Granite Reports Second-Quarter 2012 Financial Results
- Earnings per share of
$0.05 compared to$0.13 in Q2 2011 - Total revenue increased 11.3 percent to
$539.6 million - Operating income
$14.1 million versus$9.4 million in 2011 - Other expenses increased
$6.5 million - Cash and marketable securities increased to
$327.0 million compared to$317.9 million in 2011
The second quarter 2012 reflects a
“Operating results in the quarter continue to demonstrate Granite’s ability to successfully navigate through one of the toughest construction markets our company, and our industry, has faced in recent times,” said Granite President and Chief Executive Officer
“Looking ahead, while we anticipate the Construction and Construction Materials markets in the West will remain challenging, I am encouraged by the strategic initiatives we are employing to both diversify and grow our business,” Roberts added. “In addition to a full pipeline of bidding opportunities, we expect our Large Projects to reach a number of key milestones and continue to perform very well for the balance of the year. In addition, we expect to see local and state governments put more work out to bid over the coming months given the recent passage of a two-year federal highway bill.”
Second-quarter 2012 Financial Results
- Revenue totaled
$539.6 million compared with$484.7 million in 2011, driven largely by an increase inLarge Project Construction segment revenue. - Gross profit margin was 9.6 percent compared with 9.3 percent in 2011.
- Selling, general and administrative expenses for the second quarter were
$40.8 million compared with$38.8 million . - Operating income for the quarter was
$14.1 million compared with$9 .4 million in the prior year. - Other (expense) income includes
$2.8 million attributable to a non-cash impairment loss on an investment. - Net income attributable to noncontrolling interests in joint ventures was
$2.5 million compared with$1.2 million in 2011. - Total contract backlog at
June 30, 2012 , was$2.0 billion compared with$2.1 billion a year ago.
Construction
- Construction revenue for the quarter decreased 5.9 percent to
$245.1 million . - Gross profit margin for the second quarter was 7.3 percent compared with 9.0 percent a year ago primarily reflecting two project write-downs and the continued pressure on margins due to intense competition.
Large Project Construction revenue for the quarter increased 40.9 percent to$228.8 million reflecting progress on projects that are well underway across the country.- Gross profit margin for the quarter was 12.3 percent compared with 7.8 percent for the same period last year as a result of successful project execution and proportionately less revenue from projects that had yet to recognize gross profit.
Construction Materials
- Construction Materials revenue for the quarter totaled
$63.3 million compared with$58 .1 million for the same period last year. - Gross profit margin on the sale of Construction Materials was 7.9 percent compared with 14.6 percent in 2011 reflecting ongoing weakness in the commercial and residential markets.
Outlook
Based on its year-to-date results and outlook for the remainder of the year, the company is making the following adjustments to its fiscal year 2012 guidance:
For the Construction segment, the company is reaffirming revenue guidance of
The company is also reaffirming its revenue guidance for the
As a result of the ongoing weakness in its vertically integrated markets, the company is lowering its revenue and gross profit margin guidance for the Construction Materials segment. Revenue is now expected to be
The company reaffirmed that it expects net income attributable to non-controlling interest in joint ventures to be in the range of
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 S&P 400 Midcap Index, the FTSE KLD 400 Social Index and the Russell 2000 Index. Through its wholly owned subsidiary, Granite is one of the nation’s largest diversified heavy civil contractors and construction materials producers serving public- and private-sector clients nationwide. In addition, Granite has one of the oldest and most robust ethics and compliance programs in the industry. The Company was recognized by 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 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.
