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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Sterling Infrastructure Inc | NASDAQ:STRL | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
10.25 | 10.13% | 111.40 | 109.02 | 111.56 | 105.76 | 102.0601 | 102.24 | 613,466 | 00:21:01 |
|
FORM 10-K
|
þ
|
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
For the transition period from ___ to ___
|
||
Commission File Number 1-31993
|
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
|
¨ Yes þ No
|
|
|
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
|
¨ Yes þ No
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes ¨ No
|
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). þ Yes ¨ No
|
DOCUMENTS INCORPORATED BY REFERENCE
|
Portions of the Company’s definitive Proxy Statement to be filed with the Securities and Exchange Commission and delivered to stockholders in connection with the Annual Meeting of Stockholders to be held on May 6, 2020 are incorporated by reference into Part III of this Form 10-K.
|
|
Sterling Construction Company, Inc.
Annual Report on Form 10-K
Table of Contents
|
|
|
Page
|
|
|
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Item 1.
|
||
Item 1A.
|
||
Item 1B.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
|
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Item 5.
|
||
Item 6.
|
||
Item 7.
|
||
Item 7A.
|
||
Item 8.
|
||
Item 9.
|
||
Item 9A.
|
||
Item 9B.
|
||
|
|
|
|
|
|
Item 10.
|
||
Item 11.
|
||
Item 12.
|
||
Item 13.
|
||
Item 14.
|
||
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|
|
|
|
Item 15.
|
||
Item 16.
|
||
•
|
factors that affect the accuracy of estimates inherent in the bidding for contracts, estimates of backlog, over time recognition accounting policies, including onsite conditions that differ materially from those assumed in the original bid, contract modifications, mechanical problems with machinery or equipment and effects of other risks discussed herein;
|
•
|
actions of suppliers, subcontractors, design engineers, joint venture partners, customers, competitors, banks, surety companies and others which are beyond our control, including suppliers’, subcontractors’ and joint venture partners’ failure to perform;
|
•
|
cost escalations associated with our contracts, including changes in availability, proximity and cost of materials such as steel, cement, concrete, aggregates, oil, fuel and other construction materials, including changes in U.S. trade policies and retaliatory responses from other countries, and cost escalations associated with subcontractors and labor;
|
•
|
change in cost to lease, acquire or maintain our equipment;
|
•
|
our dependence on a limited number of significant customers;
|
•
|
the presence of competitors with greater financial resources or lower margin requirements than ours, and the impact of competitive bidders on our ability to obtain new backlog at reasonable margins acceptable to us;
|
•
|
a shutdown of the federal government;
|
•
|
our ability to qualify as an eligible bidder under government contract criteria;
|
•
|
changes in general economic conditions, including recessions, reductions in federal, state and local government funding for infrastructure services, changes in those governments’ budgets, practices, laws and regulations and adverse economic conditions in our geographic markets;
|
•
|
delays or difficulties related to the completion of our projects, including additional costs, reductions in revenues or the payment of liquidated damages, or delays or difficulties related to obtaining required governmental permits and approvals;
|
•
|
design/build contracts which subject us to the risk of design errors and omissions;
|
•
|
our ability to obtain bonding or post letters of credit;
|
•
|
our ability to raise additional capital on favorable terms;
|
•
|
our ability to attract and retain key personnel;
|
•
|
increased unionization of our workforce or labor costs and any work stoppages or slowdowns;
|
•
|
adverse weather conditions;
|
•
|
our ability to successfully identify, finance, complete and integrate acquisitions, including the Plateau Acquisition;
|
•
|
citations issued by any governmental authority, including the Occupational Safety and Health Administration;
|
•
|
federal, state and local environmental laws and regulations where non-compliance can result in penalties and/or termination of contracts as well as civil and criminal liability; and
|
•
|
the other factors discussed in more detail in Item 1A. “Risk Factors.”
|
•
|
onsite conditions that differ from those assumed in the original bid or contract;
|
•
|
failure to include required materials or work in a bid, or the failure to estimate properly the quantities or costs needed to complete a lump sum contract;
|
•
|
delays caused by weather conditions;
|
•
|
contract or project modifications creating unanticipated costs not covered by change orders or contract price adjustments;
|
•
|
changes in availability, proximity and costs of materials, including steel, concrete, aggregates and other construction materials (such as stone, gravel, sand and oil for asphalt paving), as well as fuel and lubricants for our equipment;
|
•
|
higher than anticipated costs to lease, acquire and maintain equipment;
|
•
|
inability to predict the costs of accessing and producing aggregates and purchasing oil required for asphalt paving projects;
|
•
|
availability and skill level of workers in the geographic location of a project;
|
•
|
rapidly increasing labor costs;
|
•
|
failure by our suppliers, subcontractors, designers, engineers, joint venture partners or customers to perform their obligations;
|
•
|
fraud, theft or other improper activities by our suppliers, subcontractors, designers, engineers, joint venture partners, customers or our own personnel;
|
•
|
mechanical problems with our machinery or equipment;
|
•
|
citations issued by any governmental authority, including OSHA;
|
•
|
difficulties in obtaining required governmental permits or approvals;
|
•
|
changes in applicable laws and regulations;
|
•
|
delays in quickly identifying and taking measures to address issues which arise during execution of a project; and
|
•
|
claims or demands from third parties for alleged damages arising from the design, construction or use and operation of a project of which our work is a part.
|
•
|
limiting our flexibility in planning for, or reacting to, changes in the industry in which we operate;
|
•
|
increasing our vulnerability to general adverse economic and industry conditions;
|
•
|
limiting our ability to fund future working capital and capital expenditures because of the need to dedicate a substantial portion of our cash flows from operations to payments on our debt service;
|
•
|
placing us at a competitive disadvantage compared to our competitors that have less debt;
|
•
|
limiting our ability to borrow additional funds or refinance existing debt; or
|
•
|
requiring that we pledge substantial collateral, which may limit flexibility in operating our business and restrict our ability to sell assets.
|
•
|
the effect of uncertainty regarding the interest rate calculation before replacement benchmark is published regularly and gains widespread market acceptance; or
|
•
|
the risk that differences in the administration or determination methodology of the replacement benchmark may affect the amount of interest payments.
|
•
|
difficulties in the integration of operations, systems, policies and procedures;
|
•
|
enhancements in our controls and procedures including those necessary for a public company may make it more difficult to integrate operations and systems;
|
•
|
failure to implement proper overall business controls, including those required to support our growth, resulting in inconsistent operating and financial practices at companies we acquire or have acquired;
|
•
|
termination of relationships with the key personnel and customers of an acquired company;
|
•
|
additional financial and accounting challenges and complexities in areas such as tax planning, treasury management, financial reporting and internal controls;
|
•
|
the incurrence of environmental and other liabilities, including liabilities arising from the operation of an acquired business or asset prior to our acquisition for which we are not indemnified or for which the indemnity is inadequate;
|
•
|
disruption of or receipt of insufficient management attention to our ongoing business; and
|
•
|
inability to realize the cost savings or other financial benefits that we anticipate.
|
•
|
lost sales and customers as a result of certain customers of the Company or Plateau deciding to terminate or reduce their business with the Company or Plateau following the Plateau Acquisition;
|
•
|
the complexities of combining multiple companies with different histories, regulatory restrictions, operating structures and markets, including geographic location and operating geography;
|
•
|
the failure to retain key employees of the Company or Plateau;
|
•
|
potential unknown liabilities and unforeseen increased expenses associated with the Plateau Acquisition; and
|
•
|
performance shortfalls at the Company or Plateau as a result of the diversion of management’s attention caused by completing the Plateau Acquisition and integrating the companies’ operations.
|
|
December 2014
|
|
December 2015
|
|
December 2016
|
|
December 2017
|
|
December 2018
|
|
December 2019
|
||||||||||||
Sterling Construction Company, Inc.
