Granite Reports Third Quarter 2022 Results
- Q3 comparable revenue (1) increased year over year led by increases in the
California and Mountain Groups - Q3 diluted EPS of
$1.44 and adjusted diluted EPS (2) of$1.41 - Construction segment gross profit margin strong at 14.8% excluding the Old Risk Portfolio ("ORP")
- Continued overall strong market and
$4.1 billion in Committed and Awarded Projects ("CAP") (3) - Adjusted EBITDA margin (2) guidance for 2022 raised to 6% to 7% after inclusion of the Water Resources and Mineral Services businesses
Third Quarter 2022 Results
Net income totaled
- Revenue decreased
$52 million to$1,010 million compared to$1,062 million in the prior year. Comparable revenue (1), which excludes Granite Inliner revenue of$65 million in the prior year, increased$13 million . - Gross profit increased slightly to
$120 million compared to the prior year; and gross profit margin increased to 11.9% compared to 11.3% in the prior year. - Selling, general, and administrative (“SG&A”) expenses were
$62 million or 6.1% of revenue, compared to$78 million or 7.3% of revenue in the prior year. The decrease in SG&A primarily relates to the sale of Granite Inliner and a decrease in incentive compensation. - Adjusted EBITDA (2) totaled
$97 million compared to$81 million in the prior year. - CAP (3) totaled
$4,078 million , down$135 million sequentially following the busiest quarter of the year. - Cash and marketable securities increased
$75 million from the prior quarter to$317 million . Debt was flat from the prior quarter at$288 million with over 80% at a fixed interest rate.
"During the third quarter, we continued to make progress towards achieving our 2024 strategic plan targets of 9% to 11% adjusted EBITDA margin," said Kyle Larkin, Granite President and Chief Executive Officer. "The overall market environment continues to be robust, and our teams are focused on driving improved profitability across our businesses. Our construction gross profit margin for the third quarter, excluding the ORP, was 14.8% following a gross margin of 14.1% in the second quarter. The continued strength of our construction gross profit margin reflects the work that has been underway over the last two years as we transform our project portfolio in alignment with our home market focus. Our third quarter CAP of over
Larkin continued, "I am also pleased with the progress we have made during the third quarter to collect cash and strengthen our excellent liquidity position. We are in position to opportunistically invest in our vertically integrated operations through organic investment and bolt-on acquisitions."
Nine Months Ended September 2022 Results
Net income totaled
- Revenue decreased
$182 million to$2,514 million compared to$2,696 million year over year. Comparable revenue (1), which excludes Granite Inliner revenue of$36 million in the current year and$174 million in the prior year, decreased$44 million . - Gross profit decreased
$22 million to$278 million compared to$300 million year over year; and gross profit margin was relatively flat at 11.1%. - SG&A expenses were
$192 million or 7.6% of revenue, compared to$227 million or 8.4% of revenue year over year. - Adjusted EBITDA (2) totaled
$165 million compared to$178 million year over year.
(1) Comparable revenue excludes revenue attributable to Granite Inliner, which was sold in March 2022.
(2) 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.
(3) 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.
