Granite is reporting a second-quarter net loss from continuing operations of $2 million, or $0.05 per diluted share, compared to net income from continuing operations of $25 million, or $0.52 per diluted share, in the same period in the prior year.
Adjusted net income from continuing operations totaled $17 million, or $0.38 per diluted share, compared to adjusted net income from continuing operations of $30 million, or $0.66 per diluted share, in the same period in the prior year.
- Revenue decreased $67 million to $768 million compared to $835 million in the prior year.
- Gross profit decreased $20 million to $78 million compared to $98 million in the prior year; and gross profit margin decreased to 10.2% compared to 11.8% in the prior year.
- Selling, general and administrative expenses were $53 million or 6.9% of revenue, compared to $59 million or 7.0% of revenue in the prior year.
Materials revenue in the second quarter increased compared to the same period in the prior year as price increases in both aggregates and asphalt more than offset volume decreases in aggregates and asphalt.
Gross profit and gross profit margin were negatively impacted year over year by higher fuel and liquid asphalt costs as many sales completed in the second quarter were fulfilling orders placed prior to the energy surcharges being implemented in early April. This price impact associated with the timing difference is expected to decline in the third quarter.
“During the second quarter, we continued to implement our strategic plan,” said Kyle Larkin, Granite president and chief executive officer. “The divestiture of the remaining businesses of the legacy Water and Mineral Services group are moving forward. We also announced strategic investments in our home markets with the purchase of aggregates in Salt Lake City and a liquid asphalt terminal in California. Additionally, we secured long-term capital to support investment and growth with the execution of our amended credit facility and we executed on a $50 million accelerated share repurchase. Second quarter results were impacted by additional costs in the ORP as the portfolio continues to be challenging with our teams working to complete them as expeditiously as possible. Our estimate of remaining ORP work going into 2023 is on track and remains largely unchanged. Looking beyond the ORP, our core business is getting stronger, illustrated by improved gross profit margins excluding the ORP and higher quality CAP in mix and margin. I am pleased with our CAP of $4.2 billion as of the end of the quarter and I am optimistic about the overall environment in our markets as we move into our busiest quarter. While we still have work to do to improve margins on bid day and in project execution, we are making progress and are tracking to the strategic plan projections provided in our last earnings call. We also took an important step forward this quarter as we accrued $12 million for an expected resolution of the SEC investigation.”
Larkin continued, “With our strong balance sheet and liquidity, we expect to continue to invest in our home markets organically as we also actively explore opportunistic bolt-on acquisitions. These investments should bolster and expand existing home markets and position the company for consistent profitable growth.”
For the six months ended June 2022, Granite is reporting a net loss from continuing operations of $21 million, or $0.47 per diluted share, compared to a net loss from continuing operations of $38 million, or $0.84 per diluted share, in the prior year.
Adjusted net income from continuing operations totaled $6 million, or $0.12 per diluted share, compared to adjusted net income from continuing operations of $23 million, or $0.51 per diluted share, in the prior year.
- Revenue from continuing operations decreased $85 million to $1.3 billion compared to $1.4 billion in the prior year.
- Gross profit from continuing operations decreased $24 million to $128 million compared to $152 million in the prior year; and gross profit margin decreased to 9.7% compared to 10.8% in the prior year.