Edgar Filing: GRANITE CONSTRUCTION INC

form_8-k.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) April 28, 2010

GRANITE CONSTRUCTION INCORPORATED

(Exact name of registrant as specified in its charter)

Delaware		1-12911		77-0239383
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

585 West Beach Street

Watsonville, California 95076

(Address of principal executive offices) (Zip Code)

(831) 724-1011

Registrant’s telephone number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01 Other Events

Introduction

On August 31, 2009, Granite Construction Incorporated (“Granite” or the “Company”) announced changes to its organizational structure designed to improve operating efficiencies and better position the Company for long-term growth. In conjunction with the restructure, the Company changed its reportable business segments to reflect its lines of business rather than its geographies, as it has been in recent history. Effective January 1, 2010 the Company’s new reportable segments are: Construction, Large Project Construction, Construction Materials and Real Estate. Additionally, the Company reclassified certain costs between cost of revenue and selling, general and administrative expense to better represent our direct cost of revenue. These reclassifications did not have a significant affect on our previously reported net operating results.

For investors who may want to consider the effects of the realignment and reclassifications in advance of the announcement of first quarter 2010 results, Granite is presenting unaudited financial information for the new reportable segments in the following tables. Specifically presented are segment net revenue, gross profit (loss), gross margin (loss) and consolidated selling, general and administrative expense for years ended 2009 and 2008 and for each of the quarterly periods in these years. Information on segment assets and related depreciation, depletion and amortization will be presented in the respective Form 10-Q and 10-K reports beginning with the Form 10-Q report for the three months ended March 31, 2010.

Former Reportable Segments

As indicated in Note 20, “Business Segment Information,” of the notes to Granite’s consolidated financial statements, set forth in Item 15 of Part IV of Granite’s Form 10-K for fiscal year ended December 31, 2009, the Company previously operated in three reportable business segments: Granite West, Granite East, and Granite Land Company.

Granite West’s revenues were generated in the western United States from construction projects and the sale of construction materials. Granite West projects tended to be smaller in nature and duration, however, they included some large, complex infrastructure projects. Granite East’s revenues were primarily generated in the eastern United States from large, complex infrastructure projects. Granite Land Company’s revenues were generated from real estate development projects and services.

Overview of New Reportable Segments

Construction

This segment performs various heavy civil construction projects with a large portion of the work focused on new construction and improvement of streets, roads, highways, bridges, site work and other infrastructure projects. Construction segment projects are typically bid-build projects completed within two years and have a contract value of less than $75 million.

Large Project Construction

This segment focuses on large, complex infrastructure projects which are long-term in nature. Large Project Construction projects include major highways, mass transit facilities, bridges, tunnels, waterway locks and dams, pipelines, canals and airport infrastructure. This segment primarily includes bid-build, design-build and construction management/general contractor (CMGC) contracts, generally with contract values in excess of $75 million.

Construction Materials

This segment mines and processes aggregates and operates plants that produce construction materials for internal use and for sale to third parties.

Real Estate

This segment purchases, develops, operates, sells and invests in real estate related projects and provides real estate services for the Company’s operations.

The following tables present unaudited summarized segment information for the years ended December 31, 2009 and 2008 and for each of the quarterly periods in these years (dollars in thousands):

Prior Segments				New Segments
Year Ended December 31, 2009	Total			Construction			Large Project Construction			Construction Materials				Real Estate			Total
Net revenue
Granite West	$	1,411,016		$	1,096,729		$	108,342			$	205,945		$	-			$	1,411,016
Granite East		550,189			55,014			495,175				-			-				550,189
Granite Land Company		2,274			-			-				-			2,274				2,274
Net revenue	$	1,963,479		$	1,151,743		$	603,517			$	205,945		$	2,274			$	1,963,479