Third Quarter 2022 Segment Results (Unaudited - dollars in thousands)
|
Construction Segment |
|
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Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||||||||||||||
|
|
|
2022 |
|
|
2021 |
|
|
Change |
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|
2022 |
|
|
2021 |
|
|
Change |
|
||||||||||||||
|
Revenue |
|
$ |
848,267 |
|
|
$ |
924,454 |
|
|
$ |
(76,187 |
) |
|
|
(8.2 |
)% |
|
$ |
2,141,009 |
|
|
$ |
2,369,848 |
|
|
$ |
(228,839 |
) |
|
|
(9.7 |
)% |
|
Gross profit |
|
$ |
98,329 |
|
|
$ |
99,237 |
|
|
$ |
(908 |
) |
|
|
(0.9 |
)% |
|
$ |
237,060 |
|
|
$ |
255,443 |
|
|
$ |
(18,383 |
) |
|
|
(7.2 |
)% |
|
Gross profit as a percent of revenue |
|
|
11.6 |
% |
|
|
10.7 |
% |
|
|
|
|
|
|
|
|
|
|
11.1 |
% |
|
|
10.8 |
% |
|
|
|
|
|
|
|
|
|
Committed and Awarded Projects |
|
September 30, 2022 |
|
|
June 30, 2022 |
|
|
Change - Quarter over Quarter |
|
|
September 30, 2021 |
|
|
Change - Year over Year |
|
|||||||||||||
|
|
|
$ |
1,555,977 |
|
|
$ |
1,629,765 |
|
|
$ |
(73,788 |
) |
|
|
(4.5 |
)% |
|
$ |
1,493,015 |
|
|
$ |
62,962 |
|
|
|
4.2 |
% |
|
Central |
|
|
1,525,672 |
|
|
|
1,518,970 |
|
|
|
6,702 |
|
|
|
0.4 |
% |
|
|
1,755,779 |
|
|
|
(230,107 |
) |
|
|
(13.1 |
)% |
|
Mountain |
|
|
996,685 |
|
|
|
1,064,925 |
|
|
|
(68,240 |
) |
|
|
(6.4 |
)% |
|
|
1,079,098 |
|
|
|
(82,413 |
) |
|
|
(7.6 |
)% |
|
Total |
|
$ |
4,078,334 |
|
|
$ |
4,213,660 |
|
|
$ |
(135,326 |
) |
|
|
(3.2 |
)% |
|
$ |
4,327,892 |
|
|
$ |
(249,558 |
) |
|
|
(5.8 |
)% |
Construction revenue in the third quarter decreased compared to the same period in the prior year. The decrease was primarily driven by a decrease in Central Group revenue, coupled with a slight decrease in Mountain Group revenue, offset by an increase in California Group revenue. The decrease in Central Group revenue reflects the ongoing transformation of its project portfolio and timing as ORP projects are completed and new projects are awarded. The California Group carried record CAP into the third quarter driving an increase in revenue year over year. While the Mountain Group reported a decrease in revenue year over year, comparable revenue excluding
Gross profit in the third quarter slightly decreased compared to the same period in the prior year as losses in the ORP were partially offset by strong performance in the vertically integrated businesses. During the third quarter, ORP revenue totaled
CAP was down
|
Materials Segment |
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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||||||||||||||||||||||||||
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|
2022 |
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|
2021 |
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|
Change |
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|
2022 |
|
|
2021 |
|
|
Change |
|
||||||||||||||
|
Revenue |
|
$ |
161,539 |
|
|
$ |
137,675 |
|
|
$ |
23,864 |
|
|
|
17.3 |
% |
|
$ |
373,185 |
|
|
$ |
326,366 |
|
|
$ |
46,819 |
|
|
|
14.3 |
% |
|
Gross profit |
|
$ |
22,038 |
|
|
$ |
20,698 |
|
|
$ |
1,340 |
|
|
|
6.5 |
% |
|
$ |
40,965 |
|
|
$ |
44,756 |
|
|
$ |
(3,791 |
) |
|
|
(8.5 |
)% |
|
Gross profit as a percent of revenue |
|
|
13.6 |
% |
|
|
15.0 |
% |
|
|
|
|
|
|
|
|
|
|
11.0 |
% |
|
|
13.7 |
% |
|
|
|
|
|
|
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|
Materials revenue in the third quarter increased compared to the same period in the prior year primarily due to aggregate sales volume and prices increases which more than offset lower asphalt sales volumes. During the quarter, revenue increases drove an increase in gross profit year over year. Although gross profit margin was down year over year, gross profit margin increased sequentially as we benefited from energy surcharges implemented in the second quarter.
