Granite Construction Incorporated · NYSE:GVA
Granite Construction — Q3 2020 Earnings Presentation
20 slides from Granite Construction's earnings presentation, February 2021
Slide 1: Q3 | FY 2020 Earnings Conference Call
Granite Construction Q3 | FY 2020 Earnings Conference Call © 2021 Granite Construction. All Rights Reserved. Highway 101 Santa Barbara to Carpinteria CMGC, CA
Slide 2: Safe Harbor
Safe Harbor Any statements contained in this made. These forward-looking statements Such risks and uncertainties include, but presentation that are not based on are estimates reflecting the best are not limited to, those described in historical facts, including statements judgment of senior manageme
Slide 3: Introduction: Claes G. Bjork
Introduction Claes G. Bjork Chairman, Board of Directors © 2021 Granite Construction. All Rights Reserved. 3
Slide 4: Introduction: Kyle Larkin, Lisa Curtis
Introduction Kyle Larkin Lisa Curtis President EVP, Chief Financial Officer © 2021 Granite Construction. All Rights Reserved. 4
Slide 5: Company Update
Company Update Kyle Larkin, President © 2021 Granite Construction. All Rights Reserved.
Slide 6: Investigation & Remediation
Investigation & Remediation Investigation Complete • Investigation of prior-period reporting for the Heavy Civil Operating Group and internal controls over financial reporting has concluded • Year-long, thorough process • Restatements following failure to adhere to policies for forecasting and risk
Slide 7: 2020 in Review
2020 in Review Strengths • Vertically-integrated businesses drove strong performance in key markets • Materials segment performed well both on a top-line and gross profit basis • Successful claim resolutions • Significant progress in de-risking CAP • Focused on delivering against ESG commitments Cha
Slide 8: Key Near-Term Priorities
Key Near-Term Priorities Current Phase Future Phase Future Phase Stabilization Strategic Direction Growth • Achieve full compliance with all reporting requirements • Reinvigorate our culture by leveraging our core values • Implement remediation plan to strengthen people, processes and projects • Del
Slide 9: Reshaping the Project Portfolio, Q4 CAP Detail
Reshaping the Project Portfolio, Q4 CAP Detail Exposure to Key End Markets Allocating Risk Diversified Operating Groups 2% 3% 7% 7% 17% 17% 12% 10% Q4 Q4 49% Q4 2018 2018 16% 2018 80% 32% 46% 2% 2% 7% 6% 8% 18% 31% 36% Q4 Q4 45% Q4 2020 2020 2020 26% 75% 18% 27% CA Heavy Civil Northwest Transportati
Slide 10: Funding
Funding Public work projects dependent on federal, state, regional and local revenues make up ~75% of Granite’s portfolio Federal State Local • $10B of relief spending for state • California to benefit from SB-1 being on • Voter-approved transportation measures DOTs (FHA estimates ~$1.5B for track t
Slide 11: 2020 Financial Results
2020 Financial Results Lisa Curtis, EVP, Chief Financial Officer © 2021 Granite Construction. All Rights Reserved.
Slide 12: 2020 Financial Performance
2020 Financial Performance Revenue Gross Profit +2% +40% Transportation $238 Strength in vertically-integrated businesses; $2,616 profitability continues to be negatively $2,560 impacted by Heavy Civil Operating Group $48 $539 $513 $170 $276 $45 Water $268 Volume impacted by project and bid delays $
Slide 13: 2020 Financial Performance: Key Non-GAAP Metrics
2020 Financial Performance Key Non-GAAP 1 Metrics YTD Q3 2020 YTD Q3 2019 % Change Adjusted EBITDA $126.7 $63.3 101% Adjusted EBITDA Margin 4.8% 2.5% 2.3% Adjusted Net Income (Loss) $41.3 ($14.7) 381% Adjusted EPS $0.89 ($0.31) 387% $ in millions except per share 1See appendix for reconciliation of
Slide 14: Strong Financial Position
Strong Financial Position Strong balance sheet and ample liquidity Liquidity Total Debt $671 • Dividend remained consistent with our $588 capital allocation framework $230 $364 $339 • No upcoming debt maturities until 2023 $293 • Continuity of strong relationships with banks $441 $295 • Continuity o
Slide 15: Company-Wide Process Improvements
Company-Wide Process Improvements Granite has begun implementing a comprehensive plan to strengthen people, processes and controls. Remediation expected to be complete by end of year. Current Phase Future Phase Future Phase Stabilization Strategic Direction Growth • Strengthen controls • Organizatio
Slide 16: Concluding Remarks
Concluding Remarks Kyle Larkin, President © 2021 Granite Construction. All Rights Reserved.
Slide 17: Concluding Remarks
Concluding Remarks • Core business is healthy and generating consistent financial returns • Expect to achieve full compliance with all reporting requirements • Reinvigorate our culture by leveraging our core values • Implementation of remediation plan underway • Positive trends in our industry, mark
Slide 18: Q&A
Q&A © 2021 Granite Construction. All Rights Reserved.
Slide 19: Appendix: Non-GAAP Financial Information
Appendix Non-GAAP Financial Information share to indicate the impact of amortization alternatives for, the Company's reported The tables below contain financial of debt discount related to our convertible results prepared in accordance with GAAP. information calculated other than in notes and non-re
Slide 20: Adjusted EBITDA and NI Reconciliations
Adjusted EBITDA and NI Reconciliations © 2021 Granite Construction. All Rights Reserved. 20