |
|
|
|
41,044 |
|
|
|
46,762 |
|
|
|
40,074 |
|
Dividends per common share |
|
$ |
0.13 |
|
|
$ |
0.13 |
|
|
$ |
0.26 |
|
|
$ |
0.26 |
|
GRANITE CONSTRUCTION INCORPORATED |
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(Unaudited - in thousands) |
||||||||
Six Months Ended June 30, |
|
2019 |
|
2018 |
||||
Operating activities |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(125,042 |
) |
|
$ |
(15,743 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
|
61,747 |
|
|
|
43,547 |
|
Gain on sales of property and equipment, net |
|
|
(6,835 |
) |
|
|
(2,048 |
) |
Change in deferred income taxes |
|
|
(35,192 |
) |
|
|
— |
|
Stock-based compensation |
|
|
7,221 |
|
|
|
10,193 |
|
Equity in net loss from unconsolidated joint ventures |
|
|
105,834 |
|
|
|
13,418 |
|
Net income from affiliates |
|
|
(3,884 |
) |
|
|
(3,758 |
) |
Other non-cash adjustments |
|
|
4,630 |
|
|
|
— |
|
Changes in assets and liabilities, net of the effects of acquisitions |
|
|
(101,994 |
) |
|
|
(121,054 |
) |
Net cash used in operating activities |
|
|
(93,515 |
) |
|
|
(75,445 |
) |
Investing activities |
|
|
|
|
|
|
|
|
Purchases of marketable securities |
|
|
— |
|
|
|
(9,952 |
) |
Maturities of marketable securities |
|
|
5,000 |
|
|
|
60,000 |
|
Purchases of property and equipment |
|
|
(54,354 |
) |
|
|
(36,471 |
) |
Proceeds from sales of property and equipment |
|
|
7,870 |
|
|
|
2,704 |
|
Cash paid to purchase businesses, net of cash and restricted cash acquired |
|
|
(6,227 |
) |
|
|
(55,030 |
) |
Other investing activities, net |
|
|
(215 |
) |
|
|
269 |
|
Net cash used in investing activities |
|
|
(47,926 |
) |
|
|
(38,480 |
) |
Financing activities |
|
|
|
|
|
|
|
|
Proceeds from debt |
|
|
75,499 |
|
|
|
105,250 |
|
Debt principal repayments |
|
|
(43,842 |
) |
|
|
(1,250 |
) |
Cash dividends paid |
|
|
(12,152 |
) |
|
|
(10,389 |
) |
Repurchases of common stock |
|
|
(3,948 |
) |
|
|
(6,165 |
) |
Distributions to non-controlling partners |
|
|
(3,200 |
) |
|
|
(6,400 |
) |
Other financing activities, net |
|
|
1,238 |
|
|
|
429 |
|
Net cash provided by financing activities |
|
|
13,595 |
|
|
|
81,475 |
|
Net decrease in cash, cash equivalents and restricted cash |
|
|
(127,846 |
) |
|
|
(32,450 |
) |
Cash and cash equivalents and restricted cash of $5,825 and $0 at beginning of each period |
|
|
278,629 |
|
|
|
233,711 |
|
Cash, cash equivalents and restricted cash of $5,825 and $5,746 at end of each period |
|
$ |
150,783 |
|
|
$ |
201,261 |
|
GRANITE CONSTRUCTION INCORPORATED |
||||||||||||||||
Business Segment Information |
||||||||||||||||
(Unaudited - dollars in thousands) |
||||||||||||||||
|
||||||||||||||||
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation |
|
$ |
403,978 |
|
|
$ |
502,711 |
|
|
$ |
742,188 |
|
|
$ |
861,856 |
|
Water |
|
|
112,831 |
|
|
|
51,618 |
|
|
|
212,086 |
|
|
|
91,659 |
|
Specialty |
|
|
175,084 |
|
|
|
151,842 |
|
|
|
315,777 |
|
|
|
270,313 |
|
Materials |
|
|
97,647 |
|
|
|
100,948 |
|
|
|
139,290 |
|
|
|
146,670 |
|
Total revenue |
|
$ |
789,540 |
|
|
$ |
807,119 |
|
|
$ |
1,409,341 |
|
|
$ |
1,370,498 |
|