Outlook
For the 2022 fiscal year, guidance is updated as noted below:
- Revenue updated to a range of
$3.2 billion to$3.3 billion - SG&A expense unchanged in the range of 8.0% to 8.5% of revenue
- Adjusted effective tax rate range unchanged at low-to-mid-20s
- Raised adjusted EBITDA margin (2) range of 6% - 7%
- Capital expenditures updated to a range of
$120 million to$130 million
Conference Call
Granite will conduct a conference call today, October 27, 2022, at 8:00 a.m. Pacific Time/11:00 a.m. Eastern Time to discuss the results of the quarter ended September 30, 2022. 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 3, 2022, by calling 1-877-344-7529, replay access code 4451949; 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, 2022 fiscal year guidance for revenue, adjusted EBITDA margin, SG&A expense, effective tax rate, and capital expenditures, 2023 adjusted EBITDA margin guidance, Committed and Awarded Projects (“CAP”), results, 2024 strategic plan targets, the Company's focus on driving improved profitability to achieve the Company's strategic plan targets, 9 to 11 percent adjusted EBITDA margin in 2024, higher quality CAP, the Company is well positioned for success, the addition of CAP in this strong funding environment, the Company is in position to be opportunistic with bolt-on acquisitions that will bolster and expand the Company's vertically integrated operations 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, 2022 fiscal year guidance for revenue, adjusted EBITDA margin, SG&A expense, effective tax rate, and capital expenditures, 2023 adjusted EBITDA margin guidance, CAP, results, 2024 strategic plan targets, the Company's focus on driving improved profitability to achieve the Company's strategic plan targets, 9 to 11 percent adjusted EBITDA margin in 2024, higher quality CAP, the Company is well positioned for success, the addition of CAP in this strong funding environment, the Company is in position to be opportunistic with bolt-on acquisitions that will bolster and expand the Company's vertically integrated operations. 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 |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||||||
|
(Unaudited - in thousands, except share and per share data) |
||||||||||||
|
|
|
September 30, |
|
|
December 31, |
|
|
September 30, |
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|||
|
ASSETS |
|
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|
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|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
255,084 |
|
|
$ |
395,647 |
|
|
$ |
464,049 |
|
|
Short-term marketable securities |
|
|
39,873 |
|
|
|
— |
|
|
|
— |
|
|
Receivables, net |
|
|
618,144 |
|
|
|
464,588 |
|
|
|
684,822 |
|
|
Contract assets |
|
|
241,238 |
|
|
|
145,437 |
|
|
|
204,046 |
|
|
Inventories |
|
|
81,296 |
|
|
|
61,965 |
|
|
|
77,412 |
|
|
Equity in construction joint ventures |
|
|
186,824 |
|
|
|
189,911 |
|
|
|
195,354 |
|
|
Other current assets |
|
|
157,231 |
|
|
|
177,210 |
|
|
|
39,749 |
|
|
Current assets held-for-sale |
|
|
— |
|
|
|
392,641 |
|
|
|
— |
|
|
Total current assets |
|
|
1,579,690 |
|
|
|
1,827,399 |
|
|
|
1,665,432 |
|
|
Property and equipment, net |
|
|
500,827 |
|
|
|
433,504 |
|
|
|
