Granite Reports Third Quarter 2023 Results
- Q3 revenue increased 11% year-over-year to
$1.1 billion - Q3 diluted EPS of
$1.13 and adjusted diluted EPS (1) of$1.69 - Operating cash flow increased
$153 million sequentially - Record Committed and Awarded Projects ("CAP") (2) of
$5.6 billion , a sequential increase of$147 million and year-over-year increase of$1.5 billion - 2023 guidance and 2024 targets unchanged
Third Quarter 2023 Results
Net income totaled
- Revenue increased
$108 million to$1.1 billion compared to$1.0 billion for the same period in the prior year. Both Construction and Materials segments posted year-over-year increases with theCalifornia and Mountain Groups up 15% and 11%, respectively, as well as a slight increase in revenue in the Central Group. - Gross profit increased
$52 million to$167 million compared to$115 million for the same period in the prior year. - Selling, general, and administrative (“SG&A”) expenses increased
$13 million to$75 million , or 6.7% of revenue, compared to$62 million , or 6.1% of revenue, for the same period in the prior year. The increase in SG&A expenses was primarily due to$11 million of additional incentive compensation expense year-over-year. - Adjusted EBITDA (1) totaled
$124 million , compared to$91 million for the same period in the prior year.
"I am pleased with our third quarter performance,” said Kyle Larkin, Granite President and Chief Executive Officer. “These results demonstrate the strong progress we are making towards the goals identified in our strategic plan that we introduced just over two years ago. We have built record CAP while also de-risking our project portfolio by focusing on best value projects. During this same time, we have also bolstered our materials business through both greenfield and bolt-on investments, and we improved segment margins. We are growing revenue and increasing adjusted EBITDA margin and believe we are on track to reach our 2024 financial targets.”
Nine Months Ended September 30, 2023 Results
Net income totaled
- Revenue increased
$63 million to$2.58 billion compared to$2.51 billion for the same period in the prior year. - Gross profit increased
$29 million to$302 million compared to$273 million for the same period in the prior year. - SG&A expenses were
$212 million , or 8.3% of revenue, compared to$192 million , or 7.6% of revenue, for the same period in the prior year. The increase was primarily driven by higher incentive compensation and non-qualified deferred compensation expenses in 2023. - Adjusted EBITDA (1) totaled
$195 million compared to$160 million for the same period in the prior year.
|
(1) |
Adjusted net income, adjusted diluted earnings per share, earnings before interest, taxes, depreciation, and amortization (“EBITDA”), EBITDA margin, 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) |
CAP is comprised of revenue we expect to record in the future on executed contracts, including 100% of our consolidated joint venture contracts and our proportionate share of unconsolidated joint venture contracts, as well as the general construction portion of construction manager/general contractor, construction manager/at risk and progressive design build contracts to the extent contract execution and funding is probable. |
Three and Nine Months ended September 30, 2023 (Unaudited - dollars in thousands)
|
Construction Segment |
|||||||||||||||||||||||||||
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||||||||||||||
|
|
|
2023 |
|
|
As Restated |
|
Change |
|
|
2023 |
|
|
As Restated |
|
Change |
||||||||||||
|
|
|
2022 |
|
|
|
|
|
2022 |
|
|
|||||||||||||||||
|
Revenue |
$ |
945,698 |
|
$ |
847,371 |
|
$ |
98,327 |
11.6 |
% |
$ |
2,198,527 |
|
$ |
2,138,858 |
|
$ |
59,669 |
2.8 |
% |
|||||||
|
Gross profit |
$ |
137,162 |
|
$ |
93,017 |
|
$ |
44,145 |
47.5 |
% |
$ |
253,021 |
|
$ |
231,748 |
|
$ |
