Exhibit 99.1

Granite Reports Third Quarter 2018 Results

 

Highlights

 

Third Quarter

 

Revenue up 10.3 percent year-over-year to $1.06 billion

 

Gross profit margin up more than 170 basis points year-over-year to 13.7 percent

 

Net income up 21.1 percent year-over year to $55.7 million

 

Adjusted net income1 up 46.6 percent year-over-year to $67.4 million

 

Adjusted EBITDA1 up 30.9 percent year-over-year to $112.7 million

 

Adjusted EBITDA1 margin 10.7 percent, compared to 9.0 percent last year

Year-To-Date

 

Revenue up 10.9 percent year-over-year to $2.43 billion

 

Gross profit margin up 180 basis points year-over-year to 11.6 percent

 

Net income down slightly year-over-year to $35.9 million

 

Adjusted net income1 up 118.1 percent year-over-year to $79.2 million

 

Adjusted EBITDA1 up 62.5 percent year-over-year to $172.9 million

 

Adjusted EBITDA1 margin 7.1 percent, compared to 4.9 percent last year

 

WATSONVILLE, Calif. (October 26, 2018) - Granite Construction Incorporated (NYSE: GVA) today reported third quarter 2018 net income of $55.7 million, an increase of 21.1 percent from net income of $46.0 million in the third quarter of 2017. Earnings per diluted share (EPS) was $1.17, compared to $1.14 last year. Third quarter and year-to-date 2018 results include after-tax acquisition-related expenses of $11.7 million and $43.4 million, respectively2. Excluding the impact of these expenses, third quarter adjusted net income was $67.4 million1, with adjusted EPS of $1.421. For the first nine months of 2018, EPS was $0.84, compared to $0.90 in the prior-year period. Excluding the impact of after-tax acquisition-related expenses, year-to-date 2018 adjusted net income increased significantly to $79.2 million1, with adjusted EPS of $1.851 more than doubling from the prior year.

 

“In 2018, Granite has executed our strategy to develop a leadership position as America’s Infrastructure Company,” said Granite President and Chief Executive Officer James H. Roberts. “Acquisitions have helped us to deliver profitable geographic and end-market diversification, and this action highlights the significant opportunities we have to expand Granite’s platforms for growth in the new Transportation, Water, Specialty, and Materials segments.

 

“Our focus has remained intent on improved profitability this year, and our teams, new and old, have delivered,” Roberts said. “Demand for projects across all segments of our business remains strong as we maintain our deliberate emphasis on improved pricing. Increased pricing is creating solid bottom-line improvement, while having an expected, near-term impact on project win rates, most notably transportation projects. Transportation demand continues to strengthen, fueling expected growth in project bookings and revenue that, coupled with our ongoing pricing discipline, will spur improved segment margin performance for quite some time.”

 

Roberts continued, “Our pricing strategy is sound, built upon both practical and strategic considerations, especially given the healthy balance of near- and long-term public- and private-market demand. This year’s highly focused work on pricing discipline illustrates the broad leverage our business can exert to create bottom-line results and steadily improving capital returns on the significant, long-term investments that underpin our business. Our focus remains on sustained pricing discipline to deliver consistent, balanced, risk-adjusted returns across end markets.”

 

 


 

Third Quarter and Year-To-Date 2018 Consolidated Results

 

 

Revenue increased 10.3 percent to $1.06 billion in the third quarter of 2018, compared with $957.1 million in the prior-year period. For the nine months ending September 30, 2018, revenue increased 10.9 percent to $2.43 billion, compared with $2.19 billion last year.

 

Consolidated gross profit increased 26.2 percent to $144.5 million, compared with $114.5 million last year. On a year-to-date basis, gross profit increased 31.2 percent to $281.1 million compared to $214.2 million last year.

 

Gross profit margin was 13.7 percent in the third quarter, compared with 12.0 percent in 2017. For the first nine months of 2018, gross profit margin was 11.6 percent compared with 9.8 percent last year.

