Latest news with #KyleLarkin
Yahoo
4 days ago
- Business
- Yahoo
Granite continues buying spree as backlog hits $6.1B
This story was originally published on Construction Dive. To receive daily news and insights, subscribe to our free daily Construction Dive newsletter. Granite Construction continued paving a profitable path in the second quarter while racking up a record amount of backlog and buying two aggregate suppliers. The Watsonville, California-based road builder, materials supplier and infrastructure firm purchased Hattiesburg, Mississippi-based Warren Paving and Arroyo Grande, California-headquartered Papich Construction for a combined price of $710 million. Granite's continued investment in material suppliers reflects the firm's bullishness on both public and private infrastructure work, along with the booming data center market. Those facilities, along with computer chips and racks of servers, need roads and parking lots to access them as well. Two aggregate purchases Warren Paving, which owns a quarry, 11 aggregate yards and three asphalt plants along with 170 owned and leased barges on the Mississippi River system, will expand Granite's materials business in the Southeast, while building on its buying spree in the region. In late 2023, Granite scooped up Lehman-Roberts and Memphis Stone & Gravel, both of Memphis, for a combined $278 million. Then last year, it acquired Brookhaven, Mississippi-based aggregate supplier Dickerson & Bowen. On an earnings call Aug. 7 to discuss the firm's second-quarter results, CEO Kyle Larkin said Warren Paving will complement those previous purchases. 'Warren Paving's logistics expertise should allow us to supply materials to certain Lehman-Roberts and Dickerson & Bowen asphalt plants and positions us to expand the distribution network as we continue to grow our Southeast platform investment,' Larkin said on the call. He also highlighted opportunities to supply data center jobsites in the region, which has been attractive to owners looking for cheap land, plentiful power and water and a robust labor pool. 'We believe private investment will ramp up in the region, whether through data centers or other large commercial developments.' In California, Papich will expand Granite's operations along the state's Central Coast and Valley, an area where it currently has less of a presence. 'It's complementary to our current footprint,' Larkin said. The addition of the two businesses will add approximately $425 million to Granite's revenue annually, the company said. It raised its revenue guidance for 2025 accordingly to between $4.35 billion and $4.55 billion and anticipates approximately $150 million in revenue from the units in the remainder of the year. By the numbers The deal was the highlight of a quarter that also saw Granite grow its backlog — which the company calls Committed or Awarded Projects — to $6.1 billion, a company high. That's $488 million more, or 9% higher, than a year ago. Revenue of $1.13 billion increased 4% from $1.08 billion a year ago. The company also grew profits to $71.7 million, nearly doubling the $36.9 million of net income it reported for 2024's second quarter. Larkin attributed the higher revenue, backlog and profits to a robust bidding and funding environment, particularly in the company's core infrastructure markets, as well as more efficient operations and integration within the company. 'In California and across our footprint, we continue to see a healthy list of project bidding opportunities in both the public and private markets,' Larkin said. He also said money from the Infrastructure Investment and Jobs Act, passed in 2021, hasn't reached its apex, which he expects to come in 2026 or 2027. 'IIJA funding continues to be strong,' Larkin said. 'I think that's pretty universal in all the markets that we're in. And just as a reminder, the spending to date on the IIJA is still less than 50%. And so we haven't seen, in our opinion, that peak yet.' Recommended Reading Granite JV lands $158M missile defense project
Yahoo
08-08-2025
- Business
- Yahoo
Granite Construction (NYSE:GVA) Reports Sales Below Analyst Estimates In Q2 Earnings, But Stock Soars 8%
