Granite Reports Fourth Quarter and Fiscal Year 2020 Results

Rhea-AI Summary

Granite Construction reported a net loss of ($145.1) million for FY 2020, reflecting a significant increase from a net loss of ($60.2) million in FY 2019. However, adjusted net income rose to $60.0 million, up from an adjusted net loss of ($27.2) million. Revenue grew 3.4% to $3.6 billion, with gross profit surging 55.5% to $344.8 million. Adjusted EBITDA rose to $189.7 million. Operating cash flow reached a record $268.5 million. The company anticipates low- to mid-single digit revenue growth for 2021.

Positive

• Adjusted net income increased to $60.0 million compared to an adjusted net loss of ($27.2) million in FY 2019.
• Operating cash flow reached a record $268.5 million, up from $111.4 million in the prior year.
• Revenue grew by 3.4% to $3.6 billion in 2020, compared to $3.4 billion in 2019.
• Gross profit increased by 55.5% to $344.8 million in FY 2020.

Negative

• Net loss totaled ($145.1) million for FY 2020, compared to ($60.2) million in FY 2019.
• Selling, general, and administrative expenses rose to $353.3 million, up from $308.0 million in the prior year.
• Committed and awarded projects decreased by 2.3% year-over-year to $4.3 billion.

Granite Construction Incorporated (NYSE: GVA) today announced results for the fourth quarter and year ended December 31, 2020.

Fiscal Year 2020 Results

Fiscal year 2020 net loss totaled ($145.1) million, or ($3.18) per diluted share, compared to a net loss of ($60.2) million, or ($1.29) per diluted share, in the prior year. Adjusted net income(1) for fiscal year 2020 totaled $60.0 million, or $1.30 per diluted share, compared to an adjusted net loss of ($27.2) million, or ($0.58) per diluted share, in the prior year. Adjusted net income (loss) excludes transaction costs(2), amortization of debt discount, non-recurring legal and accounting investigation costs and non-cash impairment charges.

• Revenue increased 3.4% in 2020 to $3.6 billion, compared to $3.4 billion in the prior year.
• Gross profit increased 55.5% in 2020 to $344.8 million, compared to $221.7 million in the prior year.
• Selling, general & administrative (“SG&A”) expenses in 2020 were $353.3 million or 9.9% of revenue, compared to $308.0 million or 8.9% of revenue in the prior year. The increase was primarily attributable to $35.6 million of non-recurring legal and accounting investigation fees.
• Adjusted EBITDA (1) increased to $189.7 million in 2020, compared to $71.7 million in the prior year.
• Committed and Award Projects (“CAP”) (3) totaled $4.3 billion, down 2.3% year-over-year. The year-over-year decrease in CAP reflects backlog burn of the Heavy Civil Operating Group Old Risk Portfolio(4) partially offset by successful pursuits of best-value procurement work.(5)
• Operating cash flow increased $157.0 million in 2020 to a Granite record $268.5 million, compared to $111.4 million in the prior year.
• Balance sheet remains strong with cash and marketable securities increasing $146.3 million in 2020 to $441.3 million, compared to $295.1 million in the prior year, while debt decreased $25.6 million to $338.8 million compared to $364.4 million in the prior year.

“Fiscal year 2020 was one of the most challenging years in Granite’s history as we navigated the pandemic and the Audit/Compliance Committee’s internal investigation,” said Kyle Larkin, Granite President. “Despite these challenges, our teams performed well, particularly in our vertically integrated businesses. Our continued focus on enhancing profit and cash flow produced record operating cash flow in 2020. Looking ahead, we remain committed to positioning our balance sheet and CAP for future growth and success. While we continue to manage risk in the Heavy Civil Operating Group, I am confident that we have established the appropriate parameters to not only execute on existing projects, but also rebuild the portfolio by prioritizing projects with an appropriate risk profile as we leverage federal, state and local infrastructure funding opportunities.”

Fourth Quarter 2020 Results

Results for the fourth quarter of 2020 were net income of $8.0 million, or $0.17 per diluted share compared to a net loss of ($19.4) million, or ($0.42) per diluted share, in the prior year. Adjusted net income(1) for the fourth quarter of 2020, which excludes transaction costs(2), amortization of debt discount and non-recurring legal and accounting investigation costs, was $18.8 million, or $0.41 per diluted share compared to an adjusted net loss of ($12.5) million, or ($0.27) per diluted share, in the prior year.

