Granite Construction Inc (GVA) 2025 Q2 法說會逐字稿

Good morning. My name is Steve, and I'll be your conference facilitator today. At this time, I would like to welcome everyone to the Granite Construction Inc. 2025 Second Quarter Conference Call. This call is being recorded. (Operator Instructions) It is now my pleasure to turn the floor over to the Vice President of Investor Relations, Mike Barker.

早安.我叫史蒂夫，今天我將擔任你們的會議主持人。現在，我歡迎大家參加 Granite Construction Inc. 2025 年第二季電話會議。此通話正在錄音。（操作員指示）現在我很高興將發言權交給投資人關係副總裁 Mike Barker。

Good morning, and thank you for joining us. I'm pleased to be here today with President and Chief Executive Officer, Kyle Larkin, and Executive Vice President and Chief Financial Officer, Staci Woolsey. Please note that today's earnings presentation will be available on the Events and Presentations page of our Investor Relations website. We begin today with a brief discussion regarding forward-looking statements and non-GAAP measures.

早安，感謝您加入我們。我很高興今天能與總裁兼執行長 Kyle Larkin 以及執行副總裁兼財務長 Staci Woolsey 一起來到這裡。請注意，今天的收益報告將在我們投資者關係網站的活動和演示頁面上發布。今天我們首先簡要討論前瞻性陳述和非公認會計準則指標。

Some of the discussion today may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are estimates reflecting the current expectations and best judgment of senior management regarding the future events, occurrences, opportunities, targets, growth, demand, strategic plans, circumstances, activities, performance, shareholder value, outcomes, outlook, guidance, objectives, committed and awarded projects or CAP and results. .

今天的一些討論可能包括 1995 年《私人證券訴訟改革法案》所定義的前瞻性陳述。這些前瞻性陳述是反映高階管理層對未來事件、情況、機會、目標、成長、需求、策略計劃、情況、活動、績效、股東價值、結果、展望、指導、目標、承諾和授予的專案或 CAP 和結果的當前預期和最佳判斷的估計。。

Actual results could differ materially from statements made today. Please refer to Granite's most recent 10-K and 10-Q filings for a more complete description of risk factors that could affect these forward-looking statements. The company assumes no obligation to update forward-looking statements, except as required by law. Certain non-GAAP measures may be discussed during today's call and from time to time by the company's executives.

實際結果可能與今天的聲明有重大差異。請參閱 Granite 最新的 10-K 和 10-Q 文件，以獲得可能影響這些前瞻性聲明的風險因素的更完整描述。除法律要求外，本公司不承擔更新前瞻性陳述的義務。公司高層可能會在今天的電話會議中以及不時討論某些非公認會計準則指標。

These include, but are not limited to, adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share and cash gross profit. The required disclosures regarding our non-GAAP measures are included as part of our earnings press releases and in company presentations, which are available on our website, graniteconstruction.com under Investor Relations. Now I would like to turn the call over to Kyle Larkin.

這些包括但不限於調整後的 EBITDA、調整後的 EBITDA 利潤率、調整後的淨收入、調整後的每股盈餘和現金毛利。有關我們的非公認會計準則 (non-GAAP) 指標的必要揭露包含在我們的收益新聞稿和公司介紹中，您可以在我們的網站 graniteconstruction.com 的「投資者關係」部分找到。現在我想把電話轉給凱爾拉金 (Kyle Larkin)。

Good morning, and thank you for joining us. Before we discuss our second quarter results, I'd like to talk about the recently announced acquisitions of Warren Paving and Papich Construction. These transactions are an exciting step forward for Granite as we continue to execute on our strategic plan. The strategic plan started with a focus on raising construction margins and driving organic growth by selecting the right projects in the right markets with the right owners while standardizing execution practices across the business.

早安，感謝您加入我們。在我們討論第二季業績之前，我想先談談最近宣布的 Warren Paving 和 Papich Construction 的收購。隨著我們繼續執行戰略計劃，這些交易對 Granite 來說是一個令人興奮的進步。該策略計劃首先專注於提高建築利潤率，並透過在合適的市場與合適的業主選擇合適的專案來推動有機成長，同時在整個業務範圍內標準化執行實踐。

We also revisited our capital deployment and shifted strategic investments to support our materials business as we work to maximize the benefits of our vertically integrated business model. Our strategy is working. Both our Construction and Materials businesses are seeing significantly higher margins, which in turn, are driving strong cash generation. As we progress with our construction and materials strategy, we are continuing to grow and strengthen the company with M&A. We are using M&A to support, strengthen and expand our home markets into new geographies.

我們也重新審視了我們的資本配置，並轉移了策略投資以支援我們的材料業務，努力最大限度地發揮我們的垂直整​​合業務模式的優勢。我們的策略正在發揮作用。我們的建築和材料業務的利潤率都大幅提高，從而推動了強勁的現金產生。隨著我們的建築和材料策略不斷推進，我們將繼續透過併購來發展和壯大公司。我們正在利用併購來支持、加強和擴展我們的本土市場到新的地區。

Over the last year, we have built out our corporate development team with the expectation that we will be building our company through M&A. We have also been putting a lot of work into our integration framework. We are prepared to efficiently integrate these companies into our organization. We will continue to maintain a disciplined and targeted approach to M&A only pursuing those targets to support our strategic plan. We remain committed to our vertical integration strategy with target companies being primarily materials focused both within our current footprint and in new attractive geographies.