510,658 |
|
|
Long-term marketable securities |
|
|
21,575 |
|
|
|
15,600 |
|
|
|
10,600 |
|
|
Investments in affiliates |
|
|
78,663 |
|
|
|
23,368 |
|
|
|
72,415 |
|
|
Goodwill |
|
|
73,704 |
|
|
|
53,715 |
|
|
|
116,788 |
|
|
Right of use assets |
|
|
49,590 |
|
|
|
49,312 |
|
|
|
58,226 |
|
|
Deferred income taxes, net |
|
|
45,650 |
|
|
|
24,141 |
|
|
|
41,228 |
|
|
Other noncurrent assets |
|
|
58,265 |
|
|
|
67,888 |
|
|
|
86,409 |
|
|
Total assets |
|
$ |
2,407,964 |
|
|
$ |
2,494,927 |
|
|
$ |
2,561,756 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current maturities of long-term debt |
|
$ |
1,438 |
|
|
$ |
8,727 |
|
|
$ |
8,718 |
|
|
Accounts payable |
|
|
398,285 |
|
|
|
324,313 |
|
|
|
397,152 |
|
|
Contract liabilities |
|
|
191,037 |
|
|
|
200,041 |
|
|
|
195,267 |
|
|
Accrued expenses and other current liabilities |
|
|
450,223 |
|
|
|
452,829 |
|
|
|
499,214 |
|
|
Current liabilities held-for-sale |
|
|
— |
|
|
|
83,408 |
|
|
|
— |
|
|
Total current liabilities |
|
|
1,040,983 |
|
|
|
1,069,318 |
|
|
|
1,100,351 |
|
|
Long-term debt |
|
|
286,872 |
|
|
|
331,191 |
|
|
|
331,192 |
|
|
Long-term lease liabilities |
|
|
32,701 |
|
|
|
32,928 |
|
|
|
39,908 |
|
|
Other long-term liabilities |
|
|
60,664 |
|
|
|
65,927 |
|
|
|
67,951 |
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Common stock, |
|
|
437 |
|
|
|
458 |
|
|
|
458 |
|
|
Additional paid-in capital |
|
|
468,662 |
|
|
|
559,752 |
|
|
|
558,121 |
|
|
Accumulated other comprehensive income (loss) |
|
|
535 |
|
|
|
(3,359 |
) |
|
|
(3,468 |
) |
|
Retained earnings |
|
|
481,489 |
|
|
|
410,831 |
|
|
|
430,074 |
|
|
Total Granite Construction Incorporated shareholders’ equity |
|
|
951,123 |
|
|
|
967,682 |
|
|
|
985,185 |
|
|
Non-controlling interests |
|
|
35,621 |
|
|
|
27,881 |
|
|
|
37,169 |
|
|
Total equity |
|
|
986,744 |
|
|
|
995,563 |
|
|
|
1,022,354 |
|
|
Total liabilities and equity |
|
$ |
2,407,964 |
|
|
$ |
2,494,927 |
|
|
$ |
2,561,756 |
|
|
GRANITE CONSTRUCTION INCORPORATED |
||||||||||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||
|
(Unaudited - in thousands, except per share data) |
||||||||||||||||
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction |
|
$ |
848,267 |
|
|
$ |
924,454 |
|
|
$ |
2,141,009 |
|
|
$ |
2,369,848 |
|
|
Materials |
|
|
161,539 |
|
|
|
137,675 |
|
|
|
373,185 |
|
|
|
326,366 |
|
|
Total revenue |
|
|
1,009,806 |
|
|
|
1,062,129 |
|
|
|
2,514,194 |
|
|
|
2,696,214 |
|
|
Cost of revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction |
|
|
749,938 |
|
|
|
825,217 |
|
|
|
1,903,949 |
|
|
|
2,114,405 |
|
|
Materials |
|
|
139,501 |
|
|
|
116,977 |
|
|
|
332,220 |
|
|
|
281,610 |
|
|
Total cost of revenue |
|
|
889,439 |
|
|
|
942,194 |
|
|
|
2,236,169 |
|
|
|
2,396,015 |
|
|
Gross profit |
|
|
120,367 |
|
|
|
119,935 |
|
|
|
278,025 |
|
|
|
300,199 |
|
|
Selling, general and administrative expenses |
|
|
61,795 |
|
|
|
77,603 |
|
|
|
192,036 |
|
|
|
227,400 |
|
|
Other costs, net |
|
|
(490 |
) |
|
|
3,759 |
|
|
|
19,445 |
|
|
|
85,547 |
|
|
Gain on sales of property and equipment, net |
|
|
(949 |
) |
|
|
(5,159 |
) |
|
|
(10,462 |
) |
|
|
(39,349 |
) |
|
Operating income |
|
|
60,011 |
|
|
|
43,732 |
|
|
|
77,006 |
|
|
|
26,601 |
|
|
