Granite Construction Incorporated Reports Third Quarter 2007 Results
"Granite delivered another strong quarter," Granite President and Chief Executive Officer
Operating Results -- Quarter and Year-To-Date
For the third quarter of 2007, total revenue decreased 10% to
For the nine-month period ended
Results by Segment
Granite East revenue for the quarter decreased 30% to
For the nine-month period ended
Granite West revenue for the quarter totaled
For the nine-month period ended
Granite
Outlook
"Our outlook for the remainder of the year is positive. Granite West is on track to have another great year and Granite East will show significant improvement over 2006. For the total Company, we are currently expecting 2007 earnings per share in the range of
"Our longer term outlook is also positive, driven by both a record level of public transportation funding in
Share Repurchase Program
Granite is issuing a separate news release today announcing that its Board of Directors has authorized the repurchase of up to
Financial Results
The 2007 and 2006 financial information in this announcement reflects the Company's organizational and strategic realignment and are preliminary subject to completion of the quarterly review. The final quarterly financial results will appear in Granite's Form 10-Q, which will be filed on or before
Conference Call
Granite will conduct a conference call tomorrow,
About Granite
Forward-Looking Statements
This press release contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which represents our management's beliefs and assumptions concerning future events such as statements related to the existence of bidding opportunities and economic conditions on the Company's future results. Additionally, forward-looking statements include statements that can be identified by the use of forward-looking terminology such as "believes," "expects," "appears," "may," "will," "should," "look for," or "anticipates," or the negative thereof or comparable terminology, or by discussions of strategy. All such forward-looking statements are subject to risks and uncertainties that could cause actual results of operations and financial condition and other events, as well as the timing thereof, to differ materially from those expressed or implied in such forward-looking statements. Specific risk factors include, without limitation, changes in the composition of applicable federal and state legislation appropriation committees; federal and state appropriation changes for infrastructure spending; the general state of the economy; job productivity; accuracy of project estimates; weather conditions; competition and pricing pressures; and state referendums and initiatives. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this news release. You should also understand that many important factors in addition to those discussed, referred to or incorporated by reference in this press release, could cause our results to differ materially from those expressed in the forward-looking statements. In light of these risks and uncertainties, it is important to be aware that the forward-looking events discussed in this release may not occur. We undertake no obligation to revise or update publicly any forward-looking statements to conform the statement to actual results or changes in the Company's expectations.
Granite is today issuing a separate news release announcing a new share repurchase program and increased quarterly dividend and investors are advised to read that separate release with respect to those matters.
For further information regarding risks and uncertainties associated with Granite's business, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operation" and "Risk Factors" sections of Granite's
GRANITE CONSTRUCTION INCORPORATED
COMPARATIVE FINANCIAL SUMMARY
(Unaudited - In Thousands, Except Per Share Data)
Three Months Ended
September 30, Variance
2007 2006 Amount Percent
Revenue
Construction $701,622 $807,384 $(105,762) (13.1)
Material sales $123,453 $133,375 $(9,922) (7.4)
Real estate $21,238 $913 $20,325 ****
Total revenue $846,313 $941,672 $(95,359) (10.1)
Cost of revenue
Construction $601,880 $736,839 $134,959 18.3
Material sales $96,130 $98,459 $2,329 2.4
Real estate $11,666 $442 $(11,224) ****
Total cost
of revenue $709,676 $835,740 $126,064 15.1
Gross profit $136,637 $105,932 $30,705 29.0
Gross profit
as a percent of
revenue 16.1% 11.2% 4.9% -
General and
administrative
expenses $63,666 $58,560 $(5,106) (8.7)
G&A expenses as
a percent of
revenue 7.5% 6.2% (1.3%) -
Gain on sales of
property and
equipment $2,994 $1,230 $1,764 ****
Other income
(expense)
Interest income $7,514 $7,055 $459 6.5
Interest expense $(1,884) $(1,319) $(565) (42.8)
Equity in income
of affiliates $4,037 $770 $3,267 ****
Other, net $(391) $(8) $(383) ****
Total other
income $9,276 $6,498 $2,778 42.8
Income before
provision for income
taxes and minority
interest $85,241 $55,100 $30,141 54.7
