Granite Reports Fourth Quarter and FY 2023 Results
- Q4 revenue increased 18% year-over-year to
$934 million - Q4 diluted EPS of
$0.55 and adjusted diluted EPS (1) of$0.82 - Operating cash flow increased
$150 million sequentially - Committed and Awarded Projects ("CAP") (2) of
$5.5 billion , a year-over-year increase of$1.1 billion - 2024 guidance continues to align with previously provided targets
Fourth Quarter 2023 Results
Net income totaled
- Revenue increased
$145 million to$934 million compared to$789 million for the same period in the prior year. Both Construction and Materials segments posted year-over-year increases with theCalifornia and Mountain Groups up 44% and 14%, respectively, offset by a decrease in revenue of 9% in the Central Group. - Gross profit decreased
$3 million to$94 million compared to$97 million for the same period in the prior year. - Selling, general, and administrative (“SG&A”) expenses were
$82 million , or 8.8% of revenue, compared to$81 million , or 10.2% of revenue, for the same period in the prior year. - Adjusted EBITDA (1) totaled
$74 million , compared to$50 million for the same period in the prior year.
“Across the Company, our teams had an outstanding fourth quarter,” said Kyle Larkin, Granite President and Chief Executive Officer. “The quarter’s strong results, however, were tempered by impacts from the legacy Tappan Zee and I-64 projects. Looking back on 2023, it was a transformative year for Granite as we delivered on our strategic plan. We met our expectations for organic revenue growth and achieved our adjusted EBITDA margin range. We continued to develop our home markets while growing what we believe is the highest quality CAP in Granite’s history by
“Our guidance in 2024 reflects significant revenue growth driven by the high level of our CAP, robust construction and materials markets, and contribution from the Lehman-Roberts Company and Memphis Stone & Gravel Company acquisition. Our 2024 adjusted EBITDA margin guidance range remains unchanged, and we expect to see further improvements in operating cash flow.”
Fiscal Year 2023 Results
Net income totaled
- Revenue increased
$208 million to$3.5 billion compared to$3.3 billion in the prior year. - Gross profit increased
$27 million to$396 million compared to$369 million in the prior year. - SG&A expenses totaled
$294 million , or 8.4% of revenue, compared to$273 million , or 8.3% of revenue, 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
$269 million compared to$210 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. |
Fourth Quarter and Fiscal Year 2023 Segment Results (Unaudited - dollars in thousands)
|
Construction Segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
Three Months Ended December 31, |
|
Years Ended December 31, |
||||||||||||||||||||||||||
|
|
2023 |
|
2022 |
|
Change |
|
2023 |
|
2022 |
|
Change |
||||||||||||||||||
|
Revenue |
$ |
793,727 |
|
|
$ |
665,077 |
|
|
$ |
128,650 |
|
|
19.3 |
% |
|
$ |
2,992,254 |
|
|
$ |
2,803,935 |
|
|
$ |
188,319 |
|
6.7 |
% |
|
|
Gross profit |
$ |
72,034 |
|
|
$ |
72,133 |
|
|
$ |
(99 |
) |
|
(0.1 |
)% |
|
$ |
325,055 |
|
|
$ |
303,881 |
|
|
$ |
21,174 |
|
7.0 |
% |
|
|
Gross profit as a percent of revenue |
|
9.1 |
% |
|
|
