• Materials revenue and gross profit increased YOY driven by higher asphalt and aggregates sales and improved aggregate sales volume • Record CAP of $5.4 billion, up $1.2 billion YOY and $334 million sequentially • Strong public market environment • Strong balance sheet and liquidity position • 2023 guidance revised with revenue between $3.35 billion and $3.45 billion and adjusted EBITDA margin between 7.5% and 8.5% CAP $5,438 MSee appendix for a presentation of the most directly comparable GAAP measure and ...

UNITED STATES Table of Contents SECURITIES AND EXCHANGE COMMISSION o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission File Number: 1-12911 Washington, D.C. 20549 FORM 10-Q GRANITE CONSTRUCTION INCORPORATED x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Delaware 77-0239383 State of Incorporation: I.R.S. Employer Identification Number: For the quarterly period ...

Granite Construction Incorporated (NYSE:GVA) Q2 2023 Earnings Conference Call July 27, 2023 11:00 AM ET Company Participants Mike Barker - Vice President-Investor Relations Kyle Larkin - President & Chief Executive Officer Lisa Curtis - Executive Vice President & Chief Financial Officer Conference Call Participants Brent Thielman - D.A. Davidson Brian Russo - Sidoti Steven Ramsey - Thompson Research Group Michael Dudas - Vertical Research Operator Good morning. My name is Sarah, and I will be your conferenc ...

Granite Construction Incorporated (NYSE:GVA) Q1 2023 Earnings Conference Call May 2, 2023 11:00 AM ET Company Participants Mike Barker – Vice President-Investor Relations Kyle Larkin – President and Chief Executive Officer Conference Call Participants Steven Ramsey – Thompson Research Group Brent Thielman – D.A. Davidson Brian Russo – Sidoti Michael Dudas – Vertical Research Partners Jerry Revich – Goldman Sachs Operator Good morning. My name is Andrea and I will be your conference facilitator today. At thi ...

EXPLANATORY NOTE [Restatement and Recast Background](index=3&type=section&id=Restatement%20and%20Recast%20Background) Unaudited Q1-Q3 2022 financial information was restated for deferred tax errors and reclassified Water and Mineral Services businesses - Restatement of unaudited quarterly financial information for the first three quarters of 2022 was necessary to correct errors related to **deferred taxes** and **income tax expense** from the Inliner business sale and other immaterial errors[9](index=9&type=chunk) - Financial information for Q1 2022 includes adjustments to retrospectively reclassify **Water and Mineral Services businesses** from discontinued to continuing operations[10](index=10&type=chunk) PART I. FINANCIAL INFORMATION [Item 1. FINANCIAL STATEMENTS (Unaudited)](index=4&type=section&id=Item%201.%20FINANCIAL%20STATEMENTS) This section provides unaudited condensed consolidated financial statements, including balance sheets, income statements, and cash flow statements, with explanatory notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands) | (in thousands) | March 31, 2023 | December 31, 2022 | | :--------------- | :------------- | :---------------- | | **Total assets** | $2,077,387 | $2,167,933 | | **Total liabilities** | $972,411 | $985,145 | | **Total equity** | $925,457 | $953,016 | - Total assets decreased by **$90.5 million** from December 31, 2022, to March 31, 2023[14](index=14&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (in thousands) | (in thousands) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 (As Restated and Recast) | | :--------------- | :-------------------------------- | :------------------------------------------------------- | | **Total revenue** | $560,068 | $653,886 | | **Gross profit** | $32,359 | $60,092 | | **Operating loss** | $(43,249) | $(15,709) | | **Net loss attributable to Granite Construction Incorporated** | $(23,023) | $(26,733) | | **Basic net loss per share** | $(0.53) | $(0.58) | - Total revenue decreased by **$93.8 million (14.3%)** year-over-year (YoY)[16](index=16&type=chunk) - Gross profit decreased by **$27.7 million (46.1%)** YoY[16](index=16&type=chunk) - Operating loss widened by **$27.5 million** YoY[16](index=16&type=chunk) - Net loss attributable to Granite Construction Incorporated improved by **$3.7 million** YoY[16](index=16&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Condensed Consolidated Statements of Comprehensive Income (Loss) (in thousands) | (in thousands) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 (As Restated) | | :--------------- | :-------------------------------- | :---------------------------------------------- | | **Net loss** | $(25,772) | $(25,095) | | **Other comprehensive income (loss), net of tax** | $(135) | $4,932 | | **Comprehensive loss attributable to Granite Construction Incorporated, net of tax** | $(23,158) | $(21,801) | - Other comprehensive income shifted from a gain of **$4.9 million** in Q1 2022 to a loss of **$0.1 million** in Q1 2023[19](index=19&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Condensed Consolidated Statements of Shareholders' Equity (in thousands) | (in thousands) | March 31, 2023 | December 31, 2022 | | :--------------- | :------------- | :---------------- | | **Total Granite Shareholders' Equity** | $925,457 | $953,016 | | **Non-controlling