Gross profit (loss)
Granite West	$	236,868		$	202,598		$	19,870			$	14,400		$	-			$	236,868
Granite East		110,823			10,106			100,717				-			-				110,823
Granite Land Company		(1,318	)		-			-				-			(1,318	)			(1,318	)
Gross profit (loss)		346,373			212,704			120,587				14,400			(1,318	)			346,373
Cost reclassification		3,136			(3,217	)		(487	)			6,840			-				3,136
Gross profit (loss) adjusted	$	349,509		$	209,487		$	120,100			$	21,240		$	(1,318	)		$	349,509

Gross margin (loss)
Granite West		16.8	%		18.5	%		18.3	%			7.0	%		-	%			16.8	%
Granite East		20.1			18.4			20.3				-			-				20.1
Granite Land Company		(58.0	)		-			-				-			(58.0	)			(58.0	)
Gross margin (loss)		17.6			18.5			20.0				7.0			(58.0	)			17.6
Gross margin (loss) adjusted		17.8	%		18.2	%		19.9	%			10.3	%		(58.0	)%			17.8	%

Selling, general and administrative
Selling, general and administrative																		$	224,910
Cost reclassification																			3,136
Selling, general and administrative adjusted																		$	228,046

Prior Segments				New Segments
Year Ended December 31, 2008	Total			Construction			Large Project Construction			Construction Materials				Real Estate			Total
Net revenue
Granite West	$	1,970,196		$	1,418,583		$	198,498			$	353,115		$	-			$	1,970,196
Granite East		695,035			66,278			628,757				-			-				695,035
Granite Land Company		9,013			-			-				-			9,013				9,013
Net revenue	$	2,674,244		$	1,484,861		$	827,255			$	353,115		$	9,013			$	2,674,244

Gross profit (loss)
Granite West	$	348,818		$	269,032		$	37,917			$	41,869		$	-			$	348,818
Granite East		121,425			5,214			116,211				-			-				121,425
Granite Land Company		(1,523	)		-			-				-			(1,523	)			(1,523	)
Gross profit (loss)		468,720			274,246			154,128				41,869			(1,523	)			468,720
Cost reclassification		3,229			(3,378	)		(557	)			7,164			-				3,229
Gross profit (loss) adjusted	$	471,949		$	270,868		$	153,571			$	49,033		$	(1,523	)		$	471,949

Gross margin (loss)
Granite West		17.7	%		19.0	%		19.1	%			11.9	%		-	%			17.7	%
Granite East		17.5			7.9			18.5				-			-				17.5
Granite Land Company		(16.9	)		-			-				-			(16.9	)			(16.9	)
Gross margin (loss)		17.5			18.5			18.6				11.9			(16.9	)			17.5
Gross margin (loss) adjusted		17.6	%		18.2	%		18.6	%			13.9	%		(16.9	)%			17.6	%

Selling, general and administrative
Selling, general and administrative																		$	257,532
Cost reclassification																			3,229
Selling, general and administrative adjusted																		$	260,761

Prior Segments				New Segments
Three Months Ended March 31, 2009	Total			Construction			Large Project Construction			Construction Materials				Real Estate			Total
Net revenue
Granite West	$	197,049		$	149,769		$	17,434			$	29,846		$	-			$	197,049
Granite East		149,906			18,280			131,626				-			-				149,906
Granite Land Company		417			-			-				-			417				417
Net revenue	$	347,372		$	168,049		$	149,060			$	29,846		$	417			$	347,372

Gross profit (loss)
Granite West	$	32,939		$	32,568		$	2,708			$	(2,337	)	$	-			$	32,939
Granite East		34,864			3,754			31,110				-			-				34,864
Granite Land Company		210			-			-				-			210				210
Gross profit (loss)		68,013			36,322			33,818				(2,337	)		210				68,013
Cost reclassification		723			(1,146	)		(154	)			2,023			-				723
Gross profit (loss) adjusted	$	68,736		$	35,176		$	33,664			$	(314	)	$	210			$	68,736

Gross margin (loss)
Granite West		16.7	%		21.7	%		15.5	%			(7.8	)%		-	%			16.7	%
Granite East		23.3			20.5			23.6				-			-				23.3
Granite Land Company		50.4			-			-				-			50.4				50.4
Gross margin (loss)		19.6			21.6			22.7				(7.8	)		50.4				19.6
Gross margin (loss) adjusted		19.8	%		20.9	%		22.6	%			(1.1	)%		50.4	%			19.8	%

