Granite Reports First Quarter 2021 Results

Rhea-AI Summary

Granite Construction reported a net loss of $66.2 million ($1.45 per diluted share) for Q1 2021, slightly worse than a $65.4 million loss in Q1 2020. Revenue rose 5.3% to $669.9 million, with gross profit increasing 166.1% to $63.3 million, reflecting a margin boost to 9.5%. Adjusted EBITDA improved significantly to $16.9 million from a loss of $18.4 million a year prior. Operating cash flow surged $58.2 million to $38.1 million. Cash and marketable securities increased to $464.2 million, while debt fell to $340.3 million.

Positive

• Revenue increased 5.3% to $669.9 million.
• Gross profit rose 166.1% to $63.3 million with a gross margin of 9.5%.
• Adjusted EBITDA improved to $16.9 million from a loss of $18.4 million.
• Operating cash flow increased $58.2 million to $38.1 million.
• Cash and marketable securities grew to $464.2 million, debt decreased to $340.3 million.

Negative

• Net loss of $66.2 million in Q1 2021 compared to a loss of $65.4 million in Q1 2020.

Granite Construction Incorporated (NYSE: GVA) today announced results for the first quarter ended March 31, 2021.

First Quarter 2021 Results

Results for the first quarter of 2021 were a net loss of ($66.2) million, or ($1.45) per diluted share, compared to a net loss of ($65.4) million, or ($1.44) per diluted share, in the prior year. Adjusted net loss⁽²⁾ for the first quarter of 2021, which excludes other costs⁽³⁾, non-cash impairments of goodwill, Transaction costs⁽⁴⁾, and amortization of debt discount related to our 2.75% convertible notes, was ($4.9) million, or ($0.11) per diluted share, compared to an adjusted net loss⁽²⁾ of ($31.6) million, or ($0.69) per diluted share, in the prior year.

• Revenue increased 5.3% to $669.9 million compared to $635.9 million in the prior year.
• Gross profit increased 166.1% to $63.3 million compared to $23.8 million in the prior year. Gross profit margin increased to 9.5% compared to 3.7% in the prior year.
• Selling, general & administrative ("SG&A") expenses were $75.7 million or 11.3% of revenue, compared to $73.2 million or 11.5% of revenue in the prior year. The increase was primarily attributable to a change in the fair market value of our Non-Qualified Deferred Compensation plan liability of $5.3 million year-over-year, which is primarily offset in other (income) expense, net.
• Adjusted EBITDA⁽²⁾ was $16.9 million compared to ($18.4) million in the prior year.
• CAP⁽¹⁾ totaled $4.45 billion, up slightly year-over-year and up 4% compared to the fourth quarter of 2020.
• Operating cash flow increased $58.2 million to $38.1 million compared to ($20.1) million in the prior year.
• Cash and marketable securities increased $216.6 million to $464.2 million compared to $247.6 million in the prior year, while debt decreased $23.8 million to $340.3 million compared to $364.2 million in the prior year.

“Building on momentum from 2020 to 2021, Granite completed a strong first quarter,” said Kyle Larkin, Granite President. “In our seasonally slowest quarter, we realized continued improvement in the Transportation segment with minimal losses in the Heavy Civil Operating Group Old Risk Portfolio⁽⁵⁾ and significant improvement in gross profit in our Specialty segment. We continued to build cash and marketable securities through positive operating cash flow and our balance sheet position remains strong even after considering the previously disclosed settlement agreement. This settlement marks another significant milestone for Granite as we move forward.”

“Additionally, we are encouraged by the bidding activity across the company during the first quarter,” continued Larkin. “Our major markets are healthy with robust opportunities. We are optimistic that the federal government will continue to work towards an infrastructure plan this year, which should only strengthen the environment.”

⁽¹⁾ CAP is comprised of contract backlog (unearned revenue and other awards), as well as awarded construction management/general contractor, construction manager at-risk, and progressive design build projects not yet included in contract backlog.

⁽²⁾ Adjusted net income (loss), adjusted diluted income (loss) 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⁾ Other costs includes the settlement charge, legal and accounting investigation fees, integration expenses related to the acquisition of the Layne Christensen Company (“Layne”) and restructuring charges related to our Heavy Civil Operating Group.

⁽⁴⁾ Transaction costs includes acquired intangible amortization expenses and acquisition related depreciation related to the acquisition of Layne and LiquiForce.

⁽⁵⁾ The Heavy Civil Operating Group Old Risk Portfolio include projects with risk criteria that do not align with Granite's new project selection criteria for the Heavy Civil Operating Group.

First Quarter 2021 Segment Results (Unaudited - dollars in thousands)

Transportation Segment
Three Months Ended March 31,		2021				2020

FAQ

What were Granite Construction's Q1 2021 financial results?

Granite Construction reported a net loss of $66.2 million and revenue of $669.9 million for Q1 2021.

How did Granite's gross profit change in Q1 2021?

Gross profit increased 166.1% to $63.3 million in Q1 2021.

What is Granite Construction's adjusted EBITDA for Q1 2021?

Adjusted EBITDA for Q1 2021 was $16.9 million.

What were the cash and debt levels for Granite Construction as of Q1 2021?

Cash and marketable securities rose to $464.2 million, while debt decreased to $340.3 million.

What was the change in Granite's operating cash flow in Q1 2021?

Operating cash flow increased by $58.2 million to $38.1 million in Q1 2021.