Form 8-K - Current report

0000861459false00008614592024-10-312024-10-31

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported): October 31, 2024

 

GRANITE CONSTRUCTION INCORPORATED
(Exact Name of Registrant as Specified in its Charter)

 

Delaware (State or Other Jurisdiction of Incorporation)			1-12911 (Commission File Number)			77-0239383 (IRS Employer Identification No.)

 

585 West Beach Street

Watsonville, California 95076

(Address of Principal Executive Offices) (Zip Code)

 

Registrant’s telephone number, including area code: [phone]

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

 

☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class			Trading Symbol(s)			Name of each exchange on which registered
Common Stock, $0.01 par value			GVA			New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

---

Item 2.02.    Results of Operations and Financial Condition.

On October 31, 2024, Granite Construction Incorporated (the “Company”) issued a press release with respect to its earnings for the three and nine months ended September 30, 2024, a copy of which is attached as Exhibit 99.1 and incorporated herein by reference.

The information set forth herein, including the exhibit is furnished pursuant to Item 2.02, “Results of Operations and Financial Condition” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall the information, including the exhibit, be deemed incorporated by reference in any filing of the Company, except as shall be expressly set forth by specific reference in such filing.

Item 9.01.    Financial Statements and Exhibits.

(d)Exhibits. The following exhibits are attached hereto and furnished herewith:

Exhibit Number						Description
99.1						Press Release of the Company, dated – October 31, 2024
104						Cover Page Interactive Data File (formatted as Inline XBRL)

---

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			GRANITE CONSTRUCTION INCORPORATED
			By:			/s/ Staci M. Woolsey
						Staci M. Woolsey
						Executive Vice President and Chief Financial Officer

Date: October 31, 2024

Exhibit 99.1

Granite Reports Third Quarter 2024 Results

•Q3 revenue increased 14% year-over-year to $1.3 billion

•Q3 diluted EPS of $1.57 and adjusted diluted EPS (1) of $2.05, compared to $1.13 and $1.72 in the prior year, respectively

•Record Committed and Awarded Projects (“CAP”) (2) of $5.6 billion, a sequential increase of $44 million

•Year-to-date operating cash flow increased $249 million year-over-year

•Expanded southeast home market with acquisition of Dickerson & Bowen, Inc.

WATSONVILLE, Calif. - Granite Construction Incorporated (NYSE: GVA) today announced results for the quarter ended September 30, 2024.

Third Quarter 2024 Results

Net income attributable to Granite Construction Incorporated totaled $79 million, or $1.57 per diluted share, compared to $58 million, or $1.13 per diluted share, for the same period in the prior year. Adjusted net income attributable to Granite Construction Incorporated (1) totaled $91 million, or $2.05 per diluted share, compared to $77 million, or $1.72 per diluted share, for the same period in the prior year.

•Revenue increased $159 million to $1.3 billion, compared to $1.1 billion for the same period in the prior year. The Construction and Materials segments each posted year-over-year increases of 14%.

•Gross profit increased $36 million to $203 million, compared to $167 million for the same period in the prior year. 

•Selling, general, and administrative (“SG&A”) expenses increased $17 million to $92 million, or 7.2% of revenue, compared to $75 million, or 6.7% of revenue, for the same period in the prior year.

•Adjusted EBITDA (1) totaled $149 million, compared to $126 million for the same period in the prior year.

•CAP (2) increased $44 million sequentially and $35 million year-over-year to $5.6 billion.

"In the third quarter, we continued to build on our momentum with revenue growth and margin expansion,” said Kyle Larkin, Granite President and Chief Executive Officer. “Revenue grew 14% year-over-year, resulting in another record quarter. The market continues to be robust, and we added to our CAP despite the third quarter being our highest revenue quarter. Our new business model is producing strong operating cash flow, and we expect to significantly exceed our target of 7% of revenue for the year.”