|
$
|
100.00
|
|
|
$
|
95.15
|
|
|
$
|
132.39
|
|
|
$
|
254.77
|
|
|
$
|
170.42
|
|
|
$
|
220.34
|
|
Dow Jones US Total Return Index
|
$
|
100.00
|
|
|
$
|
100.63
|
|
|
$
|
112.96
|
|
|
$
|
137.24
|
|
|
$
|
130.42
|
|
|
$
|
171.04
|
|
Dow Jones US Heavy Construction Index
|
$
|
100.00
|
|
|
$
|
88.48
|
|
|
$
|
109.14
|
|
|
$
|
115.00
|
|
|
$
|
84.97
|
|
|
$
|
113.99
|
|
Period
|
Total Number of Shares Purchased
|
Average Price Paid per Share
|
|||
October 1 – October 31, 2019
|
2,029
|
|
$
|
16.87
|
|
November 1 – November 30, 2019
|
1,071
|
|
$
|
14.57
|
|
December 1 – December 31, 2019
|
—
|
|
$
|
—
|
|
|
Years Ended December 31,
|
||||||||||||||||||
(In thousands, except per share data)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Revenues
|
$
|
1,126,278
|
|
|
$
|
1,037,667
|
|
|
$
|
957,958
|
|
|
$
|
690,123
|
|
|
$
|
623,595
|
|
Acquisition related costs
|
(4,311
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Operating income
|
37,751
|
|
|
42,611
|
|
|
26,176
|
|
|
(4,279
|
)
|
|
(14,387
|
)
|
|||||
Interest expense
|
(16,686
|
)
|
|
(12,350
|
)
|
|
(9,800
|
)
|
|
(2,628
|
)
|
|
(3,012
|
)
|
|||||
Income (loss) before income taxes
|
14,479
|
|
|
31,278
|
|
|
15,935
|
|
|
(7,324
|
)
|
|
(17,179
|
)
|
|||||
Income tax benefit (expense)
|
26,216
|
|
|
(1,738
|
)
|
|
(118
|
)
|
|
(88
|
)
|
|
(7
|
)
|
|||||
Net income (loss)
|
40,695
|
|
|
29,540
|
|
|
15,817
|
|
|
(7,412
|
)
|
|
(17,186
|
)
|
|||||
Less: Net income attributable to noncontrolling interests
|
(794
|
)
|
|
(4,353
|
)
|
|
(4,200
|
)
|
|
(1,826
|
)
|
|
(3,216
|
)
|
|||||
Net income (loss) attributable to Sterling common stockholders before noncontrolling interest revaluation
|
39,901
|
|
|
25,187
|
|
|
11,617
|
|
|
(9,238
|
)
|
|
(20,402
|
)
|
|||||
Revaluation of noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,774
|
)
|
|||||
Net income (loss) attributable to Sterling common stockholders
|
$
|
39,901
|
|
|
$
|
25,187
|
|
|
$
|
11,617
|
|
|
$
|
(9,238
|
)
|
|
$
|
(39,176
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) per share attributable to Sterling common stockholders:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
1.50
|
|
|
$
|
0.94
|
|
|
$
|
0.44
|
|
|
$
|
(0.40
|
)
|
|
$
|
(2.02
|
)
|
Diluted
|
$
|
1.47
|
|
|
$
|
0.93
|
|
|
$
|
0.43
|
|
|
$
|
(0.40
|
)
|
|
$
|
(2.02
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
26,671
|
|
26,903
|
|
|
26,274
|
|
|
23,140
|
|
|
19,375
|
|
||||||
Diluted
|
27,119
|
|
27,194
|
|
|
26,712
|
|
|
23,140
|
|
|
19,375
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance sheet:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
961,940
|
|
|
$
|
482,573
|
|
|
$
|
463,298
|
|
|
$
|
301,823
|
|
|
$
|
266,165
|
|
Long-term debt
|
$
|
390,627
|
|
|
$
|
79,117
|
|
|
$
|
86,160
|
|
|
$
|
1,549
|
|
|
$
|
15,324
|
|
Equity attributable to Sterling common stockholders
|
$
|
219,918
|
|
|
$
|
164,401
|
|
|
$
|
141,333
|
|
|
$
|
107,434
|
|
|
$
|
95,845
|
|
Shares outstanding
|
27,772
|
|
|
26,597
|
|
|
27,051
|
|
|
24,987
|
|
|
19,753
|
|
(In thousands)
|
Backlog
|
Gross Margin in Backlog
|
Fourth quarter of 2019
|
$1,068,025
|
11.5%
|
Third quarter of 2019
|
$881,428
|
9.3%
|
Second quarter of 2019
|
$909,030
|
8.8%
|
First quarter of 2019
|
$808,740
|
8.3%
|
Fourth quarter of 2018
|
$850,725
|
8.5%
|
|
Years Ended December 31,
|
|
|
|||||||
(In thousands)
|
2019
|
|
2018
|
|
% Change
|
|||||
Revenues
|
$
|
1,126,278
|
|
|
$
|
1,037,667
|
|
|
8.5
|
%
|
Gross profit
|
107,794
|
|
|
110,332
|
|
|
(2.3
|
)%
|
||
General and administrative expenses
|
(49,200
|
)
|
|
(48,220
|
)
|
|
2.0
|
%
|
||
Intangible asset amortization
|
(4,695
|
)
|
|
(2,400
|
)
|
|
95.6
|
%
|
||
Acquisition related costs
|
(4,311
|
)
|
|
—
|
|
|
NM
|
|
||
Other operating expense, net
|
(11,837
|
)
|
|
(17,101
|
)
|
|
(30.8
|
)%
|
||
Operating income
|
37,751
|
|
|
42,611
|
|
|
(11.4
|
)%
|
||
Interest income
|
1,142
|
|
|
1,017
|
|
|
12.3
|
%
|
||
Interest expense
|
(16,686
|
)
|
|
(12,350
|
)
|
|
35.1
|
%
|
||
Loss on extinguishment of debt
|
(7,728
|
)
|
|
—
|
|
|
NM
|
|
||
Income before income taxes and noncontrolling interests in earnings
|
14,479
|
|
|
31,278
|
|
|
(53.7
|
)%
|
||
Income tax benefit (expense)
|
26,216
|
|
|
(1,738
|
)
|
|
NM
|
|
||
Net income
|
40,695
|
|
|
29,540
|
|
|
37.8
|
%
|
||
Noncontrolling interests in earnings
|
(794
|
)
|
|
(4,353
|
)
|
|
(81.8
|
)%
|
||
Net income attributable to Sterling common stockholders
|
$
|
39,901
|
|
|
$
|
25,187
|
|
|
58.4
|
%
|
|
|
|
|
|
|
|||||
Gross margin
|
9.6
|
%
|
|
10.6
|
%
|
|
|
|
||
|
|
|
|
|
|
|||||
Operating margin
|
3.4
|
%
|
|
4.1
|
%
|
|
|
|
||
|
|
|
|
|
|
|||||
Backlog, end of year
|
$
|
1,068,025
|
|
|
$
|
850,725
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||||
(In thousands)
|
|
2019
|
|
% of
Revenue |
|
2018
|
|
% of
Revenue |
||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
||
Heavy Civil
|
|
$
|
760,325
|
|
|
67%
|
|
$
|
765,638
|
|
|
73%
|
Specialty Services
|
|
212,824
|
|
|
19%
|
|
120,333
|
|
|
12%
|
||
Residential
|
|
153,129
|
|
|
14%
|
|
151,696
|
|
|
15%
|
||
Total Revenue
|
|
$
|
1,126,278
|
|
|
|
|
$
|
1,037,667
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating Income
|
|
|
|
|
|
|
|
|
|
|
||
Heavy Civil
|
|
$
|
3,316
|
|
|
0.4%
|
|
$
|
17,044
|
|
|
2.2%
|
Specialty Services
|
|
18,207
|
|
|
8.6%
|
|
4,629
|
|
|
3.8%
|
||
Residential
|
|
20,539
|
|
|
13.4%
|
|
20,938
|
|
|
13.8%
|
||
Subtotal
|
|
42,062
|
|
|
3.7%
|
|
42,611
|
|
|
4.1%
|
||
Acquisition related costs
|
|
(4,311
|
)
|
|
|
|
—
|
|
|
|
||
Total Operating Income
|
|
$
|
37,751
|
|
|
3.4%
|
|
$
|
42,611
|
|
|
4.1%
|
|
Years Ended December 31,
|
||||||
(In thousands)
|
2019
|
|
2018
|
||||
Net cash provided by (used in):
|
|
|
|
|
|
||
Operating activities
|
$
|
41,093
|
|
|
$
|
39,474
|
|
Investing activities
|
(410,386
|
)
|
|
(11,382
|
)
|
||
Financing activities
|
320,931
|
|
|
(17,950
|
)
|
||
Net change in cash and cash equivalents
|
$
|
(48,362
|
)
|
|
$
|
10,142
|
|
|
As of December 31,
|
||||||
(In thousands)
|
2019
|
|
2018
|
||||
Cash and cash equivalents
|
$
|
45,733
|
|
|
$
|
94,095
|
|
Working capital (Current Assets Minus Current Liabilities)
|
$
|
64,017
|
|
|
$
|
123,442
|
|
|
As of December 31,
|
||||||
(In thousands)
|
2019
|
|
2018
|
||||
Generally Available
|
$
|
29,659
|
|
|
$
|
42,605
|
|
Consolidated 50% Owned Subsidiaries
|
12,004
|
|
|
31,026
|
|
||
Construction Joint Ventures
|
4,070
|
|
|
20,464
|
|
||
Total Cash
|
$
|
45,733
|
|
|
$
|
94,095
|
|
|
Changes in Components of
Contract Capital
|
||||||||||
(In thousands)
|
2019
|
|
2018
|
|
Variance
|
||||||
Costs and estimated earnings in excess of billings
|
$
|
(39
|
)
|
|
$
|
(4,430
|
)
|
|
$
|
4,391
|
|
Billings in excess of costs and estimated earnings
|
6,062
|
|
|
33
|
|
|
6,029
|
|
|||
Contracts in progress, net
|
6,023
|
|
|
(4,397
|
)
|
|
10,420
|
|
|||
Accounts receivable, including retainage
|
(21,300
|
)
|
|
(11,094
|
)
|
|
(10,206
|
)
|
|||
Receivables from and equity in construction joint ventures
|
1,524
|
|
|
659
|
|
|
865
|
|
|||
Accounts payable
|
10,987
|
|
|
1,969
|
|
|
9,018
|
|
|||
Contract Capital, net
|
$
|
(2,766
|
)
|
|
$
|
(12,863
|
)
|
|
$
|
10,097
|
|
•
|
a Total Leverage Ratio (as defined in the Credit Agreement) at the last day of each fiscal quarter not to be greater than 4.00 to 1.00 ending on December 31, 2019 through and including June 30, 2020, 3.75 to 1.00 ending on September 30, 2020, 3.50 to 1.00 ending on December 31, 2020 through and including March 31, 2021, 3.25 to 1.00 ending on June 30, 2021 through and including September 30, 2021, and 3.00 to 1.00 ending on December 31, 2021 and thereafter; and
|
•
|
a Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of not less than 1.20 to 1.00 as of the last day of each fiscal quarter of the Company, commencing with the fiscal quarter ending December 31, 2019.