在過去的一年裡，我們組建了企業發展團隊，並期望透過併購來建立我們的公司。我們也為我們的整合框架投入了大量的工作。我們準備好有效地將這些公司整合到我們的組織中。我們將繼續保持嚴謹且有針對性的併購方式，只追求那些支持我們策略計畫的目標。我們將繼續致力於我們的垂直整​​合策略，目標公司主要集中在我們現有業務範圍內以及新的有吸引力的地區的材料領域。

The deals announced this we significant resources to our Southeast platform with a large supply of high-quality aggregates on Mississippi River and will also strengthen our Central California operations by adding a leading vertically integrated contractor to our business portfolio. With a combined transaction price of $710 million, the acquisitions are expected to annually contribute approximately $425 million of revenue with an approximate adjusted EBITDA margin of 18%. The acquisition should provide a significant uplift to the Materials segment by increasing annual aggregate volumes by approximately 5 million tons or 27% and in increasing aggregate reserves and resources by more than 440 million tons or approximately 30%.

該交易宣布我們將為東南平台注入重要資源，在密西西比河上供應大量優質骨料，同時透過在我們的業務組合中增加一家領先的垂直整合承包商，也將加強我們在加州中部的業務。此次收購的總交易價格為 7.1 億美元，預計每年將貢獻約 4.25 億美元的收入，調整後的 EBITDA 利潤率約為 18%。此次收購將大幅提升材料部門的業績，使年總產量增加約 500 萬噸或 27%，總儲量和資源增加超過 4.4 億噸或約 30%。

The acquisitions are expected to be immediately accretive to adjusted EBITDA margin with an annual uplift of approximately 60 basis points, driven by the increased aggregate exposure. Now I will discuss each acquisition starting with a new addition to the Southeast platform. Warren Paving which owns a flat makes quarry is a premier producer of construction materials and provider of construction services in Mississippi and the Gulf Coast regions of Louisiana and Alabama, and it's a great addition to our Southeast platform. This last Lucas quarry strategically located on the Cumberland River attributory the Mississippi and has an estimated 400 million tons of very-high-quality aggregate reserves and resources.

預計此次收購將立即增加調整後的 EBITDA 利潤率，受整體風險敞口增加的推動，年增幅約為 60 個基點。現在，我將從東南平台的新成員開始討論每次收購。沃倫鋪路公司 (Warren Paving) 擁有一座平坦的採石場，是密西西比州以及路易斯安那州和阿拉巴馬州墨西哥灣沿岸地區首屈一指的建築材料生產商和建築服務提供商，對我們的東南平台來說是一個很好的補充。這座最後的盧卡斯採石場位於密西西比河支流坎伯蘭河的戰略位置，擁有約 4 億噸高品質骨材儲量和資源。

Utilizing a distribution network of approximately 170 owned and leased barges and 11 aggregate yards, Warren Paving cells aggregates, both internally supplying its own asphalt plants and externally. I'm excited not only because we are adding such a high-performing business to our Southeast platform, but also because of the future growth opportunities provided by the addition of Warren Paving. The combination of these high-quality aggregates and Warren Paving's logistics expertise should allow us to supply materials to certain LandRobers and Diggerson and Bond asphalt plants and positions us to expand the distribution network as we continue to grow our Southeast platform.

Warren Paving 利用由大約 170 艘自有和租賃駁船以及 11 個骨料場組成的分銷網絡，進行骨料的集料供應，既向內部供應自己的瀝青廠，也向外部供應。我感到興奮，不僅因為我們在東南平台上增加了這樣一家高績效企業，還因為 Warren Paving 的加入將帶來未來的成長機會。這些高品質骨材與 Warren Paving 的物流專業知識相結合，使我們能夠向某些 LandRobers 和 Diggerson 和 Bond 瀝青廠供應材料，並使我們能夠在繼續發展東南平台的同時擴大分銷網絡。

Investment in and further growth of the distribution network, in addition to building out additional outlets for the aggregates along the Mississippi River system should have a compounding impact on the profitability of the Southeast platform bilirevenue and associated gross profit while driving increases in volumes and margin. We are actively evaluating opportunities to continue to build upon the platform and I look forward to sharing progress that we make on our strategic plan in the coming quarters. With the acquisition of Warren Paving, the Southeast platform has grown to be a more significant component of Granite. We are excited by the opportunities to continue that growth.

對分銷網絡的投資和進一步發展，以及在密西西比河系統沿線建設額外的骨料銷售點，將對東南平台雙倍收入和相關毛利潤的盈利能力產生複合影響，同時推動銷量和利潤率的增長。我們正在積極評估繼續建立該平台的機會，我期待在未來幾季分享我們策略計畫的進展。隨著對 Warren Paving 的收購，東南平台已成長為 Granite 更重要的組成部分。我們對繼續成長的機會感到非常興奮。

The market from Memphis through Mississippi and into Louisiana is growing in terms of public funding and private investment. We view the region as a historically underfunded area. But recently, the Mississippi and Louisiana day legislatures have recognized an ever infrastructure investment and are working on initiatives that should support future growth. In addition to the expected continued increase in public funds, we believe private investment will ramp up in the region whether through data centers or other large commercial developments, the region is attractive due to affordable lane, clinical water and electricity and labor availability.

從孟菲斯經密西西比州到路易斯安那州的市場在公共資金和私人投資方面正在成長。我們認為該地區歷來是資金不足的地區。但最近，密西西比州和路易斯安那州的立法機構已經認識到持續的基礎設施投資，並正在製定支持未來成長的措施。除了預期公共資金持續增加外，我們相信私人投資也將增加，無論是透過資料中心還是其他大型商業開發，該地區都因其價格實惠的車道、臨床水力發電和勞動力供應而具有吸引力。

A number of large developments have begun in Mississippi, and we expect this trend to continue. Throughout Granite's history, we have found success by investing in markets that were historically underfunded, but growing and expanding. We believe this region aligns well with that formula, and we are excited to be part of that growth. Now let's move on to our acquisition in California. Papich Construction is a leading producer of aggregates and asphalt in California Central Coast and Central Valley and has expertise in Infastech projects across the public and private sectors.

