Granite Reports First-Quarter 2013 Financial Results

  Granite Reports First-Quarter 2013 Financial Results

  *First quarter revenues increased to $378.7 million, compared with $310.2
    million in the first quarter of 2012, including $63.7 million associated
    with the acquisition of Kenny Construction Company
  *Operating segment gross margins in line with last year
  *Balance sheet remains strong with $363.6 million in cash and marketable
    securities
  *Backlog totaled $2.4 billion compared with $1.7 billion at year-end

Business Wire

WATSONVILLE, Calif. -- May 09, 2013

Granite Construction Incorporated (NYSE: GVA) today reported a net loss of
$22.0 million, or $0.57 per diluted share, for the first quarter of 2013
compared with a net loss of $11.8 million, or $0.31 per diluted share, for the
first quarter of 2012.

“As expected, we had strong backlog growth in the quarter driven by
significant large project awards,” said James H. Roberts, Granite president
and chief executive officer. “We remain very encouraged by the quality of our
backlog and the opportunities to grow the company in 2013 and beyond. We are
slated to bid approximately $13 billion of Large Project work over the next 12
months, of which Granite’s share would be approximately $6 billion.

“Our integration of Kenny is progressing well, meeting our expectations, and
reinforcing the continued execution of our strategic plan. We are working
successfully to expand our presence into targeted end-markets such as power
delivery, water and wastewater infrastructure and tunneling, all of which have
attractive long-term fundamentals.”

First-quarter 2013 Financial Results

Total Company

  *Revenues for the quarter totaled $378.7 million, compared with $310.2
    million in 2012. Revenues included $63.7 million from Kenny Construction
    Company (“Kenny”), which Granite acquired on December 31, 2012.
  *Gross profit margin was 7.9 percent compared with 8.0 percent in 2012.
  *Selling, general and administrative expenses (“SG&A”) for the first
    quarter were $57.7 million, compared with $45.1 million in 2012. Kenny
    accounted for a significant portion of the increase.
  *Operating loss for the quarter was $26.0 million compared with $16.3
    million in the prior year.
  *Total contract backlog at March 31, 2013, was $2.4 billion compared with
    $1.7 billion at December 31, 2012 and $2.1 billion at March 31, 2012.
    Backlog at March 31, 2013 included $733.0 million associated with our
    portion of the Tappan Zee Bridge project in New York.

Construction

  *Construction revenues in the first quarter were $177.1 million compared
    with $117.9 million a year ago. The increase reflects $53.3 million
    associated with Kenny.
  *Gross profit margin was 7.5 percent as compared with 7.3 percent a year
    ago. Included in the first quarter of 2013 was a $1.6 million amortization
    charge for intangible assets (acquired backlog) associated with the Kenny
    acquisition. There were no significant changes in project profitability
    from revisions in estimates during the first quarter of 2013.

Large Project Construction

  *Large Project Construction revenues for the quarter were $171.7 million
    compared with $163.9 million at March 31, 2012.
  *Gross profit margin for the quarter was 13.2 percent compared with 13.6
    percent for the same period last year. Changes in project profitability
    from revisions in estimates during the first quarter of 2013 resulted in a
    net increase of $9.2 million.

Construction Materials

  *Construction Materials revenue for the quarter totaled $29.8 million
    compared with $25.6million for the same period last year.
  *Gross loss on the sale of construction materials was $6.0 million,
    essentially unchanged from a year ago.

Outlook and Guidance

“In the short-term, certain markets of our vertically integrated business
continue to face challenges as capacity exceeds demand for both our
construction services and construction materials. While we will not see a
turnaround overnight, the fundamentals of our business remain extremely solid
and our future is very bright,” Roberts said.

“As our 2013 guidance reflects, we anticipate growing the top line of our
business by at least double digits. We also anticipate that Granite will
continue to generate strong cash flow, allowing us to further implement our
strategic long-term plan. Our solid Large Project portfolio has created
significant opportunities to continue to grow this part of the business. In
addition to leveraging Kenny’s existing capabilities and presence in the
power, underground and tunnel markets, we are confident that a recovery in the
private construction market will help drive significant long-term operational
and financial performance.”