 

Selling, general & administrative (SG&A) expenses during the quarter and on a year-to-date basis include the impact of higher acquisition-related overhead. SG&A expenses were $70.8 million, or 6.7 percent of revenue in the quarter, compared to $49.5 million, or 5.2 percent of revenue, last year. For the first nine months of 2018, SG&A expenses were $193.3 million, or 8.0 percent of revenue, compared to $162.7 million, or 7.4 percent of revenue, during the same prior-year period. The increase is attributable to acquisition-related costs.

 

Company effective tax rate in the third quarter was 12.8 percent, driven by a $7.6 million benefit3, a discrete item related to revaluation of deferred tax assets and liabilities.

 

Adjusted EBITDA increased 30.9 percent year-over-year to $112.7 million in the third quarter of 2018, from $86.1 million last year. On a year-to-date basis, adjusted EBITDA increased 62.5 percent year-over-year to $172.9 million, compared to $106.4 million in 2017.

 

Company backlog3 was $3.24 billion, down 23.5 percent year-over-year. Earlier in 2018 we received notification of certain project wins that are not yet included in our backlog. These three projects, in California, Utah, and Florida, total more than $825 million and are expected to enter our backlog late in 2018 and in 2019.

 

Our balance sheet remains strong with cash and marketable securities of $311.4 million as of September 30, 2018. Our capital structure is well positioned to support the execution of our strategic plan.

 

Third Quarter and Year-To-Date 2018 Segment Results

 

On October 9, the Company filed an 8-K with the Securities and Exchange Commission, which provides a quarterly and annual lookback and mapping of our new reportable segments. Third quarter 2018 results reflect the new reporting structure.

Transportation

 

 

Third quarter 2018 revenue decreased 2.2 percent to $610.8 million, compared to $624.7 million last year. Year-to-date 2018 revenue increased 3.5 percent to $1.47 billion, compared to $1.42 billion last year. Transportation revenue growth in 2018 reflects both increased bidding discipline and higher margin expectations.

 

Quarterly gross profit increased 8.3 percent to $71.0 million from $65.5 million last year, with gross profit margin of 11.6 percent, up more than 100 basis points from 10.5 percent last year. Year-to-date gross profit increased 15.4 percent to $138.4 million from $119.9 million last year, with a resulting gross profit margin of 9.4 percent up from 8.4 percent in 2017. Year-over-year profit improvement continues to reflect our efforts to raise prices in a healthy environment for most of our geographic markets.

 

Segment backlog decreased 29.6 percent year-over-year to $2.31 billion, driven by steady project burn rates in mild weather conditions during the quarter. Healthy and improving transportation market demand positions our teams with top- and bottom-line growth opportunities across geographies. We continue to patiently re-shape our project portfolio, pursuing revenue strategies in alignment with increased returns that balance project risk dynamics.

 

 


 

Water

 

 

Third quarter 2018 revenue increased 241.7 percent to $124.3 million compared to $36.4 million last year. Year-to-date 2018 revenue increased 113.9 percent to $216.0 million, compared to $100.9 million last year.

 

Quarterly gross profit increased to $24.1 million from $1.8 million last year, with gross profit margin of 19.4 percent up from 5.0 percent last year. Year-to-date gross profit increased to $41.1 million from $9.8 million last year, with gross profit margin of 19.0 percent, up from 9.7 percent in 2017. Year-over-year profit improvement is tied to solid execution on projects in the robust markets we are now addressing in the Water segment.

 

Segment backlog increased significantly year-over-year to $364.8 million, with the largest impact from recent acquisitions. The segment’s bidding environment remains healthy, mirroring steady to improving federal, state, and local water infrastructure funding.

Specialty

 

 

Third quarter 2018 revenue decreased 3.6 percent to $190.8 million, compared to $197.9 million last year. Year-to-date 2018 revenue increased 2.0 percent to $461.1 million, compared to $452.3 million last year. Drivers of the performance include continued strong demand for mining work both by legacy businesses and recent acquisitions, coupled with steady demand in power and tunnel projects.