密西西比州已開始實施多項大型開發項目，我們預計這一趨勢將會持續下去。縱觀 Granite 的發展歷史，我們透過投資歷史上資金不足但正在成長和擴張的市場獲得了成功。我們相信這個地區非常符合這一模式，我們很高興成為這一成長的一部分。現在讓我們來談談我們在加州的收購。Papich Construction 是加州中央海岸和中央谷地領先的骨材和瀝青生產商，在公共和私營部門的 Infastech 專案方面擁有專業知識。

The addition of more than 40 million tons of aggregate reserves and resources right across the market is complementary to Granite's current operations in the area with the combined footprint. We will be better positioned to serve the market in aggregate and asphalt sales as well as construction projects. The addition of Papich Construction is a great example of executing on our strategy of strengthening existing home markets with bolt-ons that will enhance our vertical integration in our home market that we know well.

整個市場新增的 4,000 多萬噸總儲量和資源將對 Granite 目前在該地區的業務形成補充。我們將更好地服務於骨料和瀝青銷售以及建築項目市場。Papich Construction 的加入是我們實施強化現有國內市場策略的一個很好的例子，這將增強我們在我們熟悉的國內市場的垂直整合。

Looking forward, I believe that M&A will be a significant component of our growth. We are focused on generating cash while the improvement CapEx resulting in strong free cash flow, whether it is through proactive outreach by our teams for bank-led auction processes, there is a robust lifting of active M&A opportunities ahead of us. While we will continue to be selective in the coming quarters, I believe we will continue to execute on transactions that will further strengthen our national footprint.

展望未來，我相信併購將成為我們成長的重要組成部分。我們專注於創造現金，同時改善資本支出以產生強勁的自由現金流，無論是透過我們的團隊主動聯繫銀行主導的拍賣流程，我們面前都有大量活躍的併購機會。雖然我們在未來幾季仍會繼續精挑細選，但我相信我們將繼續執行能夠進一步加強我們全國影響力的交易。

Now let's discuss our strong second quarter results, starting with the Materials segment. Our Materials business completed another exceptional quarter. The strong public market environment is continuing to drive growth, as has been the case in previous quarters and private market levels relatively unchanged. We continue to execute on our strategic plan and we remain focused on continuing to raise the bar across all of our businesses. Part of our strategy while restructuring our operational leadership to place our materials experts in charge of Materials business and centralized management functions, such as sales and quality control.

現在讓我們來討論一下我們第二季的強勁業績，首先從材料部門開始。我們的材料業務又完成了一個出色的季度。強勁的公開市場環境繼續推動成長，就像前幾季的情況一樣，而私人市場水平相對沒有變化。我們將繼續執行我們的策略計劃，並繼續致力於提高所有業務的標準。我們的策略之一是重組營運領導層，讓材料專家負責材料業務​​和集中管理職能，例如銷售和品質控制。

This realignment is helping us grow our materials margins. We're also investing in capital improvement projects such as aggregate plant automation to drive efficiency and reduce production costs, and we are promoting best practices across all of our operations through the implementation of our materials playbook. These efforts are driving increases in volumes and prices per ton on aggregates and asphalt as we work to increase our margin. I'm proud of the accomplishments of the materials team and of our performance this quarter. We have a long runway of opportunities to capture additional potential gains in profitability in the business for the coming quarters and years.

此次調整有助於我們提高材料利潤。我們還投資了資本改善項目，例如骨材廠自動化，以提高效率並降低生產成本，我們正在透過實施材料手冊在所有營運中推廣最佳實踐。我們努力提高利潤率，這些努力正在推動骨材和瀝青每噸產量和價格的上漲。我為材料團隊的成就和我們本季的表現感到自豪。我們擁有大量的機會來在未來幾季和幾年內獲得業務盈利的額外潛在收益。

Now let's move to the Construction segment. During the quarter, our SMA teams did a great job capitalizing on the robust bidding environment by winning a number of high-quality projects that drove our cap to a new record high of $6.1 billion. The new projects span across our footprint, including Nevada, Utah, California and Alaska.

現在讓我們進入建築領域。在本季度，我們的 SMA 團隊充分利用強勁的投標環境，贏得了許多高品質項目，使我們的上限達到了 61 億美元的新高。新項目遍布我們的業務範圍，包括內華達州、猶他州、加利福尼亞州和阿拉斯加州。

In California, our largest market, the budget for the 2025-2026 fiscal year was finalized during Q2. Gas portation funding for the upcoming fiscal year remains strong with the key components of the transportation budget, capital outlay projects and local assistance, increasing budget allocations 9% over the fiscal year ended June 2025.

在我們最大的市場加州，2025-2026 財年的預算已於第二季最終確定。即將到來的財政年度的天然氣輸送資金仍然強勁，主要來自交通預算、資本支出項目和地方援助，預算撥款比截至 2025 年 6 月的財政年度增加 9%。

In California and across our footprint, we continue to see a healthy boost of project bidding opportunities in both the public and private markets. Based on these encouraging signs, we believe we will continue to see cap increase over the next several quarters. I'm pleased with the segment performance during the quarter. Revenue during the quarter was strong, and we expect revenue growth to accelerate in the second half of the year as projects progress.

在加州以及我們的業務範圍內，我們繼續看到公共和私人市場的專案投標機會健康成長。基於這些令人鼓舞的跡象，我們相信未來幾季我們將繼續看到上限增加。我對本季的分部表現感到滿意。本季營收強勁，我們預計隨著專案的進展，下半年營收成長將會加速。

In addition, I believe we are on track to achieve our gross margin expansion expectations of greater than 1% during 2025. Through the first half of 2025, we are seeing the benefits of the steps we have implemented to improve project performance and expect further gains in the Construction segment in the future. Now I'll turn it over to Staci to review our financial performance for the quarter.