|
|
Payments due by period
|
||||||||||||||||||
(In thousands)
|
Total
|
|
<1
Year
|
|
1 - 3
Years
|
|
4 – 5
Years
|
|
>5
Years
|
||||||||||
Operating leases (1)
|
$
|
15,680
|
|
|
$
|
6,813
|
|
|
$
|
8,038
|
|
|
$
|
829
|
|
|
$
|
—
|
|
Credit Facility
|
420,000
|
|
|
30,000
|
|
|
100,000
|
|
|
290,000
|
|
|
—
|
|
|||||
Credit Facility interest
|
108,217
|
|
|
25,451
|
|
|
49,123
|
|
|
33,643
|
|
|
—
|
|
|||||
Notes payable to Sellers, Plateau Acquisition (inclusive of outstanding interest)
|
14,400
|
|
|
800
|
|
|
1,600
|
|
|
1,600
|
|
|
10,400
|
|
|||||
Notes and deferred payments to Sellers, Tealstone Acquisition (inclusive of outstanding interest)
|
12,600
|
|
|
12,600
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Notes payable for equipment
|
805
|
|
|
243
|
|
|
338
|
|
|
224
|
|
|
—
|
|
|||||
Earn-out Liability (2)
|
1,027
|
|
|
1,027
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Members' interest subject to mandatory redemption and undistributed earnings (3)
|
49,003
|
|
|
49,003
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
621,732
|
|
|
$
|
125,937
|
|
|
$
|
159,099
|
|
|
$
|
326,296
|
|
|
$
|
10,400
|
|
(1) Operating leases are stated at minimum annual rentals for all operating leases having initial non-cancelable lease terms in excess of one year.
|
(2) The Tealstone earn-out arrangement requires the Company to pay up to an aggregate of $15 million in earn-out payments on the first, second, third and fourth anniversaries of the closing date to continuing Tealstone management or their affiliates if specified financial performance levels are achieved.
|
(3) Mandatory redemption is based on the death or disability of the interest holders. Undistributed earnings can be distributed upon unanimous consent from the members and for tax distributions. At this time we cannot predict when such distributions will be made. The Company has purchased two separate $20 million death and permanent total disability insurance policies to mitigate the Company’s cash draw if such events were to occur.
|
|
Page
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues
|
$
|
1,126,278
|
|
|
$
|
1,037,667
|
|
|
$
|
957,958
|
|
Cost of revenues
|
(1,018,484
|
)
|
|
(927,335
|
)
|
|
(868,866
|
)
|
|||
Gross profit
|
107,794
|
|
|
110,332
|
|
|
89,092
|
|
|||
General and administrative expense
|
(49,200
|
)
|
|
(48,220
|
)
|
|
(46,552
|
)
|
|||
Intangible asset amortization
|
(4,695
|
)
|
|
(2,400
|
)
|
|
(1,799
|
)
|
|||
Acquisition related costs
|
(4,311
|
)
|
|
—
|
|
|
—
|
|
|||
Other operating expense, net
|
(11,837
|
)
|
|
(17,101
|
)
|
|
(14,565
|
)
|
|||
Operating income
|
37,751
|
|
|
42,611
|
|
|
26,176
|
|
|||
Interest income
|
1,142
|
|
|
1,017
|
|
|
314
|
|
|||
Interest expense
|
(16,686
|
)
|
|
(12,350
|
)
|
|
(9,800
|
)
|
|||
Loss on extinguishment of debt
|
(7,728
|
)
|
|
—
|
|
|
(755
|
)
|
|||
Income before income taxes
|
14,479
|
|
|
31,278
|
|
|
15,935
|
|
|||
Income tax benefit (expense)
|
26,216
|
|
|
(1,738
|
)
|
|
(118
|
)
|
|||
Net income
|
40,695
|
|
|
29,540
|
|
|
15,817
|
|
|||
Less: Net income attributable to noncontrolling interests
|
(794
|
)
|
|
(4,353
|
)
|
|
(4,200
|
)
|
|||
Net income attributable to Sterling common stockholders
|
$
|
39,901
|
|
|
$
|
25,187
|
|
|
$
|
11,617
|
|
|
|
|
|
|
|
||||||
Net income per share attributable to Sterling common stockholders:
|
|
|
|
|
|
|
|
|
|||
Basic
|
$
|
1.50
|
|
|
$
|
0.94
|
|
|
$
|
0.44
|
|
Diluted
|
$
|
1.47
|
|
|
$
|
0.93
|
|
|
$
|
0.43
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
26,671
|
|
|
26,903
|
|
|
26,274
|
|
|||
Diluted
|
27,119
|
|
|
27,194
|
|
|
26,712
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net income
|
$
|
40,695
|
|
|
$
|
29,540
|
|
|
$
|
15,817
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
||||||
Loss on interest rate swap
|
(209
|
)
|
|
—
|
|
|
—
|
|
|||
Total comprehensive income
|
40,486
|
|
|
29,540
|
|
|
15,817
|
|
|||
Less: Comprehensive income attributable to noncontrolling interests
|
(794
|
)
|
|
(4,353
|
)
|
|
(4,200
|
)
|
|||
Comprehensive income attributable to Sterling common stockholders
|
$
|
39,692
|
|
|
$
|
25,187
|
|
|
$
|
11,617
|
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Assets
|
|
|
|
|
|||
Current assets:
|
|
|
|
||||
Cash and cash equivalents ($7,538 and $8,750 related to variable interest entities (“VIEs”))
|
$
|
45,733
|
|
|
$
|
94,095
|
|
Accounts receivable, including retainage ($24,642 and $24,108 related to VIEs)
|
248,247
|
|
|
145,026
|
|
||
Costs and estimated earnings in excess of billings ($8,328 and $8,180 related to VIEs)
|
42,555
|
|
|
41,542
|
|
||
Receivables from and equity in construction joint ventures ($7,406 and $6,984 related to VIEs)
|
9,196
|
|
|
10,720
|
|
||
Other current assets ($503 and $32 related to VIEs)
|
11,790
|
|
|
11,233
|
|
||
Total current assets
|
357,521
|
|
|
302,616
|
|
||
Property and equipment, net ($5,619 and $7,219 related to VIEs)
|
116,030
|
|
|
51,999
|
|
||
Operating lease right-of-use assets ($3,817 and $0 related to VIEs)
|
13,979
|
|
|
—
|
|
||
Goodwill ($1,501 and $1,501 related to VIEs)
|
191,892
|
|
|
85,231
|
|
||
Other intangibles, net
|
256,323
|
|
|
42,418
|
|
||
Deferred tax asset, net
|
26,012
|
|
|
—
|
|
||
Other non-current assets, net
|
183
|
|
|
309
|
|
||
Total assets
|
$
|
961,940
|
|
|
$
|
482,573
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|||
Current liabilities:
|
|
|
|
||||
Accounts payable ($18,213 and $22,859 related to VIEs)
|
$
|
137,593
|
|
|
$
|
99,426
|
|
Billings in excess of costs and estimated earnings ($9,649 and $6,585 related to VIEs)
|
85,011
|
|
|
62,407
|
|
||
Current maturities of long-term debt ($39 and $174 related to VIEs)
|
42,473
|
|
|
2,899
|
|
||
Current portion of long-term lease obligations ($1,838 and $0 related to VIEs)
|
7,095
|
|
|
—
|
|
||
Income taxes payable
|
1,212
|
|
|
318
|
|
||
Accrued compensation ($1,521 and $1,566 related to VIEs)
|
13,727
|
|
|
9,448
|
|
||
Other current liabilities ($1,429 and $1,485 related to VIEs)
|
6,393
|
|
|
4,676
|
|
||
Total current liabilities
|
293,504
|
|
|
179,174
|
|
||
Long-term debt ($2 and $1,976 related to VIEs)
|
390,627
|
|
|
79,117
|
|
||
Long-term lease obligations ($1,979 and $0 related to VIEs)
|
6,976
|
|
|
—
|
|
||
Members’ interest subject to mandatory redemption and undistributed earnings
|
49,003
|
|
|
49,343
|
|
||
Deferred taxes
|
—
|
|
|
1,450
|
|
||
Other long-term liabilities
|
619
|
|
|
1,229
|
|
||
Total liabilities
|
740,729
|
|
|
310,313
|
|
||
Commitments and contingencies (Note 12)
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
|
|||
Common stock, par value $0.01 per share; 38,000 shares authorized, 28,290 and 27,064 shares issued, 27,772 and 26,597 shares outstanding
|
283
|
|
|
271
|
|
||
Additional paid in capital
|
251,019
|
|
|
233,795
|
|
||
Treasury Stock, at cost: 518 and 467 shares
|
(6,142
|
)
|
|
(4,731
|
)
|
||
Retained deficit
|
(25,033
|
)
|
|
(64,934
|
)
|
||
Accumulated other comprehensive loss
|
(209
|
)
|
|
—
|
|
||
Total Sterling stockholders’ equity
|
219,918
|
|
|
164,401
|
|
||
Noncontrolling interests
|
1,293
|
|
|
7,859
|
|
||
Total stockholders’ equity
|
221,211
|
|
|
172,260
|
|
||
Total liabilities and stockholders’ equity
|
$
|
961,940
|
|
|
$
|
482,573
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|||
Net income
|
$
|
40,695
|
|
|
$
|
29,540
|
|
|
$
|
15,817
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|||||
Depreciation and amortization
|
20,740
|
|
|
16,770
|
|
|
16,994
|
|
|||
Amortization of deferred debt costs
|
3,393
|
|
|
3,250
|
|
|
2,563
|
|
|||
(Gain) loss on disposal of property and equipment
|
(527
|
)
|
|
(580
|
)
|
|
171
|
|
|||
Loss on debt extinguishment
|
4,334
|
|
|
—
|
|
|
755
|
|
|||
Deferred taxes
|
(27,398
|
)
|
|
1,450
|
|
|
—
|
|
|||
Stock-based compensation
|
3,788
|
|
|
3,064
|
|
|
2,843
|
|
|||
Unrealized gain on hedge
|
(30
|
)
|
|
—
|
|
|
—
|
|
|||
Changes in operating assets and liabilities (Note 18)
|
(3,902
|
)
|
|
(14,020
|
)
|
|
(14,376
|
)
|
|||
Net cash provided by operating activities
|
41,093
|
|
|
39,474
|
|
|
24,767
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|||||
Plateau Acquisition, net of cash acquired
|
(396,323
|
)
|
|
—
|
|
|
—
|
|
|||
Tealstone Acquisition, net of cash acquired
|
—
|
|
|
—
|
|
|
(54,861
|
)
|
|||
Capital expenditures
|
(15,397
|
)
|
|
(13,171
|
)
|
|
(9,420
|
)
|
|||
Proceeds from sale of property and equipment
|
1,334
|
|
|
1,789
|
|
|
8,384
|
|
|||
Net cash used in investing activities
|
(410,386
|
)
|
|
(11,382
|
)
|
|
(55,897
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||
Cash received from credit facility
|
430,000
|
|
|
—
|
|
|
85,000
|
|
|||
Repayments of long-term debt
|
(87,621
|
)
|
|
(11,555
|
)
|
|
(4,710
|
)
|
|||
Distributions to noncontrolling interest owners
|
(7,360
|
)
|
|
(1,350
|
)
|
|
—
|
|
|||
Purchase of treasury stock
|
(3,201
|
)
|
|
(4,731
|
)
|
|
—
|
|
|||
Debt issuance costs
|
(10,688
|
)
|
|
—
|
|
|
(6,871
|
)
|
|||
Other
|
(199
|
)
|
|
(314
|
)
|
|
(1,121
|
)
|
|||
Net cash provided by (used in) financing activities
|
320,931
|
|
|
(17,950
|
)
|
|
72,298
|
|
|||
Net change in cash and cash equivalents
|
(48,362
|
)
|
|
10,142
|
|
|
41,168
|
|
|||
Cash and cash equivalents at beginning of period
|
94,095
|
|
|
83,953
|
|
|
42,785
|
|
|||
Cash and cash equivalents at end of period
|
$
|
45,733
|
|
|
$
|
94,095
|
|
|
$
|
83,953
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||||||
Cash paid during the period for interest
|
$
|
11,566
|
|
|
$
|
10,829
|
|
|
$
|
9,800
|
|
Cash paid during the period for income taxes
|
$
|
94
|
|
|
$
|
276
|
|
|
$
|
279
|
|
Non-cash items:
|
|
|
|
|
|
||||||
Share consideration given for acquisitions
|
$
|
16,195
|
|
|
$
|
—
|
|
|
$
|
17,601
|
|
Notes and deferred payments to sellers
|
$
|
10,000
|
|
|
$
|
—
|
|
|
$
|
11,588
|
|
Estimated tax basis election
|
$
|
5,141
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Warrants issued to lenders (1,000 Warrants)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,500
|
|
|
STERLING CONSTRUCTION COMPANY, INC. STOCKHOLDERS
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Common Stock
|
|
Additional Paid in Capital
|
|
Treasury Stock
|
|
Retained Deficit
|
|
Accumulated Other Comprehensive Loss
|
|
Total Sterling Stockholders’ Equity
|
|
Non-controlling interests
|
|
|
||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
Shares
|
|
Amount
|
|
|
|
|
|
Total
|
|||||||||||||||||||||||
Balance at December 31, 2016
|
24,987
|
|
|
$
|
250
|
|
|
$
|
208,922
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
(101,738
|
)
|
|
$
|
—
|
|
|
$
|
107,434
|
|
|
$
|
656
|
|
|
$
|
108,090
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,617
|
|
|
—
|
|
|
11,617
|
|
|
4,200
|
|
|
15,817
|
|
||||||||
Stock-based compensation
|
248
|
|
|
3
|
|
|
2,840
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,843
|
|
|
—
|
|
|
2,843
|
|
||||||||
Stock issued for Tealstone Acquisition
|
1,882
|
|
|
19
|
|
|
17,042
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,061
|
|
|
—
|
|
|
17,061
|
|
||||||||
Distribution to owners
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Warrants issued to lenders
|
—
|
|
|
—
|
|
|
3,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,500
|
|
|
—
|
|
|
3,500
|
|
||||||||
Other
|
(66
|
)
|
|
(1
|
)
|
|
(1,121
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,122
|
)
|
|
—
|
|
|
(1,122
|
)
|
||||||||
Balance at December 31, 2017
|
27,051
|
|
|
271
|
|
|
231,183
|
|
|
—
|
|
|
—
|
|
|
(90,121
|
)
|
|
—
|
|
|
141,333
|
|
|
4,856
|
|
|
146,189
|
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,187
|
|
|
—
|
|
|
25,187
|
|
|
4,353
|
|
|
29,540
|
|
||||||||
Stock-based compensation
|
40
|
|
|
—
|
|
|
3,064
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,064
|
|
|
—
|
|
|
3,064
|
|
||||||||
Distribution to owners
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,350
|
)
|
|
(1,350
|
)
|
||||||||
Purchase of Treasury Stock
|
(467
|
)
|
|
—
|
|
|
—
|
|
|
467
|
|
|
(4,731
|
)
|
|
—
|
|
|
—
|
|
|
(4,731
|
)
|
|
—
|
|
|
(4,731
|
)
|
||||||||
Shares withheld for taxes
|
(27
|
)
|
|
—
|
|
|
(452
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(452
|
)
|
|
—
|
|
|
(452
|
)
|
||||||||
Balance at December 31, 2018
|
26,597
|
|
|
271
|
|
|
233,795
|
|
|
467
|
|
|
(4,731
|
)
|
|
(64,934
|
)
|
|
—
|
|
|
164,401
|
|
|
7,859
|
|
|
172,260
|
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39,901
|
|
|
—
|
|
|
39,901
|
|
|
794
|
|
|
40,695
|
|
||||||||
Loss on interest rate swap
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(209
|
)
|
|
(209
|
)
|
|
—
|
|
|
(209
|
)
|
||||||||
Stock-based compensation
|
(1
|
)
|
|
—
|
|
|
3,788
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,788
|
|
|
—
|
|
|
3,788
|
|
||||||||
Distributions to owners
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,360
|
)
|
|
(7,360
|
)
|
||||||||
Purchase of Treasury Stock
|
(250
|
)
|
|
—
|
|
|
—
|
|
|
250
|
|
|
(3,201
|
)
|
|
—
|
|
|
—
|
|
|
(3,201
|
)
|
|
—
|
|
|
(3,201
|
)
|
||||||||
Stock issued for Plateau Acquisition
|
1,245
|
|
|
12
|
|
|
16,183
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,195
|
|
|
—
|
|
|
16,195
|
|
||||||||
Issuance of stock
|
273
|
|
|
—
|
|
|
(2,599
|
)
|
|
(273
|
)
|
|
2,751
|
|
|
—
|
|
|
—
|
|
|
152
|
|
|
—
|
|
|
152
|
|
||||||||
Shares withheld for taxes
|
(92
|
)
|
|
—
|
|
|
(148
|
)
|
|
74
|
|
|
(961
|
)
|
|
—
|
|
|
—
|
|
|
(1,109
|
)
|
|
—
|
|
|
(1,109
|
)
|
||||||||
Balance at December 31, 2019
|
27,772
|
|
|
$
|
283
|
|
|
$
|
251,019
|
|
|
518
|
|
|
$
|
(6,142
|
)
|
|
$
|
(25,033
|
)
|
|
$
|
(209
|
)
|
|
$
|
219,918
|
|
|
$
|
1,293
|
|
|
$
|
221,211
|
|
1.
|
NATURE OF OPERATIONS
|
2.