10.8 |
% |
|
|
|
|
|
|
10.9 |
% |
|
|
10.8 |
% |
|
|
|
|
||||||
|
Committed and Awarded Projects |
December 31, 2023 |
|
September 30, 2023 |
|
Change - Quarter over Quarter |
|
December 31, 2022 |
|
Change - Year over Year |
|||||||||||||
|
|
$ |
2,436,521 |
|
$ |
2,345,294 |
|
$ |
91,227 |
|
|
3.9 |
% |
|
$ |
1,747,163 |
|
$ |
689,358 |
|
39.5 |
% |
|
|
Central |
|
1,707,862 |
|
|
1,811,426 |
|
|
(103,564 |
) |
|
(5.7 |
)% |
|
|
1,661,613 |
|
|
46,249 |
|
2.8 |
% |
|
|
Mountain |
|
1,401,371 |
|
|
1,427,803 |
|
|
(26,432 |
) |
|
(1.9 |
)% |
|
|
1,076,363 |
|
|
325,008 |
|
30.2 |
% |
|
|
Total |
$ |
5,545,754 |
|
$ |
5,584,523 |
|
$ |
(38,769 |
) |
|
(0.7 |
)% |
|
$ |
4,485,139 |
|
$ |
1,060,615 |
|
23.6 |
% |
|
Construction revenue in the fourth quarter increased 19% year-over-year led by the
While construction gross profit increased year-over-year for the fiscal year, gross profit margin in the fourth quarter decreased year-over-year primarily due to negative impacts from the legacy Tappan Zee and I-64 High Rise Bridge Projects. Although a non-cash event, we adjusted our probable claim recovery estimate on the Tappan Zee project to reflect developments in the dispute review process. This resulted in a negative impact to gross profit of
CAP decreased
|
Materials Segment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
Three Months Ended December 31, |
|
Years Ended December 31, |
||||||||||||||||||||||||||
|
|
2023 |
|
2022 |
|
Change |
|
2023 |
|
2022 |
|
Change |
||||||||||||||||||
|
Revenue |
$ |
139,971 |
|
|
$ |
124,136 |
|
|
$ |
15,835 |
|
|
12.8 |
% |
|
$ |
516,884 |
|
|
$ |
497,321 |
|
|
$ |
19,563 |
|
3.9 |
% |
|
|
Gross profit |
$ |
22,277 |
|
|
$ |
24,648 |
|
|
$ |
(2,371 |
) |
|
(9.6 |
)% |
|
$ |
71,344 |
|
|
$ |
65,613 |
|
|
$ |
5,731 |
|
8.7 |
% |
|
|
Gross profit as a percent of revenue |
|
15.9 |
% |
|
|
19.9 |
% |
|
|
|
|
|
|
13.8 |
% |
|
|
13.2 |
% |
|
|
|
|
||||||
Materials revenue for the fourth quarter and fiscal year ended December 31, 2023 increased compared to the same periods in the prior year, driven primarily by sales from facilities and businesses acquired in 2023 and higher asphalt and aggregate sales prices. Gross profit and gross profit margin decreased during the fourth quarter primarily due to a gross loss from our newly acquired operations, including the impact of purchase accounting, which reduced gross profit margin by 260 bps.
Outlook
Our guidance for 2024 is described below:
- Revenue in the range of
$3.8 billion to$4.0 billion - Adjusted EBITDA margin in the range of 9.0% to 11.0%
- SG&A expense in the range of 7.5% to 8.0% of revenue
- Mid-20s effective tax rate for adjusted net income
- Capital expenditures of approximately
$130 million to$150 million
We do not provide a reconciliation of forward-looking adjusted EBITDA margin or the most directly comparable forward-looking GAAP measure of net income attributable to Granite Construction Incorporated because we cannot predict with a reasonable degree of certainty and without unreasonable efforts certain components or excluded items that are inherently uncertain and depend on various factors. For these reasons, we are unable to assess the potential significance of the unavailable information.