Interests** | $46,954 | $32,129 | | **Total Equity** | $972,411 | $985,145 | - Total equity decreased by **$12.7 million** from December 31, 2022, to March 31, 2023[22](index=22&type=chunk) - Common stock repurchases for employee tax withholding amounted to **$3.5 million** in Q1 2023, compared to **$20.2 million** in Q1 2022 (which included share repurchase program activity)[22](index=22&type=chunk)[23](index=23&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (in thousands) | (in thousands) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 (As Restated) | | :--------------- | :-------------------------------- | :---------------------------------------------- | | **Net cash used in operating activities** | $(76,688) | $(50,180) | | **Net cash used in investing activities** | $(24,336) | $89,396 | | **Net cash provided by (used in) financing activities** | $6,784 | $(82,904) | | **Net decrease in cash, cash equivalents and restricted cash** | $(94,240) | $(43,688) | - Cash used in operating activities increased by **$26.5 million** YoY[26](index=26&type=chunk) - Investing activities shifted from providing **$89.4 million** cash in Q1 2022 to using **$24.3 million** in Q1 2023, primarily due to proceeds from the Inliner business sale in 2022[26](index=26&type=chunk) - Financing activities shifted from using **$82.9 million** cash in Q1 2022 to providing **$6.8 million** in Q1 2023, mainly due to decreased debt principal repayments and common stock repurchases[26](index=26&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [Note 1. General](index=11&type=section&id=Note%201.%20General) - The financial statements are unaudited and prepared in accordance with **SEC rules**, condensing or omitting certain GAAP disclosures[30](index=30&type=chunk) - Operations are typically affected by **weather conditions** in Q1 and Q4, leading to variability in revenues and profitability, thus Q1 results are not indicative of the full year[31](index=31&type=chunk) - On April 24, 2023, the company acquired **Coast Mountain Resources (2020) Ltd.** for approximately **$27 million**, an acquisition not expected to materially impact results[32](index=32&type=chunk) [Note 2. Recently Issued and Adopted Accounting Pronouncements](index=11&type=section&id=Note%202.%20Recently%20Issued%20and%20Adopted%20Accounting%20Pronouncements) - No recently issued accounting pronouncements are expected to have a **material impact**, and no new pronouncements adopted in Q1 2023 had a material impact[33](index=33&type=chunk) [Note 3. Restatement and Recast](index=12&type=section&id=Note%203.%20Restatement%20and%20Recast) - Restatement of Q1-Q3 2022 financial information was due to errors in **deferred taxes** and **income tax expense** related to the Inliner sale, and other immaterial errors[36](index=36&type=chunk) - The **Water and Mineral Services (WMS) businesses**, previously classified as held for sale, were reclassified to continuing operations in Q1 2022, impacting the condensed consolidated statement of operations[37](index=37&type=chunk) Impact of Restatement and Recast on Q1 2022 Operations (in thousands) | Metric | As Previously Reported | Restatement Impacts | As Restated | Discontinued Operations Reclassification Impacts | As Restated and Recast | | :----- | :--------------------- | :------------------ | :---------- | :--------------------------------------------- | :--------------------- | | Total revenue | $547,586 | $1,893 | $549,479 | $104,407 | $653,886 | | Gross profit | $49,775 | $(4,126) | $45,649 | $14,443 | $60,092 | | Net loss | $(9,821) | $(15,274) | $(25,095) | $- | $(25,095) | | Basic loss per share | $(0.29) | $(0.29) | $(0.58) | $- | $(0.58) | [Note 4. Revisions in Estimates](index=15&type=section&id=Note%204.%20Revisions%20in%20Estimates) - Profit recognition on construction contracts is based on estimates, which can vary, and revisions are accounted for using the **cumulative catch-up method**[43](index=43&type=chunk)[44](index=44&type=chunk) Downward Revisions in Estimates (Q1 2023) | Metric | Three Months Ended March 31, 2023 | | :----- | :-------------------------------- | | Number of projects with downward estimate changes | 2 | | Range of reduction in gross profit from each project, net | $6.2 - $11.4 million | | Decrease to project profitability, net | $17.6 million | | Decrease to net income/increase to net loss attributable to Granite Construction Incorporated | $7.5 million | | Decrease to net income/increase to net loss per diluted share | $0.17 | - Decreases in Q1 2023 were due to **additional costs** from changes in project duration, increased labor and materials costs, lower productivity, and unfavorable weather[46](index=46&type=chunk) [Note 5. Disaggregation of Revenue](index=16&type=section&id=Note%205.