Granite Reports First-Quarter 2009 Financial Results
* Granite East is on track to provide consistent profitability in 2009 and
beyond.
* Gross margin percentage in Granite West remains unchanged at 17 percent.
* General and administrative expenses decreased $7.0 million.
* Strong balance sheet with $412.8 million in cash and short-term marketable
securities.
* Capital structure is conservative, with 27 percent debt to total capital.
WATSONVILLE, Calif.--(Business Wire)--
Granite Construction Incorporated (NYSE: GVA) today reported net income of $8.9
million for the first quarter of 2009 compared with $13.1 million for the first
quarter of 2008. Diluted earnings per share for the first quarter of 2009 were
$0.23 compared with $0.34 for the first quarter of 2008.
"Our business continues to perform well despite today`s economic challenges,"
said William G. Dorey, Granite president and chief executive officer. "Overall I
am extremely pleased with the way our teams across the country are executing on
our diverse portfolio of work."
First-quarter 2009 Financial Results
Total Company
* Total revenue for the quarter ended March 31, 2009 was $347.4 million compared
with $454.8 million in 2008.
* Gross profit as a percentage of revenue for the quarter decreased to 20
percent compared with 22 percent in 2008.
* Gross loss on the sale of construction materials was $2.3 million in 2009
compared with a gross profit of $2.5 million in 2008. The company`s construction
materials business continues to be affected by lower sales volume.
* General and administrative expenses decreased $7.0 million to $53.6 million or
15 percent of revenue compared with $60.7 million or 13 percent of revenue in
2008.
* Operating income for the quarter was $16.9 million compared with $38.4 million
in the prior year.
* Other income for the quarter was $1.9 million compared with $9.3 million last
year. The decrease was due to lower investment interest income as well as a
reduction in the gain on the sale of gold, a by-product of one of our aggregate
facilities. In 2009, the gain from gold sales was $4.4 million compared with
$9.3 million in the first quarter of 2008.
* Net income attributable to noncontrolling interest in joint ventures was $5.1
million compared with $22.5 million in 2008. The decrease was related to the
settlement of a significant claim associated with a completed large
joint-venture project in Southern California which was recognized in the first
quarter of 2008.
* At March 31, 2009, cash and short-term marketable securities totaled $412.8
million, including $120.7 million of cash and cash equivalents from the
company`s consolidated joint ventures.
* Total contract backlog at March 31, 2009, was $1.6 billion compared with $1.9
billion at March 31, 2008. Not included in contract backlog at March 31, 2009,
is the company`s 34 percent share of the $1.3 billion contract for the Houston
Metro Light Rail project awarded in the second quarter of 2009. The award will
be recorded in contract backlog incrementally as Notices to Proceed are
received.
Granite West
* Revenue for the first quarter totaled $197.0 million compared with $240.0
million for the same period in 2008. Granite West continues to experience a
competitive bidding environment as well as a reduction in the demand for
construction materials.
* Gross profit as a percentage of revenue for the quarter was unchanged at 17
percent as a result of higher construction gross profit offset by a loss from
materials sales during the quarter.
* Operating income for the quarter increased $2.0 million to $6.7 million
compared with $4.8 million for the first quarter of last year.
Granite East
* Revenue for the first quarter totaled $149.9 million compared with $214.1
million for the same period in 2008.
* Gross profit as a percentage of revenue for the quarter was 23 percent
compared with 27 percent in the same period last year.
* Operating income for the quarter decreased to $28.3 million compared with
$52.1 million for the first quarter of 2008. Operating results in both the first
quarter of 2008 and 2009 were positively affected by the recognition of project
settlements related to outstanding issues. Results in 2009 include the $16.0
million settlement associated with a large project in the Northeast. Results in
2008 include the $28.6 million settlement related to a large project in Southern
California.
Outlook
"We are off to a good start in 2009," said Dorey. "In Granite West our public
works bidding environment is becoming very active, in part due to
stimulus-funded projects out to bid. We do, however, anticipate a challenging
year in the West as the competitive climate continues to impact our hit ratio
and our margin expectations. This is particularly true in the smaller,
traditional branch work as well as our construction materials business. We are
fortunate to have the experience and the financial wherewithal to bid on larger,
more complex projects that often do not draw the same level of competitiveness
due to their increased complexity and bonding requirements. We believe it is the
larger projects that present the most encouraging opportunities for revenue and
margin growth during this business cycle.
"We expect Granite East to continue to deliver gross margins in the mid-teens
while building a strong backlog of work. Our bidding pipeline remains full, and
we are excited about the opportunities for this business. We are tracking more
than $4 billion worth of various infrastructure-related projects that are
expected to bid between now and the end of 2009.