“In 2024, we expect to achieve the revenue growth and profitability targets that we announced two years ago,” said Lisa Curtis, Executive Vice President and Chief Financial Officer. “We believe this demonstrates that we are executing on our strategic plan. Entering 2024, with CAP 24% higher year-over-year and a strong market, we expect revenue to grow significantly in 2024 to a range of
Conference Call
Granite will conduct a conference call today, February 22, 2024, at 8:00 a.m. Pacific Time/11:00 a.m. Eastern Time to discuss the results of the quarter and fiscal year ended December 31, 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 February 29, 2024, by calling 1-877-344-7529, replay access code 3276603; 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 press 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, 2024 fiscal year guidance for revenue, adjusted EBITDA margin, SG&A expense, effective tax rate, and capital expenditures, CAP, results, delivery of strong, predictable profitability, our guidance in 2024 reflects significant revenue growth driven by high levels of CAP, robust construction and materials markets and contributions from acquisitions, our adjusted EBITDA margin guidance remaining unchanged, our expectations to realize further increases in operating cash flow, our belief that there are substantial opportunities to build CAP in 2024, our expectations to achieve the revenue growth and profitability targets we previously announced, we expect revenue to grow significantly in 2024 and we expect profitability to increase in 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, 2024 fiscal year guidance for revenue, adjusted EBITDA margin, SG&A expense, effective tax rate, and capital expenditures, CAP, results, delivery of strong, predictable profitability, our guidance in 2024 reflects significant revenue growth driven by high levels of CAP, robust construction and materials markets and contributions from acquisitions, our adjusted EBITDA margin guidance remaining unchanged, our expectations to realize further increases in operating cash flow, our belief that there are substantial opportunities to build CAP in 2024, our expectations to achieve the revenue growth and profitability targets we previously announced, we expect revenue to grow significantly in 2024 and we expect profitability to increase in 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 press 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) |
||||||
|
|
December 31, 2023 |
|
December 31, 2022 |
|||
|
ASSETS |
|
|
|
|||
|
Current assets |
|
|
|
|||
|
Cash and cash equivalents |
$ |
417,663 |
|
$ |
293,991 |
|
|
Short-term marketable securities |
|
35,863 |
|
|
39,374 |
|
|
Receivables, net |
|
598,705 |
|
|
463,987 |
|
|
Contract assets |
|
262,987 |
|
|
241,916 |
|
|
Inventories |
|
103,898 |
|
|
86,809 |
|
|
Equity in unconsolidated construction joint ventures |
|
171,233 |
|
|
183,808 |
|
|
Other current assets |
|
53,102 |
|
|
37,411 |
|
|
Total current assets |
|
1,643,451 |
|
|
1,347,296 |
|
|
Property and equipment, net |
|
662,864 |
|
|
509,210 |
|
|
Long-term marketable securities |
|
— |
|
|
26,569 |
|
|
