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Is Granite Construction (GVA) Outperforming Other Construction Stocks This Year?
zacks.com· 2024-05-28 14:40
Investors interested in Construction stocks should always be looking to find the best-performing companies in the group. Is Granite Construction (GVA) one of those stocks right now? A quick glance at the company's yearto-date performance in comparison to the rest of the Construction sector should help us answer this question. Granite Construction is a member of our Construction group, which includes 94 different companies and currently sits at #1 in the Zacks Sector Rank. The Zacks Sector Rank gauges the st ...
Granite Construction (GVA) is a Great Momentum Stock: Should You Buy?
zacks.com· 2024-05-27 17:01
While many investors like to look for momentum in stocks, this can be very tough to define. There is a lot of debate surrounding which metrics are the best to focus on and which are poor quality indicators of future performance. The Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us. Below, we take a look at Granite Construction (GVA) , which currently has a Momentum Style Score of B. We also discuss some of the main drivers of the Momentum Style Score, like price ch ...
Despite Fast-paced Momentum, Granite Construction (GVA) Is Still a Bargain Stock
zacks.com· 2024-05-27 13:51
A safer approach could be investing in bargain stocks with recent price momentum. While the Zacks Momentum Style Score (part of the Zacks Style Scores system) helps identify great momentum stocks by paying close attention to trends in a stock's price or earnings, our 'Fast-Paced Momentum at a Bargain' screen comes handy in spotting fast-moving stocks that are still attractively priced. Momentum investors typically don't time the market or "buy low and sell high." In other words, they avoid betting on cheap ...
Granite (GVA) Wins $36M Contract From Caltrans, Boosts CAP
zacks.com· 2024-05-22 17:56
Granite Construction Incorporated (GVA) is all set to rehabilitate pavement along Highway 162 in Mendocino County with a $36 million contract received from the California Department of Transportation (Caltrans). Per the deal, Granite will furnish and place 150,000 tons of conventional and rubberized hot mix asphalt to rebuild the structural section of the roadway. This will improve 25 miles of roadway that connect to the Covelo- Round Valley area. The rubberized surface course will use recycled tires and pr ...
What Makes Granite Construction (GVA) a Strong Momentum Stock: Buy Now?
Zacks Investment Research· 2024-05-07 17:01
Momentum investing revolves around the idea of following a stock's recent trend in either direction. In the 'long' context, investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.While many investors like to look for moment ...
Granite Construction (GVA) Is Attractively Priced Despite Fast-paced Momentum
Zacks Investment Research· 2024-05-07 13:51
Momentum investing is essentially the opposite of the tried-and-tested Wall Street adage -- "buy low and sell high." Investors following this investing style typically avoid betting on cheap stocks and waiting long for them to recover. They believe instead that one could make far more money in lesser time by "buying high and selling higher."Who doesn't like betting on fast-moving trending stocks? But determining the right entry point isn't easy. Often, these stocks lose momentum once their valuation moves a ...
Granite(GVA) - 2024 Q1 - Quarterly Report
2024-05-02 21:04
UNITED STATES Table of Contents x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR 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 GRANITE CONSTRUCTION INCORPORATED State of Incorporation: I.R.S. Employer Identification Number: Delaware 77-0239383 SECURITIES AND EXCHANGE COMMISSION Washingt ...
