GVA Granite Construction Inc

• Q2 revenue increased 20% year-over-year to $1.1 billion
• Q2 diluted EPS of $0.76 and adjusted diluted EPS (1) of $1.73
• Committed and Awarded Projects (“CAP”) (2) of $5.6 billion, a sequential increase of $77 million
• Entered into an agreement, subject to customary closing conditions, to acquire Dickerson & Bowen, Inc., a leading regional aggregates, asphalt, and highway construction company serving central and southern Mississippi

Granite Construction Incorporated (NYSE: GVA) today announced results for the quarter ended June 30, 2024 and the agreement to acquire Dickerson & Bowen, Inc., subject to customary closing conditions.

Second Quarter 2024 Results

Net income attributable to Granite Construction Incorporated totaled $37 million, or $0.76 per diluted share, compared to net loss attributable to Granite Construction Incorporated of $17 million, or $(0.39) per diluted share, for the same period in the prior year. Adjusted net income attributable to Granite Construction Incorporated (1) totaled $77 million, or $1.73 per diluted share, compared to $47 million, or $1.06 per diluted share, for the same period in the prior year.

• Revenue increased $183 million to $1.1 billion compared to $899 million for the same period in the prior year. The Construction and Materials segments posted year-over-year increases of 22% and 10%, respectively.
• Gross profit increased $62 million to $165 million compared to $103 million for the same period in the prior year.
• Selling, general, and administrative (“SG&A”) expenses increased $5 million to $70 million, or 6.5% of revenue, compared to $65 million, or 7.2% of revenue, for the same period in the prior year.
• Adjusted EBITDA (1) totaled $130 million compared to $81 million for the same period in the prior year.
• CAP (2) increased $77 million sequentially and $139 million year-over-year to $5.6 billion.

“I am pleased with our strong second quarter,” said Kyle Larkin, Granite President and Chief Executive Officer. “Our teams continue to execute on our plan, and we are seeing the expected results. We earned record second quarter revenue, with an increase of 20% year-over-year, and also added to our CAP. This illustrates the strength of the macro construction market, and we believe there are many opportunities for us to build CAP further in the second half of the year. With our performance in the first half of 2024, I expect that our revenue will be in the upper half of our previous revenue guidance for the year in the range of $3.9 billion to $4.0 billion.”

“In addition, we are excited to announce the agreement to acquire Dickerson & Bowen, Inc. of Brookhaven, Mississippi. The transaction is expected to close in the third quarter. The acquisition will add four asphalt plants and three sand and gravel pits. Dickerson & Bowen is a natural extension of the Lehman-Roberts Company and Memphis Stone & Gravel platform that we acquired at the end of 2023. This materials-focused, vertically integrated business will expand our existing footprint in this high growth market south through Jackson, Mississippi and to the southern end of the state.”

Six Months Ended June 30, 2024 Results

Net income attributable to Granite Construction Incorporated totaled $6 million, or $0.13 per diluted share, compared to net loss attributable to Granite Construction Incorporated of $40 million, or $(0.91) per diluted share, for the same period in the prior year. Adjusted net income attributable to Granite Construction Incorporated (1) totaled $68 million, or $1.52 per diluted share, compared to $33 million, or $0.74 per diluted share, for the same period in the prior year.

• Revenue increased $296 million to $1.8 billion compared to $1.5 billion for the same period in the prior year. The Construction and Materials segments posted year-over-year increases of 21% and 17%, respectively.
• Gross profit increased $84 million to $219 million compared to $135 million for the same period in the prior year.
• SG&A expenses increased $20 million to $158 million, or 9.0% of revenue, compared to $138 million, or 9.4% of revenue, for the same period in the prior year.
• Adjusted EBITDA (1) totaled $144 million compared to $77 million for the same period in the prior year.