21,273 |
9.2 |
% |
|||||||
|
Gross profit as a percent of revenue |
|
14.5 |
% |
|
11.0 |
% |
|
|
|
11.5 |
% |
|
10.8 |
% |
|
|
|||||||||||
|
Committed and |
September 30, |
|
June 30, 2023 |
|
Change - Quarter over |
|
September |
|
Change - Year over Year |
||||||||||||
|
|
$ |
2,345,294 |
$ |
2,345,611 |
$ |
(317 |
) |
— |
% |
$ |
1,552,939 |
$ |
792,355 |
51.0 |
% |
||||||
|
Central |
|
1,811,426 |
|
1,599,538 |
|
211,888 |
|
13.2 |
% |
|
1,527,112 |
|
284,314 |
18.6 |
% |
||||||
|
Mountain |
|
1,427,803 |
|
1,492,439 |
|
(64,636 |
) |
(4.3 |
%) |
|
996,685 |
|
431,118 |
43.3 |
% |
||||||
|
Total |
$ |
5,584,523 |
$ |
5,437,588 |
$ |
146,935 |
|
2.7 |
% |
$ |
4,076,736 |
$ |
1,507,787 |
37.0 |
% |
||||||
Revenue in the third quarter increased 12% year-over-year. This increase overcame a weather-related slow start to the year and resulted in a revenue increase of 3% for the nine-months-ended September 30, 2023 compared to the same period in the prior year. The year-over-year revenue increase in the quarter was driven by strong performances by the
Gross profit and gross profit margin during the three and nine months ended September 30, 2023 increased over the same periods in the prior year despite the negative impact of the I-64 High Rise Bridge Project in
CAP increased
|
Materials Segment |
|||||||||||||||||||||||||||
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||||||||||||||
|
|
|
2023 |
|
|
|
2022 |
|
|
Change |
|
|
2023 |
|
|
|
2022 |
|
|
Change |
||||||||
|
Revenue |
$ |
171,122 |
|
$ |
161,539 |
|
$ |
9,583 |
5.9 |
% |
$ |
376,913 |
|
$ |
373,185 |
|
$ |
3,728 |
1.0 |
% |
|||||||
|
Gross profit |
$ |
29,481 |
|
$ |
22,038 |
|
$ |
7,443 |
33.8 |
% |
$ |
49,067 |
|
$ |
40,965 |
|
$ |
8,102 |
19.8 |
% |
|||||||
|
Gross profit as a percent of revenue |
|
17.2 |
% |
|
13.6 |
% |
|
|
|
13.0 |
% |
|
11.0 |
% |
|
|
|||||||||||
Materials revenue and gross profit for the three and nine months ended September 30, 2023 increased compared to the same periods of the prior year driven by higher asphalt and aggregate sales prices. Additionally, in 2023, oil and energy costs have normalized compared to the significant inflation in 2022 which negatively impacted materials gross profit margin in the prior year.
Outlook
Our guidance for 2023 is unchanged as noted below:
- Revenue in the range of
$3.35 billion to$3.45 billion - Adjusted EBITDA margin in the range of 7.5% to 8.5%
- SG&A expense in the range of 8.0% to 8.5% of revenue
- Mid-20s effective tax rate for adjusted net income
- Capital expenditures of approximately
$120 million
The Company does not provide a reconciliation of forward-looking adjusted EBITDA margin to the most directly comparable forward-looking GAAP measure of net income attributable to Granite Construction Incorporated because the Company cannot predict with a reasonable degree of certainty and without unreasonable efforts certain excluded items that are inherently uncertain and depend on various factors. For these reasons, we are unable to assess the probable significance of the unavailable information.
Conference Call
Granite will conduct a conference call today, October 31, 2023, at 8:00 a.m. Pacific Time/11:00 a.m. Eastern Time to discuss the results of the quarter ended September 30, 2023. The Company invites investors to listen to a live audio webcast of the investor conference call on its Investor Relations website, https://investor.graniteconstruction.com. The investor conference call will also be available by calling 1-877-328-5503; international callers may dial 1-412-317-5472. An archive of the webcast will be available on Granite's Investor Relations website approximately one hour after the call. A replay will be available after the live call through November 7, 2023, by calling 1-877-344-7529, replay access code 5819938; international callers may dial 1-412-317-0088.