Granite(GVA) - 2024 Q1 - Quarterly Results
2024-05-02 10:45
[First Quarter 2024 Financial Highlights](index=1&type=section&id=First%20Quarter%202024%20Financial%20Highlights) [Overall Performance Summary](index=1&type=section&id=Overall%20Performance%20Summary) Granite Construction reported a 20% revenue increase and a significant turnaround in operating cash flow in Q1 2024 Net Loss and EPS Attributable to Granite | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Loss Attributable to Granite | $(31) million | $(23) million | | Diluted EPS | $(0.70) | $(0.53) | | Adjusted Net Loss Attributable to Granite | $(9) million | $(14) million | | Adjusted Diluted EPS | $(0.21) | $(0.33) | Key Financial Metrics | Metric | Q1 2024 | Change (YoY) | | :--- | :--- | :--- | | Revenue | $672 million | +20% | | Operating Cash Flow | $24 million | +$101 million | | Committed and Awarded Projects (CAP) | $5.5 billion | +$395 million | - CEO Kyle Larkin highlighted a **strong start** to 2024, building on momentum from 2023 with **significant revenue growth** and **improved operating cash flow** The company realigned its operational leadership around the construction and materials segments to better leverage expertise and drive growth[4](index=4&type=chunk) - Selling, general, and administrative (SG&A) expenses increased by **$15 million** year-over-year, primarily due to **$7 million** in additional stock-based compensation and **$5 million** from acquired businesses SG&A as a percentage of revenue remained flat at **13.1%**[7](index=7&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) [Construction Segment](index=2&type=section&id=Construction%20Segment) Construction segment revenue grew 18.2% to $595.2 million, with gross profit up 54.8% and robust CAP at $5.5 billion Construction Segment Performance | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue | $595.2 million | $503.4 million | +18.2% | | Gross Profit | $56.8 million | $36.7 million | +54.8% | | Gross Profit Margin | 9.5% | 7.3% | +2.2 percentage points | - Revenue growth was led by operations in California, Utah, and the Midwest, benefiting from better weather in 2024 and a higher backlog (CAP) Acquired businesses contributed **$6 million** to revenue[8](index=8&type=chunk) - The increase in gross profit was attributed to higher revenue and a decrease in negative revisions in estimates However, this was partially offset by **$5 million** in gross losses from acquired businesses, which included **$3 million** in purchase accounting-related depreciation and amortization[8](index=8&type=chunk) - Committed and Awarded Projects (CAP) increased by **$395 million** year-over-year to **$5.5 billion**, remaining flat sequentially The company sees substantial opportunities to build CAP throughout 2024 in strong public and private markets[9](index=9&type=chunk) [Materials Segment](index=2&type=section&id=Materials%20Segment) Materials segment revenue increased 36.0% to $77.1 million, with gross loss improving to $2.5 million Materials Segment Performance | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue | $77.1 million | $56.7 million | +36.0% | | Gross Profit (Loss) | $(2.5) million | $(4.3) million | +41.5% | | Gross Profit Margin | (3.3)% | (7.7)% | +4.4 percentage points | - Revenue growth was driven by **$10 million** from acquired businesses, higher asphalt and aggregate sales prices, and increased volumes from more favorable weather conditions in 2024[10](index=10&type=chunk) - Gross profit improved due to higher sales prices but was partially offset by a **$3 million** gross loss from acquired businesses, of which **$2 million** was related to purchase accounting step-up depreciation and amortization[10](index=10&type=chunk) [2024 Outlook](index=3&type=section&id=2024%20Outlook) [Fiscal Year 2024 Guidance](index=3&type=section&id=Fiscal%20Year%202024%20Guidance) Granite updated its 2024 guidance, raising adjusted EBITDA margin to 9.5%-11.5% due to stock-based compensation exclusion - The company increased its adjusted EBITDA margin guidance for 2024 to a range of **9.5% to 11.5%**, up from **9.0% to 11.0%**, to account for the exclusion of stock-based compensation expense in the calculation[11](index=11&type=chunk) Fiscal Year 2024 Guidance | Metric | 2024 Guidance | | :--- | :--- | | Revenue | $3.8 billion to $4.0 billion | | Adjusted EBITDA margin | 9.5% to 11.5% | | SG&A expense (% of revenue) | 7.5% to 8.0% | | Effective tax rate (for adjusted net income) | Mid-20s | | Capital expenditures | $130 million to $150 million | [Financial Statements](index=5&type=section&id=Financial%20Statements) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $2.60 billion as of March 31, 2024, driven by lower cash and receivables Condensed Consolidated Balance Sheets | Balance Sheet Item | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $321.8 million | $417.7 million | | Total current assets | $1,418.1 million | $1,643.5 million | | Total assets | $2,595.0 million | $2,813.5 million | | Total current liabilities | $936.4 million | $1,029.9 million | | Total liabilities | $1,590.4 million | $1,786.6 million | | Total equity | $1,004.6 million | $1,027.0 million | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2024 