|
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
|
•
|
Performance Obligations Satisfied Over Time (Heavy Civil and Specialty Services)
|
•
|
Performance Obligations Satisfied at a Point-in-Time (Residential)
|
•
|
Operating & Finance Leases—Effective January 1, 2019, the Company determines if an arrangement is a lease at inception. The operating lease right-of-use (“ROU”) assets are included within the Company’s non-current assets and lease liabilities are included in current or non-current liabilities on the Company’s Consolidated Balance Sheets. Finance leases are included in “Property and equipment”, “Current maturities of long-term debt”, and “Long-term debt” on the Company’s Consolidated Balance Sheets. ROU assets represent the Company’s right to use, or control the use of, a specified asset
|
•
|
Capital Leases—The Company accounts for capital leases, which transfer substantially all the benefits and risks incident to the ownership of the leased property to the Company, as the acquisition of an asset and the incurrence of an obligation. Under this method of accounting, the recorded value of the leased asset is amortized principally using the straight-line method over its estimated useful life and the obligation, including interest thereon, is reduced through payments over the life of the lease. Depreciation expense on equipment subject to capital leases and the related accumulated depreciation is included with that of owned equipment. Capital leases are recorded in “Long-term debt, net of current maturities” and “Current maturities of long-term debt,” as applicable, in our Consolidated Balance Sheets.
|
3.
|
PLATEAU ACQUISITION
|
Cash consideration transferred, net of $2,425 of cash acquired
|
$
|
375,000
|
|
Target working capital adjustment
|
21,323
|
|
|
Equity consideration transferred (1,245 shares at $13.01 per share(1))
|
16,195
|
|
|
Note payable to seller (See Note 9 - Debt)
|
10,000
|
|
|
Estimated tax basis election
|
5,141
|
|
|
Total consideration
|
$
|
427,659
|
|
Net tangible assets:
|
|
||
Accounts receivable, including retainage
|
$
|
81,921
|
|
Costs and estimated earnings in excess of billings
|
974
|
|
|
Other current assets
|
249
|
|
|
Property and equipment, net
|
65,492
|
|
|
Other non-current assets, net
|
10
|
|
|
Accounts payable
|
(22,039
|
)
|
|
Billings in excess of costs and estimated earnings
|
(16,540
|
)
|
|
Other current liabilities
|
(7,669
|
)
|
|
Total net tangible assets
|
102,398
|
|
|
Preliminary identifiable intangible assets
|
218,600
|
|
|
Goodwill
|
106,661
|
|
|
Total consideration transferred
|
$
|
427,659
|
|
|
Weighted Average Life (Years)
|
|
October 2, 2019
Fair Value
|
||
Customer relationships
|
25
|
|
$
|
191,800
|
|
Trade name
|
25
|
|
24,800
|
|
|
Non-compete agreements
|
5
|
|
2,000
|
|
|
Total
|
|
|
$
|
218,600
|
|
|
Years Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Pro forma revenue
|
$
|
1,358,736
|
|
|
$
|
1,326,854
|
|
Pro forma net income attributable to Sterling
|
$
|
90,408
|
|
|
$
|
54,282
|
|
4.
|
REVENUE FROM CUSTOMERS
|
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Heavy Civil Backlog
|
|
$
|
834,049
|
|
|
$
|
780,706
|
|
Specialty Services Backlog
|
|
233,976
|
|
|
70,019
|
|
||
Total Heavy Civil and Specialty Services Backlog
|
|
$
|
1,068,025
|
|
|
$
|
850,725
|
|
|
|
Years Ended December 31,
|
||||||||||
Revenue by major end market
|
|
2019
|
|
2018
|
|
2017
|
||||||
Heavy Highway
|
|
$
|
483,175
|
|
|
$
|
513,376
|
|
|
$
|
579,157
|
|
Aviation
|
|
141,371
|
|
|
111,824
|
|
|
77,399
|
|
|||
Water Containment and Treatment
|
|
65,795
|
|
|
66,928
|
|
|
59,593
|
|
|||
Other
|
|
69,984
|
|
|
73,510
|
|
|
85,503
|
|
|||
Heavy Civil Revenue
|
|
$
|
760,325
|
|
|
$
|
765,638
|
|
|
$
|
801,652
|
|
|
|
|
|
|
|
|
||||||
Land Development
|
|
$
|
84,637
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial
|
|
128,187
|
|
|
120,333
|
|
|
48,314
|
|
|||
Specialty Services Revenue
|
|
$
|
212,824
|
|
|
$
|
120,333
|
|
|
$
|
48,314
|
|
|
|
|
|
|
|
|
||||||
Residential Revenue
|
|
$
|
153,129
|
|
|
$
|
151,696
|
|
|
$
|
107,992
|
|
|
|
|
|
|
|
|
||||||
Revenues
|
|
$
|
1,126,278
|
|
|
$
|
1,037,667
|
|
|
$
|
957,958
|
|
|
|
|
|
|
|
|
||||||
Revenue by contract type
|
|
|
|
|
|
|
||||||
Fixed-Unit Price
|
|
$
|
708,638
|
|
|
$
|
733,047
|
|
|
$
|
755,840
|
|
Lump Sum
|
|
262,237
|
|
|
146,874
|
|
|
57,823
|
|
|||
Residential and Other
|
|
155,403
|
|
|
157,746
|
|
|
144,295
|
|
|||
Revenues
|
|
$
|
1,126,278
|
|
|
$
|
1,037,667
|
|
|
$
|
957,958
|
|
5.
|
CONSOLIDATED 50% OWNED SUBSIDIARIES
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
Members’ interest subject to mandatory redemption
|
$
|
40,000
|
|
|
$
|
40,000
|
|
Net accumulated earnings
|
9,003
|
|
|
9,343
|
|
||
Total liability
|
$
|
49,003
|
|
|
$
|
49,343
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues
|
$
|
205,615
|
|
|
$
|
193,677
|
|
|
$
|
181,589
|
|
Operating income
|
$
|
6,372
|
|
|
$
|
8,819
|
|
|
$
|
9,069
|
|
Net income attributable to Sterling common stockholders
|
$
|
3,196
|
|
|
$
|
4,415
|
|
|
$
|
4,531
|
|
6.
|
CONSTRUCTION JOINT VENTURES
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Balance, beginning of period
|
$
|
7,859
|
|
|
$
|
4,856
|
|
|
$
|
656
|
|
Net income attributable to noncontrolling interest included in equity
|
794
|
|
|
4,353
|
|
|
4,200
|
|
|||
Distributions to noncontrolling interest owners
|
(7,360
|
)
|
|
(1,350
|
)
|
|
—
|
|
|||
Balance, end of period
|
$
|
1,293
|
|
|
$
|
7,859
|
|
|
$
|
4,856
|
|
|
Year Ended December 31, 2019
|
||
Revenues
|
$
|
6,903
|
|
Operating income
|
$
|
467
|
|
Net income attributable to Sterling common stockholders
|
$
|
471
|
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
Current assets
|
$
|
92,710
|
|
|
$
|
64,815
|
|
Current liabilities
|
$
|
(86,705
|
)
|
|
$
|
(74,543
|
)
|
Sterling’s receivables from and equity in construction joint ventures
|
$
|
9,196
|
|
|
$
|
10,720
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues
|
$
|
158,291
|
|
|
$
|
115,441
|
|
|
$
|
93,848
|
|
Income before tax
|
$
|
20,449
|
|
|
$
|
8,097
|
|
|
$
|
7,827
|
|
Sterling’s noncontrolling interest:
|
|
|
|
|
|
||||||
Revenues
|
$
|
76,419
|
|
|
$
|
55,134
|
|
|
$
|
44,948
|
|
Income before tax
|
$
|
8,170
|
|
|
$
|
4,104
|
|
|
$
|
3,847
|
|
7.
|
PROPERTY AND EQUIPMENT
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
Construction and transportation equipment
|
$
|
217,945
|
|
|
$
|
144,630
|
|
Buildings and improvements
|
14,641
|
|
|
11,072
|
|
||
Land
|
3,891
|
|
|
2,720
|
|
||
Office equipment
|
2,767
|
|
|
2,711
|
|
||
Total property and equipment
|
239,244
|
|
|
161,133
|
|
||
Less accumulated depreciation
|
(123,214
|
)
|
|
(109,134
|
)
|
||
Total property and equipment, net
|
$
|
116,030
|
|
|
$
|
51,999
|
|
8.
|
GOODWILL AND OTHER INTANGIBLE ASSETS
|
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Goodwill
|
|
|
|
|
||||
Heavy Civil
|
|
$
|
54,806
|
|
|
$
|
54,806
|
|
Specialty Services
|
|
106,661
|
|
|
—
|
|
||
Residential
|
|
30,425
|
|
|
30,425
|
|
||
Total Goodwill
|
|
$
|
191,892
|
|
|
$
|
85,231
|
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
Weighted
Average Life (Years) |
|
Gross
Carrying Amount |
|
Accumulated Amortization |
|
Gross
Carrying Amount |
|
Accumulated Amortization |
||||||||
Customer relationships
|
25
|
|
$
|
232,623
|
|
|
$
|
(6,911
|
)
|
|
$
|
40,823
|
|
|
$
|
(3,159
|
)
|
Trade name
|
23
|
|
30,107
|
|
|
(1,692
|
)
|
|
5,307
|
|
|
(919
|
)
|
||||
Non-compete agreements
|
5
|
|
2,487
|
|
|
(291
|
)
|
|
487
|
|
|
(121
|
)
|
||||
Total
|
24
|
|
$
|
265,217
|
|
|
$
|
(8,894
|
)
|
|
$
|
46,617
|
|
|
$
|
(4,199
|
)
|
9.
