- Record Committed and Awarded Projects ("CAP") (1) of $5.4
billion, a sequential increase of $334 million and year-over-year
increase of $1.2 billion
- Q2 revenue increased $50 million year-over-year led by the
California and Mountain Groups
- Q2 diluted EPS of $(0.39) and adjusted diluted EPS (2) of
$1.03
Granite Construction Incorporated (NYSE: GVA) today announced
results for the quarter ended June 30, 2023.
Second Quarter 2023 Results
Net loss totaled $17 million, or $(0.39) per diluted share,
compared to net income of $19 million, or $0.39 per diluted share,
for the same period in the prior year. Net loss in the quarter was
primarily attributable to a $51 million non-cash charge related to
the refinancing of our convertible bonds and a $12 million charge
for litigation. Adjusted net income (2) totaled $46 million, or
$1.03 per diluted share, compared to adjusted net income (2) of $34
million, or $0.76 per diluted share, in the same period in the
prior year.
- Revenue increased $50 million to $899 million compared to $849
million in the same period in the prior year. Both Construction and
Materials segments posted year-over-year increases with the
California and Mountain Groups more than offsetting a slight
decrease in revenue in the Central Group.
- Gross profit increased $5 million to $103 million compared to
$98 million in the same period in the prior year.
- Selling, general, and administrative (“SG&A”) expenses
increased $5 million to $65 million, or 7.2% of revenue, compared
to $60 million, or 7.1% of revenue, in the same period in the prior
year. The increase in SG&A expense was primarily due to higher
non-qualified deferred compensation expense of $4.4 million, which
was mostly offset in Other (income) expense, net.
- Adjusted EBITDA (2) was $80 million compared to $63 million in
the same period in the prior year.
"We ended the second quarter with a record CAP balance,” said
Kyle Larkin, Granite President and Chief Executive Officer. “Our
public and private markets remain very strong across our
geographies, and we believe we are winning the work necessary to
meet our 2024 growth and margin targets.”
“In the second quarter, as we expected, the California and
Mountain Groups grew construction revenue year-over-year, more than
offsetting the decrease in revenue in the Central Group. Our
materials business, which is integral to our home market strategy,
showed impressive revenue and gross profit margin growth over the
prior year as we recovered from a weather-impacted first quarter of
2023. I expect we will see continued year-over-year improvement in
materials and construction revenue and gross profit in the second
half of the year.”
“As a reminder, we disclosed our 2024 strategic plan revenue and
adjusted EBITDA margin targets back in the first quarter of 2021.
Since that time, we have taken steps to de-risk the company, grow a
higher-quality CAP portfolio, and with a renewed focus on
operational excellence, I believe we are well on our way to meet
these targets."
Six Months Ended June 30, 2023 Results
Net loss totaled $40 million, or $(0.91) per diluted share,
compared to a net loss of $8 million, or $(0.18) per diluted share,
in the prior year. In addition to the litigation and convertible
bond charges described above, the six months ended June 30, 2023
were significantly impacted by inclement weather in the first half
of the year compared to the same period in the prior year. Adjusted
net income (2) totaled $28 million, or $0.63 per diluted share,
compared to adjusted net income (2) of $22 million, or $0.48 per
diluted share, in the prior year.
- Revenue was flat at $1.5 billion compared to the same period in
the prior year as project teams and plants rebounded from the
weather-impacted first quarter.
- Gross profit decreased $23 million to $135 million compared to
$158 million in the same period in the prior year primarily due to
schedule impacts on the I-64 High Rise Bridge project and weather
impacts in the first quarter of 2023.
- SG&A expenses were $138 million or 9.4% of revenue,
compared to $130 million or 8.7% of revenue in the same period of
the prior year primarily due to higher non-qualified deferred
compensation expenses in 2023, which was mostly offset in Other
(income) expense, net. Increased stock-based compensation expense
also contributed to the higher SG&A expenses. These increases
for the six months ended June 30, 2023 were partially offset by the
sale of Inliner on March 16, 2022.
