Granite Q2 2023 Earnings Report
Key Takeaways
Granite reported a $50 million increase in revenue to $899 million compared to the previous year. However, the company experienced a net loss of $17 million, primarily due to a $51 million non-cash charge related to refinancing convertible bonds and a $12 million litigation charge. Adjusted net income was $46 million, or $1.03 per diluted share.
Record Committed and Awarded Projects (CAP) of $5.4 billion, a sequential increase of $334 million and year-over-year increase of $1.2 billion.
Q2 revenue increased $50 million year-over-year led by the California and Mountain Groups.
Q2 diluted EPS of $(0.39) and adjusted diluted EPS of $1.03.
Adjusted EBITDA was $80 million compared to $63 million in the same period in the prior year.
Granite
Granite
Forward Guidance
Granite updated its 2023 guidance, lowering expectations for completed work but maintaining confidence in revenue growth for 2024 and 2025. The adjusted EBITDA margin range was narrowed to 7.5% to 8.5%, primarily due to losses on the I-64 High Rise Bridge project.
Positive Outlook
- Revenue in the range of $3.35 billion to $3.45 billion.
- Adjusted EBITDA margin in the range of 7.5% to 8.5%.
- Expect record CAP will drive expected revenue growth in 2024 and 2025.
- Strong public funding environment.
- Believe that the work we have been adding to CAP supports our 2024 target of 9.0% to 11.0% adjusted EBITDA margin.
Challenges Ahead
- Lowering expectation for the amount of work that will be completed in 2023.
- SG&A expense in the range of 8.0% to 8.5% of revenue.
- Mid-20s effective tax rate for adjusted net income.
- Capital expenditures range of $100 million to $120 million.
- Adjusted EBITDA margin primarily due to the losses incurred on the I-64 High Rise Bridge project.