FALSE000087423800008742382023-11-062023-11-06

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 6, 2023

Sterling Infra Inc Logo_4C.jpg
STERLING INFRASTRUCTURE, INC.
(Exact name of registrant as specified in its charter)
Delaware001-3199325-1655321
(State or other jurisdiction of incorporation
or organization)		(Commission File Number)(I.R.S. Employer
Identification No.)
  
1800 Hughes Landing Blvd.
The Woodlands, Texas
 
77380
(Address of principal executive offices)(Zip Code)
  
Registrant’s telephone number, including area code:  (281) 214-0777
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, $0.01 par value per shareSTRLThe NASDAQ Stock Market LLC
(Title of Class)(Trading Symbol)(Name of each exchange on which registered)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR § 240.12b-2 of this chapter).
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐



Item 2.02
Results of Operations and Financial Condition.
On November 6, 2023, Sterling Infrastructure, Inc. (the “Company”) issued a press release announcing financial results for the three and nine months ended September 30, 2023 and an update to the full year 2023 guidance. The press release is being furnished with this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
 
The information provided in this Item 2.02 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, unless the Company specifically states that the information is to be considered “filed” under the Exchange Act, nor shall it be incorporated by reference in any filing made by the Company pursuant to the Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”), other than to the extent that such filing incorporates by reference any or all of such information by express reference thereto.
Item 7.01Regulation FD Disclosure.
On November 7, 2023, the Company will host a conference call to discuss the third quarter results as well as corporate developments. The slides to be used during the conference call are being furnished with this Current Report on Form 8-K as Exhibit 99.2 and are incorporated herein by reference.

The information provided in this Item 7.01 shall not be deemed to be “filed” for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, unless the Company specifically states that the information is to be considered “filed” under the Exchange Act, nor shall it be incorporated by reference in any filing made by the Company pursuant to the Exchange Act or the Securities Act, other than to the extent that such filing incorporates by reference any or all of such information by express reference thereto.

Item 9.01     Financial Statements and Exhibits.

(d)    Exhibits
Exhibit Number Description
99.1
99.2
104Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 STERLING INFRASTRUCTURE, INC.
   
Date:November 6, 2023By:/s/ Ronald A. Ballschmiede
  Ronald A. Ballschmiede
  Chief Financial Officer