Construction and construction materials company Granite Construction (NYSE:GVA) missed Wall Street's revenue expectations in Q2 CY2025 as sales rose 4% year on year to $1.13 billion. On the other hand, the company's full-year revenue guidance of $4.45 billion at the midpoint came in 3.5% above analysts' estimates. Its non-GAAP profit of $1.93 per share was 13.9% above analysts' consensus estimates. Is now the time to buy Granite Construction? Find out in our full research report. Granite Construction (GVA) Q2 CY2025 Highlights: Revenue: $1.13 billion vs analyst estimates of $1.16 billion (4% year-on-year growth, 3% miss) Adjusted EPS: $1.93 vs analyst estimates of $1.70 (13.9% beat) Adjusted EBITDA: $152.4 million vs analyst estimates of $143.2 million (13.5% margin, 6.4% beat) The company lifted its revenue guidance for the full year to $4.45 billion at the midpoint from $4.3 billion, a 3.5% increase Operating Margin: 9.2%, up from 7.9% in the same quarter last year Free Cash Flow was -$27.03 million compared to -$40.98 million in the same quarter last year Market Capitalization: $4.08 billion "In the second quarter, we capitalized on the strong bidding opportunities we are seeing in both the public and private markets and increased our CAP to $6.1 billion, which is a new record,' said Kyle Larkin, Granite President and Chief Executive Officer. Company Overview Having played a role in the construction of the Hoover Dam, Granite Construction (NYSE:GVA) is a provider of infrastructure solutions for roads, bridges, and other projects. Revenue Growth A company's long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Unfortunately, Granite Construction's 4.1% annualized revenue growth over the last five years was sluggish. This wasn't a great result compared to the rest of the industrials sector, but there are still things to like about Granite Construction. We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Granite Construction's annualized revenue growth of 11.9% over the last two years is above its five-year trend, suggesting its demand recently accelerated. This quarter, Granite Construction's revenue grew by 4% year on year to $1.13 billion, falling short of Wall Street's estimates. Looking ahead, sell-side analysts expect revenue to grow 7.6% over the next 12 months, a deceleration versus the last two years. Still, this projection is above the sector average and suggests the market sees some success for its newer products and services. Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link. Operating Margin Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It's also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes. Granite Construction was profitable over the last five years but held back by its large cost base. Its average operating margin of 2% was weak for an industrials business. This result isn't too surprising given its low gross margin as a starting point. On the plus side, Granite Construction's operating margin rose by 9.2 percentage points over the last five years, as its sales growth gave it operating leverage. In Q2, Granite Construction generated an operating margin profit margin of 9.2%, up 1.3 percentage points year on year. Since its gross margin expanded more than its operating margin, we can infer that leverage on its cost of sales was the primary driver behind the recently higher efficiency. Earnings Per Share We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company's growth is profitable. Granite Construction's EPS grew at an astounding 37.6% compounded annual growth rate over the last five years, higher than its 4.1% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded. We can take a deeper look into Granite Construction's earnings to better understand the drivers of its performance. As we mentioned earlier, Granite Construction's operating margin expanded by 9.2 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don't tell us as much about a company's fundamentals. Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business. For Granite Construction, its two-year annual EPS growth of 42% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base. In Q2, Granite Construction reported adjusted EPS at $1.93, up from $1.73 in the same quarter last year. This print easily cleared analysts' estimates, and shareholders should be content with the results. We also like to analyze expected EPS growth based on Wall Street analysts' consensus projections, but there is insufficient data. Key Takeaways from Granite Construction's Q2 Results We were impressed by Granite Construction's optimistic full-year revenue guidance, which blew past analysts' expectations. We were also glad its EBITDA outperformed Wall Street's estimates. On the other hand, its revenue missed. Overall, we think this was a decent quarter with some key metrics above expectations. The stock traded up 8% to $100.89 immediately following the results. Sure, Granite Construction had a solid quarter, but if we look at the bigger picture, is this stock a buy? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it's free.
