0000861459false00008614592023-07-272023-07-27

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
Date of report (Date of earliest event reported): July 27, 2023
 
GRANITE CONSTRUCTION INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
 
Delaware
(State or Other Jurisdiction
of Incorporation)
1-12911
(Commission
File Number)
77-0239383
(IRS Employer
Identification No.)

 
585 West Beach Street
Watsonville, California 95076
(Address of Principal Executive Offices) (Zip Code)
 
Registrant’s telephone number, including area code: (831) 724-1011
 

 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
 
☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valueGVANew York Stock Exchange
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 




Item 2.02.    Results of Operations and Financial Condition.
On July 27, 2023, Granite Construction Incorporated (the “Company”) issued a press release with respect to its earnings for the three and six months ended June 30, 2023, a copy of which is attached as Exhibit 99.1 and incorporated herein by reference.
The information set forth herein, including the exhibit is furnished pursuant to Item 2.02, “Results of Operations and Financial Condition” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall the information, including the exhibit, be deemed incorporated by reference in any filing of the Company, except as shall be expressly set forth by specific reference in such filing.
Item 9.01.    Financial Statements and Exhibits.
(d)Exhibits. The following exhibits are attached hereto and furnished herewith:
Exhibit NumberDescription
99.1
104Cover Page Interactive Data File (formatted as Inline XBRL)



SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
GRANITE CONSTRUCTION INCORPORATED
By:/s/ Elizabeth L. Curtis
Elizabeth L. Curtis
Executive Vice President and Chief Financial Officer
Date: July 27, 2023


