Granite Reports First-Quarter 2012 Financial Results

• Revenue increased 21 percent compared to the first quarter of 2011
• Cash position remains strong with $367 million in cash, cash equivalents and marketable securities
• Backlog at March 31, 2012 up slightly to $2.1 billion

WATSONVILLE, Calif.--(BUSINESS WIRE)-- Granite Construction Incorporated (NYSE: GVA) today reported a net loss of $12 million, or $0.31 per diluted share, for the first quarter of 2012 compared with a net loss of $9 million, or $0.24 per diluted share, for the first quarter of 2011.

"Overall, I am pleased with our start to the year as mild weather allowed many of our business units to work throughout the quarter, which is typically a slow quarter for our business," said James H. Roberts, Granite president and CEO. "Our results are in alignment with our expectations for the year," Roberts added.

"As we manage our way through today's challenging market, we are also following a well-developed plan that will further strengthen our company and position us for long-term profitable growth," Roberts continued. "We are encouraged by the opportunities to grow, diversify our business model and optimize our asset portfolio. We also remain intensely focused on increasing efficiencies and controlling costs throughout the company."

First-quarter 2012 Financial Results

Total Company

• Revenue totaled $310 million compared with $257 million in 2011, driven by increases in Large Project Construction and Construction segment revenues.
• Gross profit margin was 8 percent compared with 12 percent in 2011. First quarter 2011 gross profit was impacted by the recognition of deferred profit on a project in New York.
• Selling, general and administrative expenses for the first quarter were $43 million, essentially flat compared to a year ago. Included in 2012 was a net gain on restructuring of $2 million related to divestiture activities of our real estate investment business.
• Operating loss for the quarter was $16 million compared with $11 million in the prior year driven largely by a decrease in gross profit.
• Other income, net for the quarter was $7 million compared with $1 million last year due primarily to a gain on the sale of gold, a by-product of aggregate production.
• Net income attributable to noncontrolling interests in joint ventures was $3 million compared with $2 million in 2011.
• Total contract backlog at March 31, 2012, was $2.1 billion compared with $2.0 billion a year ago.

Construction

• Construction revenue for the quarter increased 27 percent to $118 million due to a higher volume of work completed in the quarter related to mild weather throughout the West as well entering the year with a higher volume of backlog.
• Gross profit margin for the first quarter was 7 percent compared with 6 percent a year ago.

Large Project Construction

• Large Project Construction revenue for the quarter increased 19 percent to $164 million reflecting continued progress on projects throughout the country.
• Gross profit margin for the quarter was 14 percent compared with 23 percent for the same period last year. The decrease is largely associated with deferred profit that was recognized on a large project in New York during the first quarter 2011.

Construction Materials

• Construction Materials revenue for the quarter totaled $26 million compared with $24 million for the same period last year.
• Gross loss on the sale of construction materials was $6 million compared with $7 million in 2011.

Outlook

"We are encouraged by the number of Large Project opportunities as well as the healthy bidding activity we are seeing throughout many of our markets in the West. Our outlook is tempered, however, by the intensely competitive environment that we anticipate will continue through the balance of the year," Roberts said.

For 2012, Granite expects Construction segment revenue to be $1 billion to $1.1 billion with a corresponding gross profit margin between 9 percent and 11 percent. Large Project Construction segment revenue is expected to be $1 billion to $1.1 billion with a corresponding gross profit margin between 12 percent and 14 percent. Construction Materials segment revenue is expected to be $200 million to $220 million with corresponding gross profit margin between 7 percent and 9 percent. In addition, sales, general and administrative expenses are expected to be between $170 million and $180 million for the year and net income attributable to non-controlling interest in joint ventures for the total company is expected to be in the range of $15 million to $18 million.

Conference Call

Granite will conduct a conference call tomorrow, May 8, 2012 at 8 a.m. Pacific time/11 a.m. Eastern time to discuss the results of the quarter ended March 31, 2012. Access to a live audio webcast is available at http://investor.graniteconstruction.com/index.cfm. The live conference call may be accessed by calling (877) 643-7158. The conference ID for the live call is 73795661. The call will be recorded and will be available for replay approximately two hours after the live audio webcast through May 15, 2012 by calling (855) 859-2056. The conference ID for the replay is also 73795661.

About Granite

Granite is one of the nation's leading infrastructure contractors and is member of the S&P 400 Midcap Index, the FTSE KLD 400 Social Index and the Russell 2000 Index. Through its wholly owned subsidiary, Granite is one of the nation's largest diversified heavy civil contractors and construction materials producers serving public- and private-sector clients nationwide. In addition, Granite has one of the oldest and most robust ethics and compliance programs in the industry. The Company has been recognized by Ethisphere Institute as one of the World's Most Ethical Companies for three straight years. For more information, please visit graniteconstruction.com.