Business Wire
07-08-2025
- Business
- Business Wire
Granite Reports Second Quarter 2025 Results
WATSONVILLE, Calif.--(BUSINESS WIRE)--Granite Construction Incorporated (NYSE: GVA) today announced results for the quarter ended June 30, 2025. Second Quarter 2025 Results Net income attributable to Granite totaled $72 million, or $1.42 per diluted share, compared to net income attributable to Granite of $37 million, or $0.76 per diluted share, for the same period in the prior year. Adjusted net income attributable to Granite (2) totaled $86 million, or $1.93 per diluted share, compared to adjusted net income attributable to Granite (2) of $77 million, or $1.73 per diluted share, for the same period in the prior year. Revenue increased $43 million to $1.13 billion compared to $1.08 billion for the same period in the prior year. Gross profit increased $34 million to $199 million compared to $165 million for the same period in the prior year. Selling, general, and administrative ('SG&A') expenses increased $16 million to $86 million, or 7.6% of revenue, compared to $70 million, or 6.5% of revenue, for the same period in the prior year. The increase in SG&A expenses was primarily due to additional salaries and related expenses, coupled with a greater percentage of annual incentive compensation expense compared to the same period in the prior year. Adjusted EBITDA (2) increased $22 million to $152 million compared to $130 million for the same period in the prior year. "In the second quarter, we capitalized on the strong bidding opportunities we are seeing in both the public and private markets and increased our CAP to $6.1 billion, which is a new record,' said Kyle Larkin, Granite President and Chief Executive Officer. 'I am pleased with each of our segments' execution in the quarter, and we believe our continued focus on operational excellence should continue to produce margin expansion. We are also excited by the opportunities that come with the two acquisitions that we announced yesterday. The acquisition in the Southeast gives us a significant, high-quality aggregate supply on the Mississippi River and provides us with many opportunities to further leverage the supply network to grow our southeast platform. The acquisition in California strengthens our business in the central portion of the state with additional aggregates as we welcome a leading civil construction business into our portfolio. With our upsized credit facility and strong cash generation, I believe we will be able to continue to complete acquisitions to strengthen and expand our home markets in the upcoming quarters.' Six Months Ended June 30, 2025 Results Net income attributable to Granite totaled $38 million, or $0.84 per diluted share, compared to $6 million, or $0.13 per diluted share, for the same period in the prior year. Adjusted net income attributable to Granite (2) totaled $87 million, or $1.94 per diluted share, compared to $68 million, or $1.52 per diluted share, for the same period in the prior year. Revenue increased $71 million to $1.83 billion, compared to $1.75 billion for the same period in the prior year. Gross profit increased $64 million to $283 million, compared to $219 million for the same period in the prior year. SG&A expenses increased $44 million to $202 million, or 11.1% of revenue, compared to $158 million, or 9.0% of revenue, for the same period in the prior year. The increase in SG&A expenses was primarily due to additional stock-based compensation expenses and salaries and related expenses, coupled with a greater percentage of annual incentive compensation expense compared to the same period in the prior year. Adjusted EBITDA (2) increased $36 million to $180 million compared to $144 million for the same period in the prior year. Year-to-date operating cash flow of $5 million and positioned to achieve our target of 9% operating cash flow as a percent of revenue for the 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. Expand Revenue increased year-over-year, driven primarily by the newly acquired Dickerson & Bowen business. Revenue in the legacy business was consistent year-over-year and is expected to accelerate in the second half of the year as work commences on projects included within our record CAP. Gross profit increased year-over-year as a result of improved project execution across our higher quality project portfolio and favorable claim settlements. CAP increased $324 million sequentially to $6.1 billion and increased $488 million year-over-year. The bidding pipeline continues to be robust across the company in both public and private markets. There are ample opportunities to build CAP over the remainder of 2025 and to drive organic growth in line with our expectations. (1) Materials segment cash gross profit and cash gross profit as a percent of revenue are non-GAAP measures. Please refer to the description and reconciliation of non-GAAP measures in the attached tables. Expand Revenue, gross profit and cash gross profit improved year-over-year primarily driven by