About Granite
Granite is America’s Infrastructure Company™. Incorporated since 1922, Granite (NYSE:GVA) is one of the largest diversified construction and construction materials companies in
Forward-looking Statements
Any statements contained in this news release that are not based on historical facts, including statements regarding future events, occurrences, opportunities, circumstances, activities, performance, growth, demand, strategic plans, shareholder value, outcomes, outlook, 2023 fiscal year guidance for revenue, adjusted EBITDA margin, SG&A expense, effective tax rate, and capital expenditures, 2024 targets unchanged, Committed and Awarded Projects (“CAP”), results, our belief that we are on track to reach our 2024 financial targets, the final completion of the I-64 project is expected in the fourth quarter and our belief that there are substantial opportunities to continue to build CAP in the fourth quarter and into 2024 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,” "guidance" 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, opportunities, circumstances, activities, performance, growth, demand, strategic plans, shareholder value, outcomes, outlook, 2023 fiscal year guidance for revenue, adjusted EBITDA margin, SG&A expense, effective tax rate, and capital expenditures, 2024 targets unchanged, CAP, results, our belief that we are on track to reach our 2024 financial targets, the final completion of the I-64 project is expected in the fourth quarter and our belief that there are substantial opportunities to continue to build CAP in the fourth quarter and into 2024. 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 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, 2023 |
|
December 31, 2022 |
||
|
ASSETS |
|
|
|||
|
Current assets |
|
|
|||
|
Cash and cash equivalents |
$ |
292,124 |
$ |
293,991 |
|
|
Short-term marketable securities |
|
31,278 |
|
39,374 |
|
|
Receivables, net |
|
743,091 |
|
463,987 |
|
|
Contract assets |
|
282,280 |
|
241,916 |
|
|
Inventories |
|
92,131 |
|
86,809 |
|
|
Equity in construction joint ventures |
|
206,669 |
|
183,808 |
|
|
Other current assets |
|
47,477 |
|
37,411 |
|
|
Total current assets |
|
1,695,050 |
|
1,347,296 |
|
|
Property and equipment, net |
|
569,722 |
|
509,210 |
|
|
Long-term marketable securities |
|
5,750 |
|
26,569 |
|
|
Investments in affiliates |
|
91,101 |
|
80,725 |
|
|
Goodwill |
|
74,264 |
|
73,703 |
|
|
Right of use assets |
|
56,874 |
|
49,079 |
|
|
Deferred income taxes, net |
|
29,043 |
|
22,208 |
|
|
Other noncurrent assets |
|
58,517 |
|
59,143 |
|
|
Total assets |
$ |
2,580,321 |
$ |
2,167,933 |
|
|
|
|
|
|||
|
LIABILITIES AND EQUITY |
|
|
|||
|
Current liabilities |
|
|
|||
|
Current maturities of long-term debt |
$ |
1,475 |
$ |
1,447 |
|
|
Accounts payable |
|
477,031 |
|
334,392 |
|
|
Contract liabilities |
|
221,983 |
|
173,286 |
|
|
Accrued expenses and other current liabilities |
|
355,987 |
|
288,469 |
|
|
Total current liabilities |
|
1,056,476 |
|
797,594 |
|
|
Long-term debt |
|
403,785 |
|
286,934 |
|
|
Long-term lease liabilities |
|
42,198 |
|
32,170 |
|
|
Deferred income taxes, net |
|
3,812 |
|
1,891 |
|
|
Other long-term liabilities |
|
67,473 |
|
64,199 |
|
|
Commitments and contingencies |
|
|
|||
|
Equity |
|
|
|||
|
Preferred stock, |
|
— |
|
— |
|
|
Common stock, |
|
439 |
|
437 |
|
|
Additional paid-in capital |
|
472,379 |
|
470,407 |
|
|
Accumulated other comprehensive income |
|
894 |
|
788 |
|
|
Retained earnings |
|
481,636 |
|
481,384 |
|
|