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
| (Unaudited - in thousands, except share and per share data) | |||||||||
| 2012 | 2011 | 2011 | |||||||
| ASSETS | |||||||||
| Current assets | |||||||||
| Cash and cash equivalents | $ | 237,951 | $ | 256,990 | $ | 190,069 | |||
| Short-term marketable securities | 43,260 | 70,408 | 78,255 | ||||||
| Receivables, net | 272,562 | 251,838 | 283,944 | ||||||
| Costs and estimated earnings in excess of billings | 69,688 | 37,703 | 51,739 | ||||||
| Inventories | 67,503 | 50,975 | 64,727 | ||||||
| Real estate held for development and sale | 57,367 | 67,037 | 78,725 | ||||||
| Deferred income taxes | 38,571 | 38,571 | 52,714 | ||||||
| Equity in construction joint ventures | 107,821 | 101,029 | 87,653 | ||||||
| Other current assets | 20,436 | 35,171 | 34,779 | ||||||
| Total current assets | 915,159 | 909,722 | 922,605 | ||||||
| Property and equipment, net | 439,664 | 447,140 | 464,616 | ||||||
| Long-term marketable securities | 45,800 | 79,250 | 49,580 | ||||||
| Investments in affiliates | 28,521 | 31,071 | 32,932 | ||||||
| Other noncurrent assets | 78,503 | 80,616 | 82,214 | ||||||
| Total assets | $ | 1,507,647 | $ | 1,547,799 | $ | 1,551,947 | |||
| LIABILITIES AND EQUITY | |||||||||
| Current liabilities | |||||||||
| Current maturities of long-term debt | $ | 9,102 | $ | 9,102 | $ | 8,351 | |||
| Current maturities of non-recourse debt | 16,328 | 23,071 | 16,454 | ||||||
| Accounts payable | 186,290 | 158,660 | 179,664 | ||||||
| Billings in excess of costs and estimated earnings | 75,629 | 90,845 | 122,014 | ||||||
| Accrued expenses and other current liabilities | 155,322 | 166,790 | 156,727 | ||||||
| Total current liabilities | 442,671 | 448,468 | 483,210 | ||||||
| Long-term debt | 200,168 | 208,501 | 208,519 | ||||||
| Long-term non-recourse debt | 4,641 | 9,912 | 28,907 | ||||||
| Other long-term liabilities | 47,393 | 49,221 | 46,460 | ||||||
| Deferred income taxes | 3,644 | 4,034 | 10,983 | ||||||
| Equity | |||||||||
| Preferred stock, |
- | - | - | ||||||
|
Common stock, |
387 | 387 | 387 | ||||||
| Additional paid-in capital | 112,815 | 111,514 | 105,287 | ||||||
| Retained earnings | 667,278 | 687,296 | 642,228 | ||||||
| Total |
780,480 | 799,197 | 747,902 | ||||||
| Noncontrolling interests | 28,650 | 28,466 | 25,966 | ||||||
| Total equity | 809,130 | 827,663 | 773,868 | ||||||
| Total liabilities and equity | $ | 1,507,647 | $ | 1,547,799 | $ | 1,551,947 | |||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||
| (Unaudited - in thousands, except per share data) | ||||||||||||||||||
|
Three Months Ended |
Six Months Ended |
|||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||||
| Revenue | ||||||||||||||||||
| Construction | $ | 245,113 | $ | 260,600 | $ | 363,059 | $ | 353,292 | ||||||||||
| Large project construction | 228,799 | 162,338 | 392,727 | 300,158 | ||||||||||||||
| Construction materials | 63,349 | 58,114 | 88,972 | 81,912 | ||||||||||||||
| Real estate | 2,354 | 3,622 | 5,017 | 6,043 | ||||||||||||||
| Total revenue | 539,615 | 484,674 | 849,775 | 741,405 | ||||||||||||||
| Cost of revenue | ||||||||||||||||||
| Construction | 227,152 | 237,211 | 336,518 | 324,350 | ||||||||||||||
| Large project construction | 200,560 | 149,680 | 342,239 | 256,202 | ||||||||||||||
| Construction materials | 58,349 | 49,644 | 89,922 | 80,712 | ||||||||||||||
| Real estate | 1,638 | 3,183 | 4,244 | 5,197 | ||||||||||||||
| Total cost of revenue | 487,699 | 439,718 | 772,923 | 666,461 | ||||||||||||||
| Gross profit | 51,916 | 44,956 | 76,852 | 74,944 | ||||||||||||||
| Selling, general and administrative expenses | 40,806 | 38,793 | 83,994 | 82,165 | ||||||||||||||
| Gain on sales of property and equipment | 2,954 | 3,270 | 4,871 | 5,974 | ||||||||||||||
| Operating income (loss) | 14,064 | 9,433 | (2,271 | ) | (1,247 | ) | ||||||||||||
| Other income (expense) | ||||||||||||||||||
| Interest income | 611 | 575 | 1,655 | 1,819 | ||||||||||||||
| Interest expense | (2,827 | ) | (879 | ) | (6,009 | ) | (4,235 | ) | ||||||||||
| Equity in loss of affiliates | (484 | ) | (181 | ) | (1,101 | ) | (438 | ) | ||||||||||
| Other (expense) income, net | (5,018 | ) | (688 | ) | 1,853 | (118 | ) | |||||||||||
| Total other expense | (7,718 | ) | (1,173 | ) | (3,602 | ) | (2,972 | ) | ||||||||||
| Income (loss) before provision for (benefit from) income taxes | 6,346 | 8,260 | (5,873 | ) | (4,219 | ) | ||||||||||||