%20Disaggregation%20of%20Revenue) Disaggregated Revenue by Operating Group (in thousands) | Operating Group | Q1 2023 Construction | Q1 2023 Materials | Q1 2023 Total | Q1 2022 Construction (As Restated and Recast) | Q1 2022 Materials (As Restated and Recast) | Q1 2022 Total (As Restated and Recast) | | :-------------- | :------------------- | :---------------- | :------------ | :-------------------------------------------- | :----------------------------------------- | :------------------------------------- | | California | $148,947 | $30,138 | $179,085 | $146,309 | $45,687 | $191,996 | | Central | $171,002 | $11,556 | $182,558 | $219,894 | $10,362 | $230,256 | | Mountain | $183,467 | $14,958 | $198,425 | $212,063 | $19,571 | $231,634 | | **Total** | **$503,416** | **$56,652** | **$560,068** | **$578,266** | **$75,620** | **$653,886** | - Total revenue decreased by **$93.8 million (14.3%)** YoY, with Construction revenue down **12.9%** and Materials revenue down **25.1%**[16](index=16&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk) [Note 6. Unearned Revenue](index=16&type=section&id=Note%206.%20Unearned%20Revenue) Unearned Revenue (in thousands) | Operating Group | March 31, 2023 | December 31, 2022 | | :-------------- | :------------- | :---------------- | | California | $1,011,489 | $945,971 | | Central | $1,437,759 | $1,444,983 | | Mountain | $714,320 | $486,524 | | **Total** | **$3,163,568** | **$2,877,478** | - Total unearned revenue increased by **$286.1 million (9.9%)** from December 31, 2022, to March 31, 2023, with approximately **$2.1 billion** expected to be recognized within the next twelve months[50](index=50&type=chunk) [Note 7. Contract Assets and Liabilities](index=17&type=section&id=Note%207.%20Contract%20Assets%20and%20Liabilities) - Revenue recognized from changes in contract transaction price was **$44.2 million** in Q1 2023 and **$35.2 million** in Q1 2022[51](index=51&type=chunk) Contract Assets (in thousands) | Component | March 31, 2023 | December 31, 2022 | | :-------- | :------------- | :---------------- | | Costs in excess of billings and estimated earnings | $125,918 | $80,357 | | Contract retention | $162,228 | $161,559 | | **Total contract assets** | **$288,146** | **$241,916** | Contract Liabilities (in thousands) | Component | March 31, 2023 | December 31, 2022 | | :-------- | :------------- | :---------------- | | Billings in excess of costs and estimated earnings, net of retention | $141,702 | $152,294 | | Provisions for losses | $18,543 | $20,992 | | **Total contract liabilities** | **$160,245** | **$173,286** | [Note 8. Receivables, net](index=17&type=section&id=Note%208.%20Receivables,%20net) Receivables, net (in thousands) | Category | March 31, 2023 | December 31, 2022 | | :------- | :------------- | :---------------- | | Contracts completed and in progress (Billed) | $190,635 | $220,809 | | Contracts completed and in progress (Unbilled) | $108,931 | $120,348 | | Materials sales | $31,955 | $52,182 | | Other | $66,807 | $71,790 | | Less: allowance for credit losses | $1,097 | $1,142 | | **Total net receivables** | **$397,231** | **$463,987** | - Total net receivables decreased by **$66.8 million (14.4%)** from December 31, 2022, to March 31, 2023[54](index=54&type=chunk) [Note 9. Fair Value Measurement](index=18&type=section&id=Note%209.%20Fair%20Value%20Measurement) Fair Value Measurement of Assets and Liabilities (March 31, 2023, in thousands) | Category | Level 1 | Level 2 | Level 3 | Total | | :------- | :------ | :------ | :------ | :---- | | Cash equivalents (Money market funds) | $42,821 | $— | $— | $42,821 | | Accrued and other current liabilities (Diesel collars) | $— | $934 | $— | $934 | | Accrued and other current liabilities (Commodity swaps) | $— | $138 | $— | $138 | - The company held commodity swaps for crude oil with a notional amount of **$14.0 million** as of March 31, 2023, all maturing by October 31, 2023[56](index=56&type=chunk) - Entered into diesel collar contracts in Q1 2023, resulting in an unrealized loss of **$0.9 million**, treated as mark-to-market derivatives[57](index=57&type=chunk) [Note 10. Construction Joint Ventures](index=19&type=section&id=Note%2010.%20Construction%20Joint%20Ventures) - At March 31, 2023, the company was engaged in **eleven active Consolidated Construction Joint Ventures (CCJVs)** with a combined total contract value of **$1.7 billion**, of which Granite's share was **$1.0 billion**[63](index=63&type=chunk) - Total revenue from CCJVs was **$61.3 million** in Q1 2023, down from **$104.3 million** in Q1 2022[63](index=63&type=chunk) - At March 31, 2023, the company was engaged in **seven active unconsolidated joint venture projects** with a combined total contract value of **$7.9 billion**, of which Granite's share was **$2.3 billion**[65](index=65&type=chunk) Granite's Interest in Unconsolidated Construction Joint Ventures (in thousands) | Metric | Q1 2023 | Q1 2022 | | :----- | :------ | :------ | | Revenue (Granite's interest) | $14,845 | $49,655 | | Cost of revenue (Granite's interest) | $13,967 | $53,269 | | Gross profit (loss) (Granite's interest) | $878 | $(3,614) | | Net income (loss) (Granite's interest) | $911 | $(3,627) | [Note 11. Investments in Affiliates](index=21&type=section&id=Note%2011.%20Investments%20in%20Affiliates) Investments in Affiliates (in thousands) | Category | March 31, 2023 | December 31, 2022 | | :------- | :------------- | :---------------- | | Foreign | $61,919 | $58,579 | | Real estate | $8,022 | $8,517 | | Asphalt terminal | $13,394 | $13,629 | | **Total investments in affiliates** | **$83,335** | **$80,725** | - Total investments in affiliates increased by **$2.6 million (3.2%)** from December 31, 2022, to March 31, 2023[72](index=72&type=chunk) [Note 12. Property and Equipment, net](index=22&type=section&id=Note%2012.