revenue increased to $672.3 million, but net loss widened to $31.0 million due to higher costs Condensed Consolidated Statements of Operations | Income Statement Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total Revenue | $672.3 million | $560.1 million | | Gross Profit | $54.3 million | $32.4 million | | Operating Loss | $(43.3) million | $(43.2) million | | Net Loss Attributable to Granite | $(31.0) million | $(23.0) million | | Diluted Loss Per Share | $(0.70) | $(0.53) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow significantly improved to $24.1 million in Q1 2024, reducing net cash decrease Condensed Consolidated Statements of Cash Flows | Cash Flow Item (Three Months Ended March 31) | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $24.1 million | $(76.7) million | | Net cash used in investing activities | $(10.8) million | $(24.3) million | | Net cash provided by (used in) financing activities | $(109.2) million | $6.8 million | | Net decrease in cash | $(95.9) million | $(94.2) million | | Cash at end of period | $321.8 million | $199.8 million | [Non-GAAP Financial Measures Reconciliation](index=9&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) [EBITDA and Adjusted EBITDA Reconciliation](index=10&type=section&id=EBITDA%20and%20Adjusted%20EBITDA%20Reconciliation) Adjusted EBITDA significantly improved to $14.1 million in Q1 2024, reflecting a revised calculation excluding stock-based compensation EBITDA and Adjusted EBITDA Reconciliation | Reconciliation Item (Three Months Ended March 31) | 2024 | 2023 | | :--- | :--- | :--- | | Net loss attributable to Granite | $(31.0) million | $(23.0) million | | EBITDA | $(9.9) million | $(13.5) million | | **Adjusted EBITDA** | **$14.1 million** | **$(4.1) million** | | Adjusted EBITDA margin | 2.1% | (0.7)% | - In the first quarter of 2024, the company revised its adjusted EBITDA calculation to exclude the impact of stock-based compensation expense Prior period figures have been recast to conform to the new presentation[30](index=30&type=chunk) [Adjusted Net Income (Loss) Reconciliation](index=11&type=section&id=Adjusted%20Net%20Income%20(Loss)%20Reconciliation) Adjusted net loss improved to $9.2 million in Q1 2024, with adjusted diluted EPS at $(0.21) Adjusted Net Income (Loss) Reconciliation | Reconciliation Item (Three Months Ended March 31) | 2024 | 2023 | | :--- | :--- | :--- | | Net loss attributable to Granite | $(31.0) million | $(23.0) million | | After-tax adjusting items | $21.8 million | $8.8 million | | **Adjusted net loss attributable to Granite** | **$(9.2) million** | **$(14.3) million** | | Diluted net loss per share | $(0.70) | $(0.53) | | **Adjusted diluted loss per share** | **$(0.21)** | **$(0.33)** | - Similar to Adjusted EBITDA, the adjusted net income calculation was revised in Q1 2024 to exclude stock-based compensation expense, and prior period calculations were recast for comparability[32](index=32&type=chunk)
Granite(GVA) - 2023 Q4 - Annual Report
2024-02-23 00:55
Part I [Item 1. Business](index=5&type=section&id=Item%201.%20BUSINESS) Granite Construction is a diversified U.S. construction and materials company focused on public and private infrastructure projects - Granite operates through two reportable segments: Construction (infrastructure projects like roads, bridges, transit) and Materials (aggregates, asphalt production)[15](index=15&type=chunk) - The company's largest customer is the California Department of Transportation (Caltrans), accounting for **13.1%** of total revenue in 2023[17](index=17&type=chunk) Revenue from Caltrans (2021-2023) | Year | Revenue (millions) | % of Total Revenue | | :--- | :--- | :--- | | 2023 | $458.2 | 13.1% | | 2022 | $348.0 | 10.5% | | 2021 | $337.1 | 9.6% | - Key business strategies include selective bidding on projects, risk-balanced growth, vertical integration of materials into construction, diversification of projects, and performance-based incentives[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - Committed and Awarded Projects (CAP) totaled **$5.5 billion** at the end of 2023, a significant increase from **$4.5 billion** at the end of 2022. Approximately **$2.3 billion** of the 2023 unearned revenue is expected to be completed in 2024[44](index=44&type=chunk) [Item 1A. Risk Factors](index=15&type=section&id=Item%201A.%20RISK%20FACTORS) The company faces risks from government funding, fixed-price contracts, operational performance, cybersecurity, and climate change - Approximately **70%** of construction revenue in 2023 was funded by government agencies, making the business highly susceptible to disruptions in public funding, budget constraints, or changes in government priorities[92](index=92&type=chunk)[113](index=113&type=chunk) - The majority of contracts are fixed price or fixed unit price, which exposes the company to risks of cost overruns due to inflation, incorrect estimates, or project delays, potentially reducing profits or causing losses[58](index=58&type=chunk)[92](index=92&type=chunk) - The company faces risks from its Central operating group's performance, which includes the former Heavy Civil operating group that was subject to a strategic review and prior financial misstatements[97](index=97&type=chunk)[110](index=110&type=chunk) - Cybersecurity incidents, reliance on third-party software, and breaches of IT systems pose significant risks that could lead to business interruptions, remediation costs, and legal claims[116](index=116&type=chunk)[117](index=117&type=chunk) - Climate change presents physical, transition, and regulatory risks. Failure to achieve sustainability targets could result in loss of investors and customers, reputational damage, and a negative impact on the stock price[121](index=121&type=chunk)[122](index=122&type=chunk) [Item 1B. Unresolved Staff Comments](index=27&type=section&id=Item%201B.%20UNRESOLVED%20STAFF%20COMMENTS) The company reports that it has no unresolved staff comments from the Securities and Exchange Commission - There are no unresolved staff comments[124](index=124&type=chunk) [Item 1C. Cybersecurity](index=27&type=section&id=Item%201C.%20CYBERSECURITY) Granite's Board oversees cybersecurity risk management via a NIST-based program led by the CIO, with no material impact to date - The Audit/Compliance Committee of the Board of Directors has primary oversight responsibility for cybersecurity risk[125](index=125&type=chunk) - The company's cybersecurity program is based on recognized frameworks like NIST and includes technical safeguards, incident response planning, third-party assessments, and employee training[125](index=125&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk) - The Chief Information Officer (CIO), who has over 25 years of experience, leads a multidisciplinary Cybersecurity Committee that reports to senior leadership[132](index=132&type=chunk)[133](index=133&type=chunk) - The company has concluded that cybersecurity threats have not materially affected and are not reasonably likely to materially affect its business strategy, results of operations, or financial condition[134](index=134&type=chunk) [Item 2. Properties](index=28&type=section&id=Item%202.%20PROPERTIES) The company owns numerous quarry properties with substantial mineral reserves and resources, and operates various production plants Quarry Properties by State/Province (as of Dec 31, 2023) | State/Province | Number of Properties | Total Resources (million tons) | Total Reserves (million tons) | Acreage | | :--- | :--- | :--- | :--- | :--- | | California | 31 | 475.3 | 285.0 | 10,498 | | Utah | 10 | 117.3 | 37.4 | 1,497 | | All other | 57 | 187.4 | 187.3 | 14,712 | | **Total** | **98** | **780.0** | **509.7** | **26,707** | Total Mineral Reserves and Resources (as of Dec 31, 2023) | Category | Amount (million tons) | | :--- | :--- | | **Mineral Resources** | | | Measured & Indicated | 235.6 | | Inferred | 41.4 | | **Total Resources** | **277.0** | | **Mineral Reserves** | | | Proven & Probable | 1,012.7 | Owned Plant Properties | Plant Type | 2023 Count | 2022 Count | | :--- | :--- | :--- | | Aggregate crushing plants | 35 | 28 | | Asphalt concrete plants | 59 | 48 | | Cement concrete batch plants | 6 | 5 | [Item 3. Legal Proceedings](index=33&type=section&id=Item%203.%20LEGAL%20PROCEEDINGS) Legal proceedings information is incorporated by reference from Note 20 of the Consolidated Financial Statements - Details on legal proceedings are provided in Note 20 of the financial statements[157](index=157&type=chunk) [Item 4. Mine Safety Disclosures](index=33&type=section&id=Item%204.%20MINE%20SAFETY%20DISCLOSURES) Information concerning mine safety violations and other regulatory matters is included in Exhibit 95 of the Annual Report - Mine safety disclosures are included in Exhibit 95 to this Form 10-K[158](index=158&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=33&type=section&id=Item%205.%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) Granite's common stock trades on NYSE (GVA), with a history of dividends and a significant share repurchase program remaining - The company's common stock is traded on the New York Stock Exchange under the ticker symbol GVA[160](index=160&type=chunk) - A share repurchase program authorized in February 2022 for up to **$300.0 million** had **$231.5 million** remaining available as of December 31, 2023[162](index=162&type=chunk) - During Q4 2023, 5,477 shares were repurchased at an average price of $40.90 per share, solely in connection with employee tax withholding for vested restricted stock units[161](index=161&type=chunk) [Item 6. [Reserved]](index=34&type=section&id=Item%206.