| Provision for (benefit from) income taxes | 1,859 | 2,087 | (1,673 | ) | (3,136 | ) | ||||||||||||
| Net income (loss) | 4,487 | 6,173 | (4,200 | ) | (1,083 | ) | ||||||||||||
| Amount attributable to noncontrolling interests | (2,538 | ) | (1,227 | ) | (5,624 | ) | (2,978 | ) | ||||||||||
| Net income (loss) attributable to |
$ | 1,949 | $ | 4,946 | $ | (9,824 | ) | $ | (4,061 | ) | ||||||||
| Net income (loss) per share attributable to common shareholders: | ||||||||||||||||||
| Basic | $ | 0.05 | $ | 0.13 | $ | (0.26 | ) | $ | (0.11 | ) | ||||||||
| Diluted | $ | 0.05 | $ | 0.13 | $ | (0.26 | ) | $ | (0.11 | ) | ||||||||
| Weighted average shares of common stock: | ||||||||||||||||||
| Basic | 38,471 | 38,140 | 38,368 | 38,052 | ||||||||||||||
| Diluted | 39,151 | 38,479 | 38,368 | 38,052 | ||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (Unaudited - in thousands) | ||||||||
| Six Months Ended |
2012 | 2011 | ||||||
| Operating activities | ||||||||
| Net loss | $ | (4,200 | ) | $ | (1,083 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation, depletion and amortization | 29,573 | 30,464 | ||||||
|
Non-cash restructuring, net |
(1,888 | ) | 661 | |||||
|
Other non-cash impairment charges |
2,752 | - | ||||||
| Gain on sales of property and equipment | (4,871 | ) | (5,974 | ) | ||||
| Stock-based compensation | 6,492 | 5,913 | ||||||
| Changes in assets and liabilities, net of the effects of consolidations | (62,482 | ) | (46,717 | ) | ||||
| Net cash used in operating activities | (34,624 | ) | (16,736 | ) | ||||
| Investing activities | ||||||||
| Purchases of marketable securities | (39,945 | ) | (65,287 | ) | ||||
| Maturities of marketable securities | 65,100 | 58,375 | ||||||
| Proceeds from sale of marketable securities | 35,000 | 19,268 | ||||||
| Additions to property and equipment | (19,855 | ) | (27,542 | ) | ||||
| Proceeds from sales of property and equipment | 6,078 | 10,266 | ||||||
| Other investing activities, net | (978 | ) | 120 | |||||
| Net cash provided by (used in) investing activities | 45,400 | (4,800 | ) | |||||
| Financing activities | ||||||||
| Long-term debt principal payments | (10,834 | ) | (16,151 | ) | ||||
| Cash dividends paid | (10,050 | ) | (10,061 | ) | ||||
| Purchase of common stock | (4,054 | ) | (3,662 | ) | ||||
| Distributions to noncontrolling partners, net | (5,440 | ) | (11,616 | ) | ||||
| Other financing activities, net | 563 | 1,073 | ||||||
| Net cash used in financing activities | (29,815 | ) | (40,417 | ) | ||||
| Decrease in cash and cash equivalents | (19,039 | ) | (61,953 | ) | ||||
| Cash and cash equivalents at beginning of period | 256,990 | 252,022 | ||||||
| Cash and cash equivalents at end of period | $ | 237,951 | $ | 190,069 | ||||
| Business Segment Information | |||||||||||||||||||||||||||||||||
| (Unaudited - dollars in thousands) | |||||||||||||||||||||||||||||||||
| Three Months Ended |
Six Months Ended |
||||||||||||||||||||||||||||||||
| Construction |
|
Construction |
Real Estate | Construction |
|
Construction |
Real Estate | ||||||||||||||||||||||||||
| 2012 | |||||||||||||||||||||||||||||||||
| Revenue | $ | 245,113 | $ | 228,799 | $ | 63,349 | $ | 2,354 | $ | 363,059 | $ | 392,727 | $ | 88,972 | $ | 5,017 | |||||||||||||||||
| Gross profit (loss) | 17,961 | 28,239 | 5,000 | 716 | 26,541 | 50,488 | (950 | ) | 773 | ||||||||||||||||||||||||
| Gross profit (loss) as a percent of revenue | 7.3 | % | 12.3 | % | 7.9 | % | 30.4 | % | 7.3 | % | 12.9 | % | (1.1 | )% | 15.4 | % | |||||||||||||||||
| 2011 | |||||||||||||||||||||||||||||||||
| Revenue | $ | 260,600 | $ | 162,338 | $ | 58,114 | $ | 3,622 | $ | 353,292 | $ | 300,158 | $ | 81,912 | $ | 6,043 | |||||||||||||||||
| Gross profit | 23,389 | 12,658 | 8,470 | 439 | 28,942 | 43,956 | 1,200 | 846 | |||||||||||||||||||||||||
| Gross profit as a percent of revenue | 9.0 | % | 7.8 | % | 14.6 | % | 12.1 | % | 8.2 | % | 14.6 | % | 1.5 | % | 14.0 | % | |||||||||||||||||
| Contract Backlog by Segment | ||||||||||||||||||
| (Unaudited - dollars in thousands) | ||||||||||||||||||
| Contract Backlog by Segment | ||||||||||||||||||
| Construction | $ | 697,535 | 35.8 | % | $ | 622,240 | 29.9 | % | $ | 800,434 | 38.0 | % | ||||||
| 1,252,828 | 64.2 | % | 1,460,674 | 70.1 | % | 1,306,961 | 62.0 | % | ||||||||||
| Total | $ | 1,950,363 | 100.0 | % | $ | 2,082,914 | 100.0 | % | $ | 2,107,395 | 100.0 | % | ||||||
Source:
