Granite(US:GVA)2024-10-31 21:14PART I. FINANCIAL INFORMATION Financial Statements This section presents Granite Construction Incorporated's unaudited condensed consolidated financial statements for the periods ended September 30, 2024 Condensed Consolidated Balance Sheets As of September 30, 2024, total assets increased to $3.13 billion, total liabilities rose to $2.07 billion, and total equity increased slightly to $1.07 billion Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total current assets | $1,814,102 | $1,643,451 | | Total assets | $3,130,925 | $2,813,540 | | Total current liabilities | $1,164,826 | $1,029,883 | | Total liabilities | $2,061,246 | $1,786,574 | | Total equity | $1,069,679 | $1,026,966 | Condensed Consolidated Statements of Operations For Q3 2024, revenue grew to $1.28 billion with net income of $79.0 million, while nine-month revenue rose to $3.03 billion with net income surging to $84.9 million Q3 2024 vs Q3 2023 Performance (in thousands, except per share data) | Metric | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Total Revenue | $1,275,510 | $1,116,820 | | Gross Profit | $202,949 | $166,643 | | Operating Income | $104,298 | $73,818 | | Net Income Attributable to Granite | $78,951 | $57,624 | | Diluted EPS | $1.57 | $1.13 | Nine Months 2024 vs 2023 Performance (in thousands, except per share data) | Metric | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | | Total Revenue | $3,030,271 | $2,575,440 | | Gross Profit | $421,945 | $302,088 | | Operating Income | $146,819 | $59,429 | | Net Income Attributable to Granite | $84,863 | $17,601 | | Diluted EPS | $1.79 | $0.40 | Condensed Consolidated Statements of Comprehensive Income Comprehensive income attributable to Granite for Q3 2024 was $79.1 million, and for the nine months ended September 30, 2024, it was $84.4 million, driven by higher net income Comprehensive Income (in thousands) | Period | Comprehensive Income Attributable to Granite 2024 | Comprehensive Income Attributable to Granite 2023 | | :--- | :--- | :--- | | Three Months Ended Sep 30 | $79,118 | $57,723 | | Nine Months Ended Sep 30 | $84,419 | $17,707 | Condensed Consolidated Statements of Shareholders' Equity Total Granite shareholders' equity increased to $1.01 billion at September 30, 2024, primarily driven by net income, partially offset by dividends and stock repurchases - Key activities impacting shareholders' equity in the first nine months of 2024 include net income of $84.9 million, dividend payments of $17.1 million, and common stock repurchases totaling $21.4 million14 Condensed Consolidated Statements of Cash Flows For the nine months ended September 30, 2024, net cash from operating activities significantly improved to $283.5 million, while investing activities used $211.1 million and financing activities used $27.8 million Cash Flow Summary (in thousands) | Activity | Nine Months 2024 | Nine Months 2033 | | :--- | :--- | :--- | | Net cash provided by operating activities | $283,549 | $34,198 | | Net cash used in investing activities | ($211,107) | ($89,270) | | Net cash provided by (used in) financing activities | ($27,819) | $53,205 | | Net increase (decrease) in cash | $44,623 | ($1,867) | Notes to the Condensed Consolidated Financial Statements The notes detail financial statement presentation, recent acquisitions, revenue disaggregation, debt arrangements, and segment performance Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition and results of operations, emphasizing strong performance, a positive outlook, and liquidity management Overview Granite delivers infrastructure solutions, driven by the U.S. economy, public funding, and infrastructure needs, with a Q1 2024 operational reorganization - The company's primary business drivers are the health of the U.S. economy, public funding, population growth, infrastructure repair needs, and commodity pricing86 - In Q1 2024, Granite reorganized its operational structure to align with its two reportable segments, Construction and Materials, to better leverage expertise within each segment86 Current Economic Environment and Outlook The outlook is strong, bolstered by the $1.2 trillion IIJA and stable state funding, driving increased project lettings and a robust $5.6 billion CAP balance - Public work, accounting for ~80% of the portfolio, is supported by the IIJA, which provides $550 billion in incremental funding over five years87 - Committed and Awarded Projects (CAP) balance was strong at $5.6 billion at the end of Q3 2024, supported by a positive public funding environment89 Results of Operations For the nine months ended September 30, 2024, revenue increased 17.7% to $3.03 billion, gross profit rose 39.7% to $421.9 million, and operating income surged to $146.8 million Financial Summary (in thousands) | Metric | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | | Total Revenue | $3,030,271 | $2,575,440 | | Gross Profit | $421,945 | $302,088 | | Operating Income | $146,819 | $59,429 | | Net Income Attributable to Granite | $84,863 | $17,601 | Liquidity and Capital Resources As of September 30, 2024, Granite's liquidity remains strong with $472.4 million in cash and equivalents and $333.5 million available credit, sufficient for future needs - Primary liquidity sources include cash on hand, investments, available credit, and cash from operations, which the company believes are sufficient for the next twelve months111 Liquidity Position (in thousands) | Item | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total cash, cash equivalents and marketable securities | $472,433 | $453,526 | - The company anticipates 2024 capital expenditures to be approximately $130 million115 Quantitative and Qualitative Disclosures About Market Risk There have been no material changes in the company's exposure to market risk from previously disclosed information in its Annual Report on Form 10-K - There has been no material change in the company's exposure to market risk since the last Annual Report125 Controls and Procedures Management concluded the company's disclosure controls and procedures were effective as of September 30, 2024, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of September 30, 2024, the company's disclosure controls and procedures were effective126127 - There were no material changes to internal control over financial reporting during the third quarter of 2024128 PART II. OTHER INFORMATION Legal Proceedings The company is involved in various ordinary course legal proceedings, with recorded liabilities for these matters being immaterial as of September 30, 2024 - The company is involved in ordinary course legal proceedings; total recorded liabilities for these matters were immaterial as of September 30, 202478130 Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - No material changes in risk factors were reported compared to the last Annual Report131 Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities During Q3 2024, the company repurchased 3,546 shares for employee tax withholding, with approximately $218.2 million remaining available under the share repurchase program - During Q3 2024, 3,546 shares were repurchased for employee tax withholding on vested RSUs131 - As of September 30, 2024, $218.2 million remained available under the company's $300.0 million share repurchase authorization from February 2022131 Mine Safety Disclosures Information regarding mine safety violations and other regulatory matters is included in Exhibit 95 of this quarterly report - Mine safety disclosures are provided in Exhibit 95 to the Form 10-Q132 Other Information President and CEO Kyle T. Larkin adopted a Rule 10b5-1 trading arrangement on August 6, 2024, allowing for the sale of up to 30,000 shares - President and CEO Kyle T. Larkin adopted a Rule 10b5-1 trading plan on August 6, 2024, to sell up to 30,000 shares133 Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications, mine safety disclosures, and XBRL data files