 

Quarterly gross profit increased 1.1 percent to $28.1 million from $27.8 million last year, with gross profit margin of 14.7 percent up from 14.0 percent last year. Year-to-date gross profit increased 15.1 percent to $65.3 million from $56.7 million last year, with gross profit margin of 14.2 percent, up from 12.5 percent in 2017.

 

The gross profit and margin improvement was attributable primarily to strong market demand, solid execution, and consistent bidding discipline, which is producing improved margins on new work.

 

Segment backlog decreased 27.6 percent year-over-year to $564.7 million, based on steady project burn rates. The bidding environment in the Specialty segment remains healthy, supported by steady public- and private-market demand. This diverse, robust project and bidding environment, which includes tunnel, power, mining, site development, renewable energy and more, position our teams for backlog and revenue growth in this segment in 2019 and beyond.

Materials

 

 

Third quarter 2018 revenue increased 32.1 percent to $129.6 million, compared with $98.1 million last year. Year-to-date 2018 revenue increased 30.4 percent to $276.3 million, compared to $211.8 million last year.

 

Quarterly gross profit improved 9.9 percent to $21.3 million from $19.4 million last year, with gross profit margin of 16.4 percent down from 19.8 percent last year. Year-to-date gross profit increased 30.6 percent to $36.3 million from $27.8 million last year, with gross profit margin steady at 13.1 percent.

 

The quarterly and year-to-date revenue and profit growth was attributable primarily to improved external demand across most markets, while maintaining an expectation of overall mid-teen gross margins in the segment.

Outlook and Guidance

"Granite’s strategic growth plan is delivering strongly improved near-term results, while positioning our stakeholders to benefit from significant, long-term economic value creation,” said Roberts. “Significant voter support across the country for incremental infrastructure investment is spurring state and local governments and politicians to action. With more than 300 state and local measures on ballots on November 6, voters increasingly understand and support the sustained, increased infrastructure

 

 


 

investments that are required to improve public safety, to create jobs, to drive economic expansion, and to improve Americans’ quality of life. For those of you in California, please vote No on Proposition 6 on Election Day.”

The Company’s expectations for 2018, including acquisitions, are:

 

Mid-teens consolidated revenue growth, which is subject to late-year seasonality

 

Adjusted EBITDA margin of 7.5 percent to 8.5 percent

Endnotes

(1)  Adjusted net income, adjusted earnings per diluted 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.

(2)  Acquisition-related expenses include acquisition and integration expenses, synergy costs, and acquired intangible amortization expenses. Please refer to the description and reconciliation of non-GAAP measures in the attached tables.

(3)  For further information on income taxes, please refer to Note 16 of “NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS” in the Granite Construction Incorporated Form 10-Q for the quarterly period ended September 30, 2018, which is expected to be filed with the Securities and Exchange Commission on October 26, 2018.

(4)  Granite contract backlog is comprised of unearned revenue and other awards. For further information, please refer to “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” in the Granite Construction Incorporated Form 10-Q for the quarterly period ended September 30, 2018, which is expected to be filed with the Securities and Exchange Commission on October 26, 2018.

 

Conference Call

Granite will conduct a conference call today, October 26, 2018, at 8 a.m. Pacific Time/11 a.m. Eastern Time to discuss the results of the quarter ended September 30, 2018. The Company invites investors to listen to a live audio webcast on its Investor Relations website, https://investor.graniteconstruction.com/. An archive of the webcast will be available on the website approximately one hour after the call. The live call also is available by calling 1-877-328-5503; international callers may dial 1-412-317-5472. A replay will be available after the live call through November 2, 2018, by calling 1-877-344-7529, replay access code 10124962; international callers may dial 1-412-317-0088.

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, America’s Infrastructure Company, 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 nine 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.