%20Property%20and%20Equipment,%20net) Property and Equipment, net (in thousands) | Category | March 31, 2023 | December 31, 2022 | | :------- | :------------- | :---------------- | | Equipment and vehicles | $1,016,327 | $994,602 | | Quarry property | $226,682 | $219,843 | | Land and land improvements | $107,816 | $105,733 | | Buildings and leasehold improvements | $105,190 | $103,658 | | Office furniture and equipment | $83,860 | $82,465 | | **Property and equipment, net** | **$531,457** | **$509,210** | - Net property and equipment increased by **$22.2 million (4.4%)** from December 31, 2022, to March 31, 2023[75](index=75&type=chunk) [Note 13. Accrued Expenses and Other Current Liabilities](index=22&type=section&id=Note%2013.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Accrued Expenses and Other Current Liabilities (in thousands) | Category | March 31, 2023 | December 31, 2022 | | :------- | :------------- | :---------------- | | Accrued insurance | $84,156 | $78,427 | | Deficits in unconsolidated construction joint ventures | $14,496 | $13,989 | | Payroll and related employee benefits | $63,072 | $80,910 | | Performance guarantees | $58,190 | $64,703 | | Short-term lease liabilities | $17,552 | $18,662 | | Other | $29,075 | $31,778 | | **Total** | **$266,541** | **$288,469** | - Total accrued expenses and other current liabilities decreased by **$21.9 million (7.6%)** from December 31, 2022, to March 31, 2023[76](index=76&type=chunk) - The decrease in performance guarantees is due to receiving customer acceptance on **two unconsolidated construction joint ventures**[76](index=76&type=chunk) [Note 14. Long-Term Debt and Credit Arrangements](index=23&type=section&id=Note%2014.%20Long-Term%20Debt%20and%20Credit%20Arrangements) Long-Term Debt (in thousands) | Category | March 31, 2023 | December 31, 2022 | | :------- | :------------- | :---------------- | | 2.75% Convertible Notes | $230,000 | $230,000 | | Credit Agreement - revolver | $50,000 | $50,000 | | Other, net of debt issuance costs | $8,456 | $8,381 | | **Total debt** | **$288,456** | **$288,381** | | Less current maturities | $1,456 | $1,447 | | **Total long-term debt** | **$287,000** | **$286,934** | - As of March 31, 2023, unused availability under the Credit Agreement was **$269.5 million**, with **$50.0 million** drawn[79](index=79&type=chunk) - The company was in compliance with financial covenants: Consolidated Leverage Ratio of **1.4** (max 3.25) and Consolidated Interest Coverage Ratio of **15.7** (min 3.00)[80](index=80&type=chunk) [Note 15. Weighted Average Shares Outstanding and Net Loss Per Share](index=24&type=section&id=Note%2015.%20Weighted%20Average%20Shares%20Outstanding%20and%20Net%20Loss%20Per%20Share) Weighted Average Shares Outstanding and Net Loss Per Share (in thousands, except per share data) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 (As Restated) | | :----- | :-------------------------------- | :---------------------------------------------- | | Net loss attributable to common shareholders | $(23,023) | $(26,733) | | Weighted average common shares outstanding, basic | 43,764 | 45,730 | | Weighted average common shares outstanding, diluted | 43,764 | 45,730 | | Net loss per share, basic | $(0.53) | $(0.58) | | Net loss per share, diluted | $(0.53) | $(0.58) | - Restricted Stock Units (RSUs) (**583,000 shares** in Q1 2023) and potential dilution from **2.75% Convertible Notes** (**7,309,000 shares**) were excluded from diluted EPS calculation due to the antidilutive effect from net losses[84](index=84&type=chunk) [Note 16. Income Taxes](index=24&type=section&id=Note%2016.%20Income%20Taxes) Provision for (Benefit from) Income Taxes (in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 (As Restated and Recast) | | :----- | :-------------------------------- | :------------------------------------------------------- | | Provision for (benefit from) income taxes | $(9,469) | $6,352 | | Effective tax rate | 26.9% | (33.9%) | - The effective tax rate for Q1 2023 was **26.9%**, compared to **(33.9%)** in Q1 2022, primarily due to non-deductible goodwill associated with the Inliner sale in Q1 2022[85](index=85&type=chunk) [Note 17. Contingencies - Legal Proceedings](index=25&type=section&id=Note%2017.%20Contingencies%20-%20Legal%20Proceedings) - Total liabilities recorded for legal proceedings as of March 31, 2023, and December 31, 2022, were **immaterial**[87](index=87&type=chunk) - The company's subsidiary, **Layne Christensen Company**, is involved in a lawsuit and arbitration related to allegedly defective work on the Salesforce Tower foundation, seeking damages up to approximately **$100 million**[91](index=91&type=chunk) - Layne intends to vigorously defend against the claims and prosecute counterclaims, not believing a material loss is probable, but acknowledging a possible loss up to **$100 million**[91](index=91&type=chunk) [Note 18. Reportable Segment Information](index=26&type=section&id=Note%2018.