- Adjusted EBITDA (2) totaled $71 million compared to $69 million
in the prior year.
(1) 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. (2)
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.
Second Quarter 2023 Segment Results (Unaudited - dollars in
thousands)
Construction Segment
Three Months Ended June
30, 2023
Six Months Ended June
30, 2023
As Restated and Recast
As Recast
2023
2022
Change
2023
2022
Change
Revenue
$
749,413
$
713,221
$
36,192
5.1
%
$
1,252,829
$
1,291,487
$
(38,658
)
(3.0
)%
Gross profit
$
79,154
$
80,252
$
(1,098
)
(1.4
)%
$
115,859
$
138,731
$
(22,872
)
(16.5
)%
Gross profit as a percent of revenue
10.6
%
11.3
%
9.2
%
10.7
%
Committed and Awarded Projects
June 30, 2023
March 31, 2023
Change - Quarter over
Quarter
June 30, 2022
Change - Year over
Year
California
$
2,345,611
$
1,913,634
$
431,977
22.6
%
$
1,629,765
$
715,846
43.9
%
Central
1,599,538
1,750,375
(150,837
)
(8.6
%)
1,518,970
80,568
5.3
%
Mountain
1,492,439
1,439,944
52,495
3.6
%
1,064,925
427,514
40.1
%
Total
$
5,437,588
$
5,103,953
$
333,635
6.5
%
$
4,213,660
$
1,223,928
29.0
%
Revenue in the second quarter increased compared to the same
period in the prior year led by increases in the California and
Mountain Groups, which more than offset a decline in the Central
Group. The increase in revenue was driven by higher levels of CAP
going into the quarter that will continue to support the groups for
the remainder of 2023. For the six months ended June 30, 2023,
revenue declined compared to the same period in the prior year
primarily due to the wind down of several large projects in the
Central Group, as well as the sale of Granite Inliner in the first
quarter of 2022.
Gross profit and gross profit margin during the three and six
months ended June 30, 2023 were negatively impacted by additional
costs on the I-64 High Rise Bridge project in Virginia. The impact
to gross profit from this project in the second quarter was a $21
million decrease, and the impact after non-controlling interest was
$10 million. For the six months ended June 30, 2023, the impact to
gross profit from the project was $32 million and the impact after
non-controlling interest was $16 million. Final completion for the
project is expected early in the fourth quarter.
CAP increased $334 million sequentially and increased $1.2
billion year-over-year. Our markets have benefited from a strong
public funding environment, with California leading the way. We are
pursuing many opportunities that we believe will allow us to
continue to build strong quality CAP in the remainder of 2023.
Materials Segment
Three Months Ended June
30, 2023
Six Months Ended June
30, 2023
As Recast
2023
2022
Change
2023
2022
Change
Revenue
$
149,139
$
136,026
$
13,113
9.6
%
$
205,791
$
211,646
$
(5,855
)
(2.8
)%
Gross profit
$
23,932
$
17,314
$
6,618
38.2
%
$
19,586
$
18,927
$
659
3.5
%
Gross profit as a percent of revenue
16.0
%
12.7
%
9.5
%
8.9
%
Materials revenue and gross profit in the second quarter
increased compared to the same period of the prior year driven by
higher asphalt and aggregate sales prices and increased aggregate
sales volume. Aggregate sales volume increased 9% year-over-year,
while asphalt sales volumes were flat.
Outlook
Our guidance for 2023 is updated as noted below:
- Revenue in the range of $3.35 billion to $3.45 billion
- Adjusted EBITDA margin in the range of 7.5% to 8.5%
- SG&A expense in the range of 8.0% to 8.5% of revenue
- Mid-20s effective tax rate for adjusted net income
- Capital expenditures range of $100 million to $120 million
The Company does not provide a reconciliation of forward-looking
adjusted EBITDA margin to the most directly comparable
forward-looking GAAP measure of net income (loss) attributable to
Granite Construction Incorporated because the Company cannot
predict with a reasonable degree of certainty and without
unreasonable efforts certain excluded items that are inherently
uncertain and depend on various factors. For these reasons, we are
unable to assess the probable significance of the unavailable
information.
