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Granite Reports Second-Quarter 2013 Financial Results

Granite Construction Incorporated (NYSE: GVA) today reported net income attributable to common shareholders of $2.7 million, or $0.07 per diluted share, for the second quarter of 2013 compared with $1.9 million, or $0.05 per diluted share, for the second quarter of 2012.

“Granite continues to focus on driving results through execution of our strategic initiatives both to grow and to diversify the business,” said James H. Roberts, Granite president and chief executive officer.

“The Large Projects business continues to perform as expected. Our record backlog includes the start-up of several new projects in the second half of 2013, which will recognize profit in 2014,” Roberts said. “While our vertically integrated business still faces market-driven, competitive headwinds, we are benefitting from synergies with our acquisition of Kenny.”

Second-quarter 2013 Financial Results

Total Company

  • Revenues for the quarter totaled $550.2 million, compared with $539.6 million in 2012.
  • Gross profit in the second quarter of 2013 was $51.2 million, compared with $51.9 million last year, with corresponding gross profit margins of 9.3 percent and 9.6 percent. Gross profit and gross profit margin in the quarter were driven by the competitive environment in the Construction segment and project timing in the Large Project Construction segment.
  • Selling, general and administrative expenses for the second quarter were $46.5 million, compared with $40.8 million in 2012. Kenny Construction Company (Kenny) accounted for nearly all of the increase.
  • Operating income for the quarter was $8.0 million compared with $14.1 million in the prior year.
  • Total contract backlog at June 30, 2013, was $2.8 billion compared with $2.0 billion at June 30, 2012. Backlog booked during the second quarter included $426.2 million associated with the IH-35E project in Texas and the I-440 project in North Carolina.

Construction

  • Construction revenues in the second quarter were $308.6 million compared with $245.1 million a year ago. Revenues from Kenny and certain Western markets outweighed weakness in California in the second quarter.
  • Gross profit margin was 8.2 percent compared with 7.3 percent a year ago. Construction profit performance improved despite continued margin pressure from an intensely competitive environment in key markets in the West.

Large Project Construction

  • Large Project Construction revenues in the second quarter were $181.4 million compared with $228.8 million in the same period last year, reflecting the timing of new projects.
  • Gross profit margin for the quarter of 12.2 percent was in line with 12.3 percent last year.

Construction Materials

  • Construction Materials revenue in the second quarter totaled $60.2 million compared with $63.3 million for the same period last year.
  • Gross profit margin was 6.6 percent compared with 7.9 percent a year ago, driven by ongoing weakness in certain geographic locations.

Guidance

The Company reaffirms the 2013 guidance provided in the first quarter 2013 earnings press release with two adjustments: Large Project Construction segment revenues are expected to be in the range of $850 million to $950 million, and cash flow from operations is expected to be $70 million to $100 million for the year.

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