|
DEBT
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
Credit Facility
|
$
|
420,000
|
|
|
$
|
—
|
|
Oaktree Facility
|
—
|
|
|
74,571
|
|
||
Note payable to seller, Plateau Acquisition
|
10,000
|
|
|
—
|
|
||
Notes and deferred payments to sellers, Tealstone Acquisition
|
12,230
|
|
|
13,572
|
|
||
Notes payable for transportation and construction equipment and other
|
805
|
|
|
612
|
|
||
Total debt
|
443,035
|
|
|
88,755
|
|
||
|
|
|
|
||||
Less - Current maturities of long-term debt
|
(42,473
|
)
|
|
(2,899
|
)
|
||
Less - Unamortized debt issuance costs
|
(9,935
|
)
|
|
(6,739
|
)
|
||
Total long-term debt
|
$
|
390,627
|
|
|
$
|
79,117
|
|
•
|
a Total Leverage Ratio (as defined in the Credit Agreement) at the last day of each fiscal quarter not to be greater than 4.00 to 1.00 ending on December 31, 2019 through and including June 30, 2020, 3.75 to 1.00 ending on September 30, 2020, 3.50 to 1.00 ending on December 31, 2020 through and including March 31, 2021, 3.25 to 1.00 ending on June 30, 2021 through and including September 30, 2021, and 3.00 to 1.00 ending on December 31, 2021 and thereafter; and
|
•
|
a Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of not less than 1.20 to 1.00 as of the last day of each fiscal quarter of the Company, commencing with the fiscal quarter ending December 31, 2019.
|
10.
|
LEASE OBLIGATIONS
|
|
Twelve Months Ended December 31, 2019
|
||
Operating lease cost
|
$
|
8,594
|
|
Short-term lease cost
|
$
|
18,032
|
|
|
|
||
Finance lease cost:
|
|
||
Amortization of right-of-use assets
|
$
|
213
|
|
Interest on lease liabilities
|
20
|
|
|
Total finance lease cost
|
$
|
233
|
|
|
Twelve Months Ended December 31, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
Operating cash flows from operating leases
|
$
|
8,127
|
|
Operating cash flows from finance leases
|
$
|
20
|
|
Financing cash flows from finance leases
|
$
|
213
|
|
|
|
||
Right-of-use assets obtained in exchange for lease obligations (non-cash):
|
|
||
Operating leases
|
$
|
8,955
|
|
Finance leases
|
$
|
816
|
|
|
December 31, 2019
|
||
Operating Leases
|
|
||
Operating lease right-of-use assets
|
$
|
13,979
|
|
|
|
||
Current portion of long-term lease obligations
|
$
|
7,095
|
|
Long-term lease obligations
|
6,976
|
|
|
Total operating lease liabilities
|
$
|
14,071
|
|
|
|
||
Finance Leases
|
|
||
Property and equipment, at cost
|
$
|
1,479
|
|
Accumulated depreciation
|
(482
|
)
|
|
Property and equipment, net
|
$
|
997
|
|
|
|
||
Current maturities of long-term debt
|
$
|
204
|
|
Long-term debt
|
560
|
|
|
Total finance lease liabilities
|
$
|
764
|
|
|
|
||
Weighted Average Remaining Lease Term
|
|
||
Operating leases
|
2.5
|
|
|
Finance leases
|
4.0
|
|
|
|
|
||
Weighted Average Discount Rate
|
|
||
Operating leases
|
6.0
|
%
|
|
Finance leases
|
4.2
|
%
|
|
Operating
Leases
|
|
Finance
Leases
|
||||
Year Ending December 31,
|
|
|
|
||||
2020
|
$
|
6,813
|
|
|
$
|
233
|
|
2021
|
5,180
|
|
|
208
|
|
||
2022
|
2,858
|
|
|
161
|
|
||
2023
|
784
|
|
|
154
|
|
||
2024
|
45
|
|
|
77
|
|
||
Thereafter
|
—
|
|
|
—
|
|
||
Total lease payments
|
$
|
15,680
|
|
|
$
|
833
|
|
Less imputed interest
|
(1,609
|
)
|
|
(69
|
)
|
||
Total
|
$
|
14,071
|
|
|
$
|
764
|
|
11.
|
FINANCIAL INSTRUMENTS
|
•
|
Level 2—Fair value is based on internally developed models that use, as their basis, readily observable market parameters. Our derivative positions are classified within level 2 of the valuation hierarchy as they are valued using quoted market prices for similar assets and liabilities in active markets. These level 2 derivatives are valued utilizing an income approach, which discounts future cash flow based on current market expectations and adjusts for credit risk.
|
•
|
Level 3—Fair value is based on internally developed models that use, as their basis, significant unobservable market parameters. The Company did not have any level 3 classifications at December 31, 2019.
|
|
|
December 31, 2019
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Derivative Assets
|
|
|
|
|
|
|
|
|
||||||||
Other current assets
|
|
$
|
—
|
|
|
$
|
216
|
|
|
$
|
—
|
|
|
$
|
216
|
|
Other non-current assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total assets at fair value
|
|
$
|
—
|
|
|
$
|
216
|
|
|
$
|
—
|
|
|
$
|
216
|
|
Derivative Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Other current liabilities
|
|
$
|
—
|
|
|
$
|
(61
|
)
|
|
$
|
—
|
|
|
$
|
(61
|
)
|
Other non-current liabilities
|
|
—
|
|
|
(398
|
)
|
|
—
|
|
|
(398
|
)
|
||||
Total liabilities at fair value
|
|
$
|
—
|
|
|
$
|
(459
|
)
|
|
$
|
—
|
|
|
$
|
(459
|
)
|
|
|
Gain (Loss) Recognized in OCI
|
|
Gain (Loss) Reclassified from AOCI into Earnings (1)
|
||
Interest rate cash flow hedge
|
|
(273
|
)
|
|
30
|
|
12.
|
COMMITMENTS AND CONTINGENCIES
|
13.
|
INCOME TAXES
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Current tax expense
|
$
|
1,182
|
|
|
$
|
288
|
|
|
$
|
118
|
|
Deferred tax (benefit) expense
|
(27,398
|
)
|
|
1,450
|
|
|
—
|
|
|||
Income tax (benefit) expense
|
$
|
(26,216
|
)
|
|
$
|
1,738
|
|
|
$
|
118
|
|
|
Years Ended December 31,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|||||||||
Tax expense (recovery) at the U.S. federal statutory rate
|
$
|
3,041
|
|
|
21.0
|
%
|
|
$
|
6,568
|
|
|
21.0
|
%
|
|
$
|
5,577
|
|
|
35.0
|
%
|
State tax based on income, net of refunds and federal benefits
|
1,670
|
|
|
11.5
|
|
|
364
|
|
|
1.2
|
|
|
(264
|
)
|
|
(1.7
|
)
|
|||
Taxes on subsidiaries’ and joint ventures’ earnings allocated to noncontrolling interests owners
|
(2,241
|
)
|
|
(15.5
|
)
|
|
(4,097
|
)
|
|
(13.1
|
)
|
|
(5,504
|
)
|
|
(34.5
|
)
|
|||
Valuation allowance
|
(29,375
|
)
|
|
(202.9
|
)
|
|
(1,013
|
)
|
|
(3.3
|
)
|
|
(18,006
|
)
|
|
(113.0
|
)
|
|||
Tax credits
|
(397
|
)
|
|
(2.7
|
)
|
|
(286
|
)
|
|
(0.9
|
)
|
|
(349
|
)
|
|
(2.2
|
)
|
|||
Tax rate change
|
—
|
|
|
—
|
|
|
(281
|
)
|
|
(0.9
|
)
|
|
19,545
|
|
|
122.7
|
|
|||
Return to provision
|
48
|
|
|
0.3
|
|
|
21
|
|
|
0.1
|
|
|
(62
|
)
|
|
(0.4
|
)
|
|||
Earn-out liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
460
|
|
|
2.9
|
|
|||
Equity compensation
|
805
|
|
|
5.6
|
|
|
26
|
|
|
0.1
|
|
|
(1,371
|
)
|
|
(8.6
|
)
|
|||
Other permanent differences
|
233
|
|
|
1.6
|
|
|
436
|
|
|
1.4
|
|
|
92
|
|
|
0.6
|
|
|||
Income tax (benefit) expense
|
$
|
(26,216
|
)
|
|
(181.1
|
)%
|
|
$
|
1,738
|
|
|
5.6
|
%
|
|
$
|
118
|
|
|
0.8
|
%
|
|
Long Term
|
||||||
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
Assets related to:
|
|
|
|
||||
Accrued compensation and other
|
$
|
3,981
|
|
|
$
|
3,707
|
|
Goodwill
|
—
|
|
|
—
|
|
||
Noncontrolling interests
|
1,812
|
|
|
1,687
|
|
||
Deferred revenue
|
922
|
|
|
232
|
|
||
Members interest liabilities
|
11,328
|
|
|
11,570
|
|
||
Right of use liabilities
|
3,253
|
|
|
—
|
|
||
Net operating loss carryforwards
|
19,801
|
|
|
22,818
|
|
||
Total deferred tax assets
|
41,097
|
|
|
40,014
|
|
||
Valuation allowance for deferred tax assets
|
—
|
|
|
(31,718
|
)
|
||
Net deferred tax assets
|
$
|
41,097
|
|
|
$
|
8,296
|
|
|
|
|
|
||||
Liabilities related to:
|
|
|
|
||||
Depreciation of property and equipment
|
(7,911
|
)
|
|
(7,709
|
)
|
||
Right of use assets
|
(3,232
|
)
|
|
—
|
|
||
Amortization of tax basis goodwill
|
(3,091
|
)
|
|
(1,450
|
)
|
||
Other
|
(851
|
)
|
|
(587
|
)
|
||
Net deferred tax liabilities
|
$
|
(15,085
|
)
|
|
$
|
(9,746
|
)
|
|
|
|
|
||||
Net total deferred tax asset (liability)
|
$
|
26,012
|
|
|
$
|
(1,450
|
)
|
14.