(1)

Adjusted net income attributable to Granite Construction Incorporated, adjusted diluted earnings per share, earnings before interest, taxes, depreciation, and amortization (“EBITDA”), EBITDA margin, adjusted EBITDA, adjusted EBITDA margin and Materials segment cash gross profit 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 Six Months ended June 30, 2024 (Unaudited - dollars in thousands)

Construction Segment

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2024

 

 

 

2023

 

 

Change

 

 

2024

 

 

 

2023

 

 

Change

Revenue

$

917,954

 

 

$

749,413

 

 

$

168,541

 

22.5

%

 

$

1,513,167

 

 

$

1,252,829

 

 

$

260,338

 

20.8

%

Gross profit

$

135,372

 

 

$

79,154

 

 

$

56,218

 

 

71.0

%

 

$

192,200

 

 

$

115,859

 

 

$

76,341

 

 

65.9

%

Gross profit as a percent of revenue

 

14.7

%

 

 

10.6

%

 

 

 

 

 

 

12.7

%

 

 

9.2

%

 

 

 

 

For the three and six months ended June 30, 2024, revenue increased year-over-year due to higher levels of CAP, more favorable weather conditions early in 2024, and revenue from acquired businesses. For the three and six months ended June 30, 2024, gross profit increased year-over-year as a result of increases in revenue and a decrease in negative revisions in estimates.

CAP increased $77 million sequentially to $5.6 billion and increased $139 million year-over-year. Both public and private markets continue to be strong with substantial opportunities to build CAP in the remainder of 2024.

Materials Segment

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

Change

 

 

2024

 

 

 

2023

 

 

Change

Revenue

$

164,532

 

 

$

149,139

 

 

$

15,393

 

10.3

%

 

$

241,594

 

 

$

205,791

 

 

$

35,803

 

17.4

%

Gross profit

$

29,339

 

 

$

23,932

 

 

$

5,407

 

 

22.6

%

 

$

26,796

 

 

$

19,586

 

 

$

7,210

 

 

36.8

%

Gross profit as a percent of revenue

 

17.8

%

 

 

16.0

%

 

 

 

 

 

 

11.1

%

 

 

9.5

%

 

 

 

 

Cash gross profit(1)

$

39,300

 

 

$

30,314

 

 

$

8,986

 

 

29.6

%

 

$

46,516

 

 

$

31,378

 

 

$

15,138

 

 

48.2

%

Cash gross profit as a percent of revenue(1)

 

23.9

%

 

 

20.3

%

 

 

 

 

 

 

19.3

%

 

 

15.2

%

 

 

 

 

(1)

Materials segment cash gross profit and cash gross profit as a percent of revenue are non-GAAP measures. Please refer to the description and reconciliation of non-GAAP measures in the attached tables.

For the three and six months ended June 30, 2024, revenue increased year-over-year by $15 million and $36 million, respectively, driven by revenue from acquired businesses as well as higher asphalt and aggregate sales prices, which offset decreased volumes. Gross profit in the three and six months ended June 30, 2024, increased due primarily to inclusion of the results of acquired businesses and higher materials sales prices. The impact to gross profit for the three and six month periods ended June 30, 2024 from purchase accounting-related step-up depreciation and intangible asset amortization was $1 million and $3 million, respectively. Materials segment cash gross profit (1), which excludes the segment’s depreciation, depletion, and amortization, increased significantly for the same period year-over-year, led by the impact of acquisitions and the higher materials sales prices.

Outlook

Our guidance for 2024 is unchanged with the exception of revenue as noted below.

• Revenue in the range of $3.9 billion to $4.0 billion, narrowed from $3.8 billion to $4.0 billion
• Adjusted EBITDA margin in the range of 9.5% to 11.5%
• 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.

Conference Call

Granite will conduct a conference call today, August 1, 2024, at 8:00 a.m. Pacific Time/11:00 a.m. Eastern Time to discuss the results of the quarter ended June 30, 2024. 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 August 8, 2024, by calling 1-877-344-7529, replay access code 7954492; 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 the United States as well as a full-suite civil construction provider. Granite’s Code of Conduct and strong Core Values guide the Company and its employees to uphold the highest ethical standards. Granite is an industry leader in safety and an award-winning firm in quality and sustainability. For more information, visit graniteconstruction.com, and connect with Granite on LinkedIn, X, Facebook and Instagram.