“For 2027, our financial targets contemplate organic growth at a CAGR of 6% to 8% and continued adjusted EBITDA margin expansion and operating cash flow growth. We believe we are still in the early stages of experiencing the benefits from the federal infrastructure bill that should continue to support the public market for years to come, and we see numerous opportunities to grow in a healthy private market over the next three years. I expect that our improved CAP, particularly when combined with initiatives underway in both the Materials and Construction segments, will continue to drive increases in gross profit margin. In addition, with our strong balance sheet, liquidity and cash generation, we will continue to pursue bolt-on and larger materials-focused, vertically-integrated acquisition opportunities, while also looking to return value to shareholders through share repurchases.”

Nine Months Ended September 30, 2024 Results

Net income attributable to Granite Construction Incorporated totaled $85 million, or $1.79 per diluted share, compared to  $18 million, or $0.40 per diluted share, for the same period in the prior year. Adjusted net income attributable to Granite Construction Incorporated (1) totaled $158 million, or $3.56 per diluted share, compared to $110 million, or $2.47 per diluted share, for the same period in the prior year.

•Revenue increased $455 million to $3.0 billion, compared to $2.6 billion for the same period in the prior year. The Construction and Materials segments posted year-over-year increases of 18% and 16%, respectively.

•Gross profit increased $120 million to $422 million, compared to $302 million for the same period in the prior year. 

•SG&A expenses increased $37 million to $250 million, or 8.2% of revenue, compared to $212 million, or 8.3% of revenue, for the same period in the prior year.

•Adjusted EBITDA (1) totaled $293 million compared to $204 million for the same period in the prior year.

(1)Adjusted net income attributable to Granite Construction Incorporated, adjusted diluted earnings per share, earnings before interest, taxes, depreciation, and amortization (“EBITDA”), EBITDA margin, adjusted EBITDA and adjusted EBITDA margin are non-GAAP measures. Please refer to the description and reconciliation of non-GAAP measures in the attached tables.

(2)CAP is comprised of revenue we expect to record in the future on executed contracts, including 100% of our consolidated joint venture contracts and our proportionate share of unconsolidated joint venture contracts, as well as the general construction portion of construction manager/general contractor, construction manager/at risk and progressive design build contracts to the extent contract execution and funding is probable.

---

Three and Nine Months ended September 30, 2024 (Unaudited - dollars in thousands)

Construction Segment
			Three Months Ended September 30,															Nine Months Ended September 30,
			2024			2023			Change									2024			2023			Change
Revenue			$	1,080,705		$	945,698		$	135,007		14.3		%				$	2,593,872		$	2,198,527		$	395,345		18.0		%
Gross profit			$	170,685		$	137,162		$	33,523		24.4		%				$	362,885		$	253,021		$	109,864		43.4		%
Gross profit as a percent of revenue			15.8		%	14.5		%										14.0		%	11.5		%

For the three and nine months ended September 30, 2024, revenue increased year-over-year by $135 million and $395 million, respectively, due to higher levels of CAP, more favorable weather conditions early in 2024 and revenue from acquired businesses. For the three and nine months ended September 30, 2024, gross profit increased year-over-year as a result of increases in revenue and an increase in net positive revisions in estimates.

CAP increased $44 million sequentially to $5.6 billion and increased $35 million year-over-year. Public and private markets are strong with opportunities to continue to build CAP in the fourth quarter.

Materials Segment
			Three Months Ended September 30,															Nine Months Ended September 30,
			2024			2023			Change									2024			2023			Change
Revenue			$	194,805		$	171,122		$	23,683		13.8		%				$	436,399		$	376,913		$	59,486		15.8		%
Gross profit			$	32,264		$	29,481		$	2,783		9.4		%				$	59,060		$	49,067		$	9,993		20.4		%
Gross profit as a percent of revenue			16.6		%	17.2		%										13.5		%	13.0		%
Cash gross profit (1)			$	43,202		$	36,203		$	6,999		19.3		%				$	89,718		$	67,581		$	22,137		32.8		%
Cash gross profit as a percent of revenue (1)			22.2		%	21.2		%										20.6		%	17.9		%

(1)Materials segment cash gross profit and cash gross profit as a percent of revenue are non-GAAP measures. Please refer to the description and reconciliation of non-GAAP measures in the attached tables.