Total Granite Construction Incorporated shareholders’ equity |
|
955,348 |
|
953,016 |
|
|
Non-controlling interests |
|
51,229 |
|
32,129 |
|
|
Total equity |
|
1,006,577 |
|
985,145 |
|
|
Total liabilities and equity |
$ |
2,580,321 |
$ |
2,167,933 |
|
|
GRANITE CONSTRUCTION INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited - in thousands, except per share data) |
|||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
2023 |
|
|
As Restated(1) |
|
|
2023 |
|
|
As Restated(1) |
||||
|
|
|
2022 |
|
|
|
|
2022 |
|
|||||||
|
Revenue |
|
|
|
|
|||||||||||
|
Construction |
$ |
945,698 |
|
$ |
847,371 |
|
$ |
2,198,527 |
|
$ |
2,138,858 |
|
|||
|
Materials |
|
171,122 |
|
|
161,539 |
|
|
376,913 |
|
|
373,185 |
|
|||
|
Total revenue |
|
1,116,820 |
|
|
1,008,910 |
|
|
2,575,440 |
|
|
2,512,043 |
|
|||
|
Cost of revenue |
|
|
|
|
|||||||||||
|
Construction |
|
808,536 |
|
|
754,354 |
|
|
1,945,506 |
|
|
1,907,110 |
|
|||
|
Materials |
|
141,641 |
|
|
139,501 |
|
|
327,846 |
|
|
332,220 |
|
|||
|
Total cost of revenue |
|
950,177 |
|
|
893,855 |
|
|
2,273,352 |
|
|
2,239,330 |
|
|||
|
Gross profit |
|
166,643 |
|
|
115,055 |
|
|
302,088 |
|
|
272,713 |
|
|||
|
Selling, general and administrative expenses |
|
74,794 |
|
|
61,795 |
|
|
212,479 |
|
|
192,036 |
|
|||
|
Other costs, net |
|
19,843 |
|
|
(490 |
) |
|
37,973 |
|
|
22,401 |
|
|||
|
Gain on sales of property and equipment, net |
|
(1,812 |
) |
|
(949 |
) |
|
(7,793 |
) |
|
(10,462 |
) |
|||
|
Operating income |
|
73,818 |
|
|
54,699 |
|
|
59,429 |
|
|
68,738 |
|
|||
|
Other (income) expense |
|
|
|
|
|||||||||||
|
Loss on debt extinguishment |
|
— |
|
|
— |
|
|
51,052 |
|
|
— |
|
|||
|
Interest income |
|
(4,293 |
) |
|
(1,894 |
) |
|
(11,287 |
) |
|
(3,246 |
) |
|||
|
Interest expense |
|
4,877 |
|
|
2,519 |
|
|
11,899 |
|
|
10,003 |
|
|||
|
Equity in income of affiliates, net |
|
(7,147 |
) |
|
(3,491 |
) |
|
(19,378 |
) |
|
(9,656 |
) |
|||
|
Other (income) expense, net |
|
462 |
|
|
77 |
|
|
(2,713 |
) |
|
4,646 |
|
|||
|
Total other (income) expense, net |
|
(6,101 |
) |
|
(2,789 |
) |
|
29,573 |
|
|
1,747 |
|
|||
|
Income before income taxes |
|
79,919 |
|
|
57,488 |
|
|
29,856 |
|
|
66,991 |
|
|||
|
Provision for (benefit from) income taxes |
|
22,423 |
|
|
(7,710 |
) |
|
21,978 |
|
|
7,310 |
|
|||
|
Net income |
|
57,496 |
|
|
65,198 |
|
|
7,878 |
|
|
59,681 |
|
|||
|
Amount attributable to non-controlling interests |
|
128 |
|
|
4,104 |
|
|
9,723 |
|
|
1,569 |
|
|||
|
Net income attributable to Granite Construction Incorporated |
$ |
57,624 |
|
$ |
69,302 |
|
$ |
17,601 |
|
$ |
61,250 |
|
|||
|
|
|
|
|
|
|||||||||||
|
Net income per share attributable to common shareholders: |
|
|
|
|
|||||||||||
|
Basic |
$ |
1.31 |
|
$ |
1.58 |
|
$ |
0.40 |
|
$ |
1.37 |
|
|||
|
Diluted |
$ |
1.13 |
|
$ |
1.36 |
|
$ |
0.40 |
|
$ |
1.25 |
|
|||
|
Weighted average shares outstanding: |
|
|
|
|
|||||||||||
|
Basic |
|
43,924 |
|
|
43,973 |
|
|
43,861 |
|
|
44,739 |
|
|||
|
Diluted |
|
53,612 |
|
|
51,863 |
|
|
44,447 |
|
|
52,613 |
|
|||
|
(1) |
As previously disclosed in our 2022 Annual Report on Form 10-K filed on February 21, 2023, the restatement of our unaudited quarterly financial information for the first three quarters in the year ended December 31, 2022 was necessary. |
|
GRANITE CONSTRUCTION INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited - in thousands) |
|||||||
|
Nine Months Ended September 30, |
|
2023 |
|
|
As Restated |
||
|
|
|
2022 |
|
||||
|
Operating activities |
|
|
|||||
|
Net income |
$ |
7,878 |
|
$ |
59,681 |
|