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, 2024 fiscal year guidance for revenue, adjusted EBITDA margin, SG&A expense, effective tax rate, and capital expenditures, the acquisition of Dickerson & Bowen, Inc. and the timing of the closing of the acquisition, CAP and results constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by words such as “future,” “outlook,” “assumes,” “believes,” “expects,” “estimates,” “anticipates,” “intends,” “plans,” “appears,” “may,” “will,” “should,” “could,” “would,” “continue,” "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, the acquisition of Dickerson & Bowen, Inc. and the timing of the closing of the acquisition, CAP and results. These expectations may or may not be realized. Some of these expectations may be based on beliefs, assumptions or estimates that may prove to be incorrect. In addition, our business and operations involve numerous risks and uncertainties, many of which are beyond our control, which could result in our expectations not being realized or otherwise materially affect our business, financial condition, results of operations, cash flows and liquidity. Such risks and uncertainties include, but are not limited to, those described in greater detail in our filings with the Securities and Exchange Commission, particularly those described in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

Due to the inherent risks and uncertainties associated with our forward-looking statements, the reader is cautioned not to place undue reliance on them. The reader is also cautioned that the forward-looking statements contained herein speak only as of the date of this news release and, except as required by law; we undertake no obligation to revise or update any forward-looking statements for any reason.

GRANITE CONSTRUCTION INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

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

 

 

June 30, 2024

 

December 31, 2023

ASSETS

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

366,746

 

$

417,663

Short-term marketable securities

 

10,500

 

 

 

35,863

 

Receivables, net

 

709,248

 

 

 

598,705

 

Contract assets

 

309,376

 

 

 

262,987

 

Inventories

 

119,060

 

 

 

103,898

 

Equity in construction joint ventures

 

157,070

 

 

 

171,233

 

Other current assets

 

34,168

 

 

 

53,102

 

Total current assets

 

1,706,168

 

 

 

1,643,451

 

Property and equipment, net

 

670,876

 

 

 

662,864

 

Investments in affiliates

 

93,499

 

 

 

92,910

 

Goodwill

 

146,768

 

 

 

155,004

 

Intangible assets

 

107,575

 

 

 

117,322

 

Right of use assets

 

78,374

 

 

 

78,176

 

Deferred income taxes, net

 

19,989

 

 

 

8,179

 

Other noncurrent assets

 

58,120

 

 

 

55,634

 

Total assets

$

2,881,369

 

 

$

2,813,540

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

Current liabilities

 

 

 

Current maturities of long-term debt

$

1,510

 

 

$

39,932

 

Accounts payable

 

450,656

 

 

 

408,363

 

Contract liabilities

 

262,198

 

 

 

243,848

 

Accrued expenses and other current liabilities

 

302,039

 

 

 

337,740

 

Total current liabilities

 

1,016,403

 

 

 

1,029,883

 

Long-term debt

 

737,436

 

 

 

614,781

 

Long-term lease liabilities

 

64,995

 

 

 

63,548

 

Deferred income taxes, net

 

3,272

 

 

 

3,708

 

Other long-term liabilities

 

71,848

 

 

 

74,654

 

Commitments and contingencies

 

 

 

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: 43,686,508 shares as of June 30, 2024 and 43,944,118 shares as of December 31, 2023

 

437

 

 

 

439

 

Additional paid-in capital

 

435,271

 

 

 

474,134

 

Accumulated other comprehensive income

 

270

 

 

 

881

 

Retained earnings

 

495,679

 

 

 

501,844

 

Total Granite Construction Incorporated shareholders’ equity

 

931,657

 

 

 

977,298

 

Non-controlling interests

 

55,758

 

 

 

49,668

 

Total equity

 

987,415

 

 

 

1,026,966

 

Total liabilities and equity

$

2,881,369

 

 