 

 


 

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, 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)

 

 

 

September 30,

2018

 

 

December 31,

2017

 

 

September 30,

2017

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

230,259

 

 

$

233,711

 

 

$

185,516

 

Short-term marketable securities

 

 

35,010

 

 

 

67,775

 

 

 

47,814

 

Receivables, net

 

 

618,070

 

 

 

479,791

 

 

 

627,081

 

Contract assets

 

 

213,989

 

 

 

 

 

 

 

Costs and estimated earnings in excess of billings

 

 

 

 

 

103,965

 

 

 

94,527

 

Inventories

 

 

90,789

 

 

 

62,497

 

 

 

62,059

 

Assets held for sale

 

 

62,988

 

 

 

 

 

 

 

Equity in construction joint ventures

 

 

273,993

 

 

 

247,826

 

 

 

242,358

 

Other current assets

 

 

32,185

 

 

 

36,513

 

 

 

26,612

 

Total current assets

 

 

1,557,283

 

 

 

1,232,078

 

 

 

1,285,967

 

Property and equipment, net

 

 

560,618

 

 

 

407,418

 

 

 

412,174

 

Long-term marketable securities

 

 

46,093

 

 

 

65,015

 

 

 

69,991

 

Investments in affiliates

 

 

84,840

 

 

 

38,469

 

 

 

39,946

 

Goodwill

 

 

244,696

 

 

 

53,799

 

 

 

53,799

 

Deferred income taxes, net

 

 

6,408

 

 

 

 

 

 

 

Other noncurrent assets

 

 

143,910

 

 

 

75,199

 

 

 

85,411

 

Total assets

 

$

2,643,848

 

 

$

1,871,978

 

 

$

1,947,288

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Current maturities of long-term debt

 

$

116,796

 

 

$

46,048

 

 

$

14,796

 

Accounts payable

 

 

316,917

 

 

 

237,673

 

 

 

286,913

 

Contract liabilities

 

 

117,759

 

 

 

 

 

 

 

Billings in excess of costs and estimated earnings

 

 

 

 

 

135,146

 

 

 

168,707

 

Accrued expenses and other current liabilities

 

 

296,033

 

 

 

236,407

 

 

 

246,775

 

Total current liabilities

 

 

847,505

 

 

 

655,274

 

 

 

717,191

 

Long-term debt

 

 

316,926

 

 

 

178,453

 

 

 

225,922

 

Deferred income taxes, net

 

 

5,589

 

 

 

1,361

 

 

 

5,932

 

Other long-term liabilities

 

 

67,429

 

 

 

44,085

 

 

 

46,435

 

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: 46,897,092 shares as of September 30, 2018, 39,871,314 shares as of December 31, 2017 and 39,850,587 shares as of September 30, 2017

 

 

469

 

 

 

399

 

 

 

399

 

Additional paid-in capital

 

 

572,046

 

 

 

160,376

 

 

 

157,734

 

Accumulated other comprehensive income

 

 

1,841

 

 

 

634

 

 

 

240

 

Retained earnings

 

 

786,936

 

 

 

783,699

 

 

 

756,183

 

Total Granite Construction Incorporated shareholders’ equity

 

 

1,361,292

 

 

 

945,108

 

 

 

914,556

 

Non-controlling interests

 

 

45,107

 

 

 

47,697

 

 

 

37,252

 

Total equity

 

 

1,406,399

 

 

 

992,805

 

 

 

951,808

 

Total liabilities and equity

 

$

2,643,848

 

 

$

1,871,978

 

 

$

1,947,288

 

 

 

 

 


 

GRANITE CONSTRUCTION INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited - in thousands, except per share data)

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation

 

$

610,847

 

 

$

624,727

 

 

$

1,472,703

 

 

$

1,423,396

 

Water

 

 

124,292

 

 

 

36,378

 

 

 

215,951

 

 

 

100,944

 

Specialty

 

 