此外，我相信我們有望實現 2025 年毛利率成長 1% 以上的預期。到 2025 年上半年，我們將看到所實施的改善專案績效的措施所帶來的好處，並預期未來建築領域將取得進一步的成長。現在我將交給 Staci 來回顧我們本季的財務表現。

Thanks, Kyle. We had an outstanding second quarter and first half of 2025. In the second quarter, revenue increased $43 million or 4%. Gross profit increased $34 million or 21%. Adjusted net income improved $9 million or 12%, adjusted EBITDA improved $22 million or 17% and we ended the second quarter with year-to-date operating cash flow of $5 million, which is on track for our 2025 target. In the Construction segment, revenue increased $19 million or 2% year-over-year to $937 million, driven by the recently acquired Dickerson and Bowen and the strong cap we are working through across the company. Heading into the third quarter with a record cap balance, I believe we are on track to meet our revenue guidance for the year.

謝謝，凱爾。2025 年第二季和上半年我們表現出色。第二季度，營收增加了 4,300 萬美元，增幅為 4%。毛利增加 3,400 萬美元，增幅 21%。調整後的淨收入增加了 900 萬美元，即 12%，調整後的 EBITDA 增加了 2,200 萬美元，即 17%，第二季末，年初至今的營運現金流為 500 萬美元，這正朝著我們的 2025 年目標邁進。在建築領域，營收年增 1,900 萬美元（2%），達到 9.37 億美元，這得益於最近收購的 Dickerson 和 Bowen，以及我們正在整個公司努力實現的強大上限。進入第三季度，我們擁有創紀錄的資本餘額，我相信我們有望實現今年的收入預期。

Construction segment gross profit improved $18 million to $154 million with a gross profit margin of 16%. This 170 basis point increase is largely due to improved execution and performance across our higher-quality project portfolio as well as increased claim settlement recognition year-over-year. In the first half of 2025, our cap has increased approximately $800 million from a 2024 year-end balance of $5.3 billion. We continue to see CAP expand in our public markets across the company as we capitalize on opportunities at the federal, state and local levels.

建築部門毛利增加 1,800 萬美元，達到 1.54 億美元，毛利率為 16%。這 170 個基點的成長主要歸功於我們高品質專案組合的執行力和績效的提高，以及索賠結算確認額的同比增長。2025 年上半年，我們的上限比 2024 年年底的 53 億美元增加了約 8 億美元。隨著我們利用聯邦、州和地方各級的機會，我們看到 CAP 繼續在整個公司的公開市場上擴張。

In the Materials segment, we continue to realize year-over-year cash gross profit margin improvement led by our aggregates business. Year-over-year aggregate volumes increased 11% for the quarter and 13% year-to-date, driven by strong demand in our regions. These volume increases, coupled with higher aggregate prices led to improved cash gross profit margin for both the quarter and year-to-date periods compared to the prior year. In asphalt, we are also seeing volume increases and cash gross profit improvement year-over-year.

在材料部門，在骨材業務的帶動下，我們持續實現現金毛利率的年增。受我們所在地區強勁需求的推動，本季總交易量年增 11%，年初至今成長 13%。銷量增加加上總價上漲導致本季和年初至今的現金毛利率與去年同期相比有所提高。在瀝青方面，我們也看到銷量較去年同期成長和現金毛利潤提高。

The materials business executing on our plan to grow revenue while implementing initiatives such as automation and best practices to offset cost inflation. Now turning to cash flow and the balance sheet. We generated $5 million of operating cash flow through the first half of the year. Typically, the first half of the year is a slow period for cash flow as projects and operations ramp up. Then as we get further into the construction season, cash flow typically increases I believe we will see this seasonal pattern this year and expect that we will achieve our operating cash flow target of 9% of revenue for the year.

材料業務正在執行我們的計劃以增加收入，同時實施自動化和最佳實踐等措施來抵消成本上漲。現在轉向現金流和資產負債表。我們上半年產生了 500 萬美元的營運現金流。通常，由於專案和營運的增加，上半年是現金流的緩慢時期。然後，隨著我們進一步進入建築季節，現金流通常會增加，我相信今年我們會看到這種季節性模式，並預計我們將實現全年收入 9% 的營運現金流目標。

As of the end of Q2, cash and marketable securities were $483 million. With the closing of the 2 transactions this week, we amended our credit facility by adding a new Term Loan A of $600 million and expanding our revolver from $350 million to $600 million, of which $10 million was drawn in conjunction with the transactions. In addition to the new term loan, we have the ability to draw another term loan of $75 million within 6 months. We also utilized $100 million of cash on hand. After accounting for the transaction, our total debt outstanding is approximately $1.35 billion.

截至第二季末，現金和有價證券為 4.83 億美元。隨著本週兩筆交易的完成，我們修改了信貸安排，增加了一筆 6 億美元的新定期貸款 A，並將循環信貸額度從 3.5 億美元擴大到 6 億美元，其中 1000 萬美元是與交易一起提取的。除了新的定期貸款外，我們還可以在 6 個月內再提取 7,500 萬美元的定期貸款。我們也動用了1億美元的現金。經過交易核算後，我們的未償還債務總額約為 13.5 億美元。

With our expanded revolver, additional available term loans and cash flow generation, we are in a great position to act on future M&A opportunities that bolt on to a home market or further expand our geographic reach. Now let's discuss our guidance for the rest of this year and our 2027 targets. As a result of this week's acquisitions, we are increasing our annual revenue and adjusted EBITDA margin guidance for 2025. Our revised revenue range is now $4.35 billion to $4.55 billion and our adjusted EBITDA margin range is now 11.25% to 12.25%.