Kyle Larkin added, "Although our teams recovered well from the
wet first quarter and continued to win work across the company, we
are lowering our expectation for the amount of work that will be
completed in 2023. However, we continue to believe that our record
CAP will drive expected revenue growth in 2024 and 2025.
Additionally, we are narrowing the range of our guidance for
adjusted EBITDA margin to 7.5% to 8.5% for 2023 primarily due to
the losses incurred on the I-64 High Rise Bridge project. As I have
discussed in the past, we are executing on our plan and believe
that the work we have been adding to CAP supports our 2024 target
of 9.0% to 11.0% adjusted EBITDA margin."
Conference Call
Granite will conduct a conference call today, July 27, 2023, at
8:00 a.m. Pacific Time/11:00 a.m. Eastern Time to discuss the
results of the quarter ended June 30, 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 August 3, 2023, by calling
1-877-344-7529, replay access code 9668964; 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,
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, opportunities, circumstances, activities, performance,
growth, demand, strategic plans, shareholder value, outcomes,
outlook, 2023 fiscal year guidance for revenue, adjusted EBITDA
margin, SG&A expense, effective tax rate, and capital
expenditures, Committed and Awarded Projects (“CAP”), results, our
belief that we are winning the work necessary to meet both our
growth and margin targets in 2024, our expectation that we will
continue to see year-over-year improvement in materials and
construction revenue and gross profit in the second half of the
year, our 2024 strategic plan revenue and adjusted EBITDA margin
targets, our belief that we are well on our way to meet those
targets, higher levels of CAP going into the quarter will continue
to support the groups for the remainder of 2023, final completion
of the I-64 project is expected early in the fourth quarter, our
pursuit of opportunities that we believe will allow us to continue
to build strong quality CAP in the remainder of 2023, lowering
expectation for work to be completed in 2023, record backlog will
drive expected revenue growth in 2024 and 2025, narrowing adjusted
EBITDA margin guidance and our belief that the work we have been
adding to CAP supports our 2024 target of 9.0% to 11.0% adjusted
EBITDA margin 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, 2023 fiscal year guidance for revenue, adjusted EBITDA
margin, SG&A expense, effective tax rate, and capital
expenditures, CAP, results, our belief that we are winning the work
necessary to meet both our growth and margin targets in 2024, our
expectation that we will continue to see year-over-year improvement
in materials and construction revenue and gross profit in the
second half of the year, our 2024 strategic plan revenue and
adjusted EBITDA margin targets, our belief that we are well on our
way to meet those targets, higher levels of CAP going into the
quarter will continue to support the groups for the remainder of
2023, final completion of the I-64 project is expected early in the
fourth quarter, our pursuit of opportunities that we believe will
allow us to continue to build strong quality CAP in the remainder
of 2023, lowering expectation for work to be completed in 2023,
record backlog will drive expected revenue growth in 2024 and 2025,
narrowing adjusted EBITDA margin guidance and our belief that the
work we have been adding to CAP supports our 2024 target of 9.0% to
11.0% adjusted EBITDA margin. 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, 2023
December 31, 2022
ASSETS
Current assets
Cash and cash equivalents
$
214,446
$
293,991
Short-term marketable securities
24,981
39,374
Receivables, net
636,797
463,987
