Granite Construction Incorporated (NYSE: GVA) (“Granite” or the “Company”) today announced that it entered into a stipulation and agreement of settlement (the “Settlement Agreement”) to settle the previously disclosed securities class action litigation filed in the United States District Court for the Northern District of California titled Police Retirement System of St. Louis v. Granite Construction Incorporated, et al., which was filed in August 2019. The Settlement Agreement also settles claims alleged in the putative class action lawsuit filed in the Superior Court of California, County of Santa Cruz titled Nasseri v. Granite Construction Incorporated, et al., which was filed in October 2019. The Settlement Agreement is subject to approval of the court.
Under the terms of the Settlement Agreement, Granite will pay or cause to be paid a total of $129 million in cash, $63 million of which it expects to be paid through insurance proceeds to settle these lawsuits. The Settlement Agreement contains no admission of liability, wrongdoing or responsibility by any of the parties.
“We are pleased to have reached an agreement to resolve these matters and believe doing so is the right business decision for Granite and our shareholders,” said Kyle Larkin, Granite President. “While we are confident in the facts and the merits of our position, we believe it is prudent to end this protracted and uncertain class action litigation process and focus on doing what we know best - driving the business forward. Importantly, our balance sheet and liquidity remains in a strong position following the settlement.”
As previously disclosed, the Company had not been in a position to reasonably estimate the range of potential loss in connection with the lawsuits. As a result of the entry into the Settlement Agreement, the Company expects to recognize a pre-tax charge of approximately $66 million in the quarter ending March 31, 2021.
The previously disclosed shareholder derivative lawsuit filed in the United States District Court for the Northern District of California remains pending.
Granite is America’s Infrastructure Company™. Incorporated since 1922, Granite (NYSE:GVA) is one of the largest diversified construction and construction materials companies in the United States as well as a full-suite provider in the transportation, water infrastructure and mineral exploration markets. Granite’s Code of Conduct and strong Core Values guide the Company and its employees to uphold the highest ethical standards. Granite is an industry leader in safety and an award-winning firm in quality and sustainability. For more information, visit the Granite website, and connect with Granite on LinkedIn, Twitter, Facebook and Instagram.
Any statements contained in this news release that are not based on historical facts, including statements regarding future events, occurrences, circumstances, activities, performance, growth, demand, strategic plans, outcomes, outlook, guidance, backlog, Committed and Awarded Projects ("CAP"), results, the Settlement Agreement, the consideration to be paid in connection therewith and the consideration to be paid with insurance proceeds, court approval of the Settlement Agreement, the settlement of claims alleged in Nasseri v. Granite Construction Incorporated, et al., and the amount that will be recognized in our financial statements constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by words such as “future,” “outlook,” “assumes,” “believes,” “expects,” “estimates,” “anticipates,” “intends,” “plans,” “appears,” “may,” “will,” “should,” “could,” “would,” “continue,” and the negatives thereof or other comparable terminology or by the context in which they are made. These forward-looking statements are estimates reflecting the best judgment of senior management and reflect our current expectations regarding future events, occurrences, circumstances, activities, performance, growth, demand, strategic plans, outcomes, outlook, guidance, backlog, CAP, results, the Settlement Agreement, the settlement of claims alleged in Nasseri v. Granite Construction Incorporated, et al., the consideration to be paid in connection therewith and the consideration to be paid with insurance proceeds, court approval of the Settlement Agreement and the amount that will be recognized in our financial statements. These expectations may or may not be realized. Some of these expectations may be based on beliefs, assumptions or estimates that may prove to be incorrect. In addition, our business and operations involve numerous risks and uncertainties, many of which are beyond our control, which could result in our expectations not being realized or otherwise materially affect our business, financial condition, results of operations, cash flows and liquidity. Such risks and uncertainties include, but are not limited to, the court approving the Settlement Agreement and those described in greater detail in our filings with the Securities and Exchange Commission, particularly those specifically described in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
Due to the inherent risks and uncertainties associated with our forward-looking statements, the reader is cautioned not to place undue reliance on them. The reader is also cautioned that the forward-looking statements contained herein speak only as of the date of this news release and, except as required by law; we undertake no obligation to revise or update any forward-looking statements for any reason.
Erin Kuhlman 831-768-4111
Wenjun Xu - 831-761-7861