憑藉擴大的循環信貸額度、額外的可用定期貸款和現金流生成，我們能夠更好地抓住未來的併購機會，進軍國內市場或進一步擴大我們的地理覆蓋範圍。現在讓我們討論今年剩餘時間的指導和 2027 年的目標。由於本週的收購，我們將增加 2025 年的年度收入和調整後的 EBITDA 利潤率預期。我們修訂後的營收範圍現在為 43.5 億美元至 45.5 億美元，調整後的 EBITDA 利潤率範圍現在為 11.25% 至 12.25%。

This reflects an expected $150 million in revenue from the acquisitions for the remainder of the year as well as an uplift of 25 basis points to our adjusted EBITDA margin range. Our annual guidance for SG&A as a percent of revenue of 9%, CapEx in the range of $140 million to $160 million and adjusted effective tax rate in the mid-20s are unchanged. Through the second quarter, we have achieved a margin expansion expected in both of our segments and with our busiest month ahead of us, I believe we are on track to meet our guidance for the year.

這反映了今年剩餘時間內收購預計帶來的 1.5 億美元收入，以及調整後的 EBITDA 利潤率範圍上升 25 個基點。我們對銷售、一般及行政費用佔收入的 9%、資本支出在 1.4 億美元至 1.6 億美元之間以及調整後有效稅率在 20% 左右的年度指導保持不變。到第二季度，我們兩個部門的利潤率都實現了預期的成長，而且我們最繁忙的一個月即將到來，我相信我們有望實現今年的預期。

Looking forward, we are also revisiting our 2027 financial targets with the addition of the acquisitions. Our organic revenue growth expectations are unchanged at a CAGR of 6% to 8% through 2027 as we see a robust market ahead of us that should provide for continued growth across the company. With an active deal pipeline, we believe we'll be able to complete at least two to three deals each year to strengthen and expand our home market. While the timing of any transaction is difficult to predict, we believe we have the team, market, cash generation and balance sheet to achieve this growth. Following the completion of 2 acquisitions this week, we are raising our 2027 targets for adjusted EBITDA margins, operating cash flow margin and free cash flow margin ranges by 50 basis points. Now I'll turn it back over to Kyle.

展望未來，隨著收購的增加，我們也將重新檢視 2027 年的財務目標。我們對有機收入成長的預期保持不變，到 2027 年複合年增長率將保持在 6% 至 8%，因為我們看到未來市場強勁，這將為整個公司帶來持續成長。透過積極的交易管道，我們相信我們每年將能夠完成至少兩到三筆交易，以加強和擴大我們的本土市場。雖然任何交易的時間都難以預測，但我們相信我們擁有團隊、市場、現金產生和資產負債表來實現這一成長。繼本週完成兩項收購後，我們將 2027 年調整後 EBITDA 利潤率、營運現金流量利潤率和自由現金流量利潤率範圍的目標提高了 50 個基點。現在我將把話題交還給凱爾。

Thanks, Staci. I'll close with the following points. I'm excited by our performance in the second quarter and the first half of the year. We continue to execute on our strategic plan, and we are showing the earnings power of our company in our vertically integrated model. We continue to grow cap fueled by public market opportunities at the federal, state and local levels. Our private markets also have a number of strong opportunities, which I believe will contribute to CAP growth in the future. Overall, in 2025, we have bid and won more work than in the previous year, just as we have done for the past several years.

謝謝，史黛西。最後我想談談以下幾點。我對我們第二季和上半年的表現感到興奮。我們繼續執行我們的策略計劃，並透過垂直整合模式展示公司的獲利能力。我們將繼續在聯邦、州和地方各級公共市場機會的推動下實現成長。我們的私人市場也有很多強勁的機會，我相信這將有助於未來 CAP 的成長。總體而言，2025 年我們投標並贏得的工作比前一年更多，就像過去幾年一樣。

In both our Construction and Materials segments, our teams are meeting our margin expectations. And as we head into the third quarter, I believe we are on track to meet our 2025 guidance. The additions of Warren Paving and Papich Construction are significant strategic transactions for Granite. Not only do they aggregate high-performing businesses to our portfolio, but they also provide opportunities to continue to expand our home markets in a way that should compound returns by driving volumes.

在我們的建築和材料領域，我們的團隊都達到了我們的利潤預期。隨著我們進入第三季度，我相信我們有望實現 2025 年的目標。Warren Paving 和 Papich Construction 的加入對 Granite 來說是一項重要的策略交易。它們不僅將高績效企業聚集到我們的投資組合中，而且還提供了繼續擴大我們本土市場的機會，透過推動銷售來增加回報。

In what has historically been a seasonally slow quarter, we generated positive operating cash flow, and I believe we should reach our target for operating cash flow of 9% of revenue for 2025. Finally, with our cash generation upsized credit facility backed by our strong balance sheet and a number of organic and inorganic investment opportunities ahead of us, we believe that grand will continue to drive significant shareholder value. Operator, I will now turn it back to you for questions.

在歷史上季節性淡季，我們產生了正的經營現金流，我相信我們應該達到 2025 年經營現金流佔 9% 收入的目標。最後，憑藉我們強勁的資產負債表和大量有機和無機投資機會所支持的現金產生擴大信貸額度，我們相信盛大將繼續推動顯著的股東價值。接線員，現在我將把問題交還給您。

(Operator Instructions)

（操作員指示）

Brent Thielman with D.A. Davidson.