"Our 2009 outlook includes revenue expectations for Granite West to be in the
range of $1.6 billion to $1.9 billion with a corresponding gross profit margin
percentage between 14 percent and 17 percent. Granite East 2009 revenue is
expected to be in the range of $675.0 million to $775.0 million with a
corresponding gross profit margin percentage between 13 percent and 15 percent.
In addition, net income attributable to noncontrolling interest in joint
ventures for the total company is expected to be approximately $25.0 million to
$35.0 million."
Conference Call
Granite will conduct a conference call tomorrow, May 5, 2009, at 11 a.m. ET (8
a.m. PT) to discuss the results of the first quarter ended March 31, 2009.
Access to a live audio webcast is available at
www.graniteconstruction.com/investor-relations. The live conference call may be
accessed by calling (877) 693-6483 in the United States and (706) 758-5304 for
international listeners. The conference ID for the call is 93595270. The call
will be recorded and available for replay from approximately two hours after the
live audio webcast through May 19, 2009, by calling (800) 642-1687 or (706)
645-9291. The conference ID for the recording is 93595270.
About Granite
Granite Construction Incorporated is a member of the S&P 400 Midcap Index, the
Domini 400 Social Index, and the Russell 2000. Granite Construction Company, a
wholly owned subsidiary, is one of the nation`s largest diversified heavy civil
contractors and construction materials producers. Granite Construction Company
serves public- and private-sector clients through its offices and subsidiaries
nationwide. For more information about Granite, please visit its Web site at
www.graniteconstruction.com.
Forward-looking Statements
This press release contains statements that are not based on historical facts
and which may be forward-looking in nature. Under the Private Securities
Litigation Reform Act of 1995, a "safe harbor" may be provided to Granite for
certain of these forward-looking statements. Words such as outlook, believes,
expects, appears, may, will, should, anticipates, and the negatives thereof or
comparable terminology are intended to identify these forward-looking
statements. These forward-looking statements are estimates reflecting the best
judgment of Granite`s senior management and are based on its current
expectations and projections concerning future events, many of which are outside
Granite`s control and involve a number of risks and uncertainties that could
cause actual results to differ materially from those suggested by the
forward-looking statements. Factors that might cause or contribute to such
differences include, but are not limited to, those risks described in Granite`s
Annual Report under "Item 1A. Risk Factors." Except as required by law, Granite
undertakes no obligation to revise or update any forward-looking statements for
any reason. As a result, the reader is cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date of this
release.
GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited - In Thousands, Except Per Share Data)
Three Months Ended
March 31,
2009 2008
Revenue
Construction $ 317,109 $ 402,573
Material sales 29,846 51,554
Real estate 417 673
Total revenue 347,372 454,800
Cost of revenue
Construction 246,969 306,846
Material sales 32,183 49,056
Real estate 207 204
Total cost of revenue 279,359 356,106
Gross profit 68,013 98,694
General and administrative expenses 53,632 60,651
Gain on sales of property and equipment 2,521 401
Operating income 16,902 38,444
Other income (expense)
Interest income 2,061 6,055
Interest expense (3,488 ) (4,510 )
Equity in loss of affiliates (444 ) (707 )
Other income, net 3,785 8,463
Total other income 1,914 9,301
Income before provision for income taxes 18,816 47,745
Provision for income taxes 4,829 12,127
Net income 13,987 35,618
Amount attributable to noncontrolling interest (5,067 ) (22,495 )
Net income attributable to Granite Construction Inc. $ 8,920 $ 13,123
Net income per share attributable to common shareholders:
Basic $ 0.23 $ 0.34
Diluted $ 0.23 $ 0.34
Weighted average shares of common stock:
Basic 37,476 38,139
Diluted 37,600 38,172
GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited - In thousands, except share and per share data)
March 31, December 31, March 31,
2009 2008 2008
Assets
Current assets
Cash and cash equivalents $ 390,483 $ 460,843 $ 266,427
Short-term marketable securities 22,276 38,320 79,997
Accounts receivable, net 233,867 314,733 320,526
Costs and estimated earnings in excess of billings 54,400 13,295 74,279
Inventories, net 59,254 55,223 61,432
Real estate held for development and sale 79,409 75,089 54,736