For the three and nine months ended September 30, 2024, revenue increased year-over-year by $24 million and $59 million, respectively, driven by revenue from acquired businesses as well as higher asphalt and aggregate sales prices, which offset decreased asphalt volumes. Gross profit in the three and nine months ended September 30, 2024, increased due primarily to inclusion of the results of acquired businesses and higher materials sales prices. The impact to gross profit for the three and nine month periods ended September 30, 2024 from purchase accounting-related step-up depreciation and intangible asset amortization was $0.4 million and $3 million, respectively. Materials segment cash gross profit (1), which excludes the segment’s depreciation, depletion and amortization, also increased for the same period year-over-year.

---

Outlook

Our updated guidance for 2024 is noted below:

•Revenue unchanged in the range of $3.9 billion to $4.0 billion

•Adjusted EBITDA margin in the range of 10% to 11%, narrowed from 9.5% to 11.5%

•SG&A expense in a range from 8.3% to 8.5% of revenue from a range of 7.5% to 8.0% of revenue due to increased incentive compensation

•Mid-20s effective tax rate for adjusted net income

•Capital expenditures expected to be approximately $130 million

We do not provide a reconciliation of forward-looking adjusted EBITDA margin or the most directly comparable forward-looking GAAP measure of net income attributable to Granite Construction Incorporated because we cannot predict with a reasonable degree of certainty and without unreasonable efforts certain components or excluded items that are inherently uncertain and depend on various factors. For these reasons, we are unable to assess the potential significance of the unavailable information.

For a discussion of our 2027 targets, see the presentation posted on our Investor Relations website following our conference call.

Conference Call

Granite will conduct a conference call today, October 31, 2024, at 8:00 a.m. Pacific Time/11:00 a.m. Eastern Time to discuss the results of the quarter ended September 30, 2024. The Company invites investors to listen to a live audio webcast of the investor conference call on its Investor Relations website, https://investor.graniteconstruction.com. The investor conference call will also be available by calling 1-877-328-5503; international callers may dial 1-412-317-5472. An archive of the webcast will be available on Granite's Investor Relations website approximately one hour after the call. A replay will be available after the live call through November 7, 2024, by calling 1-877-344-7529, replay access code 8631298; international callers may dial 1-412-317-0088.

About Granite

Granite is America’s Infrastructure Company™. Incorporated since 1922, Granite (NYSE:GVA) is one of the largest diversified construction and construction materials companies in the United States as well as a full-suite civil construction provider. Granite’s Code of Conduct and strong Core Values guide the Company and its employees to uphold the highest ethical standards. Granite is an industry leader in safety and an award-winning firm in quality and sustainability. For more information, visit graniteconstruction.com, and connect with Granite on LinkedIn, Twitter, Facebook and Instagram.

Forward-looking Statements

Any statements contained in this news release that are not based on historical facts, including statements regarding future events, occurrences, opportunities, circumstances, activities, performance, growth, demand, strategic plans, shareholder value, outcomes, outlook, 2024 fiscal year guidance for revenue, adjusted EBITDA margin, SG&A expense, effective tax rate, and capital expenditures, our expectation that we significantly exceed our operating cash flow target of 7% for the year, our 2027 financial target assumptions, the federal infrastructure bill should continue to support the public markets for years to come, numerous opportunities to grow in a healthy private market over the next three years, improved CAP with initiatives underway will continue to drive increase in gross profit margin, pursuit of bolt-on and larger materials-focused, vertically integrated acquisition opportunities, returning value to shareholders through share repurchases, opportunities to build CAP in the fourth quarter, CAP and results constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by words such as “future,” “outlook,” “assumes,” “believes,” “expects,” “estimates,” “anticipates,” “intends,” “plans,” “appears,” “may,” “will,” “should,” “could,” “would,” “continue,” "guidance" and the negatives thereof or other comparable terminology or by the context in which they are made. These forward-looking statements are estimates reflecting the best judgment of senior management and reflect our current expectations regarding future events, occurrences, opportunities, circumstances, activities, performance, growth, demand, strategic plans, shareholder value, outcomes, outlook, 2024 fiscal year guidance for revenue, adjusted EBITDA margin, SG&A expense, effective tax rate, and capital expenditures, our expectation that we significantly exceed our operating cash flow target of 7% for the year, our 2027 financial target assumptions, the federal infrastructure bill should continue to support the public markets for years to come, numerous opportunities to grow in a healthy private market over the next three years, improved CAP with initiatives underway will continue to drive increase in gross profit margin, pursuit of bolt-on and larger materials-focused, vertically integrated acquisition opportunities, returning value to shareholders through share repurchases, opportunities to build CAP in the fourth quarter, CAP and results. These expectations may or may not be realized. Some of these expectations may be based on beliefs,