布倫特·蒂爾曼 (Brent Thielman) 和 D.A. Davidson。

Congrats on the great quarter and on the transactions as well. I guess the first question would be, Kyle, I mean, on the Construction segment, the growth through the first half maybe less robust relative to what I think you're seeing in the markets and obviously, your cap is picking up pretty nicely here. So maybe if you could just comment on obviously, you'll have the transactions layering into the second half, but just the pace that you're now seeing on some of this work as you're starting to work through some of the staffing cap there have been things that held it back and now you're starting to see it moving. Just wanted to get some color there.

恭喜本季取得的優異成績以及交易的順利進行。我想第一個問題是，凱爾，我的意思是，在建築領域，上半年的成長可能相對於你在市場上看到的情況來說不那麼強勁，顯然，你的上限在這裡回升得相當不錯。因此，也許您可以評論一下，顯然，您將在下半年進行交易，但您現在看到的一些工作進展速度，因為您開始解決一些人員上限問題，有一些事情阻礙了它的進展，現在您開始看到它在進展。只是想在那裡得到一些顏色。

Yes. And yes, we agree it was a great quarter, and we're excited about the performance by our teams. Regarding just the revenue on top line for the company, it really just project starts and finishes. So we feel really strongly about the back half of the year. As you mentioned, we have record cap at $6.1 billion. So we have a lot of projects that just be ramping up, and so we do expect these to accelerate in the back half of the year. So if you look at our overall guidance and our updated guidance for 2025, we left our legacy guidance alone, and we just added the contributions of the acquisitions to the guidance for the year.

是的。是的，我們同意這是一個偉大的季度，我們對我們團隊的表現感到非常興奮。就公司營業收入而言，這實際上只是專案的開始和結束。因此，我們對今年下半年的前景有非常強烈的感受。正如您所說，我們的最高紀錄是 61 億美元。因此，我們有許多專案正在加速推進，我們確實預計這些專案將在今年下半年加速。因此，如果您查看我們的整體指導和 2025 年的最新指導，您會發現我們保留了原有的指導，只是將收購的貢獻添加到了年度指導中。

Okay. And then I guess the follow-up question would just be, I mean, the materials profit margin expansion, particularly notable this quarter and just wanted to get a sense of what might be transitory factors impacting that. And what's kind of sustainable as we think about profitability of that business going forward?

好的。然後我想後續的問題就是，我的意思是，材料利潤率的擴大，特別是本季的擴大，只是想了解哪些可能是影響這現象的暫時因素。當我們考慮到該業務未來的獲利能力時，什麼是可持續的？

Yes. Well, we were pleased with -- certainly, the volumes have in the quarter and for the year-to-date. We're seeing nice volume improvements and 10% or better in both asphalt and aggregates. So I think that's signs of a healthy market there as well. I'd say it's more supported by the public markets and the private. Private has been pretty much consistent year-over-year. As we mentioned on the last call and previously that we expected around 3% gross profit margin improvement in our Materials segment for the full year. At the moment, we're certainly tracking well ahead of that today. So we'll see how the back half shakes out. But I think there's good signs that we're seeing volume increases, and we're seeing the margin expansion that we expected in the year.

是的。嗯，我們對此感到滿意——當然，本季和今年迄今的交易量都有所增長。我們看到瀝青和骨材的產量都有了顯著的提高，增加了 10% 或更高。所以我認為這也是那裡市場健康的標誌。我想說它更多地受到公開市場和私人市場的支持。私人情況逐年基本穩定。正如我們在上次電話會議和之前提到的那樣，我們預計材料部門全年毛利率將提高約 3%。目前，我們肯定已經遠遠領先於此水準。因此我們將看看後半部分如何發展。但我認為有好的跡象表明，我們看到了銷量的成長，我們看到了我們今年預期的利潤率的擴大。

And I would say that holds true for construction as well. we mentioned that we expected a 1% or greater margin expansion in our construction business. Our team has done a fantastic job, and they're tracking volume of that, too. So across the board, both Construction and Materials segments, we feel really good about our team's performance.

我想說這對建築業也同樣適用。我們提到，我們預計建築業務的利潤率將成長 1% 或更多。我們的團隊做得非常出色，他們也在追蹤其數量。因此，無論是建築領域還是材料領域，我們都對團隊的表現感到非常滿意。

Steven Ramsey with Thompson Research Group.

湯普森研究小組的史蒂文·拉姆齊。

This is actually Brian Biros on for Steven. On Page, can you just maybe touch on what that business I guess, excels at. I think you mentioned expertise in infrastructure projects in the prepared remarks. But just curious on what Pepe can add to you, what you can add to them and why their margin profile is as strong as it is.

這其實是 Brian Biros 代替 Steven 演的。在頁面上，您能否簡單談談我猜測的該業務的優勢所在？我認為您在準備好的演講中提到了基礎設施項目的專業知識。但我只是好奇 Pepe 能為您增加什麼，您能為他們增加什麼，以及為什麼他們的利潤率如此強勁。

Yes. Yes. Thank you for the question. Papich is very similar to grant. Our businesses look similar in terms of mix of work. So they're primarily a public works contractor that's around 80% of their business spend on a given year, 20% private. They can be very strong in the private market. And they fill an area within the State of California that we don't have a strong express.

是的。是的。謝謝你的提問。帕皮奇與格蘭特非常相似。從工作組合來看，我們的業務看起來很相似。因此，他們主要是一家公共工程承包商，其每年的業務支出約佔 80%，私人支出佔 20%。他們在私人市場上可能非常強大。他們填補了加州內我們沒有強大快遞的地區。

So the Central Coast kind of the central area of California. So it's really complementary to our current footprint. And it's in a state that we believe in and obviously have really nice budget and funding behind it, even coming into the '25, '26 cycles. I think the timing of it is really good for us as well.