190,836

 

 

 

197,886

 

 

 

461,149

 

 

 

452,265

 

Materials

 

 

129,616

 

 

 

98,135

 

 

 

276,286

 

 

 

211,834

 

Total revenue

 

 

1,055,591

 

 

 

957,126

 

 

 

2,426,089

 

 

 

2,188,439

 

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation

 

 

539,871

 

 

 

559,187

 

 

 

1,334,302

 

 

 

1,303,489

 

Water

 

 

100,189

 

 

 

34,573

 

 

 

174,834

 

 

 

91,172

 

Specialty

 

 

162,737

 

 

 

170,089

 

 

 

395,838

 

 

 

395,529

 

Materials

 

 

108,303

 

 

 

78,747

 

 

 

239,972

 

 

 

184,023

 

Total cost of revenue

 

 

911,100

 

 

 

842,596

 

 

 

2,144,946

 

 

 

1,974,213

 

Gross profit

 

 

144,491

 

 

 

114,530

 

 

 

281,143

 

 

 

214,226

 

Selling, general and administrative expenses

 

 

70,769

 

 

 

49,501

 

 

 

193,337

 

 

 

162,726

 

Acquisition and integration expenses

 

 

9,334

 

 

 

 

 

 

44,030

 

 

 

 

Gain on sales of property and equipment

 

 

(3,018

)

 

 

(1,753

)

 

 

(5,066

)

 

 

(2,830

)

Operating income

 

 

67,406

 

 

 

66,782

 

 

 

48,842

 

 

 

54,330

 

Other (income) expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

(1,533

)

 

 

(1,141

)

 

 

(4,227

)

 

 

(3,356

)

Interest expense

 

 

4,452

 

 

 

2,660

 

 

 

10,090

 

 

 

8,097

 

Equity in income of affiliates

 

 

(1,769

)

 

 

(2,732

)

 

 

(5,527

)

 

 

(4,907

)

Other income, net

 

 

(1,533

)

 

 

(1,309

)

 

 

(2,205

)

 

 

(2,821

)

Total other income

 

 

(383

)

 

 

(2,522

)

 

 

(1,869

)

 

 

(2,987

)

Income before provision for income taxes

 

 

67,789

 

 

 

69,304

 

 

 

50,711

 

 

 

57,317

 

Provision for income taxes

 

 

8,692

 

 

 

21,249

 

 

 

7,357

 

 

 

16,841

 

Net income

 

 

59,097

 

 

 

48,055

 

 

 

43,354

 

 

 

40,476

 

Amount attributable to non-controlling interests

 

 

(3,425

)

 

 

(2,073

)

 

 

(7,490

)

 

 

(4,151

)

Net income attributable to Granite Construction Incorporated

 

$

55,672

 

 

$

45,982

 

 

$

35,864

 

 

$

36,325

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share attributable to common shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.20

 

 

$

1.15

 

 

$

0.84

 

 

$

0.91

 

Diluted

 

$

1.17

 

 

$

1.14

 

 

$

0.84

 

 

$

0.90

 

Weighted average shares of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

46,308

 

 

 

39,844

 

 

 

42,443

 

 

 

39,774

 

Diluted

 

 

47,810

 

 

 

40,387

 

 

 

42,910

 

 

 

40,367

 

Dividends per common share

 

$

0.13

 

 

$

0.13

 

 

$

0.39

 

 

$

0.39

 

 

 


 

GRANITE CONSTRUCTION INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited - in thousands)

 

Nine Months Ended September 30,

 

2018

 

 

2017

 

Operating activities

 

 

 

 

 

 

 

 

Net income

 

$

43,354

 

 

$

40,476

 

Adjustments to reconcile net income to net cash provided by

   operating activities:

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

77,816

 

 

 

48,522

 

Gain on sales of property and equipment, net

 

 

(5,066

)

 

 

(2,830

)

Change in deferred income taxes

 

 

