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BuildingValueTogether
INVESTOR UPDATE4Q | FY 2017
Statements made in this presentation are not based on historical facts, including statements regarding future events, occurrences, circumstances,
activities, performance, outcomes and results, that may be forward looking in nature. Under the Private Securities Litigation Reform Act of 1995, a
“safe harbor” may be provided to us for certain of these forward-looking statements. Words such as “future,” “outlook,” “believes,” “expects,”
“appears,” “may,” “will,” “should,” “anticipates,” “estimates,” “intends,” “plans,” “could,” “would,” “continue,” or the negative thereof or comparable
terminology, are intended to identify these forward-looking statements. In addition, other written or oral statements which constitute forward-
looking statements have been made and may in the future be made by or on behalf of Granite. These forward-looking statements are estimates
reflecting the best judgment of our senior management and are based on our current expectations and projections concerning future events, many of
which are outside of our control, and involve a number of risks and uncertainties that could cause actual results to differ materially from those
suggested by the forward-looking statements. Some of these expectations may be based on beliefs, assumptions or estimates that may prove to be
incorrect. Factors that might cause or contribute to such differences include, but are not limited to, those risks described in the Company’s Annual
Report on Form 10-K under “Item 1A. Risk Factors” and in “Part II, Item 1A. Risk Factors” in the Quarterly Report on Form 10-Q. Except as required by
law, we undertake no obligation to revise or update any forward-looking statements for any reason. As a result, the audience is cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the date of this presentation. Except as required by law, we undertake no
obligation to revise or update any forward-looking statements for any reason.
SAFEHARBOR
Safety ● Honesty ● Integrity ● Fairness ● Accountability
Consideration of Others ● Pursuit of Excellence ● Reliability ● Citizenship
CONSECUTIVE YEARS
Named as one of AMERICA’S 100 MOST
TRUSTWORTHY COMPANIES
Forbes 2015, 2016 & 2017
2020 STRATEGIC PLAN
CORE STRATEGYDevelop the entrepreneurial spirit of our
people to flawlessly execute highly profitable
market strategies that leverage the people,
resources, and core values of our company
to exceed stakeholder expectations.
MISSION STATEMENTBy December 31, 2020 Granite will:
Be recognized as the best value diversified
infrastructure provider in North America
Have efficient operating and management systems to
support current and future opportunities
Be the company of choice for clients and partners while
creating exceptional opportunities for employees
BuildingValue
Together
Excellence in Execution
Focus on our People
Business Growth & Sustainability
DIVERSE CAPABILITIES
Broad opportunities across geographies & end-markets
Granite is a proud recipient of the Diamond Achievement award for Quality, Paving and Sustainability at more than 90% of our plant and aggregate sites, year-over-year.
Our expert teams go above and beyond to provide high-quality, technical, logistics, and scheduling solutions to our internal and external construction materials customers.
Construction Materials & Asphalt
56 Asphalt Plants
55 Quarries
>680 Million Tons ofPermitted Reserves*
*Includes owned and leased reserves as of 12/31/2017
TOTAL COMPANY
RESULTSQ4 2017
REVENUE GROSS PROFIT SG&A
$667
$468
$763
$957
$801
Q4 16 Q1 17 Q2 17 Q3 17 Q4 17
$81
$25
$75
$115
$101
Q4 16 Q1 17 Q2 17 Q3 17 Q4 17
$59 $62
$51 $50
$59
Q4 16 Q1 17 Q2 17 Q3 17 Q4 17
9% 13% 7% 5% 7%
$ in millions
NET INCOME $ PER SHARE CASH &
$ in millions, except per share amounts
$16
($24)
$14
$46
$33
Q4 16 Q1 17 Q2 17 Q3 17 Q4 17
$0.40
($0.60)
$0.35
$1.14
$0.81
Q416 Q1 17 Q2 17 Q3 17 Q4 17
$258 $297 $286 $303
$367
Q4 16 Q1 17 Q2 17 Q3 17 Q4 17
MARKETABLE SECURITIES
$2.37
$2.51
$2.99
2015 2016 2017
INCREASED
+18.9%IN 2017
TOTAL COMPANY
REVENUE
FY17 FINANCIAL PERFORMANCE
$ in billions as of 12/31
$299.8 $301.4 $314.9
12.6% 12.0%10.5%
2015 2016 2017
INCREASED
+4.5%IN 2017
TOTAL COMPANY
GROSS PROFIT
FY17 FINANCIAL PERFORMANCE
$ in millions as of 12/31percentages denote gross profit margin
BACKLOG
$2.05 $2.45
$2.82
$0.86
$1.03 $0.90
2015 2016 2017Large Projects Construction
$2.91
$3.48$3.72
FY17 FINANCIAL PERFORMANCE
INCREASED
+6.7%IN 2017
TOTAL COMPANY
BACKLOG$ in billions as of 12/31
APPENDIXNote: 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.
