Granite Reports Second-Quarter 2013 Financial Results

    --  Record company backlog of $2.8 billion; Large Project Construction
        contract backlog increased 59% year over year to a record $2.0 billion,
        and Construction contract backlog increased 16% year over year to $807.7
        million
    --  Second quarter revenues increased to $550.2 million, compared with
        $539.6 million in the second quarter of 2012; gross profit margin of 9.3
        percent down slightly from last year
    --  Revenue and profit performance driven primarily by project timing in
        Large Project Construction segment

WATSONVILLE, Calif.--(BUSINESS WIRE)-- Granite Construction Incorporated (NYSE: GVA) today reported net income attributable to common shareholders of $2.7 million, or $0.07 per diluted share, for the second quarter of 2013 compared with $1.9 million, or $0.05 per diluted share, for the second quarter of 2012.

"Granite continues to focus on driving results through execution of our strategic initiatives both to grow and to diversify the business," said
James H. Roberts, Granite president and chief executive officer.

"The Large Projects business continues to perform as expected. Our record backlog includes the start-up of several new projects in the second half of 2013, which will recognize profit in 2014," Roberts said. "While our vertically integrated business still faces market-driven, competitive headwinds, we are benefitting from synergies with our acquisition of Kenny."

Second-quarter 2013 Financial Results

Total Company

    --  Revenues for the quarter totaled $550.2 million, compared with $539.6
        million in 2012.
    --  Gross profit in the second quarter of 2013 was $51.2 million, compared
        with $51.9 million last year, with corresponding gross profit margins of
        9.3 percent and 9.6 percent. Gross profit and gross profit margin in the
        quarter were driven by the competitive environment in the Construction
        segment and project timing in the Large Project Construction segment.
    --  Selling, general and administrative expenses for the second quarter were
        $46.5 million, compared with $40.8 million in 2012. Kenny Construction
        Company (Kenny) accounted for nearly all of the increase.
    --  Operating income for the quarter was $8.0 million compared with $14.1
        million in the prior year.
    --  Total contract backlog at June 30, 2013, was $2.8 billion compared with
        $2.0 billion at June 30, 2012. Backlog booked during the second quarter
        included $426.2 million associated with the IH-35E project in Texas and
        the I-440 project in North Carolina.

Construction

    --  Construction revenues in the second quarter were $308.6 million compared
        with $245.1 million a year ago. Revenues from Kenny and certain Western
        markets outweighed weakness in California in the second quarter.
    --  Gross profit margin was 8.2 percent compared with 7.3 percent a year
        ago. Construction profit performance improved despite continued margin
        pressure from an intensely competitive environment in key markets in the
        West.

Large Project Construction

    --  Large Project Construction revenues in the second quarter were $181.4
        million compared with $228.8 million in the same period last year,
        reflecting the timing of new projects.
    --  Gross profit margin for the quarter of 12.2 percent was in line with
        12.3 percent last year.

Construction Materials

    --  Construction Materials revenue in the second quarter totaled $60.2
        million compared with $63.3 million for the same period last year.
    --  Gross profit margin was 6.6 percent compared with 7.9 percent a year
        ago, driven by ongoing weakness in certain geographic locations.

Guidance

The Company reaffirms the 2013 guidance provided in the first quarter 2013 earnings press release with two adjustments: Large Project Construction segment revenues are expected to be in the range of $850 million to $950 million, and cash flow from operations is expected to be $70 million to $100 million for the year.

Conference Call

Granite will conduct a conference call today, August 1, 2013 at 8 a.m. Pacific Time/11 a.m. Eastern Time to discuss the results of the quarter ended June 30, 2013. Access to a live audio webcast is available at http://investor.graniteconstruction.com/index.cfm. The live conference call may be accessed by calling (877) 643-7158. The conference ID for the live call is 20529008. The call will be recorded and available for replay approximately two hours after the live audio webcast through August 8, 2013 by calling (855) 859-2056. The conference ID for the replay is also 20529008.