Minority interest $(6,504) $13,421 $(19,925) ****
Net income $53,300 $45,725 $7,575 16.6
Net income per share:
Basic $1.30 $1.12 $0.18 16.1
Diluted $1.28 $1.10 $0.18 16.4
Weighted average
shares of common
stock:
Basic 41,106 40,923 183 0.4
Diluted 41,640 41,546 94 0.2
Nine Months Ended
September 30, Variance
2007 2006 Amount Percent
Revenue
Construction $1,778,638 $1,911,529 $(132,891) (7.0)
Material sales $289,655 $303,556 $(13,901) (4.6)
Real estate $36,556 $34,592 $1,964 5.7
Total revenue $2,104,849 $2,249,677 $(144,828) (6.4)
Cost of revenue
Construction $1,543,960 $1,762,217 $218,257 12.4
Material sales $229,116 $230,906 $1,790 0.8
Real estate $19,466 $17,277 $(2,189) (12.7)
Total cost
of revenue $1,792,542 $2,010,400 $217,858 10.8
Gross profit $312,307 $239,277 $73,030 30.5
Gross profit
as a percent
of revenue 14.8% 10.6% 4.2% -
General and
administrative
expenses $183,133 $155,751 $(27,382) (17.6)
G&A expenses
as a percent
of revenue 8.7% 6.9% (1.8%) -
Gain on sales of
property and
equipment $8,053 $9,517 $(1,464) (15.4)
Other income (expense)
Interest income $20,796 $16,732 $4,064 24.3
Interest expense $(4,998) $(4,105) $(893) (21.8)
Equity in income
of affiliates $4,359 $1,521 $2,838 ****
Other, net $(1,057) $2,700 $(3,757) ****
Total other
income $19,100 $16,848 $2,252 13.4
Income before
provision for
income taxes and
minority interest $156,327 $109,891 $46,436 42.3
Minority interest $(13,750) $6,769 $(20,519) ****
Net income $94,897 $77,592 $17,305 22.3
Net income per share:
Basic $2.31 $1.90 $0.41 21.6
Diluted $2.28 $1.87 $0.41 21.9
Weighted average
shares of common stock:
Basic 41,065 40,853 212 0.5
Diluted 41,587 41,434 153 0.4
GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited - In thousands, except share and per share data)
September 30, December 31,
2007 2006
Assets
Current assets
Cash and cash equivalents $265,605 $204,893
Short-term marketable securities 106,675 141,037
Accounts receivable, net 536,519 492,229
Costs and estimated earnings in
excess of billings 24,489 15,797
Inventories 50,438 41,529
Real estate held for sale 57,296 55,888
Deferred income taxes 36,041 36,776
Equity in construction joint
ventures 36,851 31,912
Other current assets 43,370 63,144
Total current assets 1,157,284 1,083,205
Property and equipment, net 487,000 429,966
Long-term marketable securities 61,308 48,948
Investment in affiliates 23,256 21,471
Other assets 78,119 49,248
Total assets $1,806,967 $1,632,838
Liabilities and Shareholders' Equity
Current liabilities
Current maturities of long-term debt $26,589 $28,660
Accounts payable 261,379 257,612
Billings in excess of costs and
estimated earnings 274,209 287,843
Accrued expenses and other current
liabilities 209,894 189,328
Total current liabilities 772,071 763,443
Long-term debt 140,410 78,576
Other long-term liabilities 65,111 58,419
Deferred income taxes 19,788 22,324
Minority interest in consolidated
subsidiaries 28,148 15,532
Shareholders' 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
41,916,706 shares in
2007 and 41,833,559 shares in
2006 419 418
Additional paid-in capital 82,678 78,620
Retained earnings 694,557 612,875
Accumulated other comprehensive
income 3,785 2,631
Total shareholders' equity 781,439 694,544
Total liabilities and
shareholders' equity $1,806,967 $1,632,838
September 30, December 31,
Financial Position 2007 2006
Working capital $385,213 $319,762
Current ratio 1.50 1.42
Debt to total capitalization 0.18 0.13
Total liabilities to equity ratio 1.31 1.35
GRANITE CONSTRUCTION INCORPORATED
REVENUE AND BACKLOG ANALYSIS
(Unaudited - Dollars In Thousands)
BY MARKET SECTOR
Revenue
Three Months Ended September 30, Variance
2007 2006 Amount Percent
Public Sector $578,356 $635,010 $(56,654) (8.9)
Private Sector 123,266 172,374 (49,108) (28.5)
Aggregate sales 123,453 133,375 (9,922) (7.4)
Real Estate 21,238 913 20,325 ****
$846,313 $941,672 $(95,359) (10.1)
BY MARKET SECTOR
Backlog
September 30, Variance
2007 2006 Amount Percent
Public Sector $2,169,060 $1,872,944 $296,116 15.8
Private Sector 167,461 247,116 (79,655) (32.2)
$2,336,521 $2,120,060 $216,461 10.2
BY GEOGRAPHIC AREA
Revenue
Three Months Ended September 30, Variance
2007 2006 Amount Percent
California $334,854 $407,047 $(72,193) (17.7)
West (Excl. CA) 325,392 310,737 14,655 4.7
Midwest 29,620 13,596 16,024 ****
Northeast 52,542 73,519 (20,977) (28.5)
Southeast 65,371 77,813 (12,442) (16.0)
South 38,534 58,960 (20,426) (34.6)
$846,313 $941,672 $(95,359) (10.1)
BY GEOGRAPHIC AREA
Backlog
September 30, Variance
2007 2006 Amount Percent
California $455,014 $610,308 $(155,294) (25.4)
West (Excl. CA) 518,755 609,422 (90,667) (14.9)
Midwest 350,496 3,805 346,691 ****
Northeast 166,453 243,968 (77,515) (31.8)
Southeast 679,635 399,096 280,539 70.3
South 166,168 253,461 (87,293) (34.4)
$2,336,521 $2,120,060 $216,461 10.2
**** Represents percentages greater than 100%
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