(2,207

)

 

 

 

Stock-based compensation

 

 

12,620

 

 

 

13,580

 

Equity in net loss from unconsolidated joint ventures

 

 

16,343

 

 

 

15,415

 

Net income from affiliates

 

 

(5,526

)

 

 

(4,907

)

Changes in assets and liabilities:

 

 

(122,591

)

 

 

(45,642

)

Net cash provided by operating activities

 

 

14,743

 

 

 

64,614

 

Investing activities

 

 

 

 

 

 

 

 

Purchases of marketable securities

 

 

(9,952

)

 

 

(79,708

)

Maturities of marketable securities

 

 

60,000

 

 

 

90,000

 

Purchases of property and equipment

 

 

(86,131

)

 

 

(56,808

)

Proceeds from sales of property and equipment

 

 

9,480

 

 

 

5,107

 

Cash paid to purchase businesses, net of cash and restricted cash acquired

 

 

(55,027

)

 

 

 

Other investing activities, net

 

 

317

 

 

 

2,321

 

Net cash used in investing activities

 

 

(81,313

)

 

 

(39,088

)

Financing activities

 

 

 

 

 

 

 

 

Proceeds from debt

 

 

143,250

 

 

 

 

Debt principal repayments

 

 

(42,149

)

 

 

(3,750

)

Cash dividends paid

 

 

(16,328

)

 

 

(15,506

)

Repurchases of common stock

 

 

(6,369

)

 

 

(6,713

)

Distributions to non-controlling partners, net

 

 

(10,128

)

 

 

(3,500

)

Other financing activities, net

 

 

441

 

 

 

133

 

Net cash provided by (used in) financing activities

 

 

68,717

 

 

 

(29,336

)

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

2,147

 

 

 

(3,810

)

Cash and cash equivalents at beginning of period

 

 

233,711

 

 

 

189,326

 

Cash, cash equivalents and restricted cash of $5,599 at end of period

 

$

235,858

 

 

$

185,516

 

 

 

 


 

 

 

GRANITE CONSTRUCTION INCORPORATED

 

Business Segment Information

 

(Unaudited - dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation

 

$

610,847

 

 

$

624,727

 

 

$

1,472,703

 

 

$

1,423,396

 

Water

 

 

124,292

 

 

 

36,378

 

 

 

215,951

 

 

 

100,944

 

Specialty

 

 

190,836

 

 

 

197,886

 

 

 

461,149

 

 

 

452,265

 

Materials

 

 

129,616

 

 

 

98,135

 

 

 

276,286

 

 

 

211,834

 

Total revenue

 

$

1,055,591

 

 

$

957,126

 

 

$

2,426,089

 

 

$

2,188,439

 

Gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation

 

$

70,976

 

 

$

65,540

 

 

$

138,401

 

 

$

119,907

 

Water

 

 

24,103

 

 

 

1,805

 

 

 

41,117

 

 

 

9,772

 

Specialty

 

 

28,099

 

 

 

27,797

 

 

 

65,311

 

 

 

56,736

 

Materials

 

 

21,313

 

 

 

19,388

 

 

 

36,314

 

 

 

27,811

 

Total gross profit

 

$

144,491

 

 

$

114,530

 

 

$

281,143

 

 

$

214,226

 

Gross profit as a percent of revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation

 

 

11.6

%

 

 

10.5

%

 

 

9.4

%

 

 

8.4

%

Water

 

 

19.4

 

 

 

5.0

 

 

 

19.0

 

 

 

9.7

 

Specialty

 

 

14.7

 

 

 

14.0

 

 

 

14.2

 

 

 

12.5

 

Materials

 

 

16.4

 

 

 

19.8

 

 

 

13.1

 

 

 

13.1

 

Total gross profit as a percent of total revenue

 

 

13.7

%

 

 

12.0

%

 

 

11.6

%

 

 

9.8

%

 

 

 

 

 

 

 

 

 

 