|
STOCKHOLDERS' EQUITY
|
|
Unrealized Fair Value of Swap (Cash Flow Hedge)
|
||
Balance at December 31, 2018
|
$
|
—
|
|
OCI before reclassifications
|
(186
|
)
|
|
Amounts reclassified from AOCI
|
(23
|
)
|
|
Net OCI
|
(209
|
)
|
|
Balance at December 31, 2019
|
$
|
(209
|
)
|
|
Amount Reclassified from AOCI (1)
|
||
Interest rate derivatives (interest expense)
|
$
|
(30
|
)
|
Tax
|
7
|
|
|
Total net of tax
|
$
|
(23
|
)
|
15.
|
STOCK INCENTIVE PLAN
|
|
Number of Shares
|
|
Weighted Average
Fair Value Per Share |
|||
Employee’s RSAs
|
|
|
|
|||
Balance at December 31, 2018
|
147
|
|
|
11.16
|
|
|
Granted
|
52
|
|
|
12.06
|
|
|
Vested
|
(114
|
)
|
|
11.04
|
|
|
Forfeited
|
(2
|
)
|
|
9.64
|
|
|
Balance at December 31, 2019
|
83
|
|
|
11.91
|
|
|
Director’s RSAs
|
|
|
|
|||
Balance at December 31, 2018
|
42
|
|
|
11.67
|
|
|
Granted
|
52
|
|
|
12.06
|
|
|
Vested
|
(52
|
)
|
|
$
|
11.69
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Balance at December 31, 2019
|
42
|
|
|
12.12
|
|
|
Number of Shares
|
|
Weighted Average
Fair Value Per Share |
||
Nonvested RSUs
|
|
|
|
||
Balance at December 31, 2018
|
217
|
|
|
12.40
|
|
Granted
|
261
|
|
|
12.14
|
|
Vested
|
(120
|
)
|
|
14.30
|
|
Forfeited
|
(14
|
)
|
|
16.14
|
|
Balance at December 31, 2019
|
344
|
|
|
13.78
|
|
|
April 3, 2017
|
||
Stock price at grant date
|
$
|
8.88
|
|
Exercise option price
|
$
|
10.25
|
|
Expected term of warrants (in years)
|
5
|
|
|
Expected volatility rate
|
48.29
|
%
|
|
Risk-free rate
|
1.88
|
%
|
|
Expected dividend yield
|
—
|
%
|
|
Total fair value
|
$
|
3,500
|
|
16.
|
EARNINGS PER SHARE
|
|
Years Ended December 31,
|
||||||||||
Numerator:
|
2019
|
|
2018
|
|
2017
|
||||||
Net income attributable to Sterling common stockholders
|
$
|
39,901
|
|
|
$
|
25,187
|
|
|
$
|
11,617
|
|
Denominator:
|
|
|
|
|
|
||||||
Weighted average common shares outstanding — basic
|
26,671
|
|
|
26,903
|
|
|
26,274
|
|
|||
Shares for dilutive unvested stock
|
448
|
|
|
291
|
|
|
438
|
|
|||
Weighted average common shares outstanding and assumed conversions— diluted
|
27,119
|
|
|
27,194
|
|
|
26,712
|
|
|||
Basic net income per share attributable to Sterling common stockholders
|
$
|
1.50
|
|
|
$
|
0.94
|
|
|
$
|
0.44
|
|
Diluted net income per share attributable to Sterling common stockholders
|
$
|
1.47
|
|
|
$
|
0.93
|
|
|
$
|
0.43
|
|
17.
|
RETIREMENT BENEFITS
|
•
|
Assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.
|
•
|
If the Company chooses to stop participating in some of its multi-employer plans, the Company may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability.
|
|
Pension Plan Employer
|
|
Pension Protection Act (“PPA”) Certified Zone Status (1)
|
|
FIP / RP Status Pending/Implemented (2)
|
|
Contributions
|
|
Surcharge
Imposed
|
|
Expiration Date of Collective Bargaining Agreement (3)
|
||||||||||||
Pension Trust
Fund
|
Identification Number
|
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
2017
|
|
|
|||||||||
Pension Trust Fund for Operating Engineers Pension Plan
|
94-6090764
|
|
Yellow
|
|
Red
|
|
Yes
|
|
$
|
2,314
|
|
|
$
|
1,932
|
|
|
$
|
2,477
|
|
|
No
|
|
Various
|
Laborers Pension Trust for Northern California
|
94-6277608
|
|
Green
|
|
Yellow
|
|
Yes
|
|
857
|
|
|
880
|
|
|
953
|
|
|
No
|
|
Various
|
|||
Carpenter Funds Administrative Office
|
94-6050970
|
|
Red
|
|
Red
|
|
Yes
|
|
547
|
|
|
748
|
|
|
727
|
|
|
No
|
|
Various
|
|||
Cement Mason Pension Trust Fund For Northern California
|
94-6277669
|
|
Yellow
|
|
Yellow
|
|
Yes
|
|
320
|
|
|
504
|
|
|
423
|
|
|
No
|
|
Various
|
|||
All other funds (4)
|
|
|
|
|
|
|
|
|
7,144
|
|
|
7,283
|
|
|
8,006
|
|
|
|
|
|
|||
|
|
|
|
|
Total Contributions:
|
|
$
|
11,182
|
|
|
$
|
11,347
|
|
|
$
|
12,586
|
|
|
|
|
|
(1)
|
The most recent PPA zone status available in 2019 and 2018 is for the plan’s year-end during 2018 and 2017, respectively. The zone status is based on information that we received from the plan and is certified by the plan’s actuary. Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the orange zone are less than 80 percent funded and have an Accumulated Funding Deficiency in the current year or projected into the next six years, plans in the yellow zone are less than 80 percent funded and plans in the green zone are at least 80 percent funded.
|
(2)
|
Indicates whether the plan has a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”) which is either pending or has been implemented.
|
(3)
|
Lists the expiration date(s) of the collective-bargaining agreement(s) to which the plans are subject.
|
(4)
|
These funds include multi-employer plans for pensions and other employee benefits. The total individually insignificant multi-employer pension costs contributed were $829, $1,300 and $1,500 for 2019, 2018 and 2017, respectively, and are included in the contributions to all other funds along with contributions to other types of benefit plans. Other employee benefits include certain coverage for medical, prescription drug, dental, vision, life and accidental death and dismemberment, disability and other benefit costs.
|
18.
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Accounts receivable, including retainage
|
$
|
(21,300
|
)
|
|
$
|
(11,094
|
)
|
|
$
|
(29,923
|
)
|
Contracts in progress, net
|
6,023
|
|
|
(4,397
|
)
|
|
(3,492
|
)
|
|||
Receivables from and equity in construction joint ventures
|
1,524
|
|
|
659
|
|
|
(4,250
|
)
|
|||
Other current and non-current assets
|
43
|
|
|
924
|
|
|
929
|
|
|||
Accounts payable
|
10,987
|
|
|
1,969
|
|
|
13,579
|
|
|||
Accrued compensation and other liabilities
|
(839
|
)
|
|
(4,038
|
)
|
|
6,625
|
|
|||
Members' interest subject to mandatory redemption and undistributed earnings
|
(340
|
)
|
|
1,957
|
|
|
2,156
|
|
|||
Changes in operating assets and liabilities
|
$
|
(3,902
|
)
|
|
$
|
(14,020
|
)
|
|
$
|
(14,376
|
)
|
19.
|
CONCENTRATION OF RISK AND ENTERPRISE WIDE DISCLOSURES
|
|
|
Years Ended December 31,
|
|||||||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|||||||||
Utah Department of Transportation (“UDOT”)
|
|
$
|
135,496
|
|
|
12.0
|
%
|
|
$
|
153,276
|
|
|
14.8
|
%
|
|
$
|
140,529
|
|
|
14.7
|
%
|
Texas Department of Transportation (“TXDOT”)
|
|
*
|
|
|
*
|
|
|
*
|
|
|
*
|
|
|
103,236
|
|
|
10.8
|
%
|
20.
|
RELATED PARTY TRANSACTIONS
|
21.