Forward-looking Statements

Any statements contained in this news release that are not based on historical facts, including statements regarding future events, occurrences, circumstances, activities, performance, outcomes 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," 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, circumstances, activities, performance, outcomes 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 specifically 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)
		March 31,			December 31,			March 31,
		2012			2011			2011
ASSETS
Current assets
Cash and cash equivalents		$	226,226		$	256,990		$	240,768
Short-term marketable securities			70,444			70,408			83,084
Receivables, net			208,707			251,838			170,441
Costs and estimated earnings in excess of billings			49,962			37,703			33,302
Inventories			67,782			50,975			56,899
Real estate held for development and sale			58,363			67,037			77,128
Deferred income taxes			38,571			38,571			52,583
Equity in construction joint ventures			91,951			101,029			78,773
Other current assets			34,882			35,171			44,059
Total current assets			846,888			909,722			837,037
Property and equipment, net			442,132			447,140			468,929
Long-term marketable securities			70,114			79,250			46,251
Investments in affiliates			30,972			31,071			28,893
Other noncurrent assets			79,849			80,616			83,478
Total assets		$	1,469,955		$	1,547,799		$	1,464,588
LIABILITIES AND EQUITY
Current liabilities
Current maturities of long-term debt		$	9,102		$	9,102		$	8,351
Current maturities of non-recourse debt			19,765			23,071			17,740
Accounts payable			129,480			158,660			94,688
Billings in excess of costs and estimated earnings			87,370			90,845			113,347
Accrued expenses and other current liabilities			148,196			166,790			144,584
Total current liabilities			393,913			448,468			378,710
Long-term debt			208,501			208,501			216,852
Long-term non-recourse debt			1,371			9,912			30,454
Other long-term liabilities			50,011			49,221			47,943
Deferred income taxes			3,393			4,034			11,048
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 38,621,370 shares as of March 31, 2012, 38,682,771 shares as of December 31, 2011 and 38,634,470 shares as of March 31, 2011			386			387			386
Additional paid-in capital			110,432			111,514			102,548
Retained earnings			670,462			687,296			642,354
Total Granite Construction Incorporated shareholders' equity			781,280			799,197			745,288
Noncontrolling interests			31,486			28,466			34,293
Total equity			812,766			827,663			779,581
Total liabilities and equity		$	1,469,955		$	1,547,799		$	1,464,588

GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - in thousands, except per share data)
Three Months Ended March 31,			2012				2011
Revenue
Construction		$	117,946			$	92,692
Large project construction			163,928				137,820
Construction materials			25,623				23,798
Real estate			2,663				2,421
Total revenue			310,160				256,731
Cost of revenue
Construction			109,366				87,139
Large project construction			141,679				106,522
Construction materials			31,573				31,068
Real estate			2,606				2,014
Total cost of revenue			285,224				226,743
Gross profit			24,936				29,988
Selling, general and administrative expenses			43,188				43,372
Gain on sales of property and equipment			1,917				2,704
Operating loss			(16,335	)			(10,680	)
Other income (expense)
Interest income			1,044				1,244
Interest expense			(3,182	)			(3,356	)
Equity in loss of affiliates			(617	)			(257	)
Other income, net			6,871				570
Total other income (expense)			4,116				(1,799	)
Loss before benefit from income taxes			(12,219	)			(12,479	)
Benefit from income taxes			(3,532	)			(5,223	)
Net loss			(8,687	)			(7,256	)
Amount attributable to noncontrolling interests			(3,086	)			(1,751	)
Net loss attributable to Granite Construction Incorporated		$	(11,773	)		$	(9,007	)
Net loss per share attributable to common shareholders:
Basic		$	(0.31	)		$	(0.24	)
Diluted		$	(0.31	)		$	(0.24	)
Weighted average shares of common stock:
Basic			38,265				37,963
Diluted			38,265				37,963

GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - in thousands)
Three Months Ended March 31,			2012				2011
Operating activities
Net loss		$	(8,687	)		$	(7,256	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation, depletion and amortization			14,961				15,291
Gain from restructuring, net			(1,888	)			-
Gain on sales of property and equipment			(1,917	)			(2,704	)
Stock-based compensation			4,196				3,149
Gain on company owned life insurance			(1,203	)			(550	)
Changes in assets and liabilities, net of the effects of consolidations			(28,335	)			(7,254	)
Net cash (used in) provided by operating activities			(22,873	)			676
Investing activities
Purchases of marketable securities			(24,987	)			(27,341	)
Maturities of marketable securities			15,000				24,000
Proceeds from sale of marketable securities			20,000				14,268
Additions to property and equipment			(9,225	)			(11,760	)
Proceeds from sales of property and equipment			2,883				4,623
Other investing activities, net			(294	)			1,221
Net cash provided by investing activities			3,377				5,011
Financing activities
Long-term debt principal payments			(2,500	)			(7,235	)
Cash dividends paid			(5,021	)			(5,038	)
Purchase of common stock			(3,837	)			(3,515	)
Distributions to noncontrolling partners, net			(66	)			(2,062	)
Other financing activities, net			156				909
Net cash used in financing activities			(11,268	)			(16,941	)
Decrease in cash and cash equivalents			(30,764	)			(11,254	)
Cash and cash equivalents at beginning of period			256,990				252,022
Cash and cash equivalents at end of period		$	226,226			$	240,768

GRANITE CONSTRUCTION INCORPORATED
Business Segment Information
(Unaudited - dollars in thousands)
		Three Months Ended March 31,
		Construction				Large Project Construction				Construction Materials				Real Estate
2012
Revenue		$	117,946			$	163,928			$	25,623			$	2,663
Gross profit (loss)			8,580				22,249				(5,950	)			57
Gross profit (loss) as a percent of revenue			7.3	%			13.6	%			(23.2	)%			2.1	%
2011
Revenue		$	92,692			$	137,820			$	23,798			$	2,421
Gross profit (loss)			5,553				31,298				(7,270	)			407
Gross profit (loss) as a percent of revenue			6.0	%			22.7	%			(30.5	)%			16.8	%

GRANITE CONSTRUCTION INCORPORATED
Contract Backlog by Segment
(Unaudited - dollars in thousands)
		March 31, 2012						December 31, 2011						March 31, 2011
Construction		$	622,240		29.9	%		$	513,624		25.4	%		$	696,055		34.7	%
Large project construction			1,460,674		70.1	%			1,508,830		74.6	%			1,307,622		65.3	%
Total		$	2,082,914		100.0	%		$	2,022,454		100.0	%		$	2,003,677		100.0	%

Granite Construction Incorporated
Jacque Fourchy, 831-761-4741

Source: Granite Construction Incorporated

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