Exhibit 99.1

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NEWS RELEASE
For Immediate Release:
November 6, 2023
Sterling Reports Third Quarter 2023 Results and Increases 2023 Full Year Guidance
THE WOODLANDS, TX – November 6, 2023 – Sterling Infrastructure, Inc. (NasdaqGS: STRL) (“Sterling” or the “Company”) today announced financial results for the third quarter 2023.
The financial information herein is from continuing operations and comparisons are to the prior year quarter, unless otherwise noted.
Third Quarter 2023 Results
•Revenues of $560.3 million, an increase of 13.7%
•Gross margin of 16.4%, an increase from 16.1%
•Net Income of $39.4 million, or $1.26 per diluted share, an increase of 28% and 25%, respectively
•EBITDA(1) of $71.2 million, an increase of 15.7%
•Cash flows from operations totaled $331.2 million for the nine months ended September 30, 2023
•Cash and Cash Equivalents totaled $409.4 million at September 30, 2023
•Backlog at September 30, 2023 was $2.01 billion, an increase of 42% over December 31, 2022
•Combined backlog(2) at September 30, 2023 was $2.39 billion, an increase of 41% over December 31, 2022
CEO Remarks and Outlook
“In the third quarter, we surpassed our internal projections by delivering diluted EPS of $1.26, a 25% increase from the corresponding period last year. As a result, we are raising our diluted EPS guidance to $4.10 to $4.23 from $4.00 to $4.20. Our quarter-end backlog of over $2 billion, a 42% increase from year-end 2022 levels, supports our expectation for continued momentum in 2024. We had another excellent quarter for cash flow generation, bringing our year to date cash flow from operations to $331 million. We remain very well positioned to grow the business through both organic initiatives and acquisitions,” stated Joe Cutillo, Sterling’s Chief Executive Officer.
“The drivers of multi-year profitability growth across each of our business segments remain strong. Our E-Infrastructure Solutions backlog of $891 million at quarter end reflects a 48% increase from year-end 2022 levels. The next generation manufacturing and data center markets remain extremely active, and our large projects in the Southeast are on track and executing well. We did, however, see a slight decline in revenue and margins due to delays of new project starts and the continued softness in e-commerce and small warehouse markets in the Northeast. Transportation Solutions had an excellent quarter, with revenue growth of 23% and operating margin expansion of 130 basis points. We are seeing broad-based demand across our Transportation Solutions footprint and end markets. Building Solutions revenue grew 41% in the quarter, including 29% organic growth, and operating income increased 38% driven by strength in both residential and commercial,” continued Mr. Cutillo.
“We remain steadfast in our commitments to maintain operational excellence and drive consistent earnings and cash flow growth. Our record backlog position and visibility into the fourth quarter give us confidence in our ability to deliver on our increased guidance for the year,” Mr. Cutillo concluded.
(1) The Company defines EBITDA as GAAP net income from Continuing Operations, adjusted for depreciation and amortization, net interest expense and taxes. The Company defines Adjusted EBITDA as EBITDA excluding acquisition related costs. See the “Non-GAAP Measures” and “EBITDA From Continuing Operations Reconciliation” sections below for more information.
(2) Combined Backlog includes Unsigned Awards of $375.2 million and $275.0 million at September 30, 2023 and December 31, 2022, respectively.


Full Year 2023 Guidance
•Revenue of $1.99 billion to $2.05 billion
•Net Income of $128 million to $132 million
•Diluted EPS of $4.10 to $4.23
•EBITDA(1) of $252 million to $260 million
Conference Call
Sterling’s management will hold a conference call to discuss these results and recent corporate developments on Tuesday, November 7, 2023 at 9:00 a.m. ET/8:00 a.m. CT. Interested parties may participate in the call by dialing (201) 493-6744 or (877) 445-9755. Please call in 10 minutes before the conference call is scheduled to begin and ask for the Sterling Infrastructure call. To coincide with the conference call, Sterling will post a slide presentation at www.strlco.com on the Events & Presentations section of the Investor Relations tab. Following management’s opening remarks, there will be a question and answer session.
To listen to a simultaneous webcast of the call, please go to the Company’s website at www.strlco.com at least 15 minutes early to download and install any necessary audio software. If you are unable to listen live, the conference call webcast will be archived on the Company’s website for 30 days.
About Sterling
Sterling operates through a variety of subsidiaries within three segments specializing in E-Infrastructure, Transportation and Building Solutions in the United States, primarily across the Southern, Northeastern, Mid-Atlantic and Rocky Mountain regions and Hawaii. E-Infrastructure Solutions provides advanced, large-scale site development services for manufacturing, data centers, e-commerce distribution centers, warehousing, power generation and more. Transportation Solutions includes infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, rail and storm drainage systems. Building Solutions includes residential and commercial concrete foundations for single-family and multi-family homes, parking structures, elevated slabs and other concrete work. From strategy to operations, we are committed to sustainability by operating responsibly to safeguard and improve society’s quality of life. Caring for our people and our communities, our customers and our investors – that is The Sterling Way.
Joe Cutillo, CEO, “We build and service the infrastructure that enables our economy to run,
our people to move and our country to grow.”

(1) The Company defines EBITDA as GAAP net income attributable to Sterling’s common stockholders, adjusted for depreciation and amortization, net interest expense and taxes. See the “Non-GAAP Measures” and “EBITDA Guidance Reconciliation” sections below for more information.