%20Reportable%20Segment%20Information) - Reportable segments are **Construction and Materials**, aligned with how the Chief Operating Decision Maker (CODM) reviews financial information[92](index=92&type=chunk) Segment Revenue and Gross Profit (in thousands) | Segment | Q1 2023 Revenue | Q1 2023 Gross Profit | Q1 2022 Revenue (As Restated and Recast) | Q1 2022 Gross Profit (As Restated and Recast) | | :------ | :-------------- | :------------------- | :--------------------------------------- | :-------------------------------------------- | | Construction | $503,416 | $36,705 | $578,266 | $58,479 | | Materials | $56,652 | $(4,346) | $75,620 | $1,613 | | **Total** | **$560,068** | **$32,359** | **$653,886** | **$60,092** | - Construction gross profit decreased by **$21.8 million (37.2%)** YoY, primarily due to increased negative net impact from revisions in estimates and higher depreciation[113](index=113&type=chunk) - Materials gross profit decreased by **$6.0 million** YoY, driven by lower sales volumes due to inclement weather[114](index=114&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition, operating results, economic drivers, and liquidity, including the impact of the IIJA and Salesforce Tower litigation - The company delivers infrastructure solutions primarily in the U.S., with public sector work accounting for approximately **65%** of revenue[96](index=96&type=chunk)[107](index=107&type=chunk) - The **$1.2 trillion Infrastructure Investment and Jobs Act (IIJA)** is expected to increase project lettings in 2023 and more significantly in 2024 and beyond, improving programming visibility for state and local governments[98](index=98&type=chunk) - Committed and Awarded Projects (CAP) stood strong at **$5.1 billion** at the end of Q1 2023, an increase of **$618.8 million** from December 31, 2022[101](index=101&type=chunk)[111](index=111&type=chunk) [Overview](index=27&type=section&id=Overview) - Granite is a diversified infrastructure company in the U.S., serving public and private clients with projects including roads, highways, mass transit, airports, bridges, and site preparation[96](index=96&type=chunk) - Business is driven by **U.S. economy health**, **public funding levels**, population growth, aging infrastructure needs, and commodity pricing[97](index=97&type=chunk) [Current Economic Environment and Outlook](index=27&type=section&id=Current%20Economic%20Environment%20and%20Outlook) - Public work funding, accounting for approximately **65%** of work, is supported by federal (**IIJA**) and state/local measures (e.g., California's SB-1)[98](index=98&type=chunk)[99](index=99&type=chunk) - The company is mitigating **inflation**, **supply chain**, and **labor constraints** through proactive measures like fixed forward purchase contracts and energy surcharges[100](index=100&type=chunk) - Committed and Awarded Projects (CAP) reached **$5.1 billion** at the end of Q1 2023, indicating strong future opportunities[101](index=101&type=chunk) [Subsequent Event](index=28&type=section&id=Subsequent%20Event) - On April 24, 2023, the company acquired **Coast Mountain Resources (2020) Ltd.**, a Canadian construction aggregate producer, for approximately **$27 million**, with no material impact expected on operations[102](index=102&type=chunk) [Litigation Matter](index=28&type=section&id=Litigation%20Matter) - **Layne Christensen Company**, a subsidiary, faces a lawsuit and arbitration seeking approximately **$100 million** for allegedly defective work on the Salesforce Tower foundation[103](index=103&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Financial Summary (in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 (As Restated and Recast) | | :----- | :-------------------------------- | :------------------------------------------------------- | | Total revenue | $560,068 | $653,886 | | Gross profit | $32,359 | $60,092 | | Selling, general and administrative expenses | $73,122 | $70,120 | | Operating loss | $(43,249) | $(15,709) | | Net loss attributable to Granite Construction Incorporated | $(23,023) | $(26,733) | - Total revenue decreased by **$93.8 million (14.3%)** YoY, with Construction revenue down **12.9%** and Materials revenue down **25.1%**[106](index=106&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk) - Gross profit decreased by **$27.7 million (46.1%)** YoY, primarily due to increased negative net impact from revisions in estimates in the Central operating group and lower Materials sales volumes due to inclement weather[113](index=113&type=chunk)[114](index=114&type=chunk) - Selling, general and administrative expenses increased by **$3.0 million (4.3%)** YoY, driven by higher stock-based compensation and changes in deferred compensation plan liability, partially offset by the Inliner sale[115](index=115&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk) - The effective tax rate for Q1 2023 was **26.9%**, compared to **(33.9%)** in Q1 2022, mainly due to non-deductible goodwill from the Inliner sale[118](index=118&type=chunk) - Amount attributable to non-controlling interests increased by **$4.4 million** YoY, primarily due to the negative impact from revisions in estimates on one project[119](index=119&type=chunk) [Committed and Awarded Projects (CAP)](index=30&type=section&id=Committed%20and%20Awarded%20Projects) - CAP includes unearned revenue (future revenue on executed contracts) and other awards (CM/GC contracts, unexercised options/task orders)[109](index=109&type=chunk)[110](index=110&type=chunk) Committed