|
|
Adjustments to reconcile net income to net cash used in operating activities: |
|
|
|||||
|
Depreciation, depletion and amortization |
|
65,298 |
|
|
61,714 |
|
|
|
Amortization related to long-term debt |
|
1,689 |
|
|
1,901 |
|
|
|
Non-cash loss on debt extinguishment |
|
51,052 |
|
|
— |
|
|
|
Gain on sale of business |
|
— |
|
|
(3,278 |
) |
|
|
Gain on sales of property and equipment, net |
|
(7,793 |
) |
|
(10,462 |
) |
|
|
Deferred income taxes |
|
1,542 |
|
|
(17,819 |
) |
|
|
Stock-based compensation |
|
8,630 |
|
|
6,151 |
|
|
|
Equity in net (income) loss from unconsolidated joint ventures |
|
(4,535 |
) |
|
25,066 |
|
|
|
Net income from affiliates |
|
(19,378 |
) |
|
(9,656 |
) |
|
|
Other non-cash adjustments |
|
5,659 |
|
|
38 |
|
|
|
Changes in assets and liabilities |
|
(75,844 |
) |
|
(127,967 |
) |
|
|
Net cash provided by (used in) operating activities |
$ |
34,198 |
|
$ |
(14,631 |
) |
|
|
Investing activities |
|
|
|||||
|
Purchases of marketable securities |
|
(9,740 |
) |
|
(59,810 |
) |
|
|
Maturities of marketable securities |
|
40,000 |
|
|
15,000 |
|
|
|
Purchases of property and equipment |
|
(108,963 |
) |
|
(97,753 |
) |
|
|
Proceeds from sales of property and equipment |
|
14,613 |
|
|
21,110 |
|
|
|
Proceeds from company owned life insurance |
|
1,545 |
|
|
— |
|
|
|
Proceeds from the sale of business |
|
— |
|
|
142,571 |
|
|
|
Acquisition of business |
|
(26,933 |
) |
|
— |
|
|
|
Issuance of notes receivable |
|
— |
|
|
(7,560 |
) |
|
|
Collection of notes receivable |
|
208 |
|
|
316 |
|
|
|
Net cash provided by (used in) investing activities |
$ |
(89,270 |
) |
$ |
13,874 |
|
|
|
Financing activities |
|
|
|||||
|
Proceeds from long-term debt |
|
55,000 |
|
|
50,000 |
|
|
|
Debt principal repayments |
|
(304,851 |
) |
|
(124,911 |
) |
|
|
Capped call transactions |
|
(53,035 |
) |
|
— |
|
|
|
Redemption of warrants |
|
(13,201 |
) |
|
— |
|
|
|
Proceeds from issuance of 3.75% Convertible Notes |
|
373,750 |
|
|
— |
|
|
|
Debt issuance costs |
|
(10,024 |
) |
|
— |
|
|
|
Cash dividends paid |
|
(17,101 |
) |
|
(17,587 |
) |
|
|
Repurchases of common stock |
|
(3,900 |
) |
|
(70,724 |
) |
|
|
Contributions from non-controlling partners |
|
35,400 |
|
|
11,925 |
|
|
|
Distributions to non-controlling partners |
|
(9,100 |
) |
|
(6,725 |
) |
|
|
Other financing activities, net |
|
267 |
|
|
208 |
|
|
|
Net cash provided by (used in) financing activities |
$ |
53,205 |
|
$ |
(157,814 |
) |
|
|
Net decrease in cash, cash equivalents and restricted cash |
|
(1,867 |
) |
|
(158,571 |
) |
|
|
Cash, cash equivalents and |
|
293,991 |
|
|
413,655 |
|
|
|
Cash, cash equivalents and |
$ |
292,124 |
|
$ |
255,084 |
|
|
Non-GAAP Financial Information
The tables below contain financial information calculated other than in accordance with
We provide adjusted income before income taxes, adjusted provision for income taxes, adjusted net income attributable to Granite Construction Incorporated, adjusted diluted weighted average shares of common stock and adjusted diluted earnings per share attributable to common shareholders, non-GAAP measures, to indicate the impact of the following:
- Other costs, net as described above;
- Transaction costs which includes acquired intangible amortization expense and acquisition related depreciation related to the acquisition of Layne and Liquiforce;
- Loss on debt extinguishment, and
- Income taxes related to the disposal of Inliner goodwill, tax basis difference on held for sale entities and establishment of valuation allowance.