$

2,813,540

 

GRANITE CONSTRUCTION INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited - in thousands, except per share data)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenue

 

 

 

 

 

 

 

Construction

$

917,954

 

 

$

749,413

 

 

$

1,513,167

 

 

$

1,252,829

 

Materials

 

164,532

 

 

 

149,139

 

 

 

241,594

 

 

 

205,791

 

Total revenue

 

1,082,486

 

 

 

898,552

 

 

 

1,754,761

 

 

 

1,458,620

 

Cost of revenue

 

 

 

 

 

 

 

Construction

 

782,582

 

 

 

670,259

 

 

 

1,320,967

 

 

 

1,136,970

 

Materials

 

135,193

 

 

 

125,207

 

 

 

214,798

 

 

 

186,205

 

Total cost of revenue

 

917,775

 

 

 

795,466

 

 

 

1,535,765

 

 

 

1,323,175

 

Gross profit

 

164,711

 

 

 

103,086

 

 

 

218,996

 

 

 

135,445

 

Selling, general and administrative expenses

 

70,052

 

 

 

64,563

 

 

 

158,045

 

 

 

137,685

 

Other costs, net

 

10,225

 

 

 

13,607

 

 

 

21,235

 

 

 

18,130

 

Gain on sales of property and equipment, net

 

(1,387

)

 

 

(3,944

)

 

 

(2,805

)

 

 

(5,981

)

Operating income (loss)

 

85,821

 

 

 

28,860

 

 

 

42,521

 

 

 

(14,389

)

Other (income) expense

 

 

 

 

 

 

 

Loss on debt extinguishment

 

27,824

 

 

 

51,052

 

 

 

27,824

 

 

 

51,052

 

Interest income

 

(3,600

)

 

 

(3,232

)

 

 

(10,302

)

 

 

(6,994

)

Interest expense

 

5,337

 

 

 

4,131

 

 

 

13,420

 

 

 

7,022

 

Equity in income of affiliates, net

 

(4,557

)

 

 

(7,044

)

 

 

(8,527

)

 

 

(12,231

)

Other (income) expense, net

 

1,267

 

 

 

(1,225

)

 

 

(476

)

 

 

(3,175

)

Total other expense, net

 

26,271

 

 

 

43,682

 

 

 

21,939

 

 

 

35,674

 

Income (loss) before income taxes

 

59,550

 

 

 

(14,822

)

 

 

20,582

 

 

 

(50,063

)

Provision for (benefit from) income taxes

 

20,693

 

 

 

9,024

 

 

 

11,167

 

 

 

(445

)

Net income (loss)

 

38,857

 

 

 

(23,846

)

 

 

9,415

 

 

 

(49,618

)

Amount attributable to non-controlling interests

 

(1,962

)

 

 

6,846

 

 

 

(3,503

)

 

 

9,595

 

Net income (loss) attributable to Granite

$

36,895

 

 

$

(17,000

)

 

$

5,912

 

 

$

(40,023

)

 

 

 

 

 

 

 

 

Net income (loss) per share attributable to

 

 

 

 

 

 

 

Basic

$

0.84

 

 

$

(0.39

)

 

$

0.13

 

 

$

(0.91

)

Diluted

$

0.76

 

 

$

(0.39

)

 

$

0.13

 

 

$

(0.91

)

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic

 

44,060

 

 

 

43,892

 

 

 

44,024

 

 

 

43,829

 

Diluted

 

52,727

 

 

 

43,892

 

 

 

44,593

 

 

 

43,829

 

GRANITE CONSTRUCTION INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited - in thousands)

 

Six Months Ended June 30,

 

2024

 

 

 

2023

 

Operating activities

 

 

 

Net income (loss)

$

9,415

 

 

$

(49,618

)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

Depreciation, depletion and amortization

 

58,468

 

 

 

41,528

 

Amortization related to long-term debt

 

2,334

 

 

 

988

 

Loss on debt extinguishment

 

27,824

 

 

 

51,052

 