---

assumptions or estimates that may prove to be incorrect. In addition, our business and operations involve numerous risks and uncertainties, many of which are beyond our control, which could result in our expectations not being realized or otherwise materially affect our business, financial condition, results of operations, cash flows and liquidity. Such risks and uncertainties include, but are not limited to, those described in greater detail in our filings with the Securities and Exchange Commission, particularly those described in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

Due to the inherent risks and uncertainties associated with our forward-looking statements, the reader is cautioned not to place undue reliance on them. The reader is also cautioned that the forward-looking statements contained herein speak only as of the date of this news release and, except as required by law; we undertake no obligation to revise or update any forward-looking statements for any reason.

---

GRANITE CONSTRUCTION INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited - in thousands, except share and per share data)

			September 30, 2024						December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents			$	462,286					$	417,663
Short-term marketable securities			10,147						35,863
Receivables, net			733,018						598,705
Contract assets			321,653						262,987
Inventories			107,973						103,898
Equity in construction joint ventures			144,097						171,233
Other current assets			34,928						53,102
Total current assets			1,814,102						1,643,451
Property and equipment, net			719,678						662,864
Investments in affiliates			94,921						92,910
Goodwill			211,624						155,004
Intangible assets			131,579						117,322
Right of use assets			86,299						78,176
Deferred income taxes, net			4,990						8,179
Other noncurrent assets			67,732						55,634
Total assets			$	3,130,925					$	2,813,540
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt			$	1,099					$	39,932
Accounts payable			509,976						408,363
Contract liabilities			292,641						243,848
Accrued expenses and other current liabilities			361,110						337,740
Total current liabilities			1,164,826						1,029,883
Long-term debt			737,458						614,781
Long-term lease liabilities			70,981						63,548
Deferred income taxes, net			3,420						3,708
Other long-term liabilities			84,561						74,654
Commitments and contingencies
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: 43,704,841 shares as of September 30, 2024 and 43,944,118 shares as of December 31, 2023			437						439
Additional paid-in capital			437,343						474,134
Accumulated other comprehensive income			437						881
Retained earnings			568,877						501,844
Total Granite Construction Incorporated shareholders’ equity			1,007,094						977,298
Non-controlling interests			62,585						49,668
Total equity			1,069,679						1,026,966
Total liabilities and equity			$	3,130,925					$	2,813,540

---

GRANITE CONSTRUCTION INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited - in thousands, except per share data)

