Granite(US:GVA)2021-05-08 04:39Financial Data and Key Metrics Changes - Consolidated revenue for Q1 2021 grew 5% year-over-year to $670 million, with gross profit increasing 166% year-over-year to $63 million, resulting in a gross profit margin of just under 10% [38][39] - Adjusted EBITDA for the first quarter increased $35 million year-over-year to $17 million, resulting in an adjusted EBITDA margin of over 2% [44] - Adjusted net loss improved to $5 million from an adjusted net loss of $32 million in the prior year [46] Business Segment Data and Key Metrics Changes - Transportation segment revenue was up slightly year-over-year to $351 million, with gross profit increasing 41% to $36 million, resulting in a gross profit margin of 10% [39] - Water segment revenue decreased 2% year-over-year, with gross profit decreasing 8% to $9 million, resulting in a gross profit margin of 9% [41] - Specialty segment revenue increased 17% year-over-year to $156 million, with gross profit increasing 262% to $17 million, resulting in a gross profit margin of 11% [42] - Materials segment revenue increased 26% year-over-year to $63 million, with gross profit increasing to $2 million, resulting in a gross profit margin of just under 3% [43] Market Data and Key Metrics Changes - The bidding environment is strong with robust opportunities, resulting in an increase in bid volume year-over-year [23][24] - Transportation committed and awarded projects (CAP) decreased year-over-year due to a shift in the portfolio [25] - Water segment CAP remains strong at $339 million, not including a recently awarded $160 million project [28] Company Strategy and Development Direction - The company is focused on executing its strategic plan while managing the transition of its portfolio to reduce risk [54] - There is optimism regarding the funding environment, with expectations for a federal infrastructure bill to be signed into law [55] - The company is committed to enhancing its core values of safety and inclusion, which are integral to its operations [10][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's liquidity and cash position despite the $66 million securities litigation settlement [9] - The company anticipates low-to-mid single-digit revenue growth for the full fiscal year 2021 [49] - Management highlighted the importance of project execution and the favorable bidding environment as key drivers for future performance [78] Other Important Information - The company ended Q1 with cash and marketable securities of over $464 million, indicating strong cash management [47] - SG&A expenses increased to $76 million, which is 11.3% of revenue for the first quarter [50] Q&A Session Summary Question: Growth in CAP within Specialty and Water segments - Management anticipates that the Specialty segment will convert awarded work relatively quickly, particularly a significant tunnel project in Ohio [62] Question: Gross margin in Transportation segment - Management noted that favorable weather conditions and strong execution contributed to a 10% gross margin in the Transportation segment [64] Question: Competitive bidding environment - Management indicated a strong bidding environment with opportunities across the portfolio, while also being selective in pursuing larger projects [74] Question: Material segment performance - Management reported strong sales volumes and demand in both external and internal markets, with the ability to factor rising costs into pricing [94] Question: Overall bid pursuit pipeline - Management stated that the bid pipeline for projects under $150 million is up by approximately $400 million to $500 million compared to the previous year [103]