Gain on sales of property and equipment, net

 

(2,805

)

 

 

(5,981

)

Stock-based compensation

 

15,084

 

 

 

6,702

 

Equity in net (income) loss from unconsolidated construction joint ventures

 

(752

)

 

 

4,005

 

Net income from affiliates

 

(8,527

)

 

 

(12,231

)

Other non-cash adjustments

 

(348

)

 

 

(7

)

Changes in assets and liabilities

 

(78,609

)

 

 

(155,386

)

Net cash provided by (used in) operating activities

$

22,084

 

 

$

(118,948

)

Investing activities

 

 

 

Maturities of marketable securities

 

25,000

 

 

 

30,000

 

Purchases of property and equipment

 

(66,861

)

 

 

(79,689

)

Proceeds from sales of property and equipment

 

4,229

 

 

 

10,564

 

Proceeds from company owned life insurance

 

—

 

 

 

1,545

 

Return of investment in affiliates

 

693

 

 

 

—

 

Cash paid for purchase price adjustments on business acquisition

 

(13,183

)

 

 

—

 

Acquisition of business

 

—

 

 

 

(26,933

)

Collection of notes receivable

 

—

 

 

 

135

 

Net cash used in investing activities

$

(50,122

)

 

$

(64,378

)

Financing activities

 

 

 

Proceeds from issuance of convertible notes

 

373,750

 

 

 

373,750

 

Proceeds from long-term debt

 

—

 

 

 

55,000

 

Debt principal repayments

 

(309,808

)

 

 

(249,589

)

Capped call transactions

 

(46,046

)

 

 

(53,035

)

Redemption of warrants

 

586

 

 

 

(13,201

)

Debt issuance costs

 

(9,654

)

 

 

(9,806

)

Cash dividends paid

 

(11,452

)

 

 

(11,391

)

Repurchases of common stock

 

(21,144

)

 

 

(3,766

)

Contributions from non-controlling partners

 

17,000

 

 

 

22,400

 

Distributions to non-controlling partners

 

(16,372

)

 

 

(6,850

)

Other financing activities, net

 

261

 

 

 

269

 

Net cash provided by (used in) financing activities

$

(22,879

)

 

$

103,781

 

Net decrease in cash and cash equivalents

 

(50,917

)

 

 

(79,545

)

Cash and cash equivalents at beginning of period

 

417,663

 

 

 

293,991

 

Cash and cash equivalents at end of period

$

366,746

 

 

$

214,446

 

Non-GAAP Financial Information

The tables below contain financial information calculated other than in accordance with U.S. generally accepted accounting principles (“GAAP”). Specifically, management believes that non-GAAP financial measures such as EBITDA and EBITDA margin are useful in evaluating operating performance and are regularly used by securities analysts, institutional investors and other interested parties, and that such supplemental measures facilitate comparisons between companies that have different capital and financing structures and/or tax rates. We are also providing adjusted EBITDA and adjusted EBITDA margin, non-GAAP measures, to indicate the impact of loss on debt extinguishment, stock-based compensation expense and other costs, net, which include legal fees for the defense of a former Company officer in his ongoing civil litigation with the Securities and Exchange Commission, reorganization costs, strategic acquisition and divestiture expenses, and a litigation charge in 2023.

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;
• Loss on debt extinguishment, and
• Stock-based compensation expense.

We also provide materials segment cash gross profit to exclude the impact of the segment’s depreciation, depletion and amortization from the segment’s gross profit. Management believes that non-GAAP financial measures such as materials segment cash gross profit are useful in evaluating operating performance and are regularly used by securities analysts, institutional investors and other interested parties, and that such supplemental measures facilitate comparisons between companies that have different capital and financing structures.