Selling, general and administrative
Selling, general and administrative																		$	53,632
Cost reclassification																			723
Selling, general and administrative adjusted																		$	54,355

Prior Segments				New Segments
Three Months Ended March 31, 2008	Total			Construction			Large Project Construction			Construction Materials				Real Estate			Total
Net revenue
Granite West	$	240,002		$	155,211		$	33,237			$	51,554		$	-		$	240,002
Granite East		214,125			11,731			202,394				-			-			214,125
Granite Land Company		673			-			-				-			673			673
Net revenue	$	454,800		$	166,942		$	235,631			$	51,554		$	673		$	454,800

Gross profit (loss)
Granite West	$	39,629		$	33,834		$	3,297			$	2,498		$	-		$	39,629
Granite East		58,596			371			58,225				-			-			58,596
Granite Land Company		469			-			-				-			469			469
Gross profit (loss)		98,694			34,205			61,522				2,498			469			98,694
Cost reclassification		(190	)		(1,065	)		(163	)			1,038			-			(190	)
Gross profit (loss) adjusted	$	98,504		$	33,140		$	61,359			$	3,536		$	469		$	98,504

Gross margin
Granite West		16.5	%		21.8	%		9.9	%			4.8	%		-	%		16.5	%
Granite East		27.4			3.2			28.8				-			-			27.4
Granite Land Company		69.7			-			-				-			69.7			69.7
Gross margin		21.7			20.5			26.1				4.8			69.7			21.7
Gross margin adjusted		21.7	%		19.9	%		26.0	%			6.9	%		69.7	%		21.7	%

Selling, general and administrative
Selling, general and administrative																	$	60,651
Cost reclassification																		(190	)
Selling, general and administrative adjusted																	$	60,461

Prior Segments				New Segments
Three Months Ended June 30, 2009	Total			Construction			Large Project Construction			Construction Materials				Real Estate			Total
Net revenue
Granite West	$	348,304		$	265,387		$	25,602			$	57,315		$	-			$	348,304
Granite East		112,237			12,069			100,168				-			-				112,237
Granite Land Company		534			-			-				-			534				534
Net revenue	$	461,075		$	277,456		$	125,770			$	57,315		$	534			$	461,075

Gross profit (loss)
Granite West	$	62,882		$	52,167		$	2,680			$	8,035		$	-			$	62,882
Granite East		21,363			1,409			19,954				-			-				21,363
Granite Land Company		(1,000	)		-			-				-			(1,000	)			(1,000	)
Gross profit (loss)		83,245			53,576			22,634				8,035			(1,000	)			83,245
Cost reclassification		650			(775	)		(123	)			1,548			-				650
Gross profit (loss) adjusted	$	83,895		$	52,801		$	22,511			$	9,583		$	(1,000	)		$	83,895

Gross margin (loss)
Granite West		18.1	%		19.7	%		10.5	%			14.0	%		-	%			18.1	%
Granite East		19.0			11.7			19.9				-			-				19.0
Granite Land Company		(187.3	)		-			-				-			(187.3	)			(187.3	)
Gross margin (loss)		18.1			19.3			18.0				14.0			(187.3	)			18.1
Gross margin (loss) adjusted		18.2	%		19.0	%		17.9	%			16.7	%		(187.3	)%			18.2	%

Selling, general and administrative
Selling, general and administrative																		$	55,669
Cost reclassification																			650
Selling, general and administrative adjusted																		$	56,319

Prior Segments				New Segments
Three Months Ended June 30, 2008	Total			Construction			Large Project Construction			Construction Materials				Real Estate			Total
Net revenue
Granite West	$	517,463		$	337,338		$	72,836			$	107,289		$	-		$	517,463
Granite East		170,769			16,865			153,904				-			-			170,769
Granite Land Company		6,100			-			-				-			6,100			6,100
Net revenue	$	694,332		$	354,203		$	226,740			$	107,289		$	6,100		$	694,332