Gross (loss) profit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation |
|
$ |
(99,879 |
) |
|
$ |
35,963 |
|
|
$ |
(78,629 |
) |
|
$ |
67,425 |
|
Water |
|
|
11,263 |
|
|
|
5,450 |
|
|
|
19,382 |
|
|
|
17,014 |
|
Specialty |
|
|
22,210 |
|
|
|
21,476 |
|
|
|
37,077 |
|
|
|
37,212 |
|
Materials |
|
|
14,002 |
|
|
|
17,480 |
|
|
|
10,244 |
|
|
|
15,001 |
|
Total gross (loss) profit |
|
$ |
(52,404 |
) |
|
$ |
80,369 |
|
|
$ |
(11,926 |
) |
|
$ |
136,652 |
|
Gross (loss) profit as a percent of revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation |
|
|
(24.7 |
%) |
|
|
7.2 |
% |
|
|
(10.6 |
%) |
|
|
7.8 |
% |
Water |
|
|
10.0 |
|
|
|
10.6 |
|
|
|
9.1 |
|
|
|
18.6 |
|
Specialty |
|
|
12.7 |
|
|
|
14.1 |
|
|
|
11.7 |
|
|
|
13.8 |
|
Materials |
|
|
14.3 |
|
|
|
17.3 |
|
|
|
7.4 |
|
|
|
10.2 |
|
Total gross (loss) profit as a percent of total revenue |
|
|
(6.6 |
%) |
|
|
10.0 |
% |
|
|
(0.8 |
%) |
|
|
10.0 |
% |
GRANITE CONSTRUCTION INCORPORATED |
||||||||||||||||||||||
Committed and Awarded Projects |
||||||||||||||||||||||
(Unaudited - dollars in thousands) |
||||||||||||||||||||||
|
||||||||||||||||||||||
|
|
June 30, 2019 |
|
March 31, 2019 |
|
June 30, 2018 |
||||||||||||||||
Unearned revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation |
|
$ |
2,921,437 |
|
|
79.1 |
% |
$ |
2,187,300 |
|
|
76.4 |
% |
$ |
2,594,464 |
|
|
75.9 |
% |
|||
Water |
|
|
253,418 |
|
|
6.9 |
|
|
|
220,303 |
|
|
7.7 |
|
|
|
275,932 |
|
|
8.1 |
|
|
Specialty |
|
|
517,457 |
|
|
14.0 |
|
|
|
456,008 |
|
|
15.9 |
|
|
|
545,944 |
|
|
16.0 |
|
|
Total unearned revenue |
|
|
3,692,312 |
|
|
100.0 |
|
|
|
2,863,611 |
|
|
100.0 |
|
|
|
3,416,340 |
|
|
100.0 |
|
|
Other awards(1) |
|
|
|
|
|
|
|
|
|
|
||||||||||||
Transportation |
|
|
18,290 |
|
|
14.7 |
|
|
|
595,952 |
|
|
81.9 |
|
|
|
42,591 |
|
|
18.1 |
|
|
Water |
|
|
64,693 |
|
|
51.8 |
|
|
|
97,479 |
|
|
13.4 |
|
|
|
122,954 |
|
|
52.2 |
|
|
Specialty |
|
|
41,807 |
|
|
33.5 |
|
|
|
34,223 |
|
|
4.7 |
|
|
|
70,037 |
|
|
29.7 |
|
|
Total other awards |
|
|
124,790 |
|
|
100.0 |
|
|
|
727,654 |
|
|
100.0 |
|
|
|
235,582 |
|
|
100.0 |
|
|
Total contract backlog(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation |
|
|
2,939,727 |
|
|
77.0 |
|
|
|
2,783,252 |
|
|
77.5 |
|
|
|
2,637,055 |
|
|
72.2 |
|
|
Water |
|
|
318,111 |
|
|
8.3 |
|
|
|
317,782 |
|
|
8.8 |
|
|
|
398,886 |
|
|
10.9 |
|
|
Specialty |
|
|
559,264 |
|
|
14.7 |
|
|
|
490,231 |
|
|
13.7 |
|
|
|
615,981 |
|
|
16.9 |
|
|
Total contract backlog(2) |
|
|
3,817,102 |
|
|
100.0 |
|
|
|
3,591,265 |
|
|
100.0 |
|
|
|
3,651,922 |
|
|
100.0 |
|
|
Alternative procurement work(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation |
|
|
1,055,751 |
|
|
100.0 |
|
|
|
884,000 |
|
|
100.0 |
|
|
|
— |
|
|
— |
|
|
Water |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
Specialty |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
Total alternative procurement work(3) |
|
|
1,055,751 |
|
|
100.0 |
|
|
|
884,000 |
|
|
100.0 |
|
|
|
— |
|
|
— |
|
|
Committed and Awarded Projects |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation |
|
|
3,995,478 |
|
|
82.0 |
|
|
|
3,667,252 |
|
|
81.9 |
|
|
|
2,637,055 |
|
|