Deferred income taxes 43,484 43,637 44,728
Equity in construction joint ventures 44,423 44,681 39,893
Other current assets 52,488 56,742 62,559
Total current assets 980,084 1,102,563 1,004,577
Property and equipment, net 526,734 517,678 518,900
Long-term marketable securities 46,387 21,239 37,303
Investment in affiliates 21,768 19,996 25,713
Other noncurrent assets 79,534 81,979 72,149
Total assets $ 1,654,507 $ 1,743,455 $ 1,658,642
Liabilities and Equity
Current liabilities
Current maturities of long-term debt $ 34,218 $ 39,692 $ 34,071
Accounts payable 141,783 174,626 195,651
Billings in excess of costs and estimated earnings 190,540 227,364 218,935
Accrued expenses and other current liabilities 159,323 184,939 166,774
Total current liabilities 525,864 626,621 615,431
Long-term debt 251,351 250,687 257,442
Other long-term liabilities 45,836 43,604 45,479
Deferred income taxes 17,917 18,261 18,228
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 in 2009 and in 2008;
issued and outstanding 38,679,123 shares as of March 31, 2009, 38,266,791 shares
as of December 31, 2008 and 38,274,800 shares as of March 31, 2008 387 383 383
Additional paid-in capital 88,158 85,035 79,534
Retained earnings 686,129 682,237 587,881
Accumulated other comprehensive loss - (146 ) (693 )
Total Granite Construction Inc. shareholders' equity 774,674 767,509 667,105
Noncontrolling interest 38,865 36,773 54,957
Total equity 813,539 804,282 722,062
Total liabilities and equity $ 1,654,507 $ 1,743,455 $ 1,658,642
March 31, December 31, March 31,
Financial Position 2009 2008 2008
Working capital $ 454,220 $ 475,942 $ 389,146
Current ratio 1.86 1.76 1.63
Debt to Granite Construction Inc. shareholders' equity capitalization 0.27 0.27 0.30
Total liabilities to Granite Construction Inc. shareholders' equity ratio 1.09 1.22 1.40
GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - In Thousands)
Three Months Ended March 31, 2009 2008
Operating activities
Net income $ 13,987 $ 35,618
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation, depletion and amortization 20,623 21,172
Gain on sales of property and equipment (2,521 ) (401 )
Change in deferred income taxes (283 ) 419
Stock-based compensation 2,777 1,609
Excess tax benefit on stock-based compensation (413 ) (746 )
Equity in loss of affiliates 444 707
Acquisition of noncontrolling interest - (16,616 )
Changes in assets and liabilities, net of the effects of acquisitions (49,009 ) (65,307 )
Net cash used in operating activities (14,395 ) (23,545 )
Investing activities
Purchases of marketable securities (29,258 ) (9,179 )
Maturities of marketable securities 15,610 21,500
Release of funds for acquisition of noncontrolling interest - 28,332
Additions to property and equipment (29,601 ) (30,735 )
Proceeds from sales of property and equipment 3,741 3,517
Acquisition of businesses - (14,022 )
Contributions to affiliates (2,219 ) -
Other investing activities 148 676
Net cash (used in) provided by investing activities (41,579 ) 89
Financing activities
Proceeds from long-term debt 2,435 1,083
Long-term debt principal payments (7,282 ) (6,683 )
Cash dividends paid (4,975 ) (5,129 )
Purchase of common stock (2,017 ) (45,468 )
Contributions from noncontrolling partners 157 4,640
Distributions to noncontrolling partners (3,153 ) (24 )
Acquisition of noncontrolling interest - (11,716 )
Excess tax benefit on stock-based compensation 413 746
Other financing 36 -
Net cash used in financing activities (14,386 ) (62,551 )
Decrease in cash and cash equivalents (70,360 ) (86,007 )
Cash and cash equivalents at beginning of period 460,843 352,434
Cash and cash equivalents at end of period $ 390,483 $ 266,427
GRANITE CONSTRUCTION INCORPORATED
Business Segment Information
(Unaudited - In Thousands)
Three Months Ended March 31, Granite West Granite East Granite Land
Company
2009
Revenue $ 197,049 $ 149,906 $ 417
Gross profit $ 32,939 $ 34,864 $ 210
Gross profit as a percent of revenue 16.7% 23.3% 50.4%
Operating income (loss) $ 6,720 $ 28,251 $ (698)
Operating income (loss) as a percent of revenue 3.4% 18.8% -167.4%
2008
Revenue $ 240,002 $ 214,125 $ 673
Gross profit $ 39,629 $ 58,596 $ 469
Gross profit as a percent of revenue 16.5% 27.4% 69.7%
Operating income (loss) $ 4,763 $ 52,136 $ (450)
Operating income (loss) as a percent of revenue 2.0% 24.3% -66.9%
GRANITE CONSTRUCTION INCORPORATED
Contract Backlog
(Unaudited - In Thousands)
Contract Backlog by Division March 31, 2009 March 31, 2008
Granite West $ 743,219 47.3 % $ 868,530 44.7 %
Granite East 826,855 52.7 % 1,074,659 55.3 %
Total $ 1,570,074 100.0 % $ 1,943,189 100.0 %
Granite Construction Incorporated
Jacque Fourchy, 831-761-4714
Copyright Business Wire 2009
