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For the fourth quarter of 2010, Granite reported a net loss of
"During the fourth quarter, we made solid progress towards reducing our
cost structure and strengthening the business for the long-term," said
Roberts continued, "We are undoubtedly operating in one of the most difficult economic environments our company has faced in decades. Despite these challenges, we grew backlog in both of our key segments, maintained a solid balance sheet, and continued to position the Company to recapture momentum in 2011."
Full Year 2010 Financial Results
Construction
Fourth Quarter 2010 Financial Results
Construction
Outlook
"The actions we are taking to reduce our cost structure are expected to lead to a substantial improvement in our bottom line results in 2011. In addition, we anticipate a positive impact to earnings from some large projects reaching the profit recognition threshold. While the pipeline of large project bidding opportunities remains full, our goal is to build high quality backlog that will provide the best return for our shareholders. The large project construction market offers a great deal of near-term growth potential for our business and we are excited about the opportunities that this segment of our business will provide.
"Our Construction segment is starting 2011 with a healthy backlog of work; however, we anticipate the competitive environment will remain very tough. Additionally, we expect the demand for our services and construction materials from the private-sector in the west will remain under pressure for the balance of the year.
"Funding for transportation infrastructure will continue to be a focus for us this year as we advocate for a multi-year highway bill that will provide the industry with much needed visibility. Despite these macro-economic challenges, we will continue to move forward with our strategy to operate our business as efficiently and effectively as possible," said Roberts.
Conference Call
Granite will conduct a conference call tomorrow,
About Granite
Forward-looking Statements
This news release contains statements that are not based on historical facts and which may be forward-looking in nature. Under the Private Securities Litigation Reform Act of 1995, a "safe harbor" may be provided to Granite for certain of these forward-looking statements. Words such as outlook, believes, expects, appears, may, will, should, anticipates and the negatives thereof or comparable terminology are intended to identify these forward-looking statements. These forward-looking statements are estimates reflecting the best judgment of Granite's senior management and are based on its current expectations and projections concerning future events, many of which are outside of Granite's control and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those risks described in Granite's Annual Report under "Item 1A. Risk Factors." Except as required by law, Granite undertakes no obligation to revise or update any forward-looking statements for any reason. As a result, the reader is cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release.
| GRANITE CONSTRUCTION INCORPORATED | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (Unaudited - in thousands, except share and per share data) | ||||||||
| December 31, | December 31, | |||||||
| 2010 | 2009 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 252,022 | $ | 338,956 | ||||
| Short-term marketable securities | 109,447 | 42,448 | ||||||
| Receivables, net | 243,986 | 280,252 | ||||||
| Costs and estimated earnings in excess of billings | 10,519 | 10,619 | ||||||
| Inventories | 51,018 | 45,800 | ||||||
| Real estate held for development and sale | 75,716 | 139,449 | ||||||
| Deferred income taxes | 53,877 | 31,034 | ||||||
| Equity in construction joint ventures | 74,716 | 67,693 | ||||||
| Other current assets | 42,555 | 50,467 | ||||||
| Total current assets | 913,856 | 1,006,718 | ||||||
| Property and equipment, net | 473,607 | 520,778 | ||||||
| Long-term marketable securities | 34,259 | 76,937 | ||||||
| Investments in affiliates | 31,410 | 24,644 | ||||||
| Other noncurrent assets | 82,401 | 80,498 | ||||||
| Total assets | $ | 1,535,533 | $ | 1,709,575 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities | ||||||||
| Current maturities of long-term debt | $ | 8,359 | $ | 15,017 | ||||
| Current maturities of non-recourse debt | 29,760 | 43,961 | ||||||
| Accounts payable | 129,700 | 131,251 | ||||||
| Billings in excess of costs and estimated earnings | 120,185 | 156,041 | ||||||