中央海岸是加州的中部地區。所以它確實與我們目前的足跡相輔相成。我們相信這是可行的，而且顯然有非常好的預算和資金支持，甚至進入 25、26 年周期。我認為這個時機對我們來說也很好。

Our businesses in the central part of the state rely a lot on third-party mutual suppliers. So having Papich's materials business is getting really additive to our overall business as a company. So we're excited about that. And I think together, we see this opportunity. We see opportunities to drive volume increases and pull through their plans to internal sales. I think we can leverage our pricing strategies, how we look at automation in our plants business today and learned from some of the previous projects we've done, implement our materials playbook, our construction playbook.

我們在州中部的業務很大程度上依賴第三方共同供應商。因此，Papich 的材料業務對我們公司的整體業務來說具有很大的增值作用。所以我們對此感到很興奮。我認為，我們共同看到了這個機會。我們看到了推動銷售成長並將他們的計劃推向內部銷售的機會。我認為我們可以利用我們的定價策略、我們如何看待當今工廠業務中的自動化以及從我們之前完成的一些項目中學到的教訓來實施我們的材料手冊和施工手冊。

And I think our legacy business can also learn a little bit from Papich around private work and some of the customer relationships that they have and bring that into other areas as well. So again, we're really excited about the acquisition. It's a great market for us. And I can tell I know Papich is excited about being part of the Granite team.

我認為我們的傳統業務也可以從 Papich 那裡學到一些關於私人工作和一些客戶關係的經驗，並將其帶到其他領域。所以，我們對此次收購感到非常興奮。對我們來說這是一個很棒的市場。我可以說，我知道帕皮奇很高興成為 Granite 團隊的一員。

Now that sounds like great pickup for you guys. Secondly, can you just compare and contrast maybe cap trends year-to-date and the outlook, I guess, between the home regions of the West and then the Southeast?

這對你們來說聽起來是個很棒的選擇。其次，您能否比較和對比今年迄今為止的上限趨勢以及西部和東南部地區之間的前景？

Yes. Yes. We don't necessarily break it apart. I would say, just in general, it's across the board. So that record cap at $6.1 billion again. It's across the entire footprint. You can see some recent announcements to be put out -- it could be some of our federal work in lung, but we've been successful there. We were successful in Utah, Nevada, so obviously, in California, even up in Alaska. So it's really across our entire footprint as a company, which isn't surprising because the overall market with the IHA funding continues to be strong.

是的。是的。我們不一定要把它拆開。我想說，總的來說，這是全面的。因此該紀錄上限再次達到 61 億美元。它覆蓋了整個足跡。您可以看到最近發布的一些公告——可能是我們在肺部方面的一些聯邦工作，但我們在那裡取得了成功。我們在猶他州、內華達州、加州甚至阿拉斯加州都取得了成功。因此，它實際上涵蓋了我們公司的整個業務範圍，這並不奇怪，因為 IHA 資助的整體市場持續強勁。

I think that's pretty universal in all the markets that we're in. And just as a reminder that the spending to date on the IIJA is still less than 50%. And so we haven't seen in our opinion of that peak yet. We think it's probably going to peak sometime in '26, '27. So we still have a long runway ahead of us, and we do believe we can continue to build up our cap across our footprint.

我認為這在我們所處的所有市場中都是普遍存在的。需要提醒的是，迄今為止，IIJA 的支出仍不到 50%。因此，我們認為尚未看到那個高峰。我們認為它可能會在 26 年或 27 年的某個時候達到頂峰。因此，我們還有很長的路要走，我們確實相信我們可以繼續擴大我們的足跡。

Michael Dudas with Vertical Research Partners.

Vertical Research Partners 的 Michael Dudas。

Sorry about that. So shifting to the Warren acquisition. Maybe you could share more perspective on the quality of the assets and some of these locations that you're picking up? And how well capitalized have they been? Are the operations be additive? Or is there things you can learn from the other parts of your business that you take from this? And how much helpful can it be to the Dixon and the acquisitions you've made in the Mississippi market because, again, I think you're correct in assessing that not just on the public side, but there's certainly a lot of energy and data center investment in that region here over the next several years.

很抱歉。因此轉向沃倫收購。也許您可以分享更多關於資產品質以及您選擇的一些地點的看法？他們的資本狀況如何？這些操作可以加法嗎？或者您可以從業務的其他部分學到一些東西嗎？這對迪克森和您在密西西比市場所做的收購有多大幫助，因為，我再次認為您的評估是正確的，不僅在公共方面，而且未來幾年肯定會在該地區進行大量的能源和數據中心投資。

Yes. Great. Thanks, Mike. Yes, we're excited about Warren Paving as part of our Southeast platform. And clearly, won't pay us performing business, just as Lehman Roberts and Dickerson Balan we get excited about having all three of these businesses together as part of the Southeast platform. Warren Paying is a little bit different. We mentioned we've been looking at these material focused acquisitions. Warren Paving is actually material centric.

是的。偉大的。謝謝，麥克。是的，我們很高興 Warren Paving 能夠成為我們東南平台的一部分。顯然，他們不會向我們支付執行業務的費用，就像雷曼羅伯茨和迪克森巴蘭一樣，我們很高興將這三家企業合併為東南平台的一部分。華倫佩因 (Warren Paying) 有點不同。我們提到我們一直在關注這些以材料為重點的收購。Warren Paving 實際上是以材料為中心的。

It's of its revenue, around 75% of materials and 25% in this construction and about 75% is materials. 70% is ag and about 30% is asphalt. So it's really an ag-centric business. And that's going to provide a lot of opportunities for us down in the southeast part of our company now.

在其收入中，約有 75% 來自材料，25% 來自建築，約 75% 是材料，70% 是農業，約 30% 是瀝青。所以這確實是一個以農業為中心的業務。這將為我們公司東南部地區提供許多機會。

So we're focused on pull through. I think there's opportunities to drive volumes with internal sales. We think we can expand this distribution yard network, which is really impressive. We think there's obviously opportunities for pricing even the automation that we can install a business like Papich, introducing liquid on materials playbook.