EBITDA RECONCILIATION
GRANITE CONSTRUCTION INCORPORATED
EBITDA(1)
(Unaudited - dollars in thousands)
Three Months Ended
December 31, Years Ended December 31,
2017 2016 2017 2016
Net income attributable to Granite Construction Incorporated $ 32,773 $ 16,173 $ 69,098 $ 57,122
Depreciation, depletion and amortization expense(2) 17,822 17,738 66,344 64,375
Provision for income taxes 11,821 10,622 28,662 30,162
Interest expense, net of interest income 1,317 2,295 6,058 9,141
EBITDA $ 63,733 $ 46,828 $ 170,162 $ 160,800
Consolidated EBITDA Margin(3) 8.0% 7.0% 5.7% 6.4%
Note:
(1)We define EBITDA as GAAP net income (loss) attributable to Granite Construction Incorporated, adjusted for interest, taxes,
depreciation, depletion and amortization. We believe this non-GAAP financial measure and the associated margin are useful in
evaluating operating performance and are regularly used by security analysts, institutional investors and other interested parties in
reviewing the Company. 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. 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.(2)Amount includes the sum of depreciation, depletion and amortization which are classified as Cost of Revenue and Selling,
General and Administrative expenses in the consolidated statements of operations of Granite Construction Incorporated.
(3)Represents EBITDA divided by consolidated revenue. Consolidated revenue was $801,274 and $2,989,713 for three and twelve
months ended December 31, 2017, respectively, and $666,681 and $2,514,617 for three and twelve months ended December 31,
2016, respectively,
CONSOLIDATEDBALANCE SHEET
GRANITE CONSTRUCTION INCORPORATED
CONSOLIDATED BALANCE SHEETS(Unaudited - in thousands, except share and per share data)
December 31, December 31,
2017 2016
ASSETS
Current assets
Cash and cash equivalents $ 233,711 $ 189,326
Short-term marketable securities 67,775 64,884
Receivables, net 479,791 419,345
Costs and estimated earnings in excess of billings 103,965 73,102
Inventories 62,497 55,245
Equity in construction joint ventures 247,826 247,182
Other current assets 36,513 39,908
Total current assets 1,232,078 1,088,992
Property and equipment, net 407,418 406,650
Long-term marketable securities 65,015 62,895
Investments in affiliates 38,469 35,668
Goodwill 53,799 53,799
Other noncurrent assets 75,199 85,449
Total assets $ 1,871,978 $ 1,733,453
LIABILITIES AND EQUITY
Current liabilities
Current maturities of long-term debt $ 46,048 $ 14,796
Accounts payable 237,673 199,029
Billings in excess of costs and estimated earnings 135,146 97,522
Accrued expenses and other current liabilities 236,407 218,587
Total current liabilities 655,274 529,934
Long-term debt 178,453 229,498
Deferred income taxes 1,361 5,441
Other long-term liabilities 44,085 45,989
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 39,871,314
shares as of December 31, 2017 and 39,621,140 shares as of December 31, 2016 399 396
Additional paid-in capital 160,376 150,337
Accumulated other comprehensive income (loss) 634 (371)
Retained earnings 783,699 735,626
Total Granite Construction Incorporated shareholders’ equity 945,108 885,988
Non-controlling interests 47,697 36,603
Total equity 992,805 922,591
Total liabilities and equity $ 1,871,978 $ 1,733,453
CONSOLIDATEDSTATEMENT OF OPERATIONS
GRANITE CONSTRUCTION INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited - in thousands, except per share data)
Three Months Ended December 31, Years Ended December 31,
2017 2016 2017 2016
Revenue
Construction $ 429,444 $ 359,741 $ 1,664,708 $ 1,365,198
