Granite Construction Inc. provided a business update and second quarter 2020 preliminary select financial information.
“While the COVID-19 pandemic will likely continue to cause substantial economic disruption in many of our markets for the foreseeable future, we are fortunate that most of our projects continued during the second quarter as our primary services are designated as essential,” said James H. Roberts, president and chief executive officer at Granite. “As we execute this work, our top priority continues to be complying with all state and local regulations to ensure the safety and health of our employees, customers, suppliers and others with whom we partner in our business activities, as well as the communities in which we work. We are focused on efficiently and safely carrying on our operations in this unprecedented business environment.”
Roberts continued, “We are also monitoring local and state governments where we operate as they address budget shortfalls. While we expect impacts to be varied by market and customer, we expect continued project opportunities in our primary markets. The infrastructure sector historically has been resilient and serves as a good investment for future public spending with the creation of economic growth.”
The company had $463.6 million of available liquidity, inclusive of $294.8 million of cash and marketable securities as of June 30, compared to $206.0 million of cash and marketable securities as of June 30, 2019. Debt was $414.0 million as of June 30, compared to $415.3 million as of June 30, 2019.
During the second quarter of 2020, the company borrowed $75 million under its credit facility to support the company’s seasonal working capital needs and continues to focus on managing cash through reductions or deferrals of non-critical expenditures such as capital investments, travel and related expenditures. Additionally, Granite resolved certain project claims in the second quarter of 2020 with cash settlements received in July 2020.
The company ended the second quarter of 2020 with Committed and Awarded Projects (CAP) – comprised of unearned revenue and other awards, as well as CMGC/CMAR and alternative procurement projects – of $4.1 billion, which includes $820.5 million of best-value procurement work. As anticipated, CAP balance modestly declined from first quarter 2020 levels as increased project activity exceeded new awards.
“As we execute our strategy of bidding smaller work, our overall CAP, as planned, will decrease. We also expect CAP to fluctuate within each quarter as smaller work is booked and burned much faster than in the past with the larger contracts. Our plan of focusing on smaller, best-value procurement work is progressing in alignment with our strategy shared in the second half of 2019,” the company stated.