			Three Months Ended September 30,												Nine Months Ended September 30,
			2024						2023						2024						2023
Revenue:
Construction			$	1,080,705					$	945,698					$	2,593,872					$	2,198,527
Materials			194,805						171,122						436,399						376,913
Total revenue			1,275,510						1,116,820						3,030,271						2,575,440
Cost of revenue:
Construction			910,020						808,536						2,230,987						1,945,506
Materials			162,541						141,641						377,339						327,846
Total cost of revenue			1,072,561						950,177						2,608,326						2,273,352
Gross profit			202,949						166,643						421,945						302,088
Selling, general and administrative expenses			91,650						74,794						249,695						212,479
Other costs, net			8,543						19,843						29,778						37,973
Gain on sales of property and equipment, net			(1,542)						(1,812)						(4,347)						(7,793)
Operating income			104,298						73,818						146,819						59,429
Other (income) expense:
(Gain) loss on debt extinguishment			(272)						—						27,552						51,052
Interest income			(7,513)						(4,293)						(17,815)						(11,287)
Interest expense			7,905						4,877						21,325						11,899
Equity in income of affiliates, net			(4,394)						(7,147)						(12,921)						(19,378)
Other (income) expense, net			(874)						462						(1,350)						(2,713)
Total other (income) expense, net			(5,148)						(6,101)						16,791						29,573
Income before income taxes			109,446						79,919						130,028						29,856
Provision for income taxes			25,469						22,423						36,636						21,978
Net income			83,977						57,496						93,392						7,878
Amount attributable to non-controlling interests			(5,026)						128						(8,529)						9,723
Net income attributable to Granite Construction Incorporated			$	78,951					$	57,624					$	84,863					$	17,601
Net income per share attributable to common shareholders:
Basic			$	1.81					$	1.31					$	1.93					$	0.40
Diluted			$	1.57					$	1.13					$	1.79					$	0.40
Weighted average shares outstanding:
Basic			43,696						43,924						43,914						43,861
Diluted			52,366						53,612						52,585						44,447

---

GRANITE CONSTRUCTION INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited - in thousands)

Nine Months Ended September 30,			2024						2023
Operating activities:
Net income			$	93,392					$	7,878
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization			92,283						65,298
Amortization related to long-term debt			3,400						1,689
Loss on debt extinguishment			27,552						51,052
Gain on sales of property and equipment, net			(4,347)						(7,793)
Deferred income taxes			—						1,542
Stock-based compensation			17,325						8,630
Equity in net (income) loss from unconsolidated construction joint ventures			651						(4,535)
Net income from affiliates			(12,921)						(19,378)
Other non-cash adjustments			(165)						5,659
Changes in assets and liabilities			66,379						(75,844)
Net cash provided by operating activities			$	283,549					$	34,198
Investing activities:
Purchases of marketable securities			(6,977)						(9,740)
Maturities of marketable securities			31,500						40,000
Purchases of property and equipment			(108,167)						(108,963)
Proceeds from sales of property and equipment			6,739						14,613
Acquisitions of businesses			(122,448)						(26,933)
Cash paid for purchase price adjustments on business acquisition			(13,183)						—
Proceeds from company owned life insurance			—						1,545
Return of investment in affiliates			1,429						—
Collection of notes receivable			—						208
Net cash used in investing activities			$	(211,107)					$	(89,270)
Financing activities:
Proceeds from issuance of convertible notes			373,750						373,750
Proceeds from long-term debt			—						55,000
Debt principal repayments			(310,226)						(304,851)
Capped call transactions			(46,046)						(53,035)
Redemption of warrants			(497)						(13,201)
Debt issuance costs			(10,053)						(10,024)
Cash dividends paid			(17,131)						(17,101)
Repurchases of common stock			(21,384)						(3,900)
Contributions from non-controlling partners			20,500						35,400
Distributions to non-controlling partners			(18,072)						(9,100)
Other financing activities, net			1,340						267
Net cash provided by (used in) financing activities			$	(27,819)					$	53,205
Net increase (decrease) in cash and cash equivalents			44,623						(1,867)
Cash and cash equivalents at beginning of period			417,663						293,991
Cash and cash equivalents at end of period			$	462,286					$	292,124

---

Non-GAAP Financial Information

The tables below contain financial information calculated other than in accordance with U.S. generally accepted accounting principles (“GAAP”). Specifically, management believes that non-GAAP financial measures such as EBITDA and EBITDA margin are useful in evaluating operating performance and are regularly used by securities analysts, institutional investors and other interested parties, and that such supplemental measures facilitate comparisons between companies that have different capital and financing structures and/or tax rates. We are also providing adjusted EBITDA and adjusted EBITDA margin, non-GAAP measures, to indicate the impact of (gain) loss on debt extinguishment, stock-based compensation expense and other costs, net, which include legal fees for the defense of a former Company officer in his ongoing civil litigation with the Securities and Exchange Commission, reorganization costs, strategic acquisition and divestiture expenses, and a litigation charge and non-cash impairment charges in 2023.