 

 


 

GRANITE CONSTRUCTION INCORPORATED

 

 

Unearned Revenue / Contract Backlog by Segment(1)

 

 

(Unaudited - dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unearned Revenue

 

September 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation

 

$

2,311,712

 

 

75.5

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Water

 

 

250,157

 

 

8.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Specialty

 

 

501,556

 

 

16.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

3,063,425

 

 

100.0

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other(2)

 

September 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transportation

 

$

 

 

0.0

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Water

 

 

114,615

 

 

64.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Specialty

 

 

63,095

 

 

35.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

177,710

 

 

100.0

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract Backlog(1)

 

September 30, 2018

 

 

June 30, 2018

 

 

September 30, 2017

 

 

Transportation

 

$

2,311,712

 

 

71.3

 

%

$

2,637,055

 

 

72.2

 

%

$

3,283,055

 

 

77.5

 

%

Water

 

 

364,772

 

 

11.3

 

 

 

398,886

 

 

10.9

 

 

 

171,939

 

 

4.1

 

 

Specialty

 

 

564,651

 

 

17.4

 

 

 

615,981

 

 

16.9

 

 

 

779,750

 

 

18.4

 

 

Total

 

$

3,241,135

 

 

100.0

 

%

$

3,651,922

 

 

100.0

 

%

$

4,234,744

 

 

100.0

 

%

 

(1)Contract Backlog is calculated by adding Unearned Revenue and Other Awards.

(2)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.

 

 


 

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 net income attributable to Granite Construction Incorporated and adjusted diluted earnings per share to indicate the impact of non-recurring acquisition, integration and acquired intangible amortization expenses related to the acquisition of Layne Christensen Company and LiquiForce.

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.

GRANITE CONSTRUCTION INCORPORATED

 

EBITDA(1)

 

(Unaudited - dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Net income attributable to Granite Construction Incorporated

 

$

55,672

 

 

$

45,982

 

 

$

35,864

 

 

$

36,325

 

Depreciation, depletion and amortization expense(2)

 

 

34,269

 

 

 

17,374

 

 

 

77,816

 

 

 

48,522

 

Provision for income taxes

 

 

8,692

 

 

 

21,249

 

 

 

7,357

 

 

 

16,841

 

Interest expense, net of interest income

 

 

2,919

 

 

 

1,519

 

 

 

5,863

 

 

 

4,741

 

EBITDA

 

$

101,552

 

 

$

86,124

 

 

$

126,900

 

 

$

106,429

 

EBITDA Margin(3)

 

 

9.6

%

 

 

9.0

%

 

 

5.2

%

 

 

4.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition and integration expenses and synergy costs(4)

 

$

11,190

 

 

$

 

 

$

46,037

 

 

$

 

Adjusted EBITDA(1)

 

$

112,742

 

 

$

86,124

 

 

$

172,937

 

 

$

106,429

 

Adjusted EBITDA margin(1)

 

 

10.7

%

 

 

9.0

%

 

 

7.1

%

 

 

4.9

%

 

(1)We define EBITDA as GAAP net income 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 synergy costs.

(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 $1.06 billion and $2.43 billion for three and nine months ended September 30, 2018, respectively, and $0.96 billion and $2.19 billion for the three and nine months ended September 30, 2017, respectively.

(4)Amount includes expenses related to external transaction costs, professional fees, internal travel, and synergy costs associated with the acquisition and integration of Layne Christensen Company and LiquiForce.  Synergy costs include expenses incurred which will be eliminated as the integration of Layne and LiquiForce is completed.

 


 

 


 

GRANITE CONSTRUCTION INCORPORATED

Adjusted Net Income Reconciliation(1)

(Unaudited - in thousands, except per share data)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Income before provision for income taxes

 

$

67,789

 

 

$

69,304

 

 

$

50,711

 

 

$

57,317

 

Acquisition and integration expenses and synergy costs(2)

 

 

11,190