• Revenue increased 6.8% in the fourth quarter of 2020 to $945.6 million compared to $885.6 million in the fourth quarter of 2019.
• Gross profit increased to $106.6 million in the fourth quarter of 2020 compared to $51.2 million in the fourth quarter of 2019.
• SG&A expenses in the fourth quarter of 2020 were $100.8 million or 10.7% of revenue, compared to $83.4 million or 9.4% of revenue in the fourth quarter of 2019. The increase was primarily attributable to non-recurring legal and accounting investigation fees.
• Adjusted EBITDA (1) increased to $56.6 million in the fourth quarter of 2020 compared to $8.5 million in the fourth quarter of 2019.

(1) 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.
(2) Transaction costs include acquisition, integration, acquired intangible amortization expenses, acquisition-related depreciation and synergy costs.
(3) 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.
(4) 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.
(5) Best value procurement work includes construction management/general contractor, construction management at-risk, and progressive design build projects.

Fourth Quarter and Fiscal Year 2020 Segment Results (Unaudited - dollars in thousands)

Transportation Segment
		Three Months Ended December 31,																Years Ended December 31,
		2020				2019				Change								2020				2019				Change
Revenue		$	507,988			$	484,572			$	23,416				4.8	%		$	2,017,989			$	1,892,149			$	125,840				6.7	%
Gross profit			22,860				23,985				(1,125	)			(4.7	)%			133,748				55,001				78,747				143.2	%
Gross profit as a percent of revenue			4.5	%			4.9	%											6.6	%			2.9	%
December 31,		2020				2019				Change
Committed and Awarded Projects		$	3,192,588			$	3,458,632			$	(266,044	)			(7.7	)%

For the fourth quarter of 2020, Transportation segment revenue increased year-over-year primarily driven by growth in California operations. Quarterly segment gross profit margin of 4.5% reflects progress working through the Heavy Civil Operating Group Old Risk Portfolio which offset the exceptional performance of the vertically-integrated businesses. In the fourth quarter, the Heavy Civil Operating Group Old Risk Portfolio recognized $107.1 million of revenue and a gross loss of ($22.4) million compared to revenue of $135.6 million and a gross loss of ($25.4) million for the fourth quarter of 2019.

For the year ended December 31, 2020, revenue and gross profit increases were driven by strength in the Company’s vertically-integrated businesses, which was partially offset by burn of the Heavy Civil Operating Group Old Risk Portfolio. In fiscal year 2020, the Heavy Civil Operating Group Old Risk Portfolio reported $458.6 million of revenue and a gross loss of ($102.9) million compared to revenue of $609.0 million and a gross loss of ($154.6) million for the year ended December 31, 2019.

Segment CAP decreased $0.3 billion year-over-year to $3.2 billion as Granite burned through its backlog of the Heavy Civil Operating Group Old Risk Portfolio.

Water Segment
		Three Months Ended December 31,																Years Ended December 31,
		2020				2019				Change								2020				2019				Change
Revenue		$	122,337			$	123,174			$	(837	)			(0.7	)%		$	440,317			$	468,730			$	(28,413	)			(6.1	)%
Gross profit			19,758				(1,319	)			21,077				(1,598.0	)%			54,241				29,766				24,475				82.2	%
Gross profit as a percent of revenue			16.2	%			(1.1	)%											12.3	%			6.4	%
December 31,		2020				2019				Change
Committed and Awarded Projects		$	311,741			$	226,023			$	85,718				37.9	%

For the fourth quarter of 2020, Water segment revenue was flat and gross profit increased year-over-year primarily due to the absence of significant project write downs experienced in the fourth quarter of 2019.

For the year ended December 31, 2020, Water segment revenue decreased due to project delays and limited crew availability attributable to COVID-19. Segment gross profit increased year-over-year due to the absence of significant project write downs experienced in 2019.

Segment CAP increased $85.7 million year-over-year to $311.7 million, primarily reflecting the addition of five trenchless sewer contracts in the third quarter of 2020 totaling $148 million.

Specialty Segment
		Three Months Ended December 31,																Years Ended December 31,
		2020				2019				Change								2020				2019				Change
Revenue		$	210,304			$	189,040			$	21,264				11.2	%		$	723,391			$	727,537			$	(4,146	)			(0.6	)%
Gross profit			44,327				13,090				31,237				238.6	%			92,180				86,729				5,451				6.3	%
Gross profit as a percent of revenue			21.1	%			6.9	%											12.7	%			11.9	%
December 31,		2020				2019				Change
Committed and Awarded Projects		$	776,888			$	696,570			$	80,318				11.5	%

For the fourth quarter of 2020, Specialty segment revenue increased year-over-year driven by strong site development and renewable energy projects in both private and public markets. Segment reported gross profit for the quarter increased year-over-year, reflecting increased activity in the California operations and improved project execution compared to the fourth quarter of 2019.