Other (income) expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
(1,894 |
) |
|
|
(293 |
) |
|
|
(3,246 |
) |
|
|
(737 |
) |
|
Interest expense |
|
|
2,519 |
|
|
|
5,131 |
|
|
|
10,003 |
|
|
|
16,019 |
|
|
Equity in income of affiliates, net |
|
|
(3,491 |
) |
|
|
(2,539 |
) |
|
|
(9,656 |
) |
|
|
(10,578 |
) |
|
Other (income) expense, net |
|
|
77 |
|
|
|
106 |
|
|
|
4,646 |
|
|
|
(3,018 |
) |
|
Total other (income) expense, net |
|
|
(2,789 |
) |
|
|
2,405 |
|
|
|
1,747 |
|
|
|
1,686 |
|
|
Income before income taxes |
|
|
62,800 |
|
|
|
41,327 |
|
|
|
75,259 |
|
|
|
24,915 |
|
|
Provision for (benefit from) income taxes |
|
|
(6,489 |
) |
|
|
8,904 |
|
|
|
(777 |
) |
|
|
2,068 |
|
|
Net income |
|
|
69,289 |
|
|
|
32,423 |
|
|
|
76,036 |
|
|
|
22,847 |
|
|
Amount attributable to non-controlling interests |
|
|
4,104 |
|
|
|
2,620 |
|
|
|
1,569 |
|
|
|
462 |
|
|
Net income attributable to Granite Construction Incorporated |
|
$ |
73,393 |
|
|
$ |
35,043 |
|
|
$ |
77,605 |
|
|
$ |
23,309 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share attributable to common shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
1.67 |
|
|
$ |
0.76 |
|
|
$ |
1.73 |
|
|
$ |
0.51 |
|
|
Diluted earnings per share |
|
$ |
1.44 |
|
|
$ |
0.73 |
|
|
$ |
1.56 |
|
|
$ |
0.49 |
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
43,973 |
|
|
|
45,821 |
|
|
|
44,739 |
|
|
|
45,773 |
|
|
Diluted |
|
|
51,863 |
|
|
|
47,906 |
|
|
|
52,613 |
|
|
|
47,522 |
|
|
GRANITE CONSTRUCTION INCORPORATED |
||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
|
(Unaudited - in thousands) |
||||||||
|
Nine Months Ended September 30, |
|
|
2022 |
|
|
|
2021 |
|
|
Operating activities |
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
76,036 |
|
|
$ |
22,847 |
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
|
61,714 |
|
|
|
81,008 |
|
|
Amortization related to long-term debt |
|
|
1,901 |
|
|
|
7,038 |
|
|
Gain on sale of business |
|
|
(6,234 |
) |
|
|
— |
|
|
Gain on sales of property and equipment, net |
|
|
(10,462 |
) |
|
|
(39,349 |
) |
|
Deferred income taxes |
|
|
(17,819 |
) |
|
|
— |
|
|
Stock-based compensation |
|
|
6,151 |
|
|
|
5,181 |
|
|
Equity in net (income) loss from unconsolidated joint ventures |
|
|
23,585 |
|
|
|
(8,027 |
) |
|
Net income from affiliates |
|
|
(9,656 |
) |
|
|
(10,578 |
) |
|
Other non-cash adjustments |
|
|
38 |
|
|
|
664 |
|
|
Changes in assets and liabilities |
|
|
(139,885 |
) |
|
|
1,138 |
|
|
Net cash provided by (used in) operating activities |
|
$ |
(14,631 |
) |
|
$ |
59,922 |
|
|
Investing activities |
|
|
|
|
|
|
|
|
|
Purchases of marketable securities |
|
|
(59,810 |
) |
|
|
(5,000 |
) |
|
Maturities of marketable securities |
|
|
15,000 |
|
|
|
— |
|
|
Purchases of property and equipment |
|
|
(97,753 |
) |
|
|
(72,964 |
) |
|
Proceeds from sales of property and equipment |
|
|
21,110 |
|
|
|
58,002 |
|
|
Proceeds from the sale of business |
|
|
142,571 |
|
|
|
— |
|
|
Issuance of notes receivable |
|
|
(7,560 |
) |
|
|
— |
|
|
Collection of notes receivable |
|
|
316 |
|
|
|
2,581 |
|
|
Net cash provided by (used in) investing activities |
|
$ |
13,874 |
|
|
$ |
(17,381 |
) |
|
Financing activities |
|
|
|
|
|
|
|
|
|
Proceeds from long-term debt |
|
|
50,000 |
|
|
|
— |
|
|
Debt principal repayments |
|
|
(124,911 |
) |
|
|
(6,795 |
) |
|
Cash dividends paid |
|
|
(17,587 |
) |
|
|
(17,846 |
) |
|
Repurchases of common stock |
|
|
(70,724 |
) |
|
|
(2,603 |
) |
|
Contributions from non-controlling partners |
|
|
11,925 |
|
|
|
15,701 |
|
|
Distributions to non-controlling partners |
|
|
(6,725 |
) |
|
|
(3,022 |
) |
|
Other financing activities, net |
|
|
208 |
|
|
|
(63 |
) |
|
Net cash used in financing activities |
|
$ |
(157,814 |
) |
|
$ |
(14,628 |
) |
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
$ |
(158,571 |
) |
|
$ |
27,913 |
|
|
Cash, cash equivalents and |
|
|
413,655 |
|
|
|
437,648 |
|
|
Cash, cash equivalents and |
|
$ |
255,084 |
|
|
$ |
465,561 |
|
Non-GAAP Financial Information
The tables below contain financial information calculated other than in accordance with
We provide adjusted income before provision for (benefit from) income taxes, adjusted provision for (benefit from) income taxes, adjusted net income attributable to Granite Construction Incorporated, and adjusted diluted earnings per share attributable to common shareholders, non-GAAP measures, to indicate the impact of the following:
- Other costs, net, which include a legal settlement charge, legal and accounting investigation fees, net costs relating to the resolution of the SEC investigation, and strategic acquisition and divestiture expenses;
- Interest expense and amortization of debt discount related to our 2.75% Convertible Notes;
- Transaction costs which includes acquired intangible amortization expense and acquisition related depreciation related to the acquisition of Layne and Liquiforce;
- Gain on sale of a business and sale of property; and
- The tax benefit from no longer having businesses classified as held for sale.
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
|
GRANITE CONSTRUCTION INCORPORATED |
|
EBITDA AND ADJUSTED EBITDA(1) |
|
(Unaudited - dollars in thousands) |
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
|
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Granite Construction Incorporated |
|
$ |
73,393 |
|
|
$ |
35,043 |
|
|
$ |
77,605 |
|
|
$ |
23,309 |
|
|
Depreciation, depletion and amortization expense(2) |
|
|
29,533 |
|
|
|
28,476 |
|
|
|
62,437 |
|
|
|
81,970 |
|
|
Provision for (benefit from) income taxes |
|
|
(6,489 |
) |
|
|
8,904 |
|
|
|
(777 |
) |
|
|
2,068 |
|
|
Interest expense, net of interest income |
|
|
625 |
|
|
|
4,838 |
|
|
|
6,757 |
|
|
|
15,282 |
|
|
EBITDA(1) |
|
$ |
97,062 |
|
|
$ |
77,261 |
|
|
$ |
146,022 |
|
|
$ |
122,629 |
|
|
EBITDA margin(1)(3) |
|
|
9.6 |
% |
|
|
7.3 |
% |
|
|
5.8 |
% |
|
|
4.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other costs, net |
|
$ |
(490 |
) |
|
$ |
3,759 |
|
|
$ |
19,445 |
|
|
$ |
85,547 |
|
|
Gain on sale of property |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(29,688 |
) |
|
Adjusted EBITDA(1) |
|
$ |
96,572 |
|
|
$ |
81,020 |
|
|
$ |
165,467 |
|
|
$ |
178,488 |
|
|
Adjusted EBITDA margin(1)(3) |
|
|
9.6 |
% |
|
|
7.6 |
% |
|
|
6.6 |
% |
|
|
6.6 |
% |
|
(1) |
We define EBITDA as |
|
|
(2) |
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. |
|
|
(3) |
Represents EBITDA and adjusted EBITDA divided by consolidated revenue of |
|
GRANITE CONSTRUCTION INCORPORATED |
||||||||||||||||
|
ADJUSTED NET INCOME RECONCILIATION |
||||||||||||||||
|
(Unaudited - in thousands, except per share data) |
||||||||||||||||
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
|
Income before income taxes |
|
$ |
62,800 |
|
|
$ |
41,327 |
|
|
$ |
75,259 |
|
|
$ |
24,915 |
|
|
Interest expense related to 2.75% Convertible Notes (1) |
|
|
1,912 |
|
|
|
— |
|
|
|
5,738 |
|
|
|
— |
|
|
Other costs, net |
|
|
(490 |
) |
|
|
3,759 |
|
|
|
19,445 |
|
|
|
85,547 |
|
|
Amortization of debt discount |
|
|
— |
|
|
|
1,772 |
|
|
|
— |
|
|
|
5,240 |
|
|
Transaction costs |
|
|
8,012 |
|
|
|
5,435 |
|
|
|
8,012 |
|
|
|
16,201 |
|
|
Gain on sale of property |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(29,688 |
) |
|
Adjusted income before income taxes |
|
$ |
72,234 |
|
|
$ |
52,293 |
|
|
$ |
108,454 |
|
|
$ |
102,215 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for (benefit from) income taxes |
|
$ |
(6,489 |
) |
|
$ |
8,904 |
|
|
$ |
(777 |
) |
|
$ |
2,068 |
|
|
Tax benefit from no longer having assets held for sale |
|
|
17,691 |
|
|
|
— |
|
|
|
17,691 |
|
|
|
— |
|
|
Tax effect of adjusting items (2) |
|
|
2,453 |
|
|
|
2,851 |
|
|
|
5,511 |
|
|
|
20,098 |
|
|
Adjusted provision for income taxes |
|
$ |
13,655 |
|
|
$ |
11,755 |
|
|
$ |
22,425 |
|
|
$ |
22,166 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Granite Construction Incorporated |
|
$ |
73,393 |
|
|
$ |
35,043 |
|
|
$ |
77,605 |
|
|
$ |
23,309 |
|
|
After-tax adjusting items |
|
|
(10,710 |
) |
|
|
8,115 |
|
|
|
9,993 |
|
|
|
57,202 |
|
|
Adjusted net income attributable to Granite Construction Incorporated |
|
$ |
62,683 |
|
|
$ |
43,158 |
|
|
$ |
87,598 |
|
|
$ |
80,511 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares of common stock |
|
|
51,863 |
|
|
|
47,906 |
|
|
|
52,613 |
|
|
|
47,522 |
|
|
Less: dilutive effect of 2.75% Convertible Notes (3) |
|
|
(7,309 |
) |
|
|
(1,522 |
) |
|
|
(7,309 |
) |
|
|
(1,226 |
) |
|
Adjusted diluted weighted average shares of common stock |
|
|
44,554 |
|
|
|
46,384 |
|
|
|
45,304 |
|
|
|
46,296 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share attributable to common shareholders |
|
$ |
1.44 |
|
|
$ |
0.73 |
|
|
$ |
1.56 |
|
|
$ |
0.49 |
|
|
After-tax adjusting items per share attributable to common shareholders |
|
|
(0.03 |
) |
|
|
0.20 |
|
|
|
0.37 |
|
|
|
1.25 |
|
|
Adjusted diluted earnings per share attributable to common shareholders |
|
$ |
1.41 |
|
|
$ |
0.93 |
|
|
$ |
1.93 |
|
|
$ |
1.74 |
|
|
(1) |
On January 1, 2022, we adopted ASU 2020-06 that requires the application of the if-converted method for calculating diluted earnings per share. In accordance with the if-converted method, during 2022 interest expense related to the 2.75% Convertible Notes is added back to income in order to calculate adjusted diluted earnings per share attributable to common shareholders. |
|
|
(2) |
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 nine months ended September 30, 2022 excludes the |
|
|
(3) |
When calculating diluted net income per share attributable to common shareholders, |
View source version on businesswire.com: https://www.businesswire.com/news/home/20221026006144/en/
Investors
Wenjun Xu, 831-761-7861
Or
Media
Erin Kuhlman, 831-768-4111
Source: Granite Construction Incorporated