Management believes that these additional non-GAAP financial measures facilitate comparisons between industry peer companies, and management uses these non-GAAP financial measures in evaluating the Company's performance. 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 AND ADJUSTED EBITDA(1) (Unaudited - dollars in thousands) |
|||||||||||||||
|
|
|
|
|
||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
2023 |
|
|
As Restated |
|
|
2023 |
|
|
As Restated |
||||
|
|
|
2022 |
|
|
|
|
2022 |
|
|||||||
|
EBITDA: |
|
|
|
|
|||||||||||
|
Net income attributable to Granite Construction Incorporated |
$ |
57,624 |
|
$ |
69,302 |
|
$ |
17,601 |
|
$ |
61,250 |
|
|||
|
Net income margin (2) |
|
5.2 |
% |
|
6.9 |
% |
|
0.7 |
% |
|
2.4 |
% |
|||
|
|
|
|
|
|
|||||||||||
|
Depreciation, depletion and amortization expense (3) |
|
23,911 |
|
|
29,610 |
|
|
65,722 |
|
|
62,437 |
|
|||
|
Provision for (benefit from) income taxes |
|
22,423 |
|
|
(7,710 |
) |
|
21,978 |
|
|
7,310 |
|
|||
|
Interest expense, net |
|
584 |
|
|
625 |
|
|
612 |
|
|
6,757 |
|
|||
|
EBITDA(1) |
$ |
104,542 |
|
$ |
91,827 |
|
$ |
105,913 |
|
$ |
137,754 |
|
|||
|
EBITDA margin(1)(2) |
|
9.4 |
% |
|
9.1 |
% |
|
4.1 |
% |
|
5.5 |
% |
|||
|
|
|
|
|
|
|||||||||||
|
ADJUSTED EBITDA: |
|
|
|
|
|||||||||||
|
Other costs, net |
|
19,843 |
|
|
(490 |
) |
|
37,973 |
|
|
22,401 |
|
|||
|
Loss on debt extinguishment |
|
— |
|
|
— |
|
|
51,052 |
|
|
— |
|
|||
|
Adjusted EBITDA(1) |
$ |
124,385 |
|
$ |
91,337 |
|
$ |
194,938 |
|
$ |
160,155 |
|
|||
|
Adjusted EBITDA margin(1)(2) |
|
11.1 |
% |
|
9.1 |
% |
|
7.6 |
% |
|
6.4 |
% |
|||
|
(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 Other costs, net, and loss on debt extinguishment, as described above. |
|
|
(2) |
Represents net income, EBITDA and adjusted EBITDA divided by consolidated revenue of |
|
|
(3) |
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. |
|
GRANITE CONSTRUCTION INCORPORATED ADJUSTED NET INCOME (LOSS) RECONCILIATION (Unaudited - in thousands, except per share data) |
|||||||||||||||
|
|
|
|
|
||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
2023 |
|
|
As Restated |
|
|
2023 |
|
|
As Restated |
||||
|
|
|
2022 |
|
|
|
|
2022 |
|
|||||||
|
Income before income taxes |
$ |
79,919 |
|
$ |
57,488 |
|
$ |
29,856 |
|
$ |
66,991 |
|
|||
|
Other costs, net |
|
19,843 |
|
|
(490 |
) |
|
37,973 |
|
|
22,401 |
|
|||
|
Transaction costs |
|
92 |
|
|
8,012 |
|
|
5,046 |
|
|
8,012 |
|
|||
|
Loss on debt extinguishment |
|
— |
|
|
— |
|
|
51,052 |
|
|
— |
|
|||
|
Adjusted income before income taxes |
$ |
99,854 |
|
$ |
65,010 |
|
$ |
123,927 |
|
$ |
97,404 |
|
|||
|
|
|
|
|
|
|||||||||||
|
Provision for (benefit from) income taxes |
$ |
22,423 |
|
$ |
(7,710 |
) |
$ |
21,978 |
|
$ |
7,310 |
|
|||
|
Tax effect of goodwill disposal related to sale of business |
|
— |
|
|
— |
|
|
— |
|
|
(10,070 |
) |
|||
|
Tax basis difference on held for sale entities |
|
— |
|
|
17,691 |
|
|
— |
|
|
17,691 |
|
|||
|
Tax expense to establish valuation allowance |