The Company’s guidance for 2013 is as follows: Construction segment revenues
are expected to total $1.25 billion to $1.4 billion, with a corresponding
gross profit margin of 8 percent to 10 percent. Large Project Construction
segment revenues are expected to be in the range of $850 million to $1.05
billion, with a corresponding gross profit margin of 12 percent to 14 percent.
Construction Materials revenues are expected to be $200 million to $230
million, with a corresponding gross profit margin of 6 percent to 9 percent.

Selling, general and administrative expenses are expected to be $210 million
to $220 million for the year. Gains on sales of property and equipment are
expected to be in the range of $10 million to $20 million, and net income
attributable to non-controlling interest in joint ventures for the total
company is expected to be $15 million to $20 million. Granite expects the tax
rate for 2013 to be in the range of 27 percent to 31 percent, with planned
capital expenditures of $40 million to $60 million. Cash flow from operations
is expected to total between $80 million and $120 million for the year.

Conference Call

Granite will conduct a conference call today, May 9, 2013 at 8 a.m. Pacific
Time/11 a.m. Eastern Time to discuss the results of the quarter ended March
31, 2013. Access to a live audio webcast is available at
http://investor.graniteconstruction.com/index.cfm. The live conference call
may be accessed by calling (877) 643-7158. The conference ID for the live call
is 46628022. The call will be recorded and will be available for replay
approximately two hours after the live audio webcast through May 16, 2013 by
calling (855) 859-2056. The conference ID for the replay is also 46628022.

About Granite

Through its offices and subsidiaries nationwide, Granite Construction
Incorporated (NYSE: GVA) is one of the nation’s largest infrastructure
contractors and construction materials producers. Incorporated in 1922,
Granite serves public- and private-sector clients on projects both small and
large. Granite’s project teams represent some of the best in the industry
serving owners in the transportation, power, federal, tunneling, underground,
and industrial/mining and water resources markets. In 2013, the Company was
recognized by the Ethisphere Institute as one of the World’s Most Ethical
Companies for the fourth year in a row. For more information please visit
www.graniteconstruction.com.

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, outcomes 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, outcomes 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
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited - in thousands, except share and per share data)

                                March 31,     December 31,   March 31,
                               2013          2012           2012
ASSETS
Current assets
Cash and cash equivalents         $ 260,773       $  321,990       $ 226,226
Short-term marketable               44,841           56,088          70,444
securities
Receivables, net                    260,231          325,529         208,707
Costs and estimated earnings        48,428           34,116          49,962
in excess of billings
Inventories                         66,291           59,785          67,782
Real estate held for                50,303           50,223          58,363
development and sale
Deferred income taxes               36,687           36,687          38,571
Equity in construction joint        171,265          105,805         91,951
ventures
Other current assets             37,401        31,834       34,882
Total current assets                976,220          1,022,057       846,888
Property and equipment, net         477,666          481,478         442,132
Long-term marketable                57,958           55,342          70,114
securities
Investments in affiliates           30,742           30,799          30,972
Goodwill                            53,593           55,419          9,900
Other noncurrent assets          82,531        84,392       69,949
Total assets                    $ 1,678,710   $  1,729,487   $ 1,469,955
LIABILITIES AND EQUITY
Current liabilities
Current maturities of             $ 8,353         $  8,353         $ 9,102
long-term debt
Current maturities of               4,132            10,707          19,765
non-recourse debt
Accounts payable                    169,940          202,541         129,480
Billings in excess of costs         124,609          139,692         87,370
and estimated earnings
Accrued expenses and other       188,685       169,979      148,196
current liabilities
Total current liabilities           495,719          531,272         393,913
Long-term debt                      270,148          270,148         208,501
Long-term non-recourse debt         7,628            922             1,371
Other long-term liabilities         49,231           47,124          50,011
Deferred income taxes               8,055            8,163           3,393
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 38,810,255 shares
as of March 31, 2013,               388              387             386
38,730,665 shares as of
December 31, 2012 and
38,621,370 shares as of March
31, 2012
Additional paid-in capital          118,265          117,422         110,432
Retained earnings                685,023       712,144      670,462
Total Granite Construction
Incorporated shareholders’          803,676          829,953         781,280
equity
Noncontrolling interests         44,253        41,905       31,486
Total equity                     847,929       871,858      812,766
Total liabilities and equity    $ 1,678,710   $  1,729,487   $ 1,469,955


GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - in thousands, except per share data)
                                                             