| Accrued expenses and other current liabilities | 150,773 | 159,843 | ||||||
| Total current liabilities | 438,777 | 506,113 | ||||||
| Long-term debt | 217,014 | 225,203 | ||||||
| Long-term non-recourse debt | 25,337 | 19,485 | ||||||
| Other long-term liabilities | 47,996 | 48,998 | ||||||
| Deferred income taxes | 10,774 | 27,220 | ||||||
| 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 in
2010 and 2009; |
387 | 386 | ||||||
| Additional paid-in capital | 104,232 | 94,633 | ||||||
| Retained earnings | 656,412 | 735,632 | ||||||
| Total Granite Construction Incorporated shareholders' equity | 761,031 | 830,651 | ||||||
| Noncontrolling interests | 34,604 | 51,905 | ||||||
| Total equity | 795,635 | 882,556 | ||||||
| Total liabilities and equity | $ | 1,535,533 | $ | 1,709,575 | ||||
| GRANITE CONSTRUCTION INCORPORATED | ||||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||||
| (Unaudited - in thousands, except per share data) | ||||||||||||||||||||||
| Three Months Ended | Years Ended | |||||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||||||||
| Revenue | ||||||||||||||||||||||
| Construction | $ | 214,127 | $ | 239,633 | $ | 943,245 | $ | 1,151,743 | ||||||||||||||
| Large project construction | 154,781 | 147,516 | 584,406 | 603,517 | ||||||||||||||||||
| Construction materials | 46,677 | 47,257 | 222,058 | 205,945 | ||||||||||||||||||
| Real estate | 1,643 | 342 | 13,256 | 2,274 | ||||||||||||||||||
| Total revenue | 417,228 | 434,748 | 1,762,965 | 1,963,479 | ||||||||||||||||||
| Cost of revenue | ||||||||||||||||||||||
| Construction | 187,831 | 190,758 | 847,536 | 942,256 | ||||||||||||||||||
| Large project construction | 137,108 | 108,812 | 517,099 | 483,417 | ||||||||||||||||||
| Construction materials | 44,151 | 43,637 | 210,040 | 184,705 | ||||||||||||||||||
| Real estate | 1,921 | 320 | 10,506 | 3,592 | ||||||||||||||||||
| Total cost of revenue | 371,011 | 343,527 | 1,585,181 | 1,613,970 | ||||||||||||||||||
| Gross profit | 46,217 | 91,221 | 177,784 | 349,509 | ||||||||||||||||||
| Selling, general and administrative expenses | 39,766 | 56,422 | 191,593 | 228,046 | ||||||||||||||||||
| Restructuring charges | 107,297 | 9,453 | 109,279 | 9,453 | ||||||||||||||||||
| Gain on sales of property and equipment | 2,331 | 10,291 | 13,748 | 17,169 | ||||||||||||||||||
| Operating (loss) income | (98,515 | ) | 35,637 | (109,340 | ) | 129,179 | ||||||||||||||||
| Other income (expense) | ||||||||||||||||||||||
| Interest income | 833 | 1,135 | 4,980 | 5,049 | ||||||||||||||||||
| Interest expense | (2,446 | ) | (5,170 | ) | (9,740 | ) | (15,756 | ) | ||||||||||||||
| Equity in income of affiliates | 933 | 3,336 | 756 | 7,696 | ||||||||||||||||||
| Other income, net | 1,114 | 4,405 | 6,968 | 12,683 | ||||||||||||||||||
| Total other income | 434 | 3,706 | 2,964 | 9,672 | ||||||||||||||||||
| (Loss) income before (benefit from) provision for income taxes | (98,081 | ) | 39,343 | (106,376 | ) | 138,851 | ||||||||||||||||
| (Benefit from) provision for income taxes | (32,695 | ) | 12,334 | (43,928 | ) | 38,650 | ||||||||||||||||
| Net (loss) income | (65,386 | ) | 27,009 | (62,448 | ) | 100,201 | ||||||||||||||||
| Amount attributable to noncontrolling interests | 15,367 | (10,976 | ) | 3,465 | (26,701 | ) | ||||||||||||||||
| Net (loss) income attributable to Granite Construction Incorporated | $ | (50,019 | ) | $ | 16,033 | $ | (58,983 | ) | $ | 73,500 | ||||||||||||
| Net (loss) income per share attributable to common shareholders: | ||||||||||||||||||||||
| Basic (1) | $ | (1.32 | ) | $ | 0.41 | $ | (1.56 | ) | $ | 1.91 | ||||||||||||
| Diluted (1) | $ | (1.32 | ) | $ | 0.41 | $ | (1.56 | ) | $ | 1.90 | ||||||||||||
| Weighted average shares of common stock: | ||||||||||||||||||||||
| Basic | 37,875 | 37,608 | 37,820 | 37,566 | ||||||||||||||||||
| Diluted | 37,875 | 37,723 | 37,820 | 37,683 | ||||||||||||||||||
| Note: | ||||||||||||||||||||||
| (1) Computed using the two-class method, except when in a net loss position | ||||||||||||||||||||||
| GRANITE CONSTRUCTION INCORPORATED | |||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||
| (Unaudited - in thousands) | |||||||||||||
| Years Ended December 31, | 2010 | 2009 | |||||||||||
| Operating activities | |||||||||||||
| Net (loss) income | $ | (62,448 | ) | $ | 100,201 | ||||||||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||||||
| Restructuring impairment charges | 93,862 | 1,449 | |||||||||||
| Other impairment charges | 821 | 4,110 | |||||||||||
| Inventory written down | 2,846 | 3,097 | |||||||||||
| Depreciation, depletion and amortization | 74,435 | 80,195 | |||||||||||