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 June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

EBITDA:

 

 

 

 

 

 

 

Net income (loss) attributable to Granite Construction

$

36,895

 

 

$

(17,000

)

 

$

5,912

 

 

$

(40,023

)

Net income (loss) margin (2)

 

3.4

%

 

 

(1.9

)%

 

 

0.3

%

 

 

(2.7

)%

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization expense (3)

 

30,303

 

 

 

21,937

 

 

 

59,576

 

 

 

41,811

 

Provision for (benefit from) income taxes

 

20,693

 

 

 

9,024

 

 

 

11,167

 

 

 

(445

)

Interest expense, net

 

1,737

 

 

 

899

 

 

 

3,118

 

 

 

28

 

EBITDA(1)

$

89,628

 

 

$

14,860

 

 

$

79,773

 

 

$

1,371

 

EBITDA margin(1)(2)

 

8.3

%

 

 

1.7

%

 

 

4.5

%

 

 

0.1

%

 

 

 

 

 

 

 

 

ADJUSTED EBITDA:

 

 

 

 

 

 

 

Other costs, net

 

10,225

 

 

 

13,607

 

 

 

21,235

 

 

 

18,130

 

Stock-based compensation (4)

 

2,189

 

 

 

1,874

 

 

 

15,084

 

 

 

6,702

 

Loss on debt extinguishment

 

27,824

 

 

 

51,052

 

 

 

27,824

 

 

 

51,052

 

Adjusted EBITDA(1)

$

129,866

 

 

$

81,393

 

 

$

143,916

 

 

$

77,255

 

Adjusted EBITDA margin(1)(2)

 

12.0

%

 

 

9.1

%

 

 

8.2

%

 

 

5.3

%

(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, loss on debt extinguishment and stock-based compensation expense, as described above.

(2)

Represents net income (loss), EBITDA and adjusted EBITDA divided by consolidated revenue of $1.1 billion and $899 million, for the three months ended June 30, 2024 and 2023, respectively and $1.8 billion and $1.5 billion for the six months ended June 30, 2024 and 2023, respectively.

(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.

(4)

In the first quarter of 2024, we revised the adjusted EBITDA calculation to exclude the impact of stock-based compensation expense. The prior period adjusted EBITDA has been recast to conform to current presentation.

GRANITE CONSTRUCTION INCORPORATED

ADJUSTED NET INCOME (LOSS) RECONCILIATION

(Unaudited - in thousands, except per share data)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Income (loss) before income taxes

$

59,550

 

 

$

(14,822

)

 

$

20,582

 

 

$

(50,063

)

Other costs, net

 

10,225

 

 

 

13,607

 

 

 

21,235

 

 

 

18,130

 

Transaction costs

 

4,313

 

 

 

2,460

 

 

 

9,940

 

 

 

4,954

 

Stock-based compensation (1)

 

2,189

 

 

 

1,874

 

 

 

15,084

 

 

 

6,702

 

Loss on debt extinguishment

 

27,824

 

 

 

51,052

 

 

 

27,824

 

 

 

51,052

 

Adjusted income before income taxes

$

104,101

 

 

$

54,171

 

 

$

94,665

 

 

$

30,775

 

 

 

 

 

 

 

 

 

Provision for (benefit from) income taxes

$

20,693

 

 

$

9,024

 

 

$

11,167

 

 

$

(445

)

Tax effect of adjusting items (2)

 

4,469

 

 

 

4,665

 

 

 

12,147

 

 

 

7,744

 

Adjusted provision for income taxes

$

25,162

 

 

$

13,689

 

 

$

23,314

 

 

$

7,299

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to Granite Construction

$

36,895

 

 

$

(17,000

)

 

$

5,912

 

 

$

(40,023

)

After-tax adjusting items

 

40,082

 

 

 

64,328

 

 

 

61,936

 

 

 

73,094

 

Adjusted net income attributable to Granite

$

76,977

 

 

$

47,328

 

 

$

67,848

 

 

$

33,071

 

 

 

 

 

 

 

 

 

Diluted weighted average shares of common stock

 

52,727

 

 

 

43,892

 

 

 

44,593

 

 

 

43,829

 

Add: dilutive effect of restricted stock units and Convertible Notes (3)

 

35

 

 

 

10,681

 

 

 