About Granite

Through its offices and subsidiaries nationwide, Granite Construction Incorporated (NYSE: GVA) is one of the nation's largest infrastructure contractors and construction materials producers. Incorporated in 1922, Granite serves public- and private-sector clients on projects both small and large. Granite's project teams represent some of the best in the industry serving owners in the transportation, power, federal, tunneling, underground, and industrial/mining and water resources markets. In 2013, the Company was recognized by the Ethisphere Institute as one of the World's Most Ethical Companies for the fourth year in a row. For more information please 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)


-------------------------------------- - ----------- - ----------- - -----------
                                           June 30,      December      June 30,
                                                            31,

                                              2013          2012          2012
-------------------------------------- - ----------- - ----------- - -----------
ASSETS

Current assets

Cash and cash equivalents                $   247,833$   321,990$   237,951

Short-term marketable securities              21,271        56,088        43,260

Receivables, net                             336,418       325,529       272,562

Costs and estimated earnings in excess
of billings                                   63,341        34,116        69,688

Inventories                                   68,905        59,785        67,503

Real estate held for development and
sale                                          50,697        50,223        57,367

Deferred income taxes                         36,687        36,687        38,571

Equity in construction joint ventures        148,727       105,805       107,821

Other current assets                          35,651        31,834        20,436
-------------------------------------- - - --------- - - --------- - - ---------
Total current assets                       1,009,530     1,022,057       915,159

Property and equipment, net                  471,265       481,478       439,664

Long-term marketable securities               55,225        55,342        45,800

Investments in affiliates                     31,421        30,799        28,521

Goodwill                                      53,598        55,419         9,900

Other noncurrent assets                       80,365        84,392        68,603
-------------------------------------- - - --------- - - --------- - - ---------
Total assets                             $ 1,701,404$ 1,729,487$ 1,507,647
-------------------------------------- - - --------- - - --------- - - ---------
LIABILITIES AND EQUITY

Current liabilities

Current maturities of long-term debt     $        20$     8,353$     9,102

Current maturities of non-recourse
debt                                           2,147        10,707        16,328

Accounts payable                             188,124       202,541       186,290

Billings in excess of costs and
estimated earnings                           144,044       139,692        75,629

Accrued expenses and other current
liabilities                                  200,521       169,979       155,322
-------------------------------------- - - --------- - - --------- - - ---------
Total current liabilities                    534,856       531,272       442,671

Long-term debt                               270,148       270,148       200,168

Long-term non-recourse debt                    7,354           922         4,641

Other long-term liabilities                   46,817        47,124        47,393

Deferred income taxes                          8,055         8,163         3,644

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 38,852,463 shares as
of June 30, 2013, 38,730,665 shares as
of December 31, 2012 and 38,684,540
shares as of June 30, 2012                       389           387           387

Additional paid-in capital                   121,368       117,422       112,815

Retained earnings                            682,610       712,144       667,278
-------------------------------------- - - --------- - - --------- - - ---------
Total Granite Construction
Incorporated shareholders' equity            804,367       829,953       780,480

Noncontrolling interests                      29,807        41,905        28,650
-------------------------------------- - - --------- - - --------- - - ---------
Total equity                                 834,174       871,858       809,130
-------------------------------------- - - --------- - - --------- - - ---------
Total liabilities and equity             $ 1,701,404$ 1,729,487$ 1,507,647
-------------------------------------- - - --------- - - --------- - - ---------




 



                                                                        GRANITE CONSTRUCTION INCORPORATED

                                                             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                                            (Unaudited - in thousands, except per share data)
---------------------------------------------------------------------------------------------------------------------------------

                                                                        ----------- - ----------- - - - ----------- - -----------
                                                                         Three Months Ended June        Six Months Ended June 30,
                                                                                   30,
                                                                        ------------------------- ----- -------------------------
                                                                             2013          2012              2013          2012
------------------------------------------------------------------- - - ----------- - ----------- - - - ----------- - -----------
Revenue

Construction                                                            $ 308,602$ 245,113$ 485,720$ 363,059

Large Project Construction                                                181,371       228,799           353,086       392,727