higher aggregates and asphalt volumes and higher aggregate sales prices. Outlook With the acquisitions announced this week, we are updating our 2025 fiscal year guidance as noted below: Revenue in the range of $4.35 billion to $4.55 billion with revenue from the new acquisitions of approximately $150 million Adjusted EBITDA margin increased to a range of 11.25% to 12.25% SG&A expense unchanged at approximately 9.0% of revenue, inclusive of an estimated $40 million of stock-based compensation expense Effective tax rate for adjusted net income unchanged in the Mid-20s Capital expenditures unchanged with a range of $140 million to $160 million We do not provide a reconciliation of forward-looking adjusted EBITDA margin or the most directly comparable forward-looking GAAP measure of net income attributable to Granite because we cannot predict with a reasonable degree of certainty and without unreasonable efforts certain components or excluded items that are inherently uncertain and depend on various factors. For these reasons, we are unable to assess the potential significance of the unavailable information. 'Our updated guidance reflects the inclusion of the new acquisitions in our 2025 results for the remainder of the third quarter and fiscal year,' stated Staci Woolsey, Granite Executive Vice President and Chief Financial Officer. 'These acquisitions are in alignment with our capital allocation strategy to invest in high quality businesses that will strengthen and expand our home markets and be immediately accretive to adjusted EBITDA margin and cash flows. Our pro-forma leverage is well within our target and with our expanded credit facility, we are well positioned to act on M&A opportunities in the future.' Conference Call Granite will conduct a conference call today, August 7, 2025, at 8:00 a.m. Pacific Time/11:00 a.m. Eastern Time to discuss the results of the quarter ended June 30, 2025. The Company invites investors to listen to a live audio webcast of the investor conference call on its Investor Relations website, 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 14, 2025, by calling 1-877-344-7529, replay access code 6869375; 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 vertically-integrated civil contractors and construction materials producers in the United States. 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 and connect with Granite on LinkedIn, X, 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, 2025 fiscal year guidance for revenue, including revenue from new acquisitions, adjusted EBITDA margin, SG&A expense, stock-based compensation expense, effective tax rate, and capital expenditures, the expectation that we will continue to produce margin expansion, opportunities resulting from the new acquisitions, the many opportunities to further leverage the newly acquired business' supply network to grow our Southeast platform, our ability to complete acquisitions in the upcoming quarters, target of 9% operating cash flow as a percent of revenue for the year, construction revenue is expected to accelerate in the second half of the year, ample opportunities to build CAP over the remainder of 2025 and drive organic growth in line with expectations, our pro forma leverage target, M&A opportunities in the future, our capital allocation strategy, CAP 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,' "guidance" and the negatives thereof or other comparable terminology or by the context in which they are made. These forward-looking statements are based on management's current beliefs, assumptions and estimates. 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 STATEMENTS OF OPERATIONS (Unaudited - in thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Revenue $ 1,125,964 $ 1,082,486 $ 1,825,511 $ 1,754,761 Cost of revenue 926,865 917,775 1,542,563 1,535,765 Gross profit 199,099 164,711 282,948 218,996 Selling, general and administrative expenses 85,887 70,052 201,798 158,045 Other costs, net 13,253 10,225 22,679 21,235 Gain on sales of property and equipment, net (3,606 ) (1,387 ) (5,343 ) (2,805 ) Operating income 103,565 85,821 63,814 42,521 Other (income) expense Loss on debt extinguishment — 27,824 — 27,824 Interest income (5,761 ) (3,600 ) (12,029 ) (10,302 ) Interest expense 7,927 5,337 15,684 13,420 Equity in income of affiliates, net (3,698 ) (4,557 ) (4,792 ) (8,527 ) Other (income) expense, net (2,462 ) 1,267 (2,525 ) (476 ) Total other (income) expense, net (3,994 ) 26,271 (3,662 ) 21,939 Income before income taxes 107,559 59,550 67,476 20,582 Provision for income taxes 27,214 20,693 15,458 11,167 Net income 80,345 38,857 52,018 9,415 Amount attributable to non-controlling interests (8,645 ) (1,962 ) (13,974 ) (3,503 ) Net income attributable to Granite Construction Incorporated $ 71,700 $ 36,895 $ 38,044 $ 5,912 Net income per share attributable to common shareholders: Diluted $ 1.42 $ 0.76 $ 0.84 $ 0.13 Weighted average shares outstanding: Basic 43,746 44,060 43,605 44,024 Diluted 52,755 52,727 52,616 44,593 Expand GRANITE