Gross profit (loss)
Granite West	$	92,924		$	61,985		$	13,485			$	17,454		$	-		$	92,924
Granite East		18,757			(1,673	)		20,430				-			-			18,757
Granite Land Company		(2,655	)		-			-				-			(2,655	)		(2,655	)
Gross profit (loss)		109,026			60,312			33,915				17,454			(2,655	)		109,026
Cost reclassification		1,062			(902	)		(144	)			2,108			-			1,062
Gross profit (loss) adjusted	$	110,088		$	59,410		$	33,771			$	19,562		$	(2,655	)	$	110,088

Gross margin (loss)
Granite West		18.0	%		18.4	%		18.5	%			16.3	%		-	%		18.0	%
Granite East		11.0			(9.9	)		13.3				-			-			11.0
Granite Land Company		(43.5	)		-			-				-			(43.5	)		(43.5	)
Gross margin (loss)		15.7			17.0			15.0				16.3			(43.5	)		15.7
Gross margin (loss) adjusted		15.9	%		16.8	%		14.9	%			18.2	%		(43.5	)%		15.9	%

Selling, general and administrative
Selling, general and administrative																	$	65,760
Cost reclassification																		1,062
Selling, general and administrative adjusted																	$	66,822

Prior Segments				New Segments
Three Months Ended September 30, 2009	Total			Construction			Large Project Construction			Construction Materials				Real Estate			Total
Net revenue
Granite West	$	564,089		$	451,670		$	40,892			$	71,527		$	-			$	564,089
Granite East		155,214			14,935			140,279				-			-				155,214
Granite Land Company		981			-			-				-			981				981
Net revenue	$	720,284		$	466,605		$	181,171			$	71,527		$	981			$	720,284

Gross profit (loss)
Granite West	$	85,499		$	70,853		$	7,647			$	6,999		$	-			$	85,499
Granite East		20,223			2,529			17,694				-			-				20,223
Granite Land Company		(550	)		-			-				-			(550	)			(550	)
Gross profit (loss)		105,172			73,382			25,341				6,999			(550	)			105,172
Cost reclassification		485			(747	)		(120	)			1,352			-				485
Gross profit (loss) adjusted	$	105,657		$	72,635		$	25,221			$	8,351		$	(550	)		$	105,657

Gross margin (loss)
Granite West		15.2	%		15.7	%		18.7	%			9.8	%		-	%			15.2	%
Granite East		13.0			16.9			12.6				-			-				13.0
Granite Land Company		(56.1	)		-			-				-			(56.1	)			(56.1	)
Gross margin (loss)		14.6			15.7			14.0				9.8			(56.1	)			14.6
Gross margin (loss) adjusted		14.7	%		15.6	%		13.9	%			11.7	%		(56.1	)%			14.7	%

Selling, general and administrative
Selling, general and administrative																		$	60,465
Cost reclassification																			485
Selling, general and administrative adjusted																		$	60,950

Prior Segments				New Segments
Three Months Ended September 30, 2008	Total			Construction			Large Project Construction			Construction Materials				Real Estate			Total
Net revenue
Granite West	$	749,487		$	558,499		$	66,510			$	124,478		$	-		$	749,487
Granite East		146,932			11,550			135,382				-			-			146,932
Granite Land Company		1,369			-			-				-			1,369			1,369
Net revenue	$	897,788		$	570,049		$	201,892			$	124,478		$	1,369		$	897,788

Gross profit (loss)
Granite West	$	133,904		$	101,022		$	17,472			$	15,410		$	-		$	133,904
Granite East		9,916			(1,941	)		11,857				-			-			9,916
Granite Land Company		482			-			-				-			482			482
Gross profit (loss)		144,302			99,081			29,329				15,410			482			144,302
Cost reclassification		673			(716	)		(142	)			1,531			-			673
Gross profit (loss) adjusted	$	144,975		$	98,365		$	29,187			$	16,941		$	482		$	144,975