| Provision for (recovery of) doubtful accounts | 368 | (4,404 | ) | ||||||||||
| Gain on sales of property and equipment | (13,748 | ) | (17,169 | ) | |||||||||
| Change in deferred income taxes | (39,289 | ) | 21,107 | ||||||||||
| Stock-based compensation | 13,040 | 10,765 | |||||||||||
| Loss (gain) from marketable securities | 680 | (485 | ) | ||||||||||
| Gain on company owned life insurance | (3,321 | ) | (2,551 | ) | |||||||||
| Equity in income of affiliates | (756 | ) | (7,696 | ) | |||||||||
| Changes in assets and liabilities, net of the effects of consolidations | (37,172 | ) | (124,318 | ) | |||||||||
| Net cash provided by operating activities | 29,318 | 64,301 | |||||||||||
| Investing activities | |||||||||||||
| Purchases of marketable securities | (121,626 | ) | (99,011 | ) | |||||||||
| Maturities of marketable securities | 74,000 | 36,970 | |||||||||||
|
Proceeds from sale of marketable securities |
15,000 | 7,966 | |||||||||||
| Purchase of company owned life insurance | (8,195 | ) | (8,000 | ) | |||||||||
| Proceeds from company owned life insurance | 2,078 | - | |||||||||||
| Additions to property and equipment | (37,004 | ) | (87,645 | ) | |||||||||
| Proceeds from sales of property and equipment | 21,148 | 23,020 | |||||||||||
| Purchase of private preferred stock | (6,400 | ) | - | ||||||||||
| Contributions to affiliates, net | (1,658 | ) | (4,969 | ) | |||||||||
| Issuance of notes receivable | (1,313 | ) | (11,314 | ) | |||||||||
| Collection of notes receivable | 3,126 | 13,104 | |||||||||||
| Other investing activities | 409 | - | |||||||||||
| Net cash used in investing activities | (60,435 | ) | (129,879 | ) | |||||||||
| Financing activities | |||||||||||||
| Proceeds from long-term debt | 1,918 | 10,750 | |||||||||||
| Long-term debt principal payments | (19,829 | ) | (18,856 | ) | |||||||||
| Cash dividends paid | (20,150 | ) | (20,057 | ) | |||||||||
| Purchase of common stock | (3,641 | ) | (3,431 | ) | |||||||||
| Contributions from noncontrolling partners | 7,321 | 420 | |||||||||||
| Distributions to noncontrolling partners | (21,498 | ) | (26,019 | ) | |||||||||
| Other financing activities, net | 62 | 884 | |||||||||||
| Net cash used in financing activities | (55,817 | ) | (56,309 | ) | |||||||||
| Decrease in cash and cash equivalents | (86,934 | ) | (121,887 | ) | |||||||||
|
Cash and cash equivalents at beginning of year |
338,956 | 460,843 | |||||||||||
|
Cash and cash equivalents at end of year |
$ | 252,022 | $ | 338,956 | |||||||||
| GRANITE CONSTRUCTION INCORPORATED | ||||||||||||||||||||||||||||||||||||||||
| Business Segment Information | ||||||||||||||||||||||||||||||||||||||||
| (Unaudited - in thousands) | ||||||||||||||||||||||||||||||||||||||||
| Three Months Ended December 31, | Years Ended December 31, | |||||||||||||||||||||||||||||||||||||||
| Construction | Large Project Construction | Construction Materials | Real Estate | Construction | Large Project Construction | Construction Materials | Real Estate | |||||||||||||||||||||||||||||||||
| 2010 | ||||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 214,127 | $ | 154,781 | $ | 46,677 | $ | 1,643 | $ | 943,245 | $ | 584,406 | $ | 222,058 | $ | 13,256 | ||||||||||||||||||||||||
| Gross profit (loss) | $ | 26,296 | $ | 17,673 | $ | 2,526 | $ | (278 | ) | $ | 95,709 | $ | 67,307 | $ | 12,018 | $ | 2,750 | |||||||||||||||||||||||
| Gross profit (loss) as a percent of revenue | 12.3 | % | 11.4 | % | 5.4 | % | -16.9 | % | 10.1 | % | 11.5 | % | 5.4 | % | 20.7 | % | ||||||||||||||||||||||||
| 2009 | ||||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 239,633 | $ | 147,516 | $ | 47,257 | $ | 342 | $ | 1,151,743 | $ | 603,517 | $ | 205,945 | $ | 2,274 | ||||||||||||||||||||||||
| Gross profit (loss) | $ | 48,875 | $ | 38,704 | $ | 3,620 | $ | 22 | $ | 209,487 | $ | 120,100 | $ | 21,240 | $ | (1,318 | ) | |||||||||||||||||||||||
| Gross profit (loss) as a percent of revenue | 20.4 | % | 26.2 | % | 7.7 | % | 6.4 | % | 18.2 | % | 19.9 | % | 10.3 | % | -58.0 | % | ||||||||||||||||||||||||
| GRANITE CONSTRUCTION INCORPORATED | |||||||||||||||||||||
| Contract Backlog by Segment | |||||||||||||||||||||
| (Unaudited - in thousands) | |||||||||||||||||||||
| December 31, 2010 | December 31, 2009 | ||||||||||||||||||||
| Construction | $ | 465,271 | 24.5 | % | $ | 359,359 | 25.6 | % | |||||||||||||
| Large Project Construction | 1,433,899 | 75.5 | % | 1,042,629 | 74.4 | % | |||||||||||||||
| Total | $ | 1,899,170 | 100.0 | % | $ | 1,401,988 | 100.0 | % | |||||||||||||
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