We provide adjusted income before income taxes, adjusted provision for income taxes, adjusted net income attributable to Granite Construction Incorporated, adjusted diluted weighted average shares of common stock and adjusted diluted earnings per share attributable to common shareholders, non-GAAP measures, to indicate the impact of the following:

•Other costs, net as described above;

•Transaction costs which include acquired intangible amortization expense and acquisition-related depreciation;

•Stock-based compensation expense;

•(Gain) loss on debt extinguishment; and

•Income taxes related to establishment of valuation allowance in 2023.

We also provide materials segment cash gross profit to exclude the impact of the segment’s depreciation, depletion and amortization from the segment’s gross profit. Management believes that non-GAAP financial measures such as materials segment cash gross profit are useful in evaluating operating performance and are regularly used by securities analysts, institutional investors and other interested parties, and that such supplemental measures facilitate comparisons between companies that have different capital and financing structures.

Management believes that these additional non-GAAP financial measures facilitate comparisons between industry peer companies, and management uses these non-GAAP financial measures in evaluating the Company's performance. 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. 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. 

---

GRANITE CONSTRUCTION INCORPORATED

EBITDA AND ADJUSTED EBITDA(1)

(Unaudited - dollars in thousands)

			Three Months Ended September 30,												Nine Months Ended September 30,
			2024						2023						2024						2023
EBITDA:
Net income attributable to Granite Construction Incorporated			$	78,951					$	57,624					$	84,863					$	17,601
Net income margin (2)			6.2		%				5.2		%				2.8		%				0.7		%
Depreciation, depletion and amortization expense (3)			33,956						23,911						93,532						65,722
Provision for income taxes			25,469						22,423						36,636						21,978
Interest expense, net			392						584						3,510						612
EBITDA(1)			$	138,768					$	104,542					$	218,541					$	105,913
EBITDA margin(1)(2)			10.9		%				9.4		%				7.2		%				4.1		%
ADJUSTED EBITDA:
Other costs, net			8,543						19,843						29,778						37,973
Stock-based compensation (4)			2,241						1,928						17,325						8,630
(Gain) loss on debt extinguishment			(272)						—						27,552						51,052
Adjusted EBITDA(1)			$	149,280					$	126,313					$	293,196					$	203,568
Adjusted EBITDA margin(1)(2)			11.7		%				11.3		%				9.7		%				7.9		%

(1)We define EBITDA as GAAP net income attributable to Granite Construction Incorporated, adjusted for net interest expense, taxes, depreciation, depletion and amortization. Adjusted EBITDA and adjusted EBITDA margin exclude the impact of Other costs, net, (gain) loss on debt extinguishment and stock-based compensation expense, as described above.

(2)Represents net income, EBITDA and adjusted EBITDA divided by consolidated revenue of $1.3 billion and $1.1 billion, for the three months ended September 30, 2024 and 2023, respectively and $3.0 billion and $2.6 billion for the nine months ended September 30, 2024 and 2023, respectively.

(3)Amount includes the sum of depreciation, depletion and amortization which are classified as cost of revenue and selling, general and administrative expenses in the condensed consolidated statements of operations.

(4)In the first quarter of 2024, we revised the adjusted EBITDA calculation to exclude the impact of stock-based compensation expense. The prior period adjusted EBITDA has been recast to conform to current presentation.