For the fiscal year 2020, Specialty segment revenue decreased primarily due to COVID-19 headwinds. Segment gross profit for the fiscal year increased driven by strong project execution, partially offset by a write down related to disputed cost overruns on a tunneling project.

Specialty segment CAP increased $80.3 million year-over-year to $776.9 million, a record high, reflecting the results of the Company's relationships with private and public customers.

Materials Segment
		Three Months Ended December 31,																Years Ended December 31,
		2020				2019				Change								2020				2019				Change
Revenue		$	104,943			$	88,801			$	16,142				18.2	%		$	380,762			$	357,190			$	23,572				6.6	%
Gross profit			19,704				15,468				4,236				27.4	%			64,619				50,182				14,437				28.8	%
Gross profit as a percent of revenue			18.8	%			17.4	%											17.0	%			14.0	%

For the fourth quarter of 2020, Materials segment revenue and gross profit increased year-over-year compared to the prior year quarter reflecting strong sales volumes due in part to favorable weather in the West.

For the year ended December 31, 2020, Materials segment revenue and gross profit increased compared to 2019 largely due to increased sales volumes and operational efficiencies.

Outlook and Guidance

The Company’s expectations for 2021 are:

• Low- to mid-single digit revenue growth
• Adjusted EBITDA margin in the range of 5.5% to 7.5%

Conference Call

Granite will conduct a conference call today, March 30, 2021, at 8:00 a.m. Pacific Time/11:00 a.m. Eastern Time to discuss the results for the quarter and fiscal year ended December 31, 2020. The Company invites investors to listen to a live audio webcast on its Investor Relations website, investor.graniteconstruction.com. The live call is available by calling 1-866-807-9684; international callers may dial 1-412-317-5415. An archive of the webcast will be available on the website approximately one hour after the call. A replay will be available after the live call through April 6, 2021, by calling 1-877-344-7529, replay access code 10153446; 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 provider in the transportation, water infrastructure and mineral exploration markets. 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 the Granite website, and connect with Granite on LinkedIn, Twitter, 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, circumstances, activities, performance, growth, demand, strategic plans, outcomes, outlook, guidance, backlog, Committed and Awarded Projects (“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,” 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, circumstances, activities, performance, growth, demand, strategic plans, outcomes, outlook, guidance, backlog, 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 specifically 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
CONSOLIDATED BALANCE SHEETS
(Unaudited - in thousands, except share and per share data)
December 31,		2020				2019
ASSETS
Current assets
Cash and cash equivalents		$	436,136			$	262,273
Short-term marketable securities			—				27,799
Receivables, net			540,812				547,417
Contract assets			164,939				211,441
Inventories			82,362				88,885
Equity in construction joint ventures			188,798				193,110
Other current assets			42,199				46,016
Total current assets			1,455,246				1,376,941
Property and equipment, net			527,016				542,297
Long-term marketable securities			5,200				5,000
Investments in affiliates			75,287				84,176
Goodwill			116,777				264,279
Right of use assets			62,256				72,534
Deferred income taxes, net			41,839				50,158
Other noncurrent assets			96,375				106,703
Total assets		$	2,379,996			$	2,502,088
LIABILITIES AND EQUITY
Current liabilities
Current maturities of long-term debt		$	8,278			$	8,244
Accounts payable			359,160				400,775
Contract liabilities			171,321				95,737
Accrued expenses and other current liabilities			404,497				337,300
Total current liabilities			943,256				842,056
Long-term debt			330,522				356,108
Lease liabilities			46,769				58,618
Deferred income taxes, net			3,155				3,754
Other long-term liabilities			64,684				63,136
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: 45,668,541 shares as of December 31, 2020, 45,503,805 shares as of December 31, 2019			457				456
Additional paid-in capital			555,407				549,307
Accumulated other comprehensive loss			(5,035	)			(2,645	)
Retained earnings			424,835				594,353
Total Granite Construction Incorporated shareholders’ equity			975,664				1,141,471
Non-controlling interests			15,946				36,945
Total equity			991,610				1,178,416
Total liabilities and equity		$	2,379,996			$	2,502,088

