Granite Reports Fiscal Year 2018 Results
WATSONVILLE, Calif.--(BUSINESS WIRE)--Feb 20, 2019--Granite Construction Incorporated (NYSE: GVA) today reported fourth quarter 2018 net income of $6.5 million, with earnings per diluted share (EPS) of $0.14. Net income in 2018 totaled $42.4 million, with diluted EPS of $0.96. Fourth quarter and fiscal year 2018 results include after-tax acquisition-related expenses of $17.0 million and $60.4 million, respectively 2. Excluding the impact of these expenses, fourth quarter adjusted net income was $23.6 million 1, with adjusted diluted EPS of $0.50 1, and 2018 adjusted net income increased 48.8 percent year-over-year to $102.8 million 1, with adjusted diluted EPS of $2.34 1.
“Granite’s teams delivered record safety performance in 2018, adding to the foundation that supports the continued growth of our leadership position as America’s Infrastructure Company,” said Granite President and Chief Executive Officer James H. Roberts. “Our intentional emphasis on bidding and pricing discipline produced higher bid-day margins and contributed to more than 140 basis points of adjusted EBITDA margin 1 improvement over 2017. In alignment with our strategic plan, our 2018 acquisitions provide geographic and end-market diversification, generate strong margin contribution, and set the stage for exciting growth opportunities in our Transportation, Water, Specialty, and Materials segments as we enter 2019.
“This quarter’s results include the effects of erratic, wet weather in the West, and reflect negative forecast adjustments on legacy unconsolidated large projects attributable to increased visibility into costs as these projects near completion,” Roberts said. “As we begin 2019, only one of our three challenged legacy projects is less than 90 percent complete. We believe that our strategic portfolio shift to lower-risk, higher-margin work, coupled with our focus on more negotiated work, will result in steady improvement in Transportation segment performance throughout 2019.”
Roberts continued, “The defeat of the Proposition 6 ballot measure in last November’s election in California highlights the significant opportunities for growth in our Transportation segment. This result preserved the 10-year, $52.4 billion Senate Bill 1, the Road Repair and Accountability Act of 2017 (“SB 1”). SB 1 is one of more than two dozen state and local transportation and infrastructure measures passed since 2015 that will drive Granite’s growth and profitability for years to come. Strong demand trends also are evidence of growth opportunities for our growing Specialty segment, including tunnel, mining, power, and site development. Our Water segment backlog increased significantly year-over-year, and the segment’s bidding environment remains healthy against a backdrop of steadily improving public and municipal water infrastructure funding. We do not see the dynamics of this robust market slowing down for the foreseeable future.”
Fiscal Year 2018 Consolidated Results
Fourth Quarter and Fiscal Year 2018 Segment Results
Outlook and Guidance
“Our hard work in 2018 has Granite well prepared for a great 2019. With strong demand, healthy backlog, and near-record committed materials volumes, we are enthusiastically poised for a strong start to the year once Mother Nature allows,” Roberts said. “As America’s Infrastructure Company, Granite is extremely well positioned to produce excellent top- and bottom-line growth not only in 2019, but well beyond, delivering exceptional value for our key stakeholders,” Roberts said.
“We also are increasingly optimistic that infrastructure investment is an opportunity for political agreement that will produce significant, incremental, and long-term funding solutions for America’s crumbling infrastructure. We believe logic will ultimately prevail in Washington D.C. in 2019. Our optimistic outlook for 2019 and beyond excludes the potential enactment of a federal infrastructure bill, which, if passed, would further enhance long-term stability in the overall market, while driving growth most likely beginning in late-2020,” Roberts concluded.
The Company’s expectations for 2019 are:
• Low-teens consolidated revenue growth
• Adjusted EBITDA margin 1 of 8.5 percent to 9.5 percent
(1) Adjusted net income, adjusted diluted earnings per share, earnings before interest, taxes, depreciation, and amortization (EBITDA), 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.
(2) Acquisition-related expenses include acquisition and integration expenses, synergy costs, and acquired intangible amortization expenses.
(3) Granite contract backlog is comprised of unearned revenue and other awards.
Granite will conduct a conference call today, February 20, 2019, at 8 a.m. Pacific Time/11 a.m. Eastern Time to discuss the results of the quarter ended December 31, 2018. The Company invites investors to listen to a live audio webcast on its Investor Relations website, https://investor.graniteconstruction.com/. An archive of the webcast will be available on the website approximately one hour after the call. The live call also is available by calling 1-888-220-8451; international callers may dial 1-786-789-4776. A replay will be available after the live call through February 27, 2019, by calling 1-888-203-1112, replay access code 5007380; international callers may dial 1-719-457-0820.
Through its offices and subsidiaries nationwide, Granite Construction Incorporated (NYSE: GVA) is a full-suite provider in the transportation, water infrastructure and mineral exploration markets. Granite, America’s Infrastructure Company, is an award-winning firm in safety, quality and environmental stewardship, and has been honored as one of the World’s Most Ethical Companies by Ethisphere Institute for nine consecutive years. Granite is listed on the New York Stock Exchange and is part of the S&P MidCap 400 Index, the MSCI KLD 400 Social Index and the Russell 2000 Index. For more information, visit www.graniteconstruction.com.
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.
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 additional non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin, adjusted net income attributable to Granite Construction Incorporated and adjusted diluted earnings per share to indicate the impact of non-recurring acquisition, integration, acquired intangible amortization expenses and synergy costs related to the acquisition of Layne Christensen Company and LiquiForce.
Management believes that these additional non-GAAP financial measures facilitate comparisons between securities analysts, institutional investors and other interested parties. 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.
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Ron Botoff, 831-728-7532
Jacque Fourchy, 831-761-4741
KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA
INDUSTRY KEYWORD: TRANSPORT OTHER TRANSPORT NATURAL RESOURCES MINING/MINERALS URBAN PLANNING CONSTRUCTION & PROPERTY COMMERCIAL BUILDING & REAL ESTATE OTHER CONSTRUCTION & PROPERTY
SOURCE: Granite Construction Incorporated
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PUB: 02/20/2019 06:55 AM/DISC: 02/20/2019 06:55 AM