---

GRANITE CONSTRUCTION INCORPORATED 

ADJUSTED NET INCOME RECONCILIATION

(Unaudited - in thousands, except per share data)

			Three Months Ended September 30,												Nine Months Ended September 30,
			2024						2023						2024						2023
Income before income taxes			$	109,446					$	79,919					$	130,028					$	29,856
Other costs, net			8,543						19,843						29,778						37,973
Transaction costs			5,546						92						15,378						5,046
Stock-based compensation (1)			2,241						1,928						17,325						8,630
(Gain) loss on debt extinguishment			(272)						—						27,552						51,052
Adjusted income before income taxes			$	125,504					$	101,782					$	220,061					$	132,557
Provision for income taxes			$	25,469					$	22,423					$	36,636					$	21,978
Tax expense to establish valuation allowance			—						(1,542)						—						(1,542)
Tax effect of adjusting items (2)			4,474						4,375						16,593						12,120
Adjusted provision for income taxes			$	29,943					$	25,256					$	53,229					$	32,556
Net income attributable to Granite Construction Incorporated			$	78,951					$	57,624					$	84,863					$	17,601
After-tax adjusting items			11,584						19,030						73,440						92,123
Adjusted net income attributable to Granite Construction Incorporated			$	90,535					$	76,654					$	158,303					$	109,724
Diluted weighted average shares of common stock			52,366						53,612						52,585						44,447
Less: dilutive effect of Convertible Notes (3)			(8,103)						(9,099)						(8,103)						—
Adjusted diluted weighted average shares of common stock			44,263						44,513						44,482						44,447
Diluted net income per share attributable to common shareholders			$	1.57					$	1.13					$	1.79					$	0.40
After-tax adjusting items per share attributable to common shareholders			0.48						0.59						1.77						2.07
Adjusted diluted earnings per share attributable to common shareholders			$	2.05					$	1.72					$	3.56					$	2.47

(1)In the first quarter of 2024, we revised the adjusted net income calculation to exclude the impact of stock-based compensation expense. The prior period adjusted net income and diluted loss per share calculations have been recast to conform to current presentation.

(2)The tax effect of adjusting items was calculated using the Company’s estimated annual statutory tax rate. The tax effect of adjusting items for the three and nine months ended September 30, 2024 includes an immaterial amount of the (gain) loss on debt extinguishment as it was almost entirely non-tax deductible. The nine months ended September 30, 2023 excludes the $51 million loss on debt extinguishment and three and nine months ended September 30, 2023 exclude $5.0 million of non-cash impairment charges included in “Other costs, net” which was non-tax deductible.

(3)When calculating diluted net income attributable to common shareholders, GAAP requires that we include potential share dilution from the convertible notes when not antidilutive. For the nine months ended September 30, 2023, the potential share dilution from the convertible notes would have been antidilutive and therefore was excluded from the calculation. For the purposes of calculating adjusted diluted net income per share attributable to common shareholders, the dilutive effect of the convertible notes is removed to reflect the impact of the purchased equity derivative instruments which economically offsets dilution risk.

---

GRANITE CONSTRUCTION INCORPORATED 

MATERIALS SEGMENT CASH GROSS PROFIT RECONCILIATION

(Unaudited - in thousands)

			Three Months Ended September 30,																		Nine Months Ended September 30,
			2024						2023						2022						2024						2023						2022
Gross profit			$	32,264					$	29,481					$	22,038					$	59,060					$	49,067					$	40,965
Gross profit as a percent of revenue			16.6		%				17.2		%				13.6		%				13.5		%				13.0		%				11.0		%
Depreciation, depletion and amortization			10,938						6,722						6,211						30,658						18,514						18,163
Cash gross profit			$	43,202					$	36,203					$	28,249					$	89,718					$	67,581					$	59,128
Cash gross profit as a percent of revenue			22.2		%				21.2		%				17.5		%				20.6		%				17.9		%				15.8		%

Contacts:

Investors

Wenjun Xu, 831-761-7861

Or

Media

Erin Kuhlman, 831-768-4111

Source: Granite Construction Incorporated

Cover	Oct. 31, 2024
Cover [Abstract]
Document Type	8-K
Entity Registrant Name	GRANITE CONSTRUCTION INCORPORATED
Entity Incorporation, State or Country Code	DE
Entity File Number	1-12911
Entity Tax Identification Number	77-0239383
Entity Address, Address Line One	585 West Beach Street
Entity Address, City or Town	Watsonville
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	95076
City Area Code	831
Local Phone Number	724-1011
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	GVA
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0000861459
Amendment Flag	false
Document Period End Date	Oct. 31, 2024

---