Large Project Construction 290,888 246,077 1,032,229 888,193
Construction Materials 80,942 60,863 292,776 261,226
Total revenue 801,274 666,681 2,989,713 2,514,617
Cost of revenue
Construction 364,231 298,045 1,417,694 1,155,983
Large Project Construction 270,530 232,618 1,002,436 824,056
Construction Materials 65,806 54,768 254,650 233,208
Total cost of revenue 700,567 585,431 2,674,780 2,213,247
Gross profit 100,707 81,250 314,933 301,370
SG&A expenses 59,068 59,342 222,811 219,299
Restructuring and impairment gains (1,394) (1,000) (2,411) (1,925)
Gain on sales of property and equipment (1,352) (5,994) (4,182) (8,358)
Operating income 44,385 28,902 98,715 92,354
Other (income) expense
Interest income (1,386) (801) (4,742) (3,225)
Interest expense 2,703 3,096 10,800 12,366
Equity in income of affiliates (2,200) (2,594) (7,107) (7,177)
Other income, net (1,878) (685) (4,699) (5,972)
Total other income (2,761) (984) (5,748) (4,008)
Income before provision for income taxes 47,146 29,886 104,463 96,362
Provision for income taxes 11,821 10,622 28,662 30,162
Net income 35,325 19,264 75,801 66,200
Amount attributable to non-controlling interests (2,552) (3,091) (6,703) (9,078)
Net income attributable to Granite Construction
Incorporated $ 32,773 $ 16,173 $ 69,098 $ 57,122
Net income per share attributable to common
shareholders:
Basic $ 0.82 $ 0.41 $ 1.74 $ 1.44
Diluted $ 0.81 $ 0.40 $ 1.71 $ 1.42
Weighted average shares of common stock:
Basic 39,857 39,610 39,795 39,557
Diluted 40,387 40,306 40,372 40,225
CONSOLIDATEDSTATEMENT OF CASH FLOWS
GRANITE CONSTRUCTION INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited - in thousands)
Years Ended December 31, 2017 2016
Operating activities
Net income $ 75,801 $ 66,200
Adjustments to reconcile net income to net cash provided by operating activities:
Non-cash restructuring and impairment gains (939) (1,000)
Depreciation, depletion and amortization 66,344 64,375
Gain on sales of property and equipment (4,182) (8,358)
Change in deferred income taxes (4,824) 9,842
Stock-based compensation 15,764 13,383
Equity in net loss (income) from unconsolidated joint ventures 14,637 (15,614)
Net income from affiliates (7,107) (7,177)
Changes in assets and liabilities: (11,129) (48,505)
Net cash provided by operating activities 144,365 73,146
Investing activities
Purchases of marketable securities (124,543) (129,685)
Maturities of marketable securities 120,000 50,000
Proceeds from called marketable securities — 55,000
Purchases of property and equipment (67,695) (90,970)
Proceeds from sales of property and equipment 10,202 12,946
Collection of notes receivable 1,952 4,331
Other investing activities, net 2,698 1,988
Net cash used in investing activities (57,386) (96,390)
Financing activities
Proceeds from long-term debt 25,000 30,000
Debt principal payments (45,000) (45,025)
Cash dividends paid (20,687) (20,563)
Purchases of common stock (6,977) (5,227)
Contributions from non-controlling partners 11,500 5,250
Distributions to non-controlling partners (7,109) (5,258)
Other financing activities 679 557
Net cash used in financing activities (42,594) (40,266)
Increase (decrease) in cash and cash equivalents 44,385 (63,510)
Cash and cash equivalents at beginning of year 189,326 252,836
Cash and cash equivalents at end of year $ 233,711 $ 189,326
Investor Contact:
Q4 2017
INVESTOR UPDATE
BuildingValue
Together
Ron BotoffVice President, Investor Relations & Government Affairs
(831) 728-7532
Corporate Office:
585 West Beach St.Watsonville, CA 95076
(831) 724-1011
www.graniteconstruction.com