Contract assets
288,349
241,916
Inventories
92,151
86,809
Equity in construction joint ventures
188,093
183,808
Other current assets
46,376
37,411
Total current assets
1,491,193
1,347,296
Property and equipment, net
564,077
509,210
Long-term marketable securities
11,575
26,569
Investments in affiliates
86,611
80,725
Goodwill
78,603
73,703
Right of use assets
53,509
49,079
Deferred income taxes, net
31,304
22,208
Other noncurrent assets
59,706
59,143
Total assets
$
2,376,578
$
2,167,933
LIABILITIES AND EQUITY
Current liabilities
Current maturities of long-term debt
$
1,466
$
1,447
Accounts payable
382,458
334,392
Contract liabilities
173,288
173,286
Accrued expenses and other current
liabilities
310,022
288,469
Total current liabilities
867,234
797,594
Long-term debt
458,692
286,934
Long-term lease liabilities
38,397
32,170
Deferred income taxes, net
4,571
1,891
Other long-term liabilities
66,234
64,199
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: 43,918,798 shares as of
June 30, 2023 and 43,743,907 shares as of December 31, 2022
439
437
Additional paid-in capital
470,511
470,407
Accumulated other comprehensive income
795
788
Retained earnings
429,797
481,384
Total Granite Construction Incorporated
shareholders’ equity
901,542
953,016
Non-controlling interests
39,908
32,129
Total equity
941,450
985,145
Total liabilities and equity
$
2,376,578
$
2,167,933
GRANITE CONSTRUCTION
INCORPORATED
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited - in thousands, except
per share data)
Three Months Ended June
30, 2023
Six Months Ended June
30, 2023
As Restated and Recast
As Restated and Recast
2023
2022
2023
2022
Revenue
Construction
$
749,413
$
713,221
$
1,252,829
$
1,291,487
Materials
149,139
136,026
205,791
211,646
Total revenue
898,552
849,247
1,458,620
1,503,133
Cost of revenue
Construction
670,259
632,969
1,136,970
1,152,756
Materials
125,207
118,712
186,205
192,719
Total cost of revenue
795,466
751,681
1,323,175
1,345,475
Gross profit
103,086
97,566
135,445
157,658
Selling, general and administrative
expenses
64,563
60,121
137,685
130,241
Other costs, net
13,607
16,612
18,130
22,891
Gain on sales of property and equipment,
net
(3,944
)
(8,915
)
(5,981
)
(9,513
)
Operating income (loss)
28,860
29,748
(14,389
)
14,039
Other (income) expense
Loss on debt extinguishment
51,052
—
51,052
—
Interest income
(3,232
)
(782
)
(6,994
)
(1,352
)
Interest expense
4,131
3,899
7,022
7,484
Equity in income of affiliates, net
(7,044
)
(4,876
)
(12,231
)
(6,165
)
Other (income) expense, net
(1,225
)
3,261
(3,175
)
4,569
Total other expense, net
43,682
1,502
35,674
4,536
Income (loss) before income
taxes
(14,822
)
28,246
(50,063
)
9,503
Provision for (benefit from) income
taxes
9,024
8,668
(445
)
15,020
Net income (loss)
(23,846
)
19,578
(49,618
)
(5,517
)
Amount attributable to non-controlling
interests
6,846
(897
)
9,595
(2,535
)
Net income (loss) attributable to
Granite Construction Incorporated
$
(17,000
)
$
18,681
$
(40,023
)
$
(8,052
)
Net income (loss) per share
attributable to common shareholders:
Basic
$
(0.39
)
$
0.42
$
(0.91
)
$
(0.18
)
Diluted
$
(0.39
)
$
0.39
$
(0.91
)
$
(0.18
)
Weighted average shares
outstanding:
Basic
43,892
44,534
43,829
45,128
Diluted
43,892
52,295
43,829
45,128
(1)
As previously disclosed in our
2022 Annual Report on Form 10-K filed on February 21, 2023, the
restatement of our unaudited quarterly financial information for
the first three quarters in the year ended December 31, 2022 is
necessary. In addition to those restatements, the financial
information for the three and six months ended June 30, 2022
presented herein includes adjustments to retrospectively reclassify
the results of the former Water and Mineral Services businesses
from discontinued operations to continuing operations.
GRANITE CONSTRUCTION
INCORPORATED
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited - in thousands)
As Restated
Six Months Ended June 30,
2023
2022
Operating activities
Net loss
$
(49,618
)
$
(5,517
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation, depletion and
amortization
41,528
32,328
Amortization related to long-term debt
988
1,423
Non-cash loss on debt extinguishment
51,052
—
Gain on sale of business
—
(6,234
)
Gain on sales of property and equipment,
net
(5,981
)
(9,513
)
Deferred income taxes
—
2,545
Stock-based compensation
6,702
4,376
Equity in net loss from unconsolidated
joint ventures
4,005
17,228
Net income from affiliates
(12,231
)
(6,165
)
Other non-cash adjustments
(7
)
(84
)
Changes in assets and liabilities
(155,386
)
(133,665
)
Net cash used in operating activities
(118,948
)
(103,278
)
Investing activities
Purchases of marketable securities
—
(49,968
)
Maturities of marketable securities
30,000
—
Purchases of property and equipment
(79,689
)
(73,216
)
Proceeds from sales of property and
equipment
10,564
15,289
Proceeds from company owned life
insurance
1,545
—
Proceeds from the sale of business
—
142,571
Acquisition of business
(26,933
)
—
Issuance of notes receivable
—
(4,560
)
Collection of notes receivable
135
201
Net cash provided by (used in) investing
activities
(64,378
)
30,317
Financing activities
Proceeds from long-term debt
55,000
50,000
Debt principal repayments
(249,589
)
(124,660
)
Issuance of capped call
(53,035
)
—
Redemption of warrant
(13,201
)
—
Proceeds from issuance of 3.75%
Convertible Notes
373,750
—
Debt issuance costs
(9,806
)
—
Cash dividends paid
(11,391
)
(11,857
)
Repurchases of common stock
(3,766
)
(70,374
)
Contributions from non-controlling
partners
22,400
6,327
Distributions to non-controlling
partners
(6,850
)
(6,700
)
Other financing activities, net
269
209
Net cash provided by (used in) financing
activities
103,781
(157,055
)
Net decrease in cash, cash equivalents and
restricted cash
(79,545
)
(230,016
)
Cash, cash equivalents and $0 and $1,512
in restricted cash at beginning of period
293,991
413,655
Cash, cash equivalents and $0 in
restricted cash at end of period
$
214,446
$
183,639
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 and other costs,
net, which include investigation-related legal fees and settlement
charges, a litigation charge, reorganization costs, strategic
acquisition and divestiture expenses, and a gain on sale of a
business in 2022.
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;
- Transaction costs which includes acquired intangible
amortization expense and acquisition related depreciation related
to the acquisition of Layne and Liquiforce;
- Loss on debt extinguishment, and
- Income taxes related to the disposal of Inliner goodwill.
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, 2023
Six Months Ended June
30, 2023
As Restated and Recast
As Restated and Recast
2023
2022
2023
2022
EBITDA:
Net income (loss) attributable to Granite
Construction Incorporated
$
(17,000
)
$
18,681
$
(40,023
)
$
(8,052
)
Net income (loss) margin (2)
(1.9
)%
2.2
%
(2.7
)%
(0.5
)%
Depreciation, depletion and amortization
expense (3)
21,937
15,769
41,811
32,827
Provision for (benefit from) income
taxes
9,024
8,668
(445
)
15,020
Interest expense, net
899
3,117
28
6,132
EBITDA(1)
$
14,860
$
46,235
$
1,371
$
45,927
EBITDA margin(1)(2)
1.7
%
5.4
%
0.1
%
3.1
%
ADJUSTED EBITDA:
Other costs, net
13,607
16,612
18,130
22,891
Loss on debt extinguishment
51,052
—
51,052
—
Adjusted EBITDA(1)
$
79,519
$
62,847
$
70,553
$
68,818
Adjusted EBITDA margin(1)(2)
8.8
%
7.4
%
4.8
%
4.6
%
(1)
We define EBITDA as GAAP net income (loss)
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, and loss on debt extinguishment, as described
above.