Construction Materials                                                     60,185        63,349            89,935        88,972

Real Estate                                                                     4         2,354               125         5,017
------------------------------------------------------------------- - - - ------- - - - ------- - - - - - ------- - - - ------- -
Total revenue                                                             550,162       539,615           928,866       849,775
------------------------------------------------------------------- - - - ------- - - - ------- - - - - - ------- - - - ------- -
Cost of revenue

Construction                                                              283,448       227,152           447,367       336,518

Large Project Construction                                                159,283       200,560           308,278       342,239

Construction Materials                                                     56,231        58,349            91,955        89,922

Real Estate                                                                     3         1,638                13         4,244
------------------------------------------------------------------- - - - ------- - - - ------- - - - - - ------- - - - ------- -
Total cost of revenue                                                     498,965       487,699           847,613       772,923
------------------------------------------------------------------- - - - ------- - - - ------- - - - - - ------- - - - ------- -
Gross profit                                                               51,197        51,916            81,253        76,852

Selling, general and administrative expenses                               46,454        40,806           104,112        85,882

Gain on restructuring                                                          --            --               497         1,888

Gain on sales of property and equipment                                     3,306         2,954             4,394         4,871
------------------------------------------------------------------- - - - ------- - - - ------- - - - - - ------- - - - ------- -
Operating income (loss)                                                     8,049        14,064           (17,968 )      (2,271 )

Other income (expense)

Interest income                                                               380           611               508         1,655

Interest expense                                                           (3,700 )      (2,827 )          (7,345 )      (6,009 )

Equity in income (loss) of affiliates                                         698          (484 )             275        (1,101 )

Other (expense) income, net                                                  (495 )      (5,018 )             608         1,853
------------------------------------------------------------------- - - - ------- - - - ------- - - - - - ------- - - - ------- -
Total other expense                                                        (3,117 )      (7,718 )          (5,954 )      (3,602 )
------------------------------------------------------------------- - - - ------- - - - ------- - - - - - ------- - - - ------- -
Income (loss) before provision for (benefit from) income taxes              4,932         6,346           (23,922 )      (5,873 )

Provision for (benefit from) income taxes                                   1,766         1,859            (7,261 )      (1,673 )
------------------------------------------------------------------- - - - ------- - - - ------- - - - - - ------- - - - ------- -
Net income (loss)                                                           3,166         4,487           (16,661 )      (4,200 )

Amount attributable to noncontrolling interests                              (448 )      (2,538 )          (2,603 )      (5,624 )
------------------------------------------------------------------- - - - ------- - - - ------- - - - - - ------- - - - ------- -
Net income (loss) attributable to Granite Construction Incorporated     $   2,718$   1,949$ (19,264 )$  (9,824 )
------------------------------------------------------------------- - - - ------- - - - ------- - - - - - ------- - - - ------- -


Net income (loss) per share attributable to common shareholders:

Basic                                                                   $    0.07$    0.05$   (0.50 )$   (0.26 )

Diluted                                                                 $    0.07$    0.05$   (0.50 )$   (0.26 )

Weighted average shares of common stock:

Basic                                                                      38,829        38,471            38,720        38,368

Diluted                                                                    39,769        39,151            38,720        38,368
------------------------------------------------------------------- - - - ------- - - - ------- - - - - - ------- - - - ------- -




 



                                                    GRANITE CONSTRUCTION INCORPORATED

                                          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                         (Unaudited - in thousands)


--------------------------------------------------------------------------- - ----------- - -----------
Six Months Ended June 30,                                                          2013          2012
--------------------------------------------------------------------------- - ----------- - -----------
Operating activities

Net loss                                                                      $ (16,661 )$  (4,200 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation, depletion and amortization                                         33,988        29,573

Non-cash restructuring, net                                                        (497 )      (1,888 )

Other non-cash impairment charges                                                     -         2,752

Gain on sales of property and equipment                                          (4,394 )      (4,871 )

Stock-based compensation                                                          8,101         6,492

