Granite Reports Fourth Quarter and FY 2023 Results
- Q4 revenue surged by 18% to $934 million year-over-year.
- Adjusted diluted EPS stood at $0.82 for Q4.
- Operating cash flow increased by $150 million sequentially.
- CAP reached $5.5 billion, up by $1.1 billion year-over-year.
- Fiscal year 2023 revenue rose to $3.5 billion.
- Adjusted net income for 2023 was $140 million.
- Gross profit margin faced challenges due to legacy projects.
- 2024 guidance includes revenue of $3.8-4.0 billion and adjusted EBITDA margin of 9.0-11.0%.
- Strategic acquisitions and market growth expected to drive revenue and profitability in 2024.
- Investor conference call scheduled for February 22, 2024, to discuss results.
- Gross profit decreased by $3 million in Q4 to $94 million.
- Gross profit margin declined due to negative impacts from legacy projects.
- SG&A expenses were 8.8% of revenue in Q4.
- Adjusted EBITDA for Q4 was $74 million.
- Net income for 2023 decreased to $44 million.
- Adjusted net income for 2023 was $140 million.
- Materials segment saw a decrease in gross profit margin in Q4.
- No reconciliation provided for forward-looking adjusted EBITDA margin.
Insights
An 18% year-over-year increase in Q4 revenue to $934 million for Granite Construction Incorporated indicates a robust performance in a challenging economic environment. This growth, driven by the Construction and Materials segments, particularly in the California and Mountain Groups, showcases the company's ability to capitalize on regional market strengths. A critical observation is the reduction in gross profit by $3 million, despite the revenue increase, which suggests margin pressures that could be attributed to project-specific challenges or broader industry trends such as increased material costs or competitive bidding environments.
The substantial year-over-year increase in Committed and Awarded Projects (CAP) to $5.5 billion reflects a healthy backlog that can translate into stable future revenues. However, investors should monitor the progression of CAP into actual revenue, considering the potential for project delays or cancellations. The adjusted EBITDA increase to $74 million from $50 million in the prior year's quarter is a positive indicator of operational efficiency and could signal improved cash flow management, a critical factor for sustaining long-term growth and capital investments.
Granite Construction's strategic focus on developing home markets and the acquisition of exclusive rights to substantial reserves aligns with industry trends towards consolidation and vertical integration. This strategy can offer competitive advantages in cost control and supply chain management, particularly important in the construction sector where material availability and pricing can significantly impact margins. The reported operating cash flow at 5.2% of revenue, exceeding targets, indicates strong financial discipline and operational execution.
It is also noteworthy that the company's 2024 guidance remains unchanged, suggesting confidence in their business model and market position. However, the unchanged guidance amidst current market growth may raise questions about the company's conservative stance or potential unrecognized risks. Investors and stakeholders should balance the optimism from the reported growth with a cautious assessment of the unchanged future guidance, keeping an eye on external market factors that could affect the company's performance.
The impact of legacy projects such as the Tappan Zee and I-64 High Rise Bridge Projects on gross profit emphasizes the importance of risk management in contract negotiations and project execution in the construction industry. The adjustment of probable claim recovery estimates reflects the inherent uncertainties in dispute resolutions and their financial implications. Stakeholders should consider the company's approach to legal risk and its potential impact on future profitability.
Furthermore, the use of non-GAAP measures like adjusted EBITDA and adjusted net income provides a clearer picture of operational performance by excluding one-time charges and non-operational expenses. However, reliance on these measures requires careful scrutiny to ensure they do not obscure underlying business challenges. The lack of forward-looking GAAP reconciliations may limit transparency and should be taken into account when evaluating the company's financial health and management's performance.
-
Q4 revenue increased
18% year-over-year to$934 million -
Q4 diluted EPS of
$0.55 $0.82 -
Operating cash flow increased
$150 million -
Committed and Awarded Projects ("CAP") (2) of
$5.5 billion $1.1 billion - 2024 guidance continues to align with previously provided targets
Fourth Quarter 2023 Results
Net income totaled
-
Revenue increased
$145 million $934 million $789 million California and Mountain Groups up44% and14% , respectively, offset by a decrease in revenue of9% in the Central Group. -
Gross profit decreased
$3 million $94 million $97 million -
Selling, general, and administrative (“SG&A”) expenses were
$82 million 8.8% of revenue, compared to$81 million 10.2% of revenue, for the same period in the prior year. -
Adjusted EBITDA (1) totaled
$74 million $50 million
“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 $3.5 billion $3.3 billion -
Gross profit increased
$27 million $396 million $369 million -
SG&A expenses totaled
$294 million 8.4% of revenue, compared to$273 million 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 $210 million
(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 |
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
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 $4.0 billion -
Adjusted EBITDA margin in the range of
9.0% to11.0% -
SG&A expense in the range of
7.5% to8.0% of revenue - Mid-20s effective tax rate for adjusted net income
-
Capital expenditures of approximately
$130 million $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
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 |
|
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 |
|
(3) |
When calculating diluted net income attributable to common shareholders, GAAP requires that we include potential share dilution from 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
FAQ
What was Granite Construction Incorporated's (GVA) Q4 revenue?
What was the adjusted diluted EPS for Granite Construction in Q4?
What was the CAP for Granite Construction in the latest report?
What is the revenue guidance range provided for 2024 by Granite Construction?
What is the expected adjusted EBITDA margin range for Granite Construction in 2024?
When is the investor conference call scheduled for Granite Construction to discuss results?