(2)
Represents net income (loss), EBITDA and
adjusted EBITDA divided by consolidated revenue of $899 million and
$849 million, for the three months ended June 30, 2023 and 2022,
respectively and $1.5 billion and $1.5 billion for the six months
ended June 30, 2023 and 2022, 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.
GRANITE CONSTRUCTION
INCORPORATED
ADJUSTED NET INCOME (LOSS)
RECONCILIATION
(Unaudited - in thousands, except
per share data)
Three Months Ended June
30, 2023
Six Months Ended June
30, 2023
As Restated and Recast
As Restated and Recast
2023
2022
2023
2022
Income (loss) before income taxes
$
(14,822
)
$
28,246
$
(50,063
)
$
9,503
Other costs, net
13,607
16,612
18,130
22,891
Transaction costs
2,460
—
4,954
—
Loss on debt extinguishment
51,052
—
51,052
—
Adjusted income before income taxes
$
52,297
$
44,858
$
24,073
$
32,394
Provision for (benefit from) income
taxes
$
9,024
$
8,668
$
(445
)
$
15,020
Tax effect of goodwill disposal related to
sale of business
—
—
—
(10,070
)
Tax effect of adjusting items (1)
4,177
1,199
6,002
2,832
Adjusted provision for income taxes
$
13,201
$
9,867
$
5,557
$
7,782
Net income (loss) attributable to Granite
Construction Incorporated
$
(17,000
)
$
18,681
$
(40,023
)
$
(8,052
)
After-tax adjusting items
62,942
15,413
68,134
30,129
Adjusted net income attributable to
Granite Construction Incorporated
$
45,942
$
34,094
$
28,111
$
22,077
Diluted weighted average shares of common
stock
43,892
52,295
43,829
45,128
Add: dilutive effect of restricted stock
units and Convertible Notes (2)
10,681
—
10,679
7,802
Less: dilutive effect of Convertible Notes
(3)
(10,095
)
(7,309
)
(10,095
)
(7,309
)
Adjusted diluted weighted average shares
of common stock
44,478
44,986
44,413
45,621
Diluted net income (loss) per share
attributable to common shareholders
$
(0.39
)
$
0.39
$
(0.91
)
$
(0.18
)
After-tax adjusting items per share
attributable to common shareholders
1.42
0.37
1.54
0.66
Adjusted diluted earnings per share
attributable to common shareholders
$
1.03
$
0.76
$
0.63
$
0.48
(1)
The tax effect of adjusting items was
calculated using the Company’s estimated annual statutory tax rate.
The tax effect of adjusting items for the three and six months
ended June 30, 2023 excludes the $51 million loss on debt
extinguishment which is not tax deductible. The tax effect of
adjusting items for the three and six months ended June 30, 2022
excludes a $12 million accrual related to the resolution of the SEC
investigation which is not tax deductible.
(2)
Represents the dilutive effect on adjusted
net income attributable to Granite Construction Incorporated of
586,000, 584,000 and 493,000 related to restricted stock units and
10,095,000, 10,095,000 and 7,309,000 related to the 2.75%
Convertible Notes and the 3.75% Convertible Notes potentially
converting into shares for the three months ended June 30, 2023 and
the six months ended June 30, 2023 and 2022, respectively.
(3)
When calculating diluted net income (loss)
attributable to common shareholders, GAAP requires that we include
potential share dilution from the 2.75% Convertible Notes and the
3.75% Convertible Notes. For the purposes of calculating adjusted
diluted net income per share attributable to common shareholders,
the dilutive effect from the 2.75% Convertible Notes and 3.75%
Convertible Notes is removed to reflect the impact of the purchased
equity derivative instruments which offset any potential share
dilution above the $31.47 conversion price up to a share price of
$53.44 for the 2.75% Convertible Notes and above the $46.12
conversion price up to a share price of $79.83 for the 3.75%
Convertible Notes. The average share price did not exceed $53.44 in
any period.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230726258322/en/
Investors Wenjun Xu, 831-761-7861
Or
Media Erin Kuhlman, 831-768-4111
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