CONSTRUCTION INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited - in thousands) Six Months Ended June 30, 2025 2024 Operating activities: Net income $ 52,018 $ 9,415 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion and amortization 65,368 58,468 Amortization related to long-term debt 2,163 2,334 Non-cash loss on debt extinguishment — 27,824 Gain on sales of property and equipment, net (5,343 ) (2,805 ) Stock-based compensation 34,632 15,084 Equity in net income from unconsolidated construction joint ventures (3,814 ) (752 ) Net income from affiliates (4,792 ) (8,527 ) Other non-cash adjustments (207 ) (348 ) Changes in assets and liabilities (134,587 ) (78,609 ) Net cash provided by operating activities $ 5,438 $ 22,084 Investing activities: Purchases of marketable securities (172,578 ) — Maturities of marketable securities 17,600 25,000 Purchases of property and equipment (61,022 ) (66,861 ) Proceeds from sales of property and equipment 8,346 4,229 Cash paid for purchase price adjustments on business acquisition — (13,183 ) Other investing activities 399 693 Net cash used in investing activities $ (207,255 ) $ (50,122 ) Financing activities: Proceeds from issuance of convertible notes — 373,750 Debt principal repayments (552 ) (309,808 ) Capped call transactions — (46,046 ) Debt issuance costs — (9,654 ) Cash dividends paid (11,338 ) (11,452 ) Repurchases of common stock (15,317 ) (21,144 ) Contributions from non-controlling partners — 17,000 Distributions to non-controlling partners (27,250 ) (16,372 ) Other financing activities, net (39 ) 847 Net cash used in financing activities $ (54,496 ) $ (22,879 ) Net decrease in cash and cash equivalents (256,313 ) (50,917 ) Cash and cash equivalents at beginning of period 578,330 417,663 Cash and cash equivalents at end of period $ 322,017 $ 366,746 Expand 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 stock-based compensation expense, loss on debt extinguishment in 2024 and other costs, net, which include legal fees for the defense of a former company officer in his ongoing civil litigation with the Securities and Exchange Commission, reorganization costs, strategic acquisition and integration expenses and, in 2024, non-cash impairment charges. We provide adjusted income before income taxes, adjusted provision for income taxes, adjusted net income attributable to Granite, 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 as described above; Transaction costs which include acquired intangible asset amortization expense and acquisition-related depreciation; Stock-based compensation expense; and Loss on debt extinguishment. We also provide materials segment cash gross profit and materials segment cash gross profit by product line and the related margins to exclude the impact of the segment's and product line's depreciation, depletion and amortization from the segment's and product line's gross profit. To better illustrate the operational performance generated by the assets of the materials segment, and its product lines, our calculation adds back all depreciation, depletion and amortization to the materials segment and its product lines and does not eliminate any in consolidation. Management believes that non-GAAP financial measures such as materials segment cash gross profit and materials segment cash gross profit by product line and the related margins 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. 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 performance. However, the reader is cautioned that any non-GAAP financial measures provided by us are provided in addition to, and not as alternatives for, our reported results prepared in accordance with GAAP. Items that may have a significant impact on our financial position, results of operations and cash flows must be considered when assessing our actual financial condition and performance regardless of whether these items are included in non-GAAP financial measures. The methods used by us to calculate 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 us may not be comparable to similar measures provided by other companies. (1) We define EBITDA as GAAP net income 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, stock-based compensation and loss on debt extinguishment as described above. (2) Represents net income, EBITDA and adjusted EBITDA divided by consolidated revenue of $1.13 billion and $1.08 billion for the three months ended June 30, 2025 and 2024, respectively, and $1.83 billion and $1.75 billion for the six months ended June 30, 2025 and 2024, 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. Expand ADJUSTED NET INCOME RECONCILIATION (Unaudited - in thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Income before income taxes $ 107,559 $ 59,550 $ 67,476 $ 20,582 Other costs, net 13,253 10,225 22,679 21,235 Transaction costs 3,992 4,313 7,979 9,940 Stock-based compensation 2,415 2,189 34,632 15,084 Loss on debt extinguishment — 27,824 — 27,824 Adjusted income before income taxes $ 127,219 $ 104,101 $ 132,766 $ 94,665 