72.2 |
|
|
Water |
|
|
318,111 |
|
|
6.5 |
|
|
|
317,782 |
|
|
7.1 |
|
|
|
398,886 |
|
|
10.9 |
|
|
Specialty |
|
|
559,264 |
|
|
11.5 |
|
|
|
490,231 |
|
|
11.0 |
|
|
|
615,981 |
|
|
16.9 |
|
|
Total Committed and Awarded Projects |
|
$ |
4,872,853 |
|
|
100.0 |
% |
$ |
4,475,265 |
|
|
100.0 |
% |
$ |
3,651,922 |
|
|
100.0 |
% |
|||
(1) Other awards include unissued task orders and unexercised contract options to the extent their issuance or exercise is probable as well as contract awards to the extent we believe contract execution and funding is probable.
(2) Contract Backlog is calculated by adding Unearned Revenue and Other Awards.
(3)Alternative Procurement Work represents Construction Manager/General Contractor projects that will enter backlog as task orders are issued in 2019 and over the next few years.
Non-GAAP Financial Information
The tables below contain financial information calculated other than in accordance with U.S. generally accepted accounting principles (“GAAP”). Specifically, management believes that non-GAAP financial measures such as EBITDA and EBITDA margin are useful in evaluating operating performance and are regularly used by securities analysts, institutional investors and other interested parties, and that such supplemental measures facilitate comparisons between companies that have different capital and financing structures and/or tax rates. We are also providing additional non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin, adjusted loss before (benefit from) provision for income taxes, adjusted benefit from (provision for) income taxes, adjusted net (loss) income attributable to Granite Construction Incorporated and adjusted diluted net (loss) income per share to indicate the impact of non-recurring acquisition, integration, acquired intangible amortization expenses, acquisition related depreciation and synergy costs (collectively referred to as “transaction costs”) related to the acquisition of the Layne Christensen Company and LiquiForce. Acquisition and integration costs include external transaction costs, professional fees and internal travel. Synergy costs include expenses incurred which will be eliminated as the integration of Layne and LiquiForce is completed.
Management believes that these additional non-GAAP financial measures facilitate comparisons between securities analysts, institutional investors and other interested parties. 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. Items that may have a significant impact on the Company's financial position, results of operations and cash flows must be considered when assessing the Company's actual financial condition and performance regardless of whether these items are included in non-GAAP financial measures. 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. The Company does not provide a reconciliation of forward-looking adjusted EBITDA margin to the most directly comparable forward-looking GAAP measure of net income (loss) attributable to Granite Construction Incorporated because the timing and amount of the excluded items are unreasonably difficult to fully and accurately estimate.