%20%5BRESERVED%5D) This item is intentionally left blank [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Granite's 2023 revenue grew to $3.51 billion, but net income decreased due to a debt extinguishment loss, despite record CAP Consolidated Results of Operations (2021-2023) | (in thousands) | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Total revenue | $3,509,138 | $3,301,256 | $3,501,865 | | Gross profit | $396,399 | $369,494 | $362,645 | | Operating income | $80,062 | $85,381 | $24,718 | | Net income attributable to Granite | $43,599 | $83,302 | $10,096 | - The public funding environment is strong, supported by the federal Infrastructure Investment and Jobs Act (IIJA), which is expected to drive project lettings in 2024 and beyond[181](index=181&type=chunk) - In November 2023, the company acquired Lehman-Roberts Company and Memphis Stone & Gravel Company (LRC/MSG) for **$278.0 million** to expand its vertically integrated operations in the Memphis market[188](index=188&type=chunk) - Committed and Awarded Projects (CAP) grew by **24%** to a record **$5.5 billion** at year-end 2023, up from **$4.5 billion** in 2022, driven by strong award volume in the California and Mountain operating groups[201](index=201&type=chunk) - Net income was significantly impacted by a **$51.1 million** loss on debt extinguishment related to the refinancing of a portion of the 2.75% Convertible Notes[211](index=211&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company faces market risks from interest rate fluctuations on variable-rate debt and foreign currency volatility - The company's primary market risks are interest rate changes affecting its variable-rate debt and investment income, and foreign currency fluctuations from its Canadian operations[241](index=241&type=chunk)[244](index=244&type=chunk) - Borrowings under the Revolver and Term Loan are tied to the SOFR term rate, exposing the company to higher interest expenses as rates rise[245](index=245&type=chunk)[246](index=246&type=chunk) Debt Obligations Principal Amounts by Maturity (as of Dec 31, 2023) | Debt Instrument | 2024 | 2025 | 2026 | 2027 | 2028 | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Credit Agreement Revolver | $— | $— | $— | $100,000 | $— | $100,000 | | Credit Agreement Term Loan | $7,500 | $7,500 | $7,500 | $127,500 | $— | $150,000 | | 3.75% Convertible Notes | $— | $— | $— | $— | $373,750 | $373,750 | | 2.75% Convertible Notes | $31,338 | $— | $— | $— | $— | $31,338 | [Item 8. Financial Statements and Supplementary Data](index=48&type=section&id=Item%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) Consolidated financial statements and the independent auditor's report are incorporated by reference - The consolidated financial statements and the independent auditor's report are included in Part IV, Item 15 of this report[250](index=250&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=48&type=section&id=Item%209.%20CHANGES%20IN%20AND%20DISAGREEMENTS%20WITH%20ACCOUNTANTS%20ON%20ACCOUNTING%20AND%20FINANCIAL%20DISCLOSURE) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - There were no disagreements with accountants on accounting and financial disclosure[251](index=251&type=chunk) [Item 9A. Controls and Procedures](index=48&type=section&id=Item%209A.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls and internal control over financial reporting were effective, excluding recent acquisitions - The principal executive and financial officers concluded that disclosure controls and procedures were effective as of December 31, 2023[252](index=252&type=chunk) - Management assessed internal control over financial reporting as effective as of December 31, 2023[254](index=254&type=chunk) - The assessment of internal controls excluded the newly acquired LRC/MSG businesses, which were acquired on November 30, 2023[255](index=255&type=chunk) [Item 9B. Other Information](index=49&type=section&id=Item%209B.%20OTHER%20INFORMATION) No directors or officers adopted, modified, or terminated trading arrangements in Q4 2023 - No directors or officers adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement in Q4 2023[257](index=257&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](index=49&type=section&id=Item%209C.%20DISCLOSURE%20REGARDING%20FOREIGN%20JURISDICTIONS%20THAT%20PREVENT%20INSPECTIONS) The company reports that this item is not applicable - There is no disclosure required under this item[258](index=258&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=50&type=section&id=Item%2010.%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%20AND%20CORPORATE%20GOVERNANCE) Information on directors, executive officers, and corporate governance is incorporated by reference from the proxy statement - Information is incorporated by reference from the company's definitive proxy statement[261](index=261&type=chunk) [Item 11. Executive Compensation](index=50&type=section&id=Item%2011.%20EXECUTIVE%20COMPENSATION) Executive compensation information is incorporated by reference from the company's definitive proxy statement - Information is incorporated by reference from the company's definitive proxy statement[262](index=262&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=50&type=section&id=Item%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) Security ownership information is incorporated by reference from the company's definitive proxy statement - Information is incorporated by reference from the company's definitive proxy statement[263](index=263&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=50&type=section&id=Item%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%2C%20AND%20DIRECTOR%20INDEPENDENCE) Related party transactions and director independence information is incorporated by reference from the proxy statement - Information is incorporated by reference from the company's definitive proxy statement[264](index=264&type=chunk) [Item 14. Principal Accountant Fees and Services](index=50&type=section&id=Item%2014.