Provision for income taxes $ 27,214 $ 20,693 $ 15,458 $ 11,167 Tax effect of adjusting items(1) 5,062 4,469 16,812 12,147 Adjusted provision for income taxes $ 32,276 $ 25,162 $ 32,270 $ 23,314 Net income attributable to Granite Construction Incorporated $ 71,700 $ 36,895 $ 38,044 $ 5,912 After-tax adjusting items 14,598 40,082 48,478 61,936 Adjusted net income attributable to Granite Construction Incorporated $ 86,298 $ 76,977 $ 86,522 $ 67,848 Diluted weighted average shares of common stock 52,755 52,727 52,616 44,593 Add: dilutive effect of Convertible Notes(2) — 35 — 8,138 Less: dilutive effect of Convertible Notes(3) (8,040 ) (8,138 ) (8,055 ) (8,138 ) Adjusted diluted weighted average shares of common stock 44,715 44,624 44,561 44,593 Diluted net income per share attributable to common shareholders $ 1.42 $ 0.76 $ 0.84 $ 0.13 After-tax adjusting items per share attributable to common shareholders 0.51 0.97 1.10 1.39 Adjusted diluted earnings per share attributable to common shareholders $ 1.93 $ 1.73 $ 1.94 $ 1.52 Expand (1) The tax effect of adjusting items was calculated using our estimated annual statutory tax rate. The tax effect of adjusting items for the three and six months ended June 30, 2024 excludes the $27 million loss on debt extinguishment as it was almost entirely non-tax deductible. (2) The dilutive effect of the 2.75% Convertible Notes and the 3.75% Convertible Notes was 35,000 and 8,138,000 shares for the three and six months ended June 30, 2024, respectively. (3) When calculating diluted net income attributable to common shareholders, GAAP requires that we include potential share dilution from the convertible notes when not antidilutive. We entered into capped call transactions relating to both the 3.75% and 3.25% convertible notes to offset the dilutive impact of the convertible notes. The impact of the capped call transactions was excluded from the GAAP diluted net income attributable to common shareholders calculation as the impact would be antidilutive. For the purpose of calculating our adjusted diluted net income per share attributable to common shareholders, the dilutive effect of the convertible notes is removed to reflect the impact of the capped call transactions. Expand NM - not meaningful (1) The Aggregate product line includes aggregates and recycled materials. The Asphalt product line includes asphalt concrete and liquid asphalt. External revenue and average selling price include freight and delivery costs that we pass along to our customers. (2) Represents our other product line which is comprised of immaterial amounts of products and services that are not considered core product lines, as well as eliminations of interproduct and intersegment transactions. (3) Includes both intersegment and interproduct revenues. Intersegment revenues for the three months ended June 30, 2025 and June 30, 2024 were $63.3 million and $74.9 million, respectively. Expand NM - not meaningful (1) The Aggregate product line includes aggregates and recycled materials. The Asphalt product line includes asphalt concrete and liquid asphalt. External revenue and average selling price include freight and delivery costs that we pass along to our customers. (2) Represents our other product line which is comprised of immaterial amounts of products and services that are not considered core product lines, as well as eliminations of interproduct and intersegment transactions. (3) Includes both intersegment and interproduct revenues. Intersegment revenues for the six months ended June 30, 2025 and June 30, 2024 were $84.0 million and $86.6 million, respectively. Expand
Business Wire
06-08-2025
- Business
- Business Wire
Granite Completes Acquisitions of Warren Paving and Papich Construction to Strengthen and Expand Vertically-Integrated Home Markets
WATSONVILLE, Calif.--(BUSINESS WIRE)--Granite (NYSE: GVA) today announced that it has completed two acquisitions that strengthen its vertically-integrated home markets for a combined purchase price of $710 million, subject to customary closing adjustments. Together, the acquisitions are expected to contribute approximately $425 million in revenue annually with an expected adjusted EBITDA margin of approximately 18%. This implies a blended multiple of approximately 9.2x expected adjusted EBITDA. 'We are excited to welcome Warren Paving and Papich Construction,' said Granite President and Chief Executive Officer, Kyle Larkin. 