Important Information for Investors and Stockholders
Non-GAAP Measures
This press release contains “Non-GAAP” financial measures as defined under Regulation G of the amended U.S. Securities Exchange Act of 1934. The Company reports financial results in accordance with U.S. generally accepted accounting principles (“GAAP”), but the Company believes that certain Non-GAAP financial measures provide useful supplemental information to investors regarding the underlying business trends and performance of the Company’s ongoing operations and are useful for period-over-period comparisons of those operations.
Non-GAAP measures may include adjusted net income, adjusted EPS, EBITDA and adjusted EBITDA, in each case excluding the impacts of certain identified items. The excluded items represent items that the Company does not consider to be representative of its normal operations. The Company believes that these measures are useful for investors to review, because they provide a consistent measure of the underlying financial results of the Company’s ongoing business and, in the Company’s view, allow for a supplemental comparison against historical results and expectations for future performance. Furthermore, the Company uses each of these to measure the performance of the Company’s operations for budgeting and forecasting, as well as for determining employee incentive compensation. However, Non-GAAP measures should not be considered as substitutes for net income, EPS, or other data prepared and reported in accordance with GAAP and should be viewed in addition to the Company’s reported results prepared in accordance with GAAP.
Reconciliations of Non-GAAP financial measures to the most comparable GAAP measures are provided in the tables included within this press release.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains statements that are considered forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which may include statements about: our business strategy; our financial strategy; our industry outlook; our guidance; our expected margin growth; and our plans, objectives, expectations, forecasts, outlook and intentions. All of these types of statements, other than statements of historical fact included in this press release, are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “project,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “pursue,” “target,” “guidance,” “continue,” the negative of such terms or other comparable terminology. The forward-looking statements contained in this press release are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management’s assumptions about future events may prove to be inaccurate. Management cautions all readers that the forward-looking statements contained in this press release are not guarantees of future performance, and we cannot assure any reader that such statements will be realized or the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to factors listed in the “Risk Factors” section in our filings with the U.S. Securities and Exchange Commission and elsewhere in those filings. Additional factors or risks that we currently deem immaterial, that are not presently known to us or that arise in the future could also cause our actual results to differ materially from our expected results. Given these uncertainties, investors are cautioned that many of the assumptions upon which our forward-looking statements are based are likely to change after the date the forward-looking statements are made. The forward-looking statements speak only as of the date made, and we undertake no obligation to publicly update or revise any forward-looking statements for any reason, whether as a result of new information, future events or developments, changed circumstances, or otherwise, notwithstanding any changes in our assumptions, changes in business plans, actual experience or other changes. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.
Company Contact:
Sterling Infrastructure, Inc.
Noelle Dilts, VP IR and Corporate Strategy
281-214-0795


STERLING INFRASTRUCTURE, INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Continuing Operations:
Revenues$560,347 $493,040 $1,486,251 $1,320,829 
Cost of revenues(468,480)(413,596)(1,240,368)(1,115,228)
Gross profit91,867 79,444 245,883 205,601 
General and administrative expense(25,237)(22,235)(72,592)(63,376)
Intangible asset amortization(3,736)(3,509)(11,209)(10,591)
Acquisition related costs(103)(77)(352)(562)
Other operating expense, net(5,654)(4,148)(11,703)(8,245)
Operating income57,137 49,475 150,027 122,827 
Interest income4,150 165 8,327 201 
Interest expense(7,257)(5,135)(22,516)(14,262)
Income before income taxes54,030 44,505 135,838 108,766 
Income tax expense(13,891)(13,173)(35,429)(30,966)
Net income, including noncontrolling interests40,139 31,332 100,409 77,800 
Less: Net income attributable to noncontrolling interests(786)(634)(1,927)(1,316)
Net income from Continuing Operations$39,353 $30,698 $98,482 $76,484 
Discontinued Operations:
Pretax loss$— $(1,786)$— $(3,287)
Income tax benefit— 611 — 1,539 
Net loss from Discontinued Operations$— $(1,175