8,138

 

 

 

10,679

 

Less: dilutive effect of Convertible Notes (4)

 

(8,138

)

 

 

(10,095

)

 

 

(8,138

)

 

 

(10,095

)

Adjusted diluted weighted average shares of common stock

 

44,624

 

 

 

44,478

 

 

 

44,593

 

 

 

44,413

 

 

 

 

 

 

 

 

 

Diluted net income (loss) per share attributable to common shareholders

$

0.76

 

 

$

(0.39

)

 

$

0.13

 

 

$

(0.91

)

After-tax adjusting items per share attributable to common shareholders

 

0.97

 

 

 

1.45

 

 

 

1.39

 

 

 

1.65

 

Adjusted diluted earnings per share attributable to common shareholders

$

1.73

 

 

$

1.06

 

 

$

1.52

 

 

$

0.74

 

(1)

In the first quarter of 2024, we revised the adjusted net income calculation to exclude the impact of stock-based compensation expense. The prior period adjusted net income and diluted loss per share calculations have been recast to conform to current presentation.

(2)

The tax effect of adjusting items was calculated using the Company’s estimated annual statutory tax. The tax effect of adjusting items for the three and six months ended June 30, 2024 excludes $27 million of the loss on debt extinguishment as it was almost entirely non-tax deductible. The three and six months ended June 30, 2023 excludes the $51 million loss on debt extinguishment which was non-tax deductible.

(3)

The dilutive effect of the restricted stock units (“RSUs”) is included in the three and six months ended June 30, 2024 diluted earnings per share calculation and therefore no additional changes are required in the reconciliation herein. Due to net losses for the three and six months ended June 30, 2023, the unvested RSUs representing 586,000 and 584,000 shares, respectively, were excluded from the calculation of diluted earnings per share. As we have adjusted net income for those periods, these potential shares are dilutive and included in the reconciliation above. The dilutive effect of the 2.75% Convertible Notes and the 3.75% Convertible Notes was 35,000 and 8,138,000 shares for the three and six months ended June 30, 2024 and 10,095,000 shares each for the three and six months ended June 30, 2023.

(4)

When calculating diluted net income attributable to common shareholders, GAAP requires that we include potential share dilution from the convertible notes when not antidilutive. For the purposes of calculating adjusted diluted net income per share attributable to common shareholders, the dilutive effect of the convertible notes is removed to reflect the impact of the purchased equity derivative instruments which economically offsets dilution risk.

GRANITE CONSTRUCTION INCORPORATED

MATERIALS SEGMENT CASH GROSS PROFIT RECONCILIATION

(Unaudited - in thousands)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

Year Ended December 31,

 

 

2024

 

 

 

2023

 

 

 

2022

 

 

 

2024

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Gross Profit

$

29,339

 

 

$

23,932

 

 

$

17,314

 

 

$

26,796

 

 

$

19,586

 

 

$

18,927

 

 

$

71,344

 

 

$

65,613

 

Gross profit as a percent of revenue

 

17.8

%

 

 

16.0

%

 

 

12.7

%

 

 

11.1

%

 

 

9.5

%

 

 

8.9

%

 

 

13.8

%

 

 

13.2

%

Depreciation, depletion and amortization

 

9,961

 

 

 

6,382

 

 

 

6,153

 

 

 

19,720

 

 

 

11,792

 

 

 

11,952

 

 

 

26,766

 

 

 

23,948

 

Cash gross profit

 

39,300

 

 

 

30,314

 

 

 

23,467

 

 

 

46,516

 

 

 

31,378

 

 

 

30,879

 

 

 

98,110

 

 

 

89,561

 

Cash gross profit as a percent of revenue

 

23.9

%

 

 

20.3

%

 

 

17.3

%

 

 

19.3

%

 

 

15.2

%

 

 

14.6

%

 

 

19.0

%

 

 

18.0

%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240731240417/en/

Investors Wenjun Xu, 831-761-7861

Or

Media Erin Kuhlman, 831-768-4111