and Awarded Projects (CAP) (in thousands) | Category | March 31, 2023 | December 31, 2022 | | :------- | :------------- | :---------------- | | Unearned revenue | $3,163,568 | $2,877,478 | | Other awards | $1,940,385 | $1,607,661 | | **Total CAP** | **$5,103,953** | **$4,485,139** | - CAP increased by **$618.8 million (13.8%)** from December 31, 2022, to March 31, 2023, with significant additions from broadband infrastructure, Guam construction, and highway projects[111](index=111&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) - Primary liquidity sources are **cash**, **investments**, **available borrowing capacity**, and **cash from operations**[121](index=121&type=chunk)[123](index=123&type=chunk) Cash, Cash Equivalents and Marketable Securities (in thousands) | Category | March 31, 2023 | December 31, 2022 | | :------- | :------------- | :---------------- | | Cash and cash equivalents excluding CCJVs | $87,411 | $191,444 | | CCJV cash and cash equivalents | $112,340 | $102,547 | | Short-term and long-term marketable securities | $56,329 | $65,943 | | **Total cash, cash equivalents and marketable securities** | **$256,080** | **$359,934** | - Total cash, cash equivalents, and marketable securities decreased by **$103.9 million (28.9%)** from December 31, 2022, to March 31, 2023[126](index=126&type=chunk) - Capital expenditures for Q1 2023 were **$40.5 million**, up from **$31.3 million** in Q1 2022, primarily due to acquisitions of materials reserves[129](index=129&type=chunk) - Anticipated 2023 capital expenditures are **$100 million to $120 million**[129](index=129&type=chunk) - Cash used in operating activities increased by **$26.5 million** YoY, mainly due to timing of working capital receipts and payments[130](index=130&type=chunk) - Investing activities shifted from providing **$89.4 million** to using **$24.3 million** YoY, primarily due to the Inliner sale proceeds in 2022[132](index=132&type=chunk) - Financing activities shifted from using **$82.9 million** to providing **$6.8 million** YoY, driven by decreased debt repayments and stock repurchases[133](index=133&type=chunk)[134](index=134&type=chunk) - The company maintains bonding capacity for **$2.6 billion** of its **$5.1 billion** Committed and Awarded Projects (CAP), requiring satisfactory cash and working capital balances[137](index=137&type=chunk) - The company was in compliance with all financial covenants under its **Credit Agreement** as of March 31, 2023[140](index=140&type=chunk) - As of March 31, 2023, **$231.5 million** remained available under the **$300.0 million** share repurchase authorization[141](index=141&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section reports no material changes in the company's market risk exposure since the last Annual Report - No **material change** in market risk exposure from what was previously disclosed in the Annual Report[144](index=144&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were ineffective due to a material weakness, though financial statements are fairly presented, with remediation efforts focused on income tax controls - Disclosure controls and procedures were **not effective** as of March 31, 2023, due to a **material weakness** in internal control over financial reporting[145](index=145&type=chunk) - Despite the material weakness, management concluded that the financial statements in this Form 10-Q **fairly present** the company's financial position, results of operations, and cash flows[145](index=145&type=chunk) - Remediation plan includes enhancing **income tax controls** for significant transactions and adding reviews for quarterly effective tax rate calculations[146](index=146&type=chunk)[153](index=153&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates legal proceedings from Note 17, confirming no new material developments - The description of legal proceedings from **Note 17** of the financial statements is incorporated by reference[148](index=148&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since the last Annual Report - No **material changes** in the risk factors previously disclosed in the Annual Report[149](index=149&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details Q1 2023 common stock repurchases for employee tax withholding and remaining share repurchase authorization Common Stock Repurchases (Q1 2023) | Period | Total number of shares purchased | Average price paid per share | Approximate dollar value of shares that may yet be purchased | | :----- | :------------------------------- | :--------------------------- | :--------------------------------------------------------- | | January 1, 2023 through January 31, 2023 | 85 | $35.20 | $231,535,405 | | February 1, 2023 through February 28, 2023 | 386 | $41.70 | $231,535,405 | | March 1, 2023 through March 31, 2023 | 86,789 | $40.38 | $231,535,405 | | **Total** | **87,260** | **$40.38** | **$231,535,405** | - Shares purchased were in connection with **employee tax withholding** for restricted stock units vested under equity incentive plans[150](index=150&type=chunk) - As of March 31, 2023, **$231.5 million** of the **$300.0 million** share repurchase authorization remained available[151](index=151&type=chunk) [Item 4. Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures and regulatory matters are referenced in Exhibit 95 as required by the Dodd-Frank Act - Information concerning **mine safety violations** or other regulatory matters is included in **Exhibit 95**[154](index=154&type=chunk) [Item 6. Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications, mine safety disclosures, and XBRL documents - The report includes various exhibits such as **certifications (31.1, 31.2, 32)**, **Mine Safety Disclosure (95)**, and **Inline XBRL documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)**[155](index=155&type=chunk) SIGNATURES [Signature](index=38&type=section&id=Signature) The report is signed by Elizabeth L. Curtis, Executive Vice President and Chief Financial Officer, on May 2, 2023 - The report was signed by **Elizabeth L. Curtis**, Executive Vice President and Chief Financial Officer, on **May 2, 2023**[158](index=158&type=chunk)

Financial Performance - Total revenue was $560 million [22], with a negative adjusted EBITDA of $(9) million [22] resulting in an adjusted EBITDA margin of (1.6)% [22] - Adjusted net loss attributable to Granite Construction Incorporated was $(17.83) million [42], leading to an adjusted diluted loss per share of $(0.41) [34, 42] - Materials revenue was $57 million [22] CAP (Committed and Awarded Projects) - Total CAP reached a record of $5.1 billion [6, 44], up by $619 million sequentially, representing a 14% increase, and a 30% increase year-over-year [6] - California Group's CAP totaled $1.4 billion [14], a sequential increase of $364 million or 34%, and a year-over-year increase of 40% [14] - Mountain Group's CAP was $1.8 billion [29], up $89 million or 5% sequentially, and 22% year-over-year [29] - California Group's CAP was $1.9 billion [6], up $167 million or 10% sequentially, and 29% year-over-year [6] Segment Performance - Asphalt volumes decreased by 39% year-over-year [21] and aggregate volumes decreased by 21% year-over-year [21] in the materials segment due to inclement weather [21] Outlook - The company maintains its 2023 guidance with revenue expected to be between $3.4 billion and $3.6 billion [24], and an adjusted EBITDA margin between 7.5% and 9.0% [24, 36]

Revenue Sources - In 2022, approximately 70% of the company's construction-related revenue was derived from contracts funded by government agencies[59] - Approximately 70% of the company's construction revenue for the year ended December 31, 2022, was funded by federal, state, and local government agencies[94] Contract Types and Risks - The percentage of fixed unit price contracts in unearned revenue increased to 72.7% in 2022 from 53.3% in 2021[63] - The percentage of fixed price contracts in unearned revenue decreased to 23.5% in 2022 from 44.3% in 2021[63] - The company faces risks related to government contracts, including potential delays or cancellations, which could adversely affect financial performance[93] - The company faces risks from fixed price and fixed unit price contracts, which can lead to increased project costs due to inflation and inefficiencies[94] Financial Position and Performance - Economic factors such as inflation and rising interest rates could negatively impact the company's financial position and results of operations[96] - The company's ability to win new contracts and renew existing ones is critical, as failure to do so could materially affect its financial condition[94] - The company's Central operating group results could adversely affect its overall financial performance if underperformance occurs[96] - The company has identified a material weakness in its internal control over financial reporting, which could lead to material misstatements in financial statements and adversely affect investor confidence[106] - The company has restated its consolidated financial statements for certain prior periods, correcting errors related to deferred taxes and income tax expense, which may continue to impact business operations and financial condition[108] Regulatory Compliance and Risks - The company is subject to various government regulations, including the Davis-Bacon Act and the Walsh-Healy Act, which impose specific wage and working condition requirements[60] - The company is subject to various regulatory requirements, including the Davis-Bacon Act and the Walsh-Healy Act, which could lead to suspension or debarment from government contracting if violated[109] - The company is exposed to potential penalties for non-compliance with environmental laws, which could adversely affect operations in the future[58] - The company faces significant risks related to environmental regulations, including potential substantial penalties for noncompliance, which could adversely affect financial position and operations[109] Operational Management - The company has implemented proactive measures to mitigate the impact of inflation and supply chain constraints, including fixed forward purchase contracts for oil-related inputs[77] - The company utilizes several project delivery methods, including design-build and construction management at-risk, to enhance efficiency and risk mitigation[64] - The company continuously monitors and adjusts its fleet size to align with current and expected future work, indicating a proactive approach to resource