'Their management teams have strong track records of success, and we look forward to combining our businesses. These acquisitions mark another significant step forward as we continue to grow our industry–leading, vertically-integrated business. With our strong cash generation and robust acquisition pipeline, I expect to continue to grow our home markets through bolt-on transactions and expansion into new markets.' Acquisition of Warren Paving Business Warren Paving is a leading aggregates producer with vertically-integrated operations in the Mississippi River and Gulf Coast regions, operating a network of strategically located assets, including one quarry, one sand and gravel operation, 11 aggregate yards, three asphalt plants and a fleet of 168 owned and leased barges. This acquisition adds over 400 million tons of aggregate reserves and resources and is a transformative opportunity to own and operate one of the largest and most attractive quarry and distribution networks in the Southeast. Warren Paving's assets are highly complementary to our Southeastern platform's plant networks across Mississippi and is expected to generate annual revenue and adjusted EBITDA of approximately $275 million and $52 million, respectively, representing an expected adjusted EBITDA margin of approximately 19%. Acquisition of Papich Construction Business Papich Construction specializes in infrastructure projects, including road, rail and highway construction and supplies both internal projects and third-party customers with a full suite of asphalt and aggregates products, including sand, gravel and crushed rock. The acquisition includes a gravel mine, two quarries and two asphalt plants. Strategic and Financial Rationale for the Acquisitions Strengthens Vertical Integration with Enhanced Scale: The acquisitions strengthen our vertical integration in both the California and Southeast markets. The barge network in the Southeast presents significant opportunities to supply additional locations as we continue to expand and work to increase volumes. Increases Exposure to Aggregates: These acquisitions increase our aggregates reserves and resources by approximately 30% and annual aggregate production by approximately 5 million tons, or 27%. Enhances Financial Profile: The acquisitions are expected to be immediately adjusted EBITDA margin accretive, with an estimated annual uplift of approximately 60 basis points driven by the increased aggregates exposure. Capitalizes on Strong Financial Position: The strength of our balance sheet and underlying operations, supplemented by the amended and restated credit facility position us to continue to invest in organic growth and strategic acquisitions. Financing The acquisitions were financed through a new 5-year $600 million term loan, $100 million of cash on hand and $10 million drawn on an upsized revolver of $600 million. Our pro forma net leverage ratio 1 for an annual period, inclusive of the acquisitions, is well below our target of 2.5x. "These acquisitions are in line with our capital allocation strategy and reinforce our focus on driving sustainable, long-term value creation for our shareholders,' said Granite Executive Vice President and Chief Financial Officer, Staci Woolsey. 'Our cash generation and upsized credit facility allow us to continue to execute on high quality M&A transactions while maintaining a prudent leverage ratio.' Further details on these transactions as well as second quarter results and revised 2025 guidance will be provided on our next earnings call on Thursday, August 7, 2025, at 8:00 am Pacific Time. Advisors Barclays served as exclusive financial advisor to Granite on the acquisition of Warren Paving. A&O Shearman served as legal advisor to Granite on the acquisitions of Warren Paving and Papich Construction. About Granite Granite is America's Infrastructure Company™. Incorporated since 1922, Granite (NYSE:GVA) is one of the largest vertically-integrated civil contractors and construction materials producers in the United States. 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 the Granite website, and connect with Granite on LinkedIn, X, Facebook, and Instagram. Forward-Looking Statements Any statements contained in this news release that are not based on historical facts, including statements regarding that the acquisitions create opportunities for commercial and operational synergies, the acquisitions are expected to be immediately accretive to adjusted EBITDA margins, the acquisitions are expected to contribute approximately $425 million of revenue annually with an expected adjusted EBITDA margin of approximately 18%, expected adjusted EBITDA, combining our businesses, the expectation that we continue to grow our home markets through bolt on transactions and expansion into new markets, Warren Paving is expected to annually generate revenue and adjusted EBITDA of approximately $275 million and $52 million, respectively, representing an expected adjusted EBITDA margin of approximately 19%, the barge network in the Southeast presents significant opportunities to supply additional locations as we continue to expand and work to increase volumes, the acquisitions are expected to be immediately adjusted EBITDA margin accretive, with an estimated annual uplift of approximately 60 basis points to adjusted EBITDA margins driven by the increased aggregates exposure, continued investment in organic growth and strategic acquisitions, pro forma net leverage ratio, that we will continue to execute on high quality M&A transactions while maintaining a prudent leverage ratio and our capital allocation strategy constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current beliefs, assumptions and estimates. 