Granite Announces Improved First-Quarter 2011 Financial Results
-- Revenue increased 16 percent from a year ago
-- SG&A decreased 22 percent in the quarter to $43.4 million
-- Net loss of $9.0 million compared with net loss in Q1 2010 of $41.0
million
-- $335 million in new awards through March 31, 2011
-- Balance sheet remains strong, with $370.1 million in cash and marketable
securities
"During the first quarter, we began to see the progress we have made on our cost savings initiatives related to our Enterprise Improvement Plan," said Granite President and Chief Executive Officer
First-quarter 2011 Financial Results
-- Revenue totaled $256.7 million compared with $220.7 million in 2010,
driven largely by an increase in Large Project revenue.
-- Gross profit margin was 12 percent compared with 3 percent in 2010,
driven primarily by a large project in the East reaching the profit
recognition threshold.
-- Operating loss for the quarter was $10.7 million compared with $45.1
million in the prior year.
-- Selling, general and administrative expenses for the first quarter were
$43.4 million compared with $55.3 million for the same period last year
as a result of the Company's Enterprise Improvement Project implemented
in late 2010.
-- Net income attributable to noncontrolling interests in joint ventures
was $1.8 million compared with $3.2 million in 2010.
-- Total contract backlog at March 31, 2011 , was $2.0 billion compared with
$1.9 billion at December 31, 2010 , and $1.6 billion at March 31, 2010 .
Construction
-- Construction revenue for the quarter increased $11.5 million to $92.7
million due to a higher volume of work completed in the quarter compared
to a year ago.
-- Gross profit margin for the first quarter was 6 percent compared with 2
percent a year ago.
-- Large Project Construction revenue for the quarter increased $31.5
million to $137.8 million reflecting continued progress on several
projects including the Queens Bored Tunnels and Structures project in
the East, the SR 520 project in Washington and the Mountain View
Corridor project in Utah .
-- Gross profit margin for the quarter increased to 23 percent compared
with 9 percent for the same period last year. The increase reflects
profitability associated with the Queens Bored Tunnel and Structures
project reaching the percentage of completion threshold.
-- Construction Materials revenue for the quarter totaled $23.8 million
compared with $26.2 million for the same period last year as the Company
experienced reduced demand for asphalt materials.
-- Gross loss on the sale of construction materials was $7.3 million in
2011 compared with $7.1 million in 2010.
Outlook
"Despite the ongoing competitive climate, we are pleased with our bid results for the first quarter as well as the upcoming volume of opportunities to bid work across the country," said Roberts. "On the other hand, the ongoing delays associated with the federal highway bill and the budgetary pressures at the state and local levels are providing some uncertainty as we look further out."
For 2011, Granite expects Construction segment revenue to be
Conference Call
Granite will conduct a conference call tomorrow,
About Granite
Granite is one of the nation's leading infrastructure contractors and is member of the
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 of 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
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) March 31, December 31, March 31, 2011 2010 2010 ASSETS Current assets Cash and cash equivalents $ 240,768 $ 252,022 $ 222,095 Short-term marketable securities 83,084 109,447 76,963 Receivables, net 170,441 243,986 197,658 Costs and estimated earnings in excess 33,302 10,519 33,445 of billings Inventories 56,899 51,018 49,483 Real estate held for development and 77,128 75,716 137,183 sale Deferred income taxes 52,583 53,877 31,150 Equity in construction joint ventures 78,773 74,716 71,693 Other current assets 44,059 42,555 56,033 Total current assets 837,037 913,856 875,703 Property and equipment, net 468,929 473,607 519,909 Long-term marketable securities 46,251 34,259 90,440 Investments in affiliates 28,893 31,410 30,823 Other noncurrent assets 83,478 82,401 80,371 Total assets $ 1,464,588 $ 1,535,533 $ 1,597,246 LIABILITIES AND EQUITY Current liabilities Current maturities of long-term debt $ 8,351 $ 8,359 $ 8,350 Current maturities of non-recourse debt 17,740 29,760 40,565 Accounts payable 94,688 129,700 100,102 Billings in excess of costs and 113,347 120,185 142,935 estimated earnings Accrued expenses and other current 144,584 150,773 156,374 liabilities Total current liabilities 378,710 438,777 448,326 Long-term debt 216,852 217,014 225,203 Long-term non-recourse debt 30,454 25,337 16,895 Other long-term liabilities 47,943 47,996 52,471 Deferred income taxes 11,048 10,774 27,217 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 38,634,470 shares as of 386 387 388 March 31, 2011, 38,745,542 shares as ofDecember 31, 2010 and 38,801,232 shares as ofMarch 31, 2010 Additional paid-in capital 102,548 104,232 93,688 Retained earnings 642,354 656,412 689,634 Total Granite Construction Incorporated 745,288 761,031 783,710 shareholders' equity Noncontrolling interests 34,293 34,604 43,424 Total equity 779,581 795,635 827,134 Total liabilities and equity $ 1,464,588 $ 1,535,533 $ 1,597,246