Investments in affiliates |
|
92,910 |
|
|
80,725 |
|
|
Goodwill |
|
155,004 |
|
|
73,703 |
|
|
Intangible assets |
|
117,322 |
|
|
9,212 |
|
|
Right of use assets |
|
78,176 |
|
|
49,079 |
|
|
Deferred income taxes, net |
|
8,179 |
|
|
22,208 |
|
|
Other noncurrent assets |
|
55,634 |
|
|
49,931 |
|
|
Total assets |
$ |
2,813,540 |
|
$ |
2,167,933 |
|
|
|
|
|
|
|||
|
LIABILITIES AND EQUITY |
|
|
|
|||
|
Current liabilities |
|
|
|
|||
|
Current maturities of long-term debt |
$ |
39,932 |
|
$ |
1,447 |
|
|
Accounts payable |
|
408,363 |
|
|
334,392 |
|
|
Contract liabilities |
|
243,848 |
|
|
173,286 |
|
|
Accrued expenses and other current liabilities |
|
337,740 |
|
|
288,469 |
|
|
Total current liabilities |
|
1,029,883 |
|
|
797,594 |
|
|
Long-term debt |
|
614,781 |
|
|
286,934 |
|
|
Long-term lease liabilities |
|
63,548 |
|
|
32,170 |
|
|
Deferred income taxes, net |
|
3,708 |
|
|
1,891 |
|
|
Other long-term liabilities |
|
74,654 |
|
|
64,199 |
|
|
Commitments and contingencies |
|
|
|
|||
|
Equity |
|
|
|
|||
|
Preferred stock, |
|
— |
|
|
— |
|
|
Common stock, |
|
439 |
|
|
437 |
|
|
Additional paid-in capital |
|
474,134 |
|
|
470,407 |
|
|
Accumulated other comprehensive income |
|
881 |
|
|
788 |
|
|
Retained earnings |
|
501,844 |
|
|
481,384 |
|
|
Total Granite Construction Incorporated shareholders’ equity |
|
977,298 |
|
|
953,016 |
|
|
Non-controlling interests |
|
49,668 |
|
|
32,129 |
|
|
Total equity |
|
1,026,966 |
|
|
985,145 |
|
|
Total liabilities and equity |
$ |
2,813,540 |
|
$ |
2,167,933 |
|
|
GRANITE CONSTRUCTION INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited - in thousands, except per share data) |
||||||||||||||||
|
|
Three Months Ended |
|
Years Ended |
|||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||||||
|
Revenue |
|
|
|
|
|
|
|
|||||||||
|
Construction |
$ |
793,727 |
|
|
$ |
665,077 |
|
|
$ |
2,992,254 |
|
|
$ |
2,803,935 |
|
|
|
Materials |
|
139,971 |
|
|
|
124,136 |
|
|
|
516,884 |
|
|
|
497,321 |
|
|
|
Total revenue |
|
933,698 |
|
|
|
789,213 |
|
|
|
3,509,138 |
|
|
|
3,301,256 |
|
|
|
Cost of revenue |
|
|
|
|
|
|
|
|||||||||
|
Construction |
|
721,693 |
|
|
|
592,944 |
|
|
|
2,667,199 |
|
|
|
2,500,054 |
|
|
|
Materials |
|
117,694 |
|
|
|
99,488 |
|
|
|
445,540 |
|
|
|
431,708 |
|
|
|
Total cost of revenue |
|
839,387 |
|
|
|
692,432 |
|
|
|
3,112,739 |
|
|
|
2,931,762 |
|
|
|
Gross profit |
|
94,311 |
|
|
|
96,781 |
|
|
|
396,399 |
|
|
|
369,494 |
|
|
|
Selling, general and administrative expenses |
|
81,987 |
|
|
|
80,574 |
|
|
|
294,466 |
|
|
|
272,610 |
|
|
|
Other costs, net |
|
12,244 |
|
|
|
1,719 |
|
|
|
50,217 |
|
|
|
24,120 |
|
|
|
Gain on sales of property and equipment, net |
|
(20,553 |
) |
|
|
(2,155 |
) |
|
|
(28,346 |
) |
|
|
(12,617 |
) |
|
|
Operating income |
|
20,633 |
|
|
|
16,643 |
|
|
|
80,062 |
|
|
|
85,381 |
|
|
|
Other (income) expense |
|
|
|
|
|
|
|
|||||||||
|
Loss on debt extinguishment |
|
— |
|
|
|
— |
|
|
|
51,052 |
|
|
|
— |
|
|
|
Interest income |
|
(6,251 |
) |
|
|
(3,282 |
) |
|
|
(17,538 |
) |
|
|
(6,528 |
) |
|
|
Interest expense |
|
6,563 |
|
|
|
2,621 |
|
|
|
18,462 |
|
|
|
12,624 |
|
|
|
Equity in income of affiliates, net |