Gross margin (loss)
Granite West		17.9	%		18.1	%		26.3	%			12.4	%		-	%		17.9	%
Granite East		6.7			(16.8	)		8.8				-			-			6.7
Granite Land Company		35.2			-			-				-			35.2			35.2
Gross margin (loss)		16.1			17.4			14.5				12.4			35.2			16.1
Gross margin adjusted		16.1	%		17.3	%		14.5	%			13.6	%		35.2	%		16.1	%

Selling, general and administrative
Selling, general and administrative																	$	71,933
Cost reclassification																		673
Selling, general and administrative adjusted																	$	72,606

Prior Segments				New Segments
Three Months Ended December 31, 2009	Total			Construction			Large Project Construction			Construction Materials				Real Estate			Total
Net revenue
Granite West	$	301,574		$	229,903		$	24,414			$	47,257		$	-			$	301,574
Granite East		132,832			9,730			123,102				-			-				132,832
Granite Land Company		342			-			-				-			342				342
Net revenue	$	434,748		$	239,633		$	147,516			$	47,257		$	342			$	434,748

Gross profit (loss)
Granite West	$	55,548		$	47,010		$	6,835			$	1,703		$	-			$	55,548
Granite East		34,373			2,414			31,959				-			-				34,373
Granite Land Company		22			-			-				-			22				22
Gross profit (loss)		89,943			49,424			38,794				1,703			22				89,943
Cost reclassification		1,278			(549	)		(90	)			1,917			-				1,278
Gross profit (loss) adjusted	$	91,221		$	48,875		$	38,704			$	3,620		$	22			$	91,221

Gross margin
Granite West		18.4	%		20.4	%		28.0	%			3.6	%		-	%			18.4	%
Granite East		25.9			24.8			26.0				-			-				25.9
Granite Land Company		6.4			-			-				-			6.4				6.4
Gross margin		20.7			20.6			26.3				3.6			6.4				20.7
Gross margin adjusted		21.0	%		20.4	%		26.2	%			7.7	%		6.4	%			21.0	%

Selling, general and administrative
Selling, general and administrative																		$	55,144
Cost reclassification																			1,278
Selling, general and administrative adjusted																		$	56,422

Prior Segments				New Segments
Three Months Ended December 31, 2008	Total			Construction			Large Project Construction			Construction Materials				Real Estate			Total
Net revenue
Granite West	$	463,244		$	367,535		$	25,915			$	69,794		$	-		$	463,244
Granite East		163,209			26,132			137,077				-			-			163,209
Granite Land Company		871			-			-				-			871			871
Net revenue	$	627,324		$	393,667		$	162,992			$	69,794		$	871		$	627,324

Gross profit (loss)
Granite West	$	82,361		$	72,191		$	3,663			$	6,507		$	-		$	82,361
Granite East		34,156			8,457			25,699				-			-			34,156
Granite Land Company		181			-			-				-			181			181
Gross profit (loss)	$	116,698		$	80,648		$	29,362			$	6,507		$	181		$	116,698
Cost reclassification		1,684			(695	)		(108	)			2,487			-			1,684
Gross profit (loss) adjusted		118,382			79,953			29,254				8,994			181			118,382

Gross margin
Granite West		17.8	%		19.6	%		14.1	%			9.3	%		-	%		17.8	%
Granite East		20.9			32.4			18.7				-			-			20.9
Granite Land Company		20.8			-			-				-			20.8			20.8
Gross margin		18.6			20.5			18.0				9.3			20.8			18.6
Gross margin adjusted		18.9	%		20.3	%		17.9	%			12.9	%		20.8	%		18.9	%

Selling, general and administrative
Selling, general and administrative																	$	59,188
Cost reclassification																		1,684
Selling, general and administrative adjusted																	$	60,872

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	GRANITE CONSTRUCTION INCORPORATED
Date: April 28, 2010	By:	/s/ LeAnne M. Stewart
		LeAnne M. Stewart
		Senior Vice President and Chief Financial Officer