|
SEGMENT INFORMATION
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue
|
|
|
|
|
|
|
||||||
Heavy Civil
|
|
$
|
760,325
|
|
|
$
|
765,638
|
|
|
$
|
801,652
|
|
Specialty Services
|
|
212,824
|
|
|
120,333
|
|
|
48,314
|
|
|||
Residential
|
|
153,129
|
|
|
151,696
|
|
|
107,992
|
|
|||
Total Revenue
|
|
$
|
1,126,278
|
|
|
$
|
1,037,667
|
|
|
$
|
957,958
|
|
|
|
|
|
|
|
|
||||||
Depreciation and Amortization
|
|
|
|
|
|
|
||||||
Heavy Civil
|
|
$
|
12,839
|
|
|
$
|
13,492
|
|
|
$
|
14,789
|
|
Specialty Services
|
|
6,059
|
|
|
1,439
|
|
|
815
|
|
|||
Residential
|
|
1,842
|
|
|
1,839
|
|
|
1,390
|
|
|||
Total Depreciation and Amortization
|
|
$
|
20,740
|
|
|
$
|
16,770
|
|
|
$
|
16,994
|
|
|
|
|
|
|
|
|
||||||
Operating Income
|
|
|
|
|
|
|
|
|
||||
Heavy Civil
|
|
$
|
3,316
|
|
|
$
|
17,044
|
|
|
$
|
8,246
|
|
Specialty Services
|
|
18,207
|
|
|
4,629
|
|
|
2,284
|
|
|||
Residential
|
|
20,539
|
|
|
20,938
|
|
|
15,646
|
|
|||
Subtotal
|
|
42,062
|
|
|
42,611
|
|
|
26,176
|
|
|||
Acquisition related costs
|
|
(4,311
|
)
|
|
—
|
|
|
—
|
|
|||
Total Operating Income
|
|
$
|
37,751
|
|
|
$
|
42,611
|
|
|
$
|
26,176
|
|
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Assets
|
|
|
|
|
||||
Heavy Civil
|
|
$
|
287,779
|
|
|
$
|
318,586
|
|
Specialty Services
|
|
587,642
|
|
|
76,170
|
|
||
Residential
|
|
86,519
|
|
|
87,817
|
|
||
Total Assets
|
|
$
|
961,940
|
|
|
$
|
482,573
|
|
22.
|
QUARTERLY FINANCIAL INFORMATION
|
|
2019 Quarters Ended (unaudited)
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Revenues
|
$
|
223,949
|
|
|
$
|
264,086
|
|
|
$
|
291,699
|
|
|
$
|
346,544
|
|
Gross profit
|
19,503
|
|
|
25,496
|
|
|
29,216
|
|
|
33,579
|
|
||||
Income (loss) before income taxes
|
2,024
|
|
|
8,571
|
|
|
9,422
|
|
|
(5,538
|
)
|
||||
Net income attributable to Sterling common stockholders
|
$
|
1,815
|
|
|
$
|
7,828
|
|
|
$
|
7,957
|
|
|
$
|
22,301
|
|
Net income per share attributable to Sterling common stockholders:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.07
|
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
$
|
0.81
|
|
Diluted
|
$
|
0.07
|
|
|
$
|
0.29
|
|
|
$
|
0.30
|
|
|
$
|
0.79
|
|
|
2018 Quarters Ended (unaudited)
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Revenues
|
$
|
222,492
|
|
|
$
|
268,734
|
|
|
$
|
291,266
|
|
|
$
|
255,175
|
|
Gross profit
|
$
|
19,834
|
|
|
$
|
31,046
|
|
|
$
|
31,279
|
|
|
$
|
28,173
|
|
Income before income taxes
|
$
|
3,721
|
|
|
$
|
9,238
|
|
|
$
|
11,581
|
|
|
$
|
6,738
|
|
Net income attributable to Sterling common stockholders
|
$
|
2,489
|
|
|
$
|
8,174
|
|
|
$
|
8,917
|
|
|
$
|
5,607
|
|
Net income per share attributable to Sterling common stockholders:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.09
|
|
|
$
|
0.30
|
|
|
$
|
0.33
|
|
|
$
|
0.22
|
|
Diluted
|
$
|
0.09
|
|
|
$
|
0.30
|
|
|
$
|
0.33
|
|
|
$
|
0.21
|
|
|
2019 Quarters Ended (unaudited)
|
|
|
||||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
Total
|
||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
||||||||||
Heavy Civil
|
$
|
150,505
|
|
|
$
|
200,236
|
|
|
$
|
218,894
|
|
|
$
|
190,690
|
|
|
$
|
760,325
|
|
Specialty Services
|
30,679
|
|
|
27,894
|
|
|
32,863
|
|
|
121,388
|
|
|
212,824
|
|
|||||
Residential
|
42,765
|
|
|
35,956
|
|
|
39,942
|
|
|
34,466
|
|
|
153,129
|
|
|||||
Total Revenue
|
$
|
223,949
|
|
|
$
|
264,086
|
|
|
$
|
291,699
|
|
|
$
|
346,544
|
|
|
$
|
1,126,278
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income
|
|
|
|
|
|
|
|
|
|
||||||||||
Heavy Civil
|
$
|
(2,147
|
)
|
|
$
|
5,747
|
|
|
$
|
7,420
|
|
|
$
|
(7,704
|
)
|
|
$
|
3,316
|
|
Specialty Services
|
1,048
|
|
|
865
|
|
|
1,371
|
|
|
14,923
|
|
|
18,207
|
|
|||||
Residential
|
5,819
|
|
|
4,834
|
|
|
5,220
|
|
|
4,666
|
|
|
20,539
|
|
|||||
Subtotal
|
4,720
|
|
|
11,446
|
|
|
14,011
|
|
|
11,885
|
|
|
42,062
|
|
|||||
Acquisition related costs
|
—
|
|
|
(262
|
)
|
|
(1,896
|
)
|
|
(2,153
|
)
|
|
(4,311
|
)
|
|||||
Total Operating Income
|
$
|
4,720
|
|
|
$
|
11,184
|
|
|
$
|
12,115
|
|
|
$
|
9,732
|
|
|
$
|
37,751
|
|
|
2018 Quarters Ended (unaudited)
|
|
|
||||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
Total
|
||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
||||||||||
Heavy Civil
|
$
|
158,722
|
|
|
$
|
194,174
|
|
|
$
|
222,299
|
|
|
$
|
190,443
|
|
|
$
|
765,638
|
|
Specialty Services
|
28,519
|
|
|
29,109
|
|
|
32,245
|
|
|
30,460
|
|
|
120,333
|
|
|||||
Residential
|
35,251
|
|
|
45,451
|
|
|
36,722
|
|
|
34,272
|
|
|
151,696
|
|
|||||
Total Revenue
|
$
|
222,492
|
|
|
$
|
268,734
|
|
|
$
|
291,266
|
|
|
$
|
255,175
|
|
|
$
|
1,037,667
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Income
|
|
|
|
|
|
|
|
|
|
||||||||||
Heavy Civil
|
$
|
1,092
|
|
|
$
|
4,322
|
|
|
$
|
7,385
|
|
|
$
|
4,245
|
|
|
$
|
17,044
|
|
Specialty Services
|
519
|
|
|
1,480
|
|
|
1,647
|
|
|
983
|
|
|
4,629
|
|
|||||
Residential
|
5,068
|
|
|
6,347
|
|
|
5,341
|
|
|
4,182
|
|
|
20,938
|
|
|||||
Total Operating Income
|
$
|
6,679
|
|
|
$
|
12,149
|
|
|
$
|
14,373
|
|
|
$
|
9,410
|
|
|
$
|
42,611
|
|
10.7.3(1)
|
|||
10.7.4(1)
|
|||
10.7.5(1)
|
|||
10.8(1)
|
|||
10.9(1)(2)
|
|||
10.10
|
|||
10.11(2)
|
|||
21.1(2)
|
|||
23.1(2)
|
|||
31.1(2)
|
|||
31.2(2)
|
|||
32.1(3)
|
|||
32.2(3)
|
|||
101.INS
|
XBRL Instance Document
|
||
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
||
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
||
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
||
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
||
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
Sterling Construction Company, Inc.
|
|
|
|
|
By:
|
/s/ Joseph A. Cutillo
|
|
|
Joseph A. Cutillo, Chief Executive Officer
|
|
|
(Duly Authorized Officer)
|
Signature
|
|
Title
|
/s/ Joseph A. Cutillo
|
|
Chief Executive Officer (Principal Executive Officer)
|
Joseph A. Cutillo
|
|
Director
|
|
|
|
/s/ Ronald A. Ballschmiede
|
|
Executive Vice President, Chief Financial Officer, Chief Accounting Officer, and Treasurer (Principal Financial Officer and Principal Accounting Officer)
|
Ronald A. Ballschmiede
|
|
|
|
|
|
/s/Thomas M. White
|
|
Director and Non-Executive Chairman
|
Thomas M. White
|
|
|
|
|
|
/s/ Roger Cregg
|
|
Director
|
Roger Cregg
|
|
|
|
|
|
/s/ Marian M. Davenport
|
|
Director
|
Marian M. Davenport
|
|
|
|
|
|
/s/ Raymond F. Messer
|
|
Director
|
Raymond F. Messer
|
|
|
|
|
|
/s/ Dana C. O’Brien
|
|
Director
|
Dana C. O’Brien
|
|
|
|
|
|
/s/ Charles R. Patton
|
|
Director
|
Charles R. Patton
|
|
|
1 Year Sterling Infrastructure Chart |
1 Month Sterling Infrastructure Chart |
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