%20PRINCIPAL%20ACCOUNTANT%20FEES%20AND%20SERVICES) Principal accountant fees and services information is incorporated by reference from the company's definitive proxy statement - Information is incorporated by reference from the company's definitive proxy statement[265](index=265&type=chunk) Part IV [Item 15. Exhibits, Financial Statement Schedules](index=51&type=section&id=Item%2015.%20EXHIBITS%2C%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists documents filed as part of the Form 10-K, including financial statements and an index of exhibits - The consolidated financial statements and the Report of Independent Registered Public Accounting Firm are filed as part of this report[267](index=267&type=chunk) - An index of exhibits, including agreements, bylaws, and certifications, is provided, with many documents incorporated by reference from previous filings[268](index=268&type=chunk)[272](index=272&type=chunk)
Granite(GVA) - 2023 Q4 - Earnings Call Transcript
2024-02-22 22:02
Financial Data and Key Metrics Changes - For fiscal year 2023, adjusted net income improved to $140 million and adjusted diluted earnings per share improved to $3.14, with adjusted EBITDA margin increasing to 7.7%, up from 6.4% in 2022 [28][51][52] - In the fourth quarter, adjusted net income was $36 million with adjusted diluted earnings per share of $0.82, and revenue increased by 18% compared to the same quarter in 2022 [51][52][54] - The construction segment's annual revenue increased by $188 million or 7% year-over-year to $3 billion, with a gross profit margin of 11% [78][80] Business Line Data and Key Metrics Changes - The construction segment experienced a revenue growth of 19% year-over-year in the fourth quarter, driven by a record capital allocation (CAP) [45][46] - The materials segment saw annual revenue increase by $20 million year-over-year to $517 million, with gross profit increasing by $6 million to $71 million and a gross profit margin of 14% [54][55] - The California group reported a CAP increase of $91 million to $2.4 billion from the third quarter, entering 2024 with a CAP 39% higher than the prior year [71] Market Data and Key Metrics Changes - In California, transportation funding has led to a 38% increase in Caltrans project awards during 2023 compared to 2022, with a proposed budget for the fiscal year ending June 2025 showing an increase in transportation funding to $8.9 billion [19][43] - Texas led the country in state and local government transportation construction contract awards at $16 billion, with California following at $9 billion [32] Company Strategy and Development Direction - The company’s growth strategy is built on two pillars: support and strengthen, and expand and transform, focusing on developing core competencies and growing home markets [6][30] - The acquisition of Lehman-Roberts and Memphis Stone & Gravel is seen as a transformational event, providing a platform for growth in the Southeast [87][119] - The company plans to continue investing in its business with a CapEx range of $130 million to $150 million in 2024, focusing on strategic materials investments and automation projects [85] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the robust level of federal and state funding for transportation projects, indicating a market environment not seen since the mid-2000s housing bubble [16][43] - The company expects strong revenue growth in 2024, targeting a range of $3.8 to $4 billion, driven by positive market conditions and organic growth opportunities [57][60] - Management anticipates achieving an adjusted EBITDA margin range of 9% to 11% in 2024, with a focus on improving operational efficiency [84][62] Other Important Information - The company reported a strong cash generation in the fourth quarter, leading to cash and marketable securities of $454 million at year-end [55] - The company’s de-risk business model is expected to drive further increases in operating cash flow, targeting 7% of revenue in 2024 [56][137] Q&A Session Summary Question: Can you dig into the material segment and discuss organic growth expectations for next year? - Management expects aggregate volume to remain consistent with 2023, with a projected price increase of around 10% for aggregates and a 5% increase for asphalt in California [64] Question: Is there a specific area or region driving further growth in construction CAP? - Management indicated a broad-based growth across all markets, with strong transportation and highway infrastructure spending in California [65] Question: How is extreme weather impacting the business, particularly in California? - Management noted that while weather has changed, they have been able to create efficiencies and expect a strong growth opportunity in 2024 [68][69] Question: Can you discuss the outlook for the water and wastewater business? - Management indicated that the pipeline has strengthened and margins have improved, with expectations for projects to hit the books in 2024 [116] Question: What is the expected free cash flow conversion for 2024? - Management targets an operating cash flow as a percentage of revenue of around 7%, with a conversion ratio of about 35% to 40% for 2024 [137]