Changes in assets and liabilities                                               (72,185 )     (62,482 )
--------------------------------------------------------------------------- - - ------- - - - ------- -
Net cash used in operating activities                                           (51,648 )     (34,624 )
--------------------------------------------------------------------------- - - ------- - - - ------- -
Investing activities

Purchases of marketable securities                                              (14,975 )     (39,945 )

Maturities of marketable securities                                              43,000        65,100

Proceeds from sale of marketable securities                                       5,000        35,000

Additions to property and equipment                                             (19,422 )     (19,855 )

Proceeds from sales of property and equipment                                     8,481         6,078

Payment of Kenny post-closing adjustments                                        (4,621 )           -

Other investing activities, net                                                     163          (978 )
--------------------------------------------------------------------------- - - ------- - - - ------- -
Net cash provided by investing activities                                        17,626        45,400
--------------------------------------------------------------------------- - - ------- - - - ------- -
Financing activities

Long-term debt principal payments                                               (10,594 )     (10,834 )

Cash dividends paid                                                             (10,078 )     (10,050 )

Purchase of common stock                                                         (5,022 )      (4,054 )

Contributions from noncontrolling partners                                        6,001             -

Distributions from noncontrolling partners                                      (21,142 )      (5,440 )

Other financing activities, net                                                     700           563
--------------------------------------------------------------------------- - - ------- - - - ------- -
Net cash used in financing activities                                           (40,135 )     (29,815 )
--------------------------------------------------------------------------- - - ------- - - - ------- -
Decrease in cash and cash equivalents                                           (74,157 )     (19,039 )

Cash and cash equivalents at beginning of period                                321,990       256,990
--------------------------------------------------------------------------- - - ------- - - - ------- -
Cash and cash equivalents at end of period                                    $ 247,833$ 237,951
--------------------------------------------------------------------------- - - ------- - - - ------- -




 



                                                                                       GRANITE CONSTRUCTION INCORPORATED

                                                                                           Business Segment Information

                                                                                       (Unaudited - dollars in thousands)


-------------------------------------------   ----------- - ----------- - ---------- - ---------   ----------- - ----------- - ----------- - ---------
                                                               Three Months Ended June 30,                            Six Months Ended June 30,

                                                               Large                                                Large
                                                              Project     Constructio     Real                     Project     Construction     Real
                                              Construction  Construction  Materials      Estate    Construction  Construction   Materials      Estate
-------------------------------------------   ----------- - ----------- - ---------- - ---------   ----------- - ----------- - ----------- - ---------


2013

Revenue                                       $ 308,602$ 181,371$ 60,185$     4$ 485,720$ 353,086$ 89,935$   125

Gross profit (loss)                              25,154        22,088        3,954           1        38,353        44,808       (2,020 )        112

Gross profit (loss) as a percent of revenue         8.2 %        12.2 %        6.6 %      25.0 %         7.9 %        12.7 %       (2.2 )%      89.6 %



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 %


-------------------------------------------   - ------- - - - ------- - - - ------ - - - ----- -   - ------- - - - ------- - - - ------ -- - - ----- -




 



                                                 GRANITE CONSTRUCTION INCORPORATED

                                                      Contract Backlog by Segment

                                                (Unaudited - dollars in thousands)


--------------------------- - ----------- - ------- - ----------- - ------- - ----------- - -------
Contract Backlog by Segment         June 30, 2013          March 31, 2013           June 30, 2012
--------------------------- - --------------------- - --------------------- - ---------------------


Construction                  $   807,686    28.9 %   $   740,259    30.8 %   $   697,535    35.8 %

Large Project Construction      1,989,156    71.1 %     1,660,056    69.2 %     1,252,828    64.2 %
--------------------------- - - --------- - ----- - - - --------- - ----- - - - --------- - ----- -


Total                         $ 2,796,842   100.0 %   $ 2,400,315   100.0 %   $ 1,950,363   100.0 %
--------------------------- - - --------- - ----- - - - --------- - ----- - - - --------- - ----- -


 


    Source: Granite Construction Incorporated