management[79] - The company’s strategic focus includes leasing or renting equipment to adapt to construction activity cycles, enhancing operational flexibility[79] Equipment and Capital Expenditure - As of December 31, 2022, the company owned 2,471 pieces of heavy construction equipment, a decrease from 2,736 in 2021, and 5,059 vehicles, down from 5,460 in 2021[78] - The company purchased $73.9 million worth of construction equipment and vehicles in 2022, compared to $60.1 million in 2021, indicating a 22% increase in capital expenditure[79] - The company sold 393 pieces of heavy construction equipment and 720 vehicles during the first quarter of 2022 as part of the sale of a business classified as held for sale[78] - The company has a diverse portfolio of equipment, including backhoes, cranes, and excavators, utilized across its operational segments[79] Market and Economic Factors - The company is exposed to significant commodity price fluctuations, including diesel fuel and steel, which could adversely affect its business[96] - Weather conditions can significantly impact the company's revenues and profitability, particularly in the first and fourth quarters of the year[96] - Seasonal weather conditions significantly impact operations, particularly in the first and fourth quarters, affecting construction schedules and revenue variability[80] - Force majeure events, including natural disasters, could negatively impact the company's operations and financial results[96] Personnel and Management - The executive team includes experienced professionals, with the CEO having been with the company since 1996 and holding various leadership roles[83] - The company must attract and retain qualified personnel and subcontractors, as failure to do so could adversely impact project execution and profitability[104] Financial Instruments and Debt - As of December 31, 2022, the balance in long-term debt for the 2.75% Convertible Notes was $230.0 million, an increase from $207.4 million in 2021[225] - The company had $50.0 million drawn under the Revolver as of December 31, 2022, with an effective interest rate of 5.92%[226] - The estimated fair value of the 2.75% Convertible Notes was approximately $281.4 million as of December 31, 2022, down from $313.8 million in 2021[227] - The weighted average interest rate for cash and cash equivalents and held-to-maturity investments was 3.66% as of December 31, 2022[227] Investment and Market Risks - The company maintains an investment portfolio targeted to an average maturity of no more than one year, with a focus on high credit quality standards[221] - The company’s investment interest rate market risk is managed primarily by controlling portfolio maturity[223] - The fair value of long-term held-to-maturity investments may be affected by changes in interest rates[223] - The company’s investment policy limits credit exposure to any one issue, issuer, or type of instrument[221] Legal and Compliance Risks - The company may incur significant costs and management attention due to litigation and regulatory examinations related to the restatement of financial statements[106] - The company is exposed to liabilities under the Foreign Corrupt Practices Act (FCPA), which could result in fines and sanctions that negatively impact financial condition and operations[110] - Cybersecurity attacks could lead to business interruptions and remediation costs, adversely affecting financial position and results of operations[113] Stock and Market Performance - The company’s stock price has historically been volatile, influenced by market factors and operational results, which could affect investor confidence and market valuation[113] - Delaware law and the company's charter may impede takeovers, potentially reducing increases in the market price of common stock[113] - The company’s stock price and access to capital markets may be adversely affected if it fails to remediate the identified material weakness in internal controls[106] - The company’s reputation and ability to pursue beneficial transactions may be negatively impacted due to the restatement of financial statements and associated issues[108]

Granite Construction Incorporated (NYSE:GVA) Q4 2022 Earnings Conference Call February 16, 2023 11:00 AM ET Company Participants Mike Barker - VP, IR Kyle Larkin - President and CEO Lisa Curtis - EVP and CFO Conference Call Participants Steven Ramsey - Thompson Research Group Brent Thielman - D.A. Davidson Brian Russo - Sidoti Operator Good morning. My name is Dave, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Granite Construction Investor Relations ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission File Number: 1-12911 GRANITE CONSTRUCTION INCORPORATED State of Incorporation: I.R.S. Employer Identification Number: Delaware ...

Granite Construction Incorporated (NYSE:GVA) Q3 2022 Earnings Conference Call October 27, 2022 11:00 AM ET Company Participants Mike Barker - VP, IR Kyle Larkin - President and CEO Lisa Curtis - EVP and CFO Conference Call Participants Michael Dudas - Vertical Research Partners Steven Ramsey - Thompson Research Group Brian Russo - Sidoti John Ramirez - Ben Tillman Operator Good morning. My name is Ramon, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the G ...