GRANITE CONSTRUCTION INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited - in thousands, except per share data) Three Months Ended March 31, 2011 2010 Revenue Construction $ 92,692 $ 81,186 Large project construction 137,820 106,325 Construction materials 23,798 26,164 Real estate 2,421 7,008 Total revenue 256,731 220,683 Cost of revenue Construction 87,139 79,340 Large project construction 106,522 96,842 Construction materials 31,068 33,289 Real estate 2,014 5,498 Total cost of revenue 226,743 214,969 Gross profit 29,988 5,714 Selling, general and administrative expenses 43,372 55,292 Gain on sales of property and equipment 2,704 4,452 Operating loss (10,680 ) (45,126 ) Other income (expense) Interest income 1,244 939 Interest expense (3,356 ) (3,734 ) Equity in loss of affiliates (257 ) (319 ) Other income, net 570 2,897 Total other expense (1,799 ) (217 ) Loss before benefit from income taxes (12,479 ) (45,343 ) Benefit from income taxes (5,223 ) (7,613 ) Net loss (7,256 ) (37,730 ) Amount attributable to noncontrolling interests (1,751 ) (3,224 ) Net loss attributable to Granite Construction $ (9,007 ) $ (40,954 ) Incorporated Net loss per share attributable to common shareholders: Basic (1) $ (0.24 ) $ (1.09 ) Diluted (1) $ (0.24 ) $ (1.09 ) Weighted average shares of common stock: Basic 37,963 37,688 Diluted 37,963 37,688 Note: (1) Computed using the two-class method, except when in a net loss position
GRANITE CONSTRUCTION INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited - in thousands) Three Months Ended March 31, 2011 2010 Operating activities Net loss $ (7,256 ) $ (37,730 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation, depletion and amortization 15,291 18,662 Gain on sales of property and equipment (2,704 ) (4,452 ) Change in deferred income taxes 1,568 (119 ) Stock-based compensation 3,149 3,158 Gain on company owned life insurance (550 ) (1,829 ) Changes in assets and liabilities, net of the effects (8,822 ) (2,044 ) of consolidations Net cash provided by (used in) operating activities 676 (24,354 ) Investing activities Purchases of marketable securities (27,341 ) (47,511 ) Maturities of marketable securities 24,000 - Proceeds from sale of marketable securities 14,268 - Additions to property and equipment (11,760 ) (14,712 ) Proceeds from sales of property and equipment 4,623 5,674 Purchase of private preferred stock - (6,400 ) Distributions from affiliates 1,325 - Other investing activities, net (104 ) (453 ) Net cash provided by (used in) investing activities 5,011 (63,402 ) Financing activities Proceeds from long-term debt 906 53 Long-term debt principal payments (7,235 ) (8,739 ) Cash dividends paid (5,038 ) (5,023 ) Purchase of common stock (3,515 ) (3,296 ) Distributions to noncontrolling partners, net (2,062 ) (12,103 ) Other financing activities 3 3 Net cash used in financing activities (16,941 ) (29,105 ) Decrease in cash and cash equivalents (11,254 ) (116,861 ) Cash and cash equivalents at beginning of period 252,022 338,956 Cash and cash equivalents at end of period $ 240,768 $ 222,095
GRANITE CONSTRUCTION INCORPORATED Business Segment Information (Unaudited - dollars in thousands) Three Months Ended March 31, Construction Large Project Construction Real Estate Construction Materials 2011 Revenue $ 92,692 $ 137,820 $ 23,798 $ 2,421 Gross profit (loss) $ 5,553 $ 31,298 $ (7,270 ) $ 407 Gross profit (loss) as a 6.0 % 22.7 % -30.5 % 16.8 % percent of revenue 2010 Revenue $ 81,186 $ 106,325 $ 26,164 $ 7,008 Gross profit (loss) $ 1,846 $ 9,483 $ (7,125 ) $ 1,510 Gross profit (loss) as a 2.3 % 8.9 % -27.2 % 21.5 % percent of revenue
GRANITE CONSTRUCTION INCORPORATED Contract Backlog by Segment (Unaudited - dollars in thousands) March 31, 2011 December 31, 2010 March 31, 2010 Construction $ 696,055 34.7 % $ 465,271 24.5 % $ 487,751 30.9 % Large Project 1,307,622 65.3 % 1,433,899 75.5 % 1,091,251 69.1 % Construction Total $ 2,003,677 100.0 % $ 1,899,170 100.0 % $ 1,579,002 100.0 %
Source: Granite Construction Incorporated 