Granite Construction Inc. (GVA, Financial) filed Annual Report for the period ended 2010-12-31.
Granite Construction Inc. has a market cap of $1.08 billion; its shares were traded at around $27.85 with a P/E ratio of 87 and P/S ratio of 0.6. The dividend yield of Granite Construction Inc. stocks is 1.9%. Granite Construction Inc. had an annual average earning growth of 11.7% over the past 10 years.Hedge Fund Gurus that owns GVA: Michael Price of MFP Investors LLC, Kenneth Fisher of Fisher Asset Management, LLC, Bruce Kovner of Caxton Associates. Mutual Fund and Other Gurus that owns GVA: Arnold Van Den Berg of Century Management, Jeff Auxier of Auxier Focus Fund, PRIMECAP Management, Chuck Royce of Royce& Associates, Jeremy Grantham of GMO LLC.
Large Project Construction: Revenue from our Large Project Construction segment was $584.4 million and $603.5 million (33.1% and 30.7% of our total revenue) in 2010 and 2009, respectively. The Large Project Construction segment focuses on large, complex infrastructure projects which typically have a longer duration than our Construction segment work. These 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 contracts, generally with contract values in excess of $75 million.
Construction Materials: Revenue from our Construction Materials segment was $222.1 million and $205.9 million (12.6% and 10.5% of our total revenue) in 2010 and 2009, respectively. The Construction Materials segment mines and processes aggregates and operates plants that produce construction materials for internal use and for sale to third parties. We have significant aggregate reserves that we have acquired by ownership in fee or through long-term leases. Aggregate products used in our construction projects represented approximately 50.2% of our tons sold during 2010 and ranged from 36.6% to 50.2% over the last five years. The remainder is sold to third parties.
GLC s current investments are located in Washington, Oregon, California and Texas. In 2010, revenue from GLC was $13.3 million (0.8% of our total revenue), compared with $2.3 million (0.1% of our total revenue) in 2009. On October 25, 2010, we announced our Enterprise Improvement Plan that includes plans to orderly divest of our real estate investment business. See Note 11 of “Notes to the Consolidated Financial Statements” and “Restructuring Charges” under “Item 7. Management s Discussion and Analysis of Financial Condition and Results of Operations” for additional information.
During the year ended December 31, 2010, our largest volume customer was the Maryland State Highway Administration (“MD SHA”). Revenue recognized from contracts with MD SHA represented 10.3% of our total revenue and 31.0% of our Large Project Construction revenue in 2010. During the year ended December 31, 2009, our largest volume customer was the California Department of Transportation (“Caltrans”). Revenue recognized from contracts with Caltrans represented 11.9% of our total revenue, 19.0% of our Construction revenue and 2.6% of our Large Project Construction revenue in 2009. Public sector revenue in California represented 23.2% and 25.0% of our total revenue in 2010 and 2009, respectively.
Our contracts with our customers are primarily “fixed unit price” or “fixed price.” Under fixed unit price contracts, we are committed to providing materials or services at fixed unit prices (for example, dollars per cubic yard of concrete placed or cubic yard of earth excavated). While the fixed unit price contract shifts the risk of estimating the quantity of units required for a particular project to the customer, any increase in our unit cost over the expected unit cost in the bid, whether due to inflation, inefficiency, errors in our estimates or other factors, is borne by us unless otherwise provided in the contract. Fixed price contracts are priced on a lump-sum basis under which we bear the risk of performing all the work for the specified amount. The percentage of fixed price contracts (excluding fixed unit price contracts) in our contract backlog decreased to approximately 68.3% at December 31, 2010 compared with approximately 75.1% at December 31, 2009.
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Granite Construction Inc. has a market cap of $1.08 billion; its shares were traded at around $27.85 with a P/E ratio of 87 and P/S ratio of 0.6. The dividend yield of Granite Construction Inc. stocks is 1.9%. Granite Construction Inc. had an annual average earning growth of 11.7% over the past 10 years.Hedge Fund Gurus that owns GVA: Michael Price of MFP Investors LLC, Kenneth Fisher of Fisher Asset Management, LLC, Bruce Kovner of Caxton Associates. Mutual Fund and Other Gurus that owns GVA: Arnold Van Den Berg of Century Management, Jeff Auxier of Auxier Focus Fund, PRIMECAP Management, Chuck Royce of Royce& Associates, Jeremy Grantham of GMO LLC.
Highlight of Business Operations:
Construction: Revenue from our Construction segment was $943.2 million and $1.2 billion (53.5% and 58.7% of our total revenue) in 2010 and 2009, respectively. Revenue from our Construction segment is derived from both public and private sector clients. The Construction 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. These are typically bid-build projects completed within two years with a contract value of less than $75 million.Large Project Construction: Revenue from our Large Project Construction segment was $584.4 million and $603.5 million (33.1% and 30.7% of our total revenue) in 2010 and 2009, respectively. The Large Project Construction segment focuses on large, complex infrastructure projects which typically have a longer duration than our Construction segment work. These 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 contracts, generally with contract values in excess of $75 million.
Construction Materials: Revenue from our Construction Materials segment was $222.1 million and $205.9 million (12.6% and 10.5% of our total revenue) in 2010 and 2009, respectively. The Construction Materials segment mines and processes aggregates and operates plants that produce construction materials for internal use and for sale to third parties. We have significant aggregate reserves that we have acquired by ownership in fee or through long-term leases. Aggregate products used in our construction projects represented approximately 50.2% of our tons sold during 2010 and ranged from 36.6% to 50.2% over the last five years. The remainder is sold to third parties.
GLC s current investments are located in Washington, Oregon, California and Texas. In 2010, revenue from GLC was $13.3 million (0.8% of our total revenue), compared with $2.3 million (0.1% of our total revenue) in 2009. On October 25, 2010, we announced our Enterprise Improvement Plan that includes plans to orderly divest of our real estate investment business. See Note 11 of “Notes to the Consolidated Financial Statements” and “Restructuring Charges” under “Item 7. Management s Discussion and Analysis of Financial Condition and Results of Operations” for additional information.
During the year ended December 31, 2010, our largest volume customer was the Maryland State Highway Administration (“MD SHA”). Revenue recognized from contracts with MD SHA represented 10.3% of our total revenue and 31.0% of our Large Project Construction revenue in 2010. During the year ended December 31, 2009, our largest volume customer was the California Department of Transportation (“Caltrans”). Revenue recognized from contracts with Caltrans represented 11.9% of our total revenue, 19.0% of our Construction revenue and 2.6% of our Large Project Construction revenue in 2009. Public sector revenue in California represented 23.2% and 25.0% of our total revenue in 2010 and 2009, respectively.
Our contracts with our customers are primarily “fixed unit price” or “fixed price.” Under fixed unit price contracts, we are committed to providing materials or services at fixed unit prices (for example, dollars per cubic yard of concrete placed or cubic yard of earth excavated). While the fixed unit price contract shifts the risk of estimating the quantity of units required for a particular project to the customer, any increase in our unit cost over the expected unit cost in the bid, whether due to inflation, inefficiency, errors in our estimates or other factors, is borne by us unless otherwise provided in the contract. Fixed price contracts are priced on a lump-sum basis under which we bear the risk of performing all the work for the specified amount. The percentage of fixed price contracts (excluding fixed unit price contracts) in our contract backlog decreased to approximately 68.3% at December 31, 2010 compared with approximately 75.1% at December 31, 2009.
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