|
(1,542 |
) |
|
— |
|
|
(1,542 |
) |
|
— |
|
|||
|
Tax effect of adjusting items (1) |
|
3,874 |
|
|
1,956 |
|
|
9,876 |
|
|
4,787 |
|
|||
|
Adjusted provision for income taxes |
$ |
24,755 |
|
$ |
11,937 |
|
$ |
30,312 |
|
$ |
19,718 |
|
|||
|
|
|
|
|
|
|||||||||||
|
Net income attributable to Granite Construction Incorporated |
$ |
57,624 |
|
$ |
69,302 |
|
$ |
17,601 |
|
$ |
61,250 |
|
|||
|
After-tax adjusting items |
|
17,603 |
|
|
(12,125 |
) |
|
85,737 |
|
|
18,005 |
|
|||
|
Adjusted net income attributable to Granite Construction Incorporated |
$ |
75,227 |
|
$ |
57,177 |
|
$ |
103,338 |
|
$ |
79,255 |
|
|||
|
|
|
|
|
|
|||||||||||
|
Diluted weighted average shares of common stock (2) |
|
53,612 |
|
|
51,863 |
|
|
44,447 |
|
|
52,613 |
|
|||
|
Less: dilutive effect of Convertible Notes (3) |
|
(9,099 |
) |
|
(7,309 |
) |
|
— |
|
|
(7,309 |
) |
|||
|
Adjusted diluted weighted average shares of common stock |
|
44,513 |
|
|
44,554 |
|
|
44,447 |
|
|
45,304 |
|
|||
|
|
|
|
|
|
|||||||||||
|
Diluted net income per share attributable to common shareholders |
$ |
1.13 |
|
$ |
1.36 |
|
$ |
0.40 |
|
$ |
1.25 |
|
|||
|
After-tax adjusting items per share attributable to common shareholders |
|
0.56 |
|
|
(0.08 |
) |
|
1.92 |
|
|
0.50 |
|
|||
|
Adjusted diluted earnings per share attributable to common shareholders |
$ |
1.69 |
|
$ |
1.28 |
|
$ |
2.32 |
|
$ |
1.75 |
|
|||
|
(1) |
The tax effect of adjusting items was calculated using the Company’s estimated annual statutory tax rate. The tax effect of adjusting items for the three and nine months ended September 30, 2023 excludes the |
|
|
(2) |
Diluted weighted average shares of common stock includes the dilutive effect on net income attributable to Granite Construction Incorporated of the 2.75% Convertible Notes and the 3.75% Convertible Notes potentially converting into 9,099 shares of common stock for the three months ended September 30, 2023 and 7,309 shares of common stock for the three and nine months ended September 30, 2022. For the nine months ended September 30, 2023, the potential dilutive effect of the 9,099 shares related to the 2.75% Convertible Notes and the 3.75% Convertible Notes is not included as their inclusion would be antidilutive. |
|
|
(3) |
When calculating diluted net income attributable to common shareholders, GAAP requires that we include potential share dilution from the 2.75% Convertible Notes and the 3.75% Convertible Notes when not antidilutive. For the purposes of calculating adjusted diluted net income per share attributable to common shareholders, the dilutive effect from the 2.75% Convertible Notes and 3.75% Convertible Notes is removed to reflect the impact of the purchased equity derivative instruments which offset any potential share dilution above the |
View source version on businesswire.com: https://www.businesswire.com/news/home/20231030236823/en/
Investors
Wenjun Xu, 831-761-7861
Or
Media
Erin Kuhlman, 831-768-4111
Source: Granite Construction Incorporated