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. Non-GAAP Financial Information This news release contains 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 also include adjusted EBITDA and adjusted EBITDA margin, non-GAAP measures, to indicate the impact of loss on debt extinguishment, stock-based compensation expense and other costs, net, which include legal fees for the defense of a former company officer in his ongoing civil litigation with the Securities and Exchange Commission, reorganization costs, strategic acquisition and integration expenses and non-cash impairment charges. We also believe net leverage to adjusted EBITDA ratio is useful in evaluating debt levels. Net leverage is calculated by subtracting cash and cash equivalents and marketable securities from total debt. Management believes that these non-GAAP financial measures facilitate comparisons between industry peer companies, and management uses these non-GAAP financial measures in evaluating performance and debt levels. However, the reader is cautioned that any non-GAAP financial measures provided by us are provided in addition to, and not as alternatives for, our reported results prepared in accordance with GAAP. Items that may have a significant impact on our financial position, results of operations and cash flows must be considered when assessing our actual financial condition and performance regardless of whether these items are included in non-GAAP financial measures. The methods used by us to calculate 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 us may not be comparable to similar measures provided by other companies. We do not provide a reconciliation of forward-looking adjusted EBITDA, adjusted EBITDA margin or net leverage to adjusted EBITDA ratio or the most directly comparable forward-looking GAAP measure of net income attributable to Granite because we cannot predict with a reasonable degree of certainty and without unreasonable efforts certain components or excluded items that are inherently uncertain and depend on various factors. For these reasons, we are unable to assess the potential significance of the unavailable information. 1 Adjusted EBITDA, adjusted EBITDA margin and net leverage ratio are non-GAAP measures. Please see "Non-GAAP Financial Information" for additional information.
Calgary Herald
24-06-2025
- Business
- Calgary Herald
Grain Growers of Canada disappointed with Parliament for passing Bill C-202
Parliament's recent passing of Bill C-202, which takes supply-managed goods off the table in trade negotiations, poses 'serious risks' to the livelihoods of Canada's grain farmers, says the Grain Growers of Canada. Article content The bill, the first set to receive royal assent in the current Parliamentary session, amends the Department of Foreign Affairs, Trade and Development Act, and is aimed at preventing the minister from 'making a commitment' that would increase the tariff rate quota for dairy, poultry or eggs in trade negotiations. It would also prevent tariff reductions on these products when they are imported in excess. Article content Article content Article content Bloc Québécois MP Yves-François Blanchet had introduced the bill, saying it was aimed at protecting the entire supply management system. Article content Article content The House of Commons unanimously passed the bill earlier this month, and the Senate followed suit last week. Article content The Grain Growers of Canada said it was 'disappointed' that Bill C-202 was passed without 'thorough review and scrutiny,' without considering its effects on international trade and 'without regard' for the country's grain sector, which exports more than 70 per cent of what farmers grow. Article content 'Despite the government's stated commitment to growing Canada's economy and expanding international trade, the first bill passed by the 45th Parliament restricts our trade negotiators' ability to secure the best possible deals for Canadians,' said Kyle Larkin, GGC executive director, in a statement. Article content Article content Canada is currently seeking a new trade and security deal with the United States, and the Grain Growers of Canada notes the federal government is also pursuing a free trade agreement with the Association of Southeast Asian Nations. Article content 'With critical trade negotiations and renegotiations ahead, including with our largest trading partner, the United States, passing Bill C-202 sends the wrong message internationally,' said Larkin. Article content 'For grain farmers who rely on access to international markets, the result will be less ambitious trade agreements, fewer export opportunities, and slower economic growth at home.' Article content Grain farmers export wheat, barley, canola, pulses and other commodities to more than 160 countries, generating more than $45 billion in export value each year, but Bill C-202 will undermine the sector's growth, says the Grain Growers of Canada.