---

GRANITE CONSTRUCTION INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - in thousands, except per share data)
		Three Months Ended December 31,								Years Ended December 31,
		2020				2019				2020				2019
Revenue
Transportation		$	507,988			$	484,572			$	2,017,989			$	1,892,149
Water			122,337				123,174				440,317				468,730
Specialty			210,304				189,040				723,391				727,537
Materials			104,943				88,801				380,762				357,190
Total revenue			945,572				885,587				3,562,459				3,445,606
Cost of revenue
Transportation			485,128				460,587				1,884,241				1,837,148
Water			102,579				124,493				386,076				438,964
Specialty			165,977				175,950				631,211				640,808
Materials			85,239				73,333				316,143				307,008
Total cost of revenue			838,923				834,363				3,217,671				3,223,928
Gross profit			106,649				51,224				344,788				221,678
Selling, general and administrative expenses			100,752				83,404				353,320				307,981
Acquisition and integration expenses			(20	)			1,530				53				15,299
Non-cash impairment charges			—				—				156,690				—
Gain on sales of property and equipment			(2,060	)			(4,767	)			(6,930	)			(18,703	)
Operating income (loss)			7,977				(28,943	)			(158,345	)			(82,899	)
Other expense (income)
Interest income			(283	)			(1,176	)			(3,096	)			(7,433	)
Interest expense			6,298				5,363				24,200				18,374
Equity in income of affiliates, net			(4,368	)			(1,295	)			(8,783	)			(11,454	)
Other income, net			(4,295	)			(2,914	)			(4,203	)			(5,308	)
Total other (income) expense			(2,648	)			(22	)			8,118				(5,821	)
Income (loss) before provision for (benefit from) income taxes			10,625				(28,921	)			(166,463	)			(77,078	)
Provision for (benefit from) income taxes			4,938				(8,860	)			(282	)			(20,376	)
Net income (loss)			5,687				(20,061	)			(166,181	)			(56,702	)
Amount attributable to non-controlling interests			2,323				681				21,064				(3,489	)
Net income (loss) attributable to Granite Construction Incorporated		$	8,010			$	(19,380	)		$	(145,117	)		$	(60,191	)
Net income (loss) per share attributable to common shareholders
Basic		$	0.18			$	(0.42	{ "@context": "https://schema.org", "@type": "FAQPage", "name": "Granite Reports Fourth Quarter and Fiscal Year 2020 Results FAQs", "mainEntity": [ { "@type": "Question", "name": "What were Granite Construction's 2020 revenue and net loss figures?", "acceptedAnswer": { "@type": "Answer", "text": "Granite Construction reported a revenue of $3.6 billion and a net loss of ($145.1) million for the fiscal year 2020." } }, { "@type": "Question", "name": "How did Granite Construction's adjusted net income change in 2020?", "acceptedAnswer": { "@type": "Answer", "text": "The adjusted net income for Granite Construction in 2020 was $60.0 million, compared to an adjusted net loss of ($27.2) million in 2019." } }, { "@type": "Question", "name": "What is the outlook for Granite Construction in 2021?", "acceptedAnswer": { "@type": "Answer", "text": "Granite Construction expects low- to mid-single digit revenue growth in 2021." } }, { "@type": "Question", "name": "What was the performance of Granite Construction's operating cash flow in 2020?", "acceptedAnswer": { "@type": "Answer", "text": "Granite Construction achieved record operating cash flow of $268.5 million in 2020, a significant increase from $111.4 million in the previous year." } } ] } FAQ What were Granite Construction's 2020 revenue and net loss figures? Granite Construction reported a revenue of $3.6 billion and a net loss of ($145.1) million for the fiscal year 2020. How did Granite Construction's adjusted net income change in 2020? The adjusted net income for Granite Construction in 2020 was $60.0 million, compared to an adjusted net loss of ($27.2) million in 2019. What is the outlook for Granite Construction in 2021? Granite Construction expects low- to mid-single digit revenue growth in 2021. What was the performance of Granite Construction's operating cash flow in 2020? Granite Construction achieved record operating cash flow of $268.5 million in 2020, a significant increase from $111.4 million in the previous year. Granite Construction Inc. NYSE:GVA GVA Rankings #1424 Ranked by Market Cap #1986 Ranked by Dividends GVA Latest News Dec 11, 2024 Granite Declares Quarterly Dividend Dec 5, 2024 Granite Named One of Newsweek’s America’s Most Responsible Companies for the Third Consecutive Year Nov 7, 2024 Granite Announces Phase 1 of the $425 Million Mosaic Quarter Development in Tucson, Arizona Oct 31, 2024 Granite Reports Third Quarter 2024 Results Oct 30, 2024 Granite Announces $42 Million P-928 Relay Ground Station Project in Guam GVA Stock Data Market Cap 3.99B Float 43.30M Insiders Ownership 0.97% Institutions Ownership 113.31% Short Percent 10.15% Industry Engineering & Construction Sector Heavy Construction Other Than Bldg Const - Contractors Website Link Country United States of America City WATSONVILLE Explore About Rhea-AI Sitemap Legal Terms of Use Cookie Notice Privacy Policy Links RSS feed Patreon Discord Server Facebook Reddit Google News © 2020-2024 StockTitan.net