因此，我們專注於渡過難關。我認為有機會透過內部銷售來提高銷量。我們認為我們可以擴大這個配送場網絡，這確實令人印象深刻。我們認為，顯然存在定價機會，甚至可以安裝像 Papich 這樣的企業，引入液體材料劇本的自動化功能。

And we also think there's opportunities now that we have scale, even explore liquid asphalt options as well. I think another piece of this that's interesting is we can connect Warren Paving to our Federal division. And there's a lot of shoreline protection opportunities with the Army Corps in that part of the country. that we can pursue both on the contracting side and also drive pull-through to the quarry. So it is a great business alone, but we see tremendous opportunities is to be part of the program oldest platform.

而且我們認為，現在我們已經有了規模，甚至還有機會探索液態瀝青的選擇。我認為另一個有趣的事情是我們可以將 Warren Paving 連接到我們的聯邦部門。在該國的這一地區，陸軍工程兵團有許多海岸線保護機會。我們可以在承包方面進行這些工作，也可以推動向採石場的延伸。因此，這本身就是一項偉大的事業，但我們也看到，成為該計劃最古老平台的一部分將帶來巨大的機會。

Sounds terrific and a great fit for the company. My follow-up would be, as you indicated or I think you talked about it in the remarks on the 2027 target. I just want to clarify. So those targets include the acquisitions you closed on this month. Is that also including potential or a percentage of potential opportunities of these two to three deals a year or is there -- could there be wider upside from the low to high levels on revenue and margin? Just kind of kind of conceptualize I can understand it clearly, what the visibility is on 2027 as you look at it today?

聽起來很棒，非常適合公司。我的後續問題是，正如您所指出的，或者我認為您在關於 2027 年目標的評論中談到了這一點。我只是想澄清一下。因此，這些目標包括您本月完成的收購。這是否也包括每年兩到三筆交易的潛在機會或一定比例的潛在機會，或者收入和利潤率是否可能從低點到高位有更大的上漲空間？只是有點概念化，我可以清楚地理解，從今天的角度來看，2027 年的可見度是什麼？

Yes. So what we provided in the updated guidance to 2027 is our consistent organic growth at that 6% to 8%. So we still feel confident in that, we still feel is of the underlying market, the public funding, the private market supports that range. So we feel good there. And then we do believe that we're going to be able to continue to layer in acquisitions. So we're set up to do that, we have the balance sheet. I think our business is operating very strong. And so that's going to give us what we need to continue to do deals.

是的。因此，我們在 2027 年更新的指引中提出的是，我們的有機成長率將保持在 6% 至 8% 之間。因此，我們仍然對此充滿信心，我們仍然認為基礎市場、公共資金和私人市場支持這個範圍。所以我們在那裡感覺很好。然後我們確實相信我們將能夠繼續進行分層收購。所以我們已經做好了準備，我們有資產負債表。我認為我們的業務運作非常強勁。這將為我們提供繼續做交易所需的一切。

We didn't want to come out and put a dollar amount to those deals because it's really tough to predict the size and the timing of these deals, as you know. And so historically now over the last couple of years, we've been able to get them across the finish line. I think it's starting to show the consistency in our business in that regard. So I think two to three deals a year is just a good number for us to put out there. And then obviously, we have the EBITDA margin improvement. That's all we put the benefit of these new acquisitions, the 50 basis points.

我們不想透露這些交易的金額，因為如你所知，預測這些交易的規模和時間真的很難。從歷史上看，過去幾年來，我們已經能夠幫助他們跨越終點線。我認為這開始體現出我們業務在這方面的一致性。所以我認為每年達成兩到三筆交易對我們來說是一個不錯的數字。顯然，我們的 EBITDA 利潤率有所提高。這就是我們為這些新收購帶來的全部收益，即 50 個基點。

Great. Just a quick -- just a quickly follow-up on -- well, how is it -- was the gestation period or the time in negotiating with these two companies? Are these not companies -- I obviously don't know pathogen in the past, but -- was it something happening recently? Or is it going to happen over several months to years as your business development team has been much more active.

偉大的。只是快速地跟進一下——嗯，與這兩家公司談判的醞釀期或時間是怎樣的？這些不是公司嗎——我過去顯然不知道病原體，但是——這是最近發生的事情嗎？或者這會在幾個月甚至幾年內發生，因為您的業務開發團隊已經更加活躍了。

How these came to fruition? Sorry, you're breaking up a little bit on our yes. Yes. Papa was a self-sourced deal, and Warren paving was a banquet process.

這些是如何實現的？抱歉，你有點分手了，我們是的。是的。Papa 是一筆自費交易，而 Warren 鋪路則是一場宴會過程。

This concludes our question-and-answer session. I would like to turn the conference back to Kyle Larkin for any closing remarks.

我們的問答環節到此結束。我想將會議交還給 Kyle Larkin 來做結束語。

Okay. Well, thank you for joining the call today. As always, we want to thank all of our employees for the work they do every day. We would also like to take this opportunity to welcome our newest team members from Warren Paving and Papich Construction. We're excited to have you on the team and look forward to building better together. Thank you for joining the call and your interest in Granite. We look forward to speaking with you all soon. .

好的。好吧，感謝您今天參加電話會議。像往常一樣，我們要感謝所有員工每天所做的工作。我們也想藉此機會歡迎來自 Warren Paving 和 Papich Construction 的新團隊成員。我們很高興您加入團隊，並期待共同創造更好的成果。感謝您參加電話會議並關注 Granite。我們期待很快與大家交談。。

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

謝謝。會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。