Three Months Ended March 31,                     2013          2012
Revenue                                                       
Construction                                       $ 177,119       $ 117,946
Large Project Construction                           171,714         163,928
Construction Materials                               29,750          25,623
Real Estate                                       121         2,663   
Total revenue                                     378,704     310,160 
Cost of revenue
Construction                                         163,918         109,366
Large Project Construction                           148,993         141,679
Construction Materials                               35,724          31,573
Real Estate                                       11          2,606   
Total cost of revenue                             348,646     285,224 
Gross profit                                         30,058          24,936
Selling, general and administrative expenses         57,659          45,090
Gain on restructuring                                498             1,902
Gain on sales of property and equipment           1,087       1,917   
Operating loss                                       (26,016 )       (16,335 )
Other (expense) income
Interest income                                      129             1,044
Interest expense                                     (3,646  )       (3,182  )
Equity in loss of affiliates                         (423    )       (617    )
Other income, net                                 1,103       6,871   
Total other (expense) income                      (2,837  )    4,116   
Loss before benefit from income taxes                (28,853 )       (12,219 )
Benefit from income taxes                         (9,027  )    (3,532  )
Net loss                                             (19,826 )       (8,687  )
Amount attributable to noncontrolling             (2,156  )    (3,086  )
interests
Net loss attributable to Granite Construction    $ (21,982 )   $ (11,773 )
Incorporated
                                                                   
Net loss per share attributable to common
shareholders:
Basic                                              $ (0.57   )     $ (0.31   )
Diluted                                            $ (0.57   )     $ (0.31   )
Weighted average shares of common stock:
Basic                                                38,610          38,265
Diluted                                           38,610      38,265  


GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - in thousands)
                                                             
Three Months Ended March 31,                      2013        2012    
Operating activities                                          
Net loss                                           $ (19,826 )     $ (8,687  )
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation, depletion and amortization             15,970          14,961
Gain on sales of property and equipment              (1,087  )       (1,917  )
Stock-based compensation                             5,386           4,196
Changes in assets and liabilities                 (55,096 )    (31,426 )
Net cash used in operating activities             (54,653 )    (22,873 )
Investing activities
Purchases of marketable securities                   (14,975 )       (24,987 )
Maturities of marketable securities                  20,000          15,000
Proceeds from sale of marketable securities          5,000           20,000
Additions to property and equipment                  (9,956  )       (9,225  )
Proceeds from sales of property and equipment        3,417           2,883
Other investing activities, net                   (57     )    (294    )
Net cash provided by investing activities         3,429       3,377   
Financing activities
Long-term debt principal payments                    —               (2,500  )
Cash dividends paid                                  (5,045  )       (5,021  )
Purchase of common stock                             (4,907  )       (3,837  )
Other financing activities, net                   (41     )    90      
Net cash used in financing activities             (9,993  )    (11,268 )
Decrease in cash and cash equivalents                (61,217 )       (30,764 )
Cash and cash equivalents at beginning of         321,990     256,990 
period
Cash and cash equivalents at end of period       $ 260,773    $ 226,226 


GRANITE CONSTRUCTION INCORPORATED
Business Segment Information
(Unaudited - dollars in thousands)
                                                       
             Three Months Ended March 31,
                              Large Project   Construction  
            Construction   Construction    Materials      Real Estate
                                                                   
2013
Revenue        $  177,119       $  171,714        $  29,750        $  121
Gross
profit            13,201           22,721            (5,974 )         110
(loss)
Gross
profit as         7.5     %        13.2     %        (20.1  )%        90.9   %
a percent
of revenue
                                
2012
Revenue        $  117,946       $  163,928        $  25,623        $  2,663
Gross
profit            8,580            22,249            (5,950 )         57
(loss)
Gross
profit as      7.3     %     13.6     %     (23.2  )%     2.1    %
a percent
of revenue


GRANITE CONSTRUCTION INCORPORATED
Contract Backlog by Segment
(Unaudited - dollars in thousands)
                                                                       
Contract
Backlog by     March 31, 2013            December 31, 2012         March 31, 2012
Segment
Construction   $ 740,259     30.8  %   $ 629,898     36.9  %   $ 622,240     29.9  %
Large
Project         1,660,056   69.2  %    1,077,417   63.1  %    1,460,674   70.1  %
Construction
Total          $ 2,400,315   100.0 %   $ 1,707,315   100.0 %   $ 2,082,914   100.0 %

Contact:

Granite Construction Incorporated
Jacque Fourchy, 831-761-4741
 
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