GRANITE CONSTRUCTION INCORPORATED |
||||||||||||||||
EBITDA(1) |
||||||||||||||||
(Unaudited - dollars in thousands) |
||||||||||||||||
|
||||||||||||||||
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
Net loss attributable to Granite Construction Incorporated |
|
$ |
(97,836 |
) |
|
$ |
(8,385 |
) |
|
$ |
(132,410 |
) |
|
$ |
(19,808 |
) |
Depreciation, depletion and amortization expense(2) |
|
|
32,901 |
|
|
|
28,036 |
|
|
|
61,747 |
|
|
|
43,547 |
|
(Benefit from) provision for income taxes |
|
|
(31,760 |
) |
|
|
2,796 |
|
|
|
(40,925 |
) |
|
|
(1,335 |
) |
Interest expense, net of interest income |
|
|
2,430 |
|
|
|
2,030 |
|
|
|
3,628 |
|
|
|
2,944 |
|
EBITDA |
|
$ |
(94,265 |
) |
|
$ |
24,477 |
|
|
$ |
(107,960 |
) |
|
$ |
25,348 |
|
EBITDA margin(3) |
|
|
(11.9 |
%) |
|
|
3.0 |
% |
|
|
(7.7 |
%) |
|
|
1.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction costs |
|
$ |
9,990 |
|
|
$ |
26,438 |
|
|
$ |
14,314 |
|
|
$ |
34,847 |
|
Adjusted EBITDA(1) |
|
$ |
(84,275 |
) |
|
$ |
50,915 |
|
|
$ |
(93,646 |
) |
|
$ |
60,195 |
|
Adjusted EBITDA margin(1) |
|
|
(10.7 |
%) |
|
|
6.3 |
% |
|
|
(6.6 |
%) |
|
|
4.4 |
% |
(1) We define EBITDA as GAAP net loss attributable to Granite Construction Incorporated, adjusted for net interest expense, taxes, depreciation, depletion and amortization. Adjusted EBITDA and adjusted EBITDA margin exclude the impact of acquisition and integration expenses and synergies.
(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 of $789.5 million and $1.41 billion for the three and six months ended June 30, 2019, respectively, and $807.1 and $1.37 billion for three and six months ended June 30, 2018, respectively.
GRANITE CONSTRUCTION INCORPORATED |
||||||||||||||||
Adjusted Net (Loss) Income Reconciliation(1) |
||||||||||||||||
(Unaudited - in thousands, except per share data) |
||||||||||||||||
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
Loss before (benefit from) provision for income taxes |
|
$ |
(125,721 |
) |
|
$ |
(3,285 |
) |
|
$ |
(165,967 |
) |
|
$ |
(17,078 |
) |
Transaction costs |
|
|
16,263 |
|
|
|
29,505 |
|
|
|
27,265 |
|
|
|
37,914 |
|
Adjusted loss before (benefit from) provision for income taxes |
|
$ |
(109,458 |
) |
|
$ |
26,220 |
|
|
$ |
(138,702 |
) |
|
$ |
20,836 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Benefit from) provision for income taxes |
|
$ |
(31,760 |
) |
|
$ |
2,796 |
|
|
$ |
(40,925 |
) |
|
$ |
(1,335 |
) |
Tax effect of the transaction costs(1) |
|
|
4,228 |
|
|
|
2,966 |
|
|
|
7,089 |
|
|
|
4,963 |
|
Adjusted (benefit from) provision for income taxes |
|
$ |
(27,532 |
) |
|
$ |
5,762 |
|
|
$ |
(33,836 |
) |
|
$ |
3,628 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to Granite Construction Incorporated |
|
$ |
(97,836 |
) |
|
$ |
(8,385 |
) |
|
$ |
(132,410 |
) |
|
$ |
(19,808 |
) |
After-tax transaction costs |
|
|
12,035 |
|
|
|
26,539 |
|
|
|
20,176 |
|
|
|
32,951 |
|
Adjusted net (loss) income attributable to Granite Construction Incorporated |
|
$ |
(85,801 |
) |
|
$ |
18,154 |
|
|
$ |
(112,234 |
) |
|
$ |
13,143 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net loss per share attributable to common shareholders |
|
$ |
(2.09 |
) |
|
$ |
(0.20 |
) |
|
$ |
(2.83 |
) |
|
$ |
(0.49 |
) |
After-tax transaction costs |
|
|
0.26 |
|
|
|
0.64 |
|
|
|
0.43 |
|
|
|
0.82 |
|
Adjusted diluted net (loss) income per share attributable to common shareholders |
|
$ |
(1.83 |
) |
|
$ |
0.44 |
|
|
$ |
(2.40 |
) |
|
$ |
0.33 |
|
(1)The tax effect of transaction costs was calculated using the Company’s estimated annual statutory tax rate.
Source: Granite Construction Incorporated