Exhibit 99.1
Granite Reports Second Quarter 2023 Results
•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
WATSONVILLE, Calif. - 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
2023As Restated and RecastChange2023As RecastChange
20222022
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 revenue10.6 %11.3 %9.2 %10.7 %
Committed and Awarded ProjectsJune 30, 2023March 31, 2023Change - Quarter over QuarterJune 30, 2022Change - Year over Year
California$2,345,611 $1,913,634 $431,977 22.6 %$1,629,765 $715,846 43.9 %
Central1,599,538 1,750,375 (150,837)(8.6 %)1,518,970 80,568 5.3 %
Mountain1,492,439 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
2023Change2023As RecastChange
20222022
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 revenue16.0 %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, 2023December 31, 2022
ASSETS
Current assets
Cash and cash equivalents $214,446 $293,991 
Short-term marketable securities24,981 39,374 
Receivables, net636,797 463,987 
Contract assets288,349 241,916 
Inventories92,151 86,809 
Equity in construction joint ventures188,093 183,808 
Other current assets 46,376 37,411 
Total current assets1,491,193 1,347,296 
Property and equipment, net564,077 509,210 
Long-term marketable securities11,575 26,569 
Investments in affiliates86,611 80,725 
Goodwill78,603 73,703 
Right of use assets53,509 49,079 
Deferred income taxes, net31,304 22,208 
Other noncurrent assets59,706 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 payable382,458 334,392 
Contract liabilities 173,288 173,286 
Accrued expenses and other current liabilities 310,022 288,469 
Total current liabilities867,234 797,594 
Long-term debt458,692 286,934 
Long-term lease liabilities38,397 32,170 
Deferred income taxes, net4,571 1,891 
Other long-term liabilities66,234 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 capital470,511 470,407 
Accumulated other comprehensive income795 788 
Retained earnings429,797 481,384 
Total Granite Construction Incorporated shareholders’ equity901,542 953,016 
Non-controlling interests39,908 32,129 
Total equity941,450 985,145 
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
2023As Restated and Recast2023As Restated and Recast
20222022
Revenue
Construction$749,413 $713,221 $1,252,829 $1,291,487 
Materials149,139 136,026 205,791 211,646 
Total revenue898,552 849,247 1,458,620 1,503,133 
Cost of revenue
Construction670,259 632,969 1,136,970 1,152,756 
Materials125,207 118,712 186,205 192,719 
Total cost of revenue795,466 751,681 1,323,175 1,345,475 
Gross profit103,086 97,566 135,445 157,658 
Selling, general and administrative expenses64,563 60,121 137,685 130,241 
Other costs, net13,607 16,612 18,130 22,891 
Gain on sales of property and equipment, net(3,944)(8,915)(5,981)(9,513)
Operating income (loss)28,860 29,748 (14,389)14,039 
Other (income) expense
Loss on debt extinguishment51,052 — 51,052 — 
Interest income(3,232)(782)(6,994)(1,352)
Interest expense4,131 3,899 7,022 7,484 
Equity in income of affiliates, net(7,044)(4,876)(12,231)(6,165)
Other (income) expense, net(1,225)3,261 (3,175)4,569 
Total other expense, net43,682 1,502 35,674 4,536 
Income (loss) before income taxes(14,822)28,246 (50,063)9,503 
Provision for (benefit from) income taxes9,024 8,668 (445)15,020 
Net income (loss)(23,846)19,578 (49,618)(5,517)
Amount attributable to non-controlling interests6,846 (897)9,595 (2,535)
Net income (loss) attributable to Granite Construction Incorporated$(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:
Basic43,892 44,534 43,829 45,128 
Diluted43,892 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)
Six Months Ended June 30,2023As Restated
2022
Operating activities
Net loss$(49,618)$(5,517)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, depletion and amortization41,528 32,328 
Amortization related to long-term debt988 1,423 
Non-cash loss on debt extinguishment51,052 — 
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 compensation6,702 4,376 
Equity in net loss from unconsolidated joint ventures4,005 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 securities30,000 — 
Purchases of property and equipment(79,689)(73,216)
Proceeds from sales of property and equipment10,564 15,289 
Proceeds from company owned life insurance1,545 — 
Proceeds from the sale of business— 142,571 
Acquisition of business(26,933)— 
Issuance of notes receivable— (4,560)
Collection of notes receivable135 201 
Net cash provided by (used in) investing activities(64,378)30,317 
Financing activities
Proceeds from long-term debt55,000 50,000 
Debt principal repayments(249,589)(124,660)
Capped call transactions(53,035)— 
Redemption of warrant(13,201)— 
Proceeds from issuance of 3.75% Convertible Notes373,750 — 
Debt issuance costs(9,806)— 
Cash dividends paid(11,391)(11,857)
Repurchases of common stock(3,766)(70,374)
Contributions from non-controlling partners22,400 6,327 
Distributions to non-controlling partners(6,850)(6,700)
Other financing activities, net269 209 
Net cash provided by (used in) financing activities103,781 (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 period293,991 413,655 
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
2023As Restated and Recast2023As Restated and Recast
20222022
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 taxes9,024 8,668 (445)15,020 
Interest expense, net899 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, net13,607 16,612 18,130 22,891 
Loss on debt extinguishment51,052 — 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
2023As Restated and Recast2023As Restated and Recast
20222022
Income (loss) before income taxes$(14,822)$28,246 $(50,063)$9,503 
Other costs, net13,607 16,612 18,130 22,891 
Transaction costs2,460 — 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 items62,942 15,413 68,134 30,129 
Adjusted net income attributable to Granite Construction Incorporated $45,942 $34,094 $28,111 $22,077 
Diluted weighted average shares of common stock 43,892 52,295 43,829 45,128 
Add: dilutive effect of restricted stock units and Convertible Notes (2)10,681 — 10,679 7,802 
Less: dilutive effect of Convertible Notes (3)(10,095)(7,309)(10,095)(7,309)
Adjusted diluted weighted average shares of common stock44,478 44,986 44,413 45,621 
Diluted net income (loss) per share attributable to common shareholders$(0.39)$0.39 $(0.91)$(0.18)
After-tax adjusting items per share attributable to common shareholders1.42 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.



Contacts:
Investors
Wenjun Xu, 831-761-7861
Or
Media
Erin Kuhlman, 831-768-4111
Source: Granite Construction Incorporated

v3.23.2
Cover
Jul. 27, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jul. 27, 2023
Entity Registrant Name GRANITE CONSTRUCTION INCORPORATED
Entity Incorporation, State or Country Code DE
Entity File Number 1-12911
Entity Tax Identification Number 77-0239383
Entity Address, Address Line One 585 West Beach Street
Entity Address, City or Town Watsonville
Entity Address, State or Province CA
Entity Address, Postal Zip Code 95076
City Area Code 831
Local Phone Number 724-1011
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.01 par value
Trading Symbol GVA
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0000861459
Amendment Flag false
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