|
(6,370 |
) |
|
|
(3,915 |
) |
|
|
(25,748 |
) |
|
|
(13,571 |
) |
|
|
Other (income) expense, net |
|
(3,307 |
) |
|
|
(3,607 |
) |
|
|
(6,020 |
) |
|
|
1,039 |
|
|
|
Total other (income) expense, net |
|
(9,365 |
) |
|
|
(8,183 |
) |
|
|
20,208 |
|
|
|
(6,436 |
) |
|
|
Income before income taxes |
|
29,998 |
|
|
|
24,826 |
|
|
|
59,854 |
|
|
|
91,817 |
|
|
|
Provision for income taxes |
|
8,289 |
|
|
|
5,650 |
|
|
|
30,267 |
|
|
|
12,960 |
|
|
|
Net income |
|
21,709 |
|
|
|
19,176 |
|
|
|
29,587 |
|
|
|
78,857 |
|
|
|
Amount attributable to non-controlling interests |
|
4,289 |
|
|
|
2,876 |
|
|
|
14,012 |
|
|
|
4,445 |
|
|
|
Net income attributable to Granite Construction Incorporated |
$ |
25,998 |
|
|
$ |
22,052 |
|
|
$ |
43,599 |
|
|
$ |
83,302 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Net income per share attributable to common shareholders: |
|
|
|
|
|
|
|
|||||||||
|
Basic |
$ |
0.59 |
|
|
$ |
0.50 |
|
|
$ |
0.99 |
|
|
$ |
1.87 |
|
|
|
Diluted |
$ |
0.55 |
|
|
$ |
0.46 |
|
|
$ |
0.97 |
|
|
$ |
1.70 |
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|||||||||
|
Basic |
|
43,934 |
|
|
|
43,732 |
|
|
|
43,879 |
|
|
|
44,485 |
|
|
|
Diluted |
|
53,605 |
|
|
|
51,475 |
|
|
|
52,565 |
|
|
|
52,326 |
|
|
|
GRANITE CONSTRUCTION INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited - in thousands) |
||||||||
|
Years Ended December 31, |
2023 |
|
2022 |
|||||
|
Operating activities |
|
|
|
|||||
|
Net income |
$ |
29,587 |
|
|
$ |
78,857 |
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|||||
|
Depreciation, depletion and amortization |
|
92,270 |
|
|
|
82,569 |
|
|
|
Amortization related to long-term debt |
|
2,390 |
|
|
|
2,366 |
|
|
|
Non-cash loss on debt extinguishment |
|
51,052 |
|
|
|
— |
|
|
|
Gain on sales of property and equipment, net |
|
(28,346 |
) |
|
|
(12,617 |
) |
|
|
Deferred income taxes |
|
26,556 |
|
|
|
5,447 |
|
|
|
Stock-based compensation |
|
10,477 |
|
|
|
7,765 |
|
|
|
Equity in net loss from unconsolidated construction joint ventures |
|
18,617 |
|
|
|
19,676 |
|
|
|
Net income from affiliates |
|
(25,748 |
) |
|
|
(13,571 |
) |
|
|
Other non-cash adjustments |
|
5,695 |
|
|
|
222 |
|
|
|
Changes in assets and liabilities |
|
1,157 |
|
|
|
(115,067 |
) |
|
|
Net cash provided by operating activities |
$ |
183,707 |
|
|
$ |
55,647 |
|
|
|
Investing activities |
|
|
|
|||||
|
Purchases of marketable securities |
|
(9,740 |
) |
|
|
(94,104 |
) |
|
|
Maturities of marketable securities |
|
40,000 |
|
|
|
45,000 |
|
|
|
Proceeds from called marketable securities |
|
— |
|
|
|
6 |
|
|
|
Purchases of property and equipment |
|
(140,384 |
) |
|
|
(121,612 |
) |
|
|
Proceeds from sales of property and equipment |
|
38,109 |
|
|
|
26,064 |
|
|
|
Proceeds from company-owned life insurance |
|
1,545 |
|
|
|
— |
|
|
|
Proceeds from the sale of business |
|
— |
|
|
|
140,576 |
|
|
|
Acquisition of businesses, net of cash acquired |
|
(294,018 |
) |
|
|
— |
|
|
|
Issuance of notes receivable |
|
— |
|
|
|
(7,560 |
) |
|
|
Collection of notes receivable |
|
5,198 |
|
|
|
630 |
|
|
|
Net cash used in investing activities |
$ |
(359,290 |
) |
|
$ |
(11,000 |
) |
|
|
Financing activities |
|
|
|
|||||
|
Proceeds from debt |
|
305,000 |
|
|
|
50,000 |
|
|
|
Debt principal repayments |
|
(305,118 |
) |
|
|
(125,164 |
) |
|
|
Capped call transactions |
|
(53,035 |
) |
|
|
— |
|
|
|
Redemption of warrants |
|
(13,201 |
) |
|
|
— |
|
|
|
Proceeds from issuance of 3.75% Convertible Notes |
|
373,750 |
|
|
|
— |
|
|
|
Debt issuance costs |
|
(10,865 |
) |
|
|
— |
|
|
|
Cash dividends paid |
|
(22,811 |
) |
|
|
(23,271 |
) |
|
|
Repurchases of common stock |
|
(4,124 |
) |
|
|
(70,898 |
) |
|
|
Contributions from non-controlling partners |
|
43,300 |
|
|
|
13,150 |
|
|
|
Distributions to non-controlling partners |
|
(14,224 |
) |
|
|
(8,567 |
) |
|
|
Other financing activities, net |
|
583 |
|
|
|
439 |
|
|
|
Net cash provided by (used in) financing activities |
$ |
299,255 |
|
|
$ |
(164,311 |
) |
|
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
$ |
123,672 |
|
|
$ |
(119,664 |
) |
|
|
Cash, cash equivalents and |
|
293,991 |
|
|
|
413,655 |
|
|
|
Cash, cash equivalents and |
$ |
417,663 |
|
|
$ |
293,991 |
|
|
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 include acquired intangible amortization expense and acquisition-related depreciation in 2023 and 2022;
- Loss on debt extinguishment in 2023, and
- Income taxes related to the disposal of Inliner goodwill and tax basis difference on held for sale entities in 2022 and establishment of valuation allowance in 2023.
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 December 31, |
|
Years ended December 31, |
|||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
EBITDA: |
|
|
|
|
|
|
|
|
|
Net income attributable to Granite Construction Incorporated |
|
|
|
|
|
|
|
|
|
Net income margin (2) |
2.8 % |
|
2.8 % |
|
1.2 % |
|
2.5 % |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization expense (3) |
27,144 |
|
21,181 |
|
92,866 |
|
83,618 |
|
|
Provision for income taxes |
8,289 |
|
5,650 |
|
30,267 |
|
12,960 |
|
|
Interest (income) expense, net |
312 |
|
(661) |
|
924 |
|
6,096 |
|
|
EBITDA(1) |
|
|
|
|
|
|
|
|
|
EBITDA margin(1)(2) |
6.6 % |
|
6.1 % |
|
4.8 % |
|
5.6 % |
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED EBITDA: |
|
|
|
|
|
|
|
|
|
Other costs, net |
|
|
|
|
|
|
|
|
|
Loss on debt extinguishment |
— |
|
— |
|
51,052 |
|
— |
|
|
Adjusted EBITDA(1) |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin(1)(2) |
7.9 % |
|
6.3 % |
|
7.7 % |
|
6.4 % |
|
|
(1) |
We define EBITDA as GAAP net income attributable to Granite Construction Incorporated, adjusted for net interest (income) 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 consolidated statements of operations. |
|
GRANITE CONSTRUCTION INCORPORATED ADJUSTED NET INCOME RECONCILIATION (Unaudited - in thousands, except per share data) |
||||||||||||||||
|
|
Three Months Ended December 31, |
|
Years Ended December 31, |
|||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||||||
|
Income before income taxes |
$ |
29,998 |
|
|
$ |
24,826 |
|
|
$ |
59,854 |
|
|
$ |
91,817 |
|
|
|
Other costs, net |
|
12,244 |
|
|
|
1,719 |
|
|
|
50,217 |
|
|
|
24,120 |
|
|
|
Transaction costs |
|
1,660 |
|
|
|
1,736 |
|
|
|
6,706 |
|
|
|
9,680 |
|
|
|
Loss on debt extinguishment |
|
— |
|
|
|
— |
|
|
|
51,052 |
|
|
|
— |
|
|
|
Adjusted income before income taxes |
$ |
43,902 |
|
|
$ |
28,281 |
|
|
$ |
167,829 |
|
|
$ |
125,617 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Provision for income taxes |
$ |
8,289 |
|
|
$ |
5,650 |
|
|
$ |
30,267 |
|
|
$ |
12,960 |
|
|
|
Tax effect of goodwill disposal related to sale of business |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(10,070 |
) |
|
|
Tax basis difference on held for sale entities |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
17,691 |
|
|
|
Tax expense to establish valuation allowance |
|
— |
|
|
|
— |
|
|
|
(1,542 |
) |
|
|
— |
|
|
|
Tax effect of adjusting items (1) |
|
3,615 |
|
|
|
899 |
|
|
|
13,491 |
|
|
|
5,668 |
|
|
|
Adjusted provision for income taxes |
$ |
11,904 |
|
|
$ |
6,549 |
|
|
$ |
42,216 |
|
|
$ |
26,249 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Net income attributable to Granite Construction Incorporated |
$ |
25,998 |
|
|
$ |
22,052 |
|
|
$ |
43,599 |
|
|
$ |
83,302 |
|
|
|
After-tax adjusting items |
|
10,289 |
|
|
|
2,556 |
|
|
|
96,026 |
|
|
|
20,511 |
|
|
|
Adjusted net income attributable to Granite Construction Incorporated |
$ |
36,287 |
|
|
$ |
24,608 |
|
|
$ |
139,625 |
|
|
$ |
103,813 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Diluted weighted average shares of common stock (2) |
|
53,605 |
|
|
|
51,475 |
|
|
|
52,565 |
|
|
|
52,326 |
|
|
|
Less: dilutive effect of Convertible Notes (3) |
|
(9,099 |
) |
|
|
(7,309 |
) |
|
|
(8,103 |
) |
|
|
(7,309 |
) |
|
|
Adjusted diluted weighted average shares of common stock |
|
44,506 |
|
|
|
44,166 |
|
|
|
44,462 |
|
|
|
45,018 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Diluted net income per share attributable to common shareholders |
$ |
0.55 |
|
|
$ |
0.46 |
|
|
$ |
0.97 |
|
|
$ |
1.70 |
|
|
|
After-tax adjusting items per share attributable to common shareholders |
|
0.27 |
|
|
|
0.10 |
|
|
|
2.17 |
|
|
|
0.61 |
|
|
|
Adjusted diluted earnings per share attributable to common shareholders |
$ |
0.82 |
|
|
$ |
0.56 |
|
|
$ |
3.14 |
|
|
$ |
2.31 |
|
|
|
(1) |
The tax effect of adjusting items was calculated using our estimated annual statutory tax rate. The tax effect of adjusting items for the fiscal year ended December 31, 2023 excludes the |
|
|
(2) |
Diluted weighted average shares of common stock includes the dilutive effect on net income per share attributable to Granite Construction Incorporated of the 2.75% Convertible Notes and the 3.75% Convertible Notes potentially converting into 9,099,009 shares of common stock for the fourth quarter ended December 31, 2023 and 7,308,848 shares of common stock for the fourth quarter and fiscal year ended December 31, 2022. For the fiscal year ended December 31, 2023, the potential dilutive effect of 995,847 shares related to the 2.75% Convertible Notes is not included as their inclusion would be antidilutive resulting in 8,103,162 potentially converting into shares of common stock. |
|
|
(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/20240221257769/en/
Investors
Wenjun Xu, 831-761-7861
Or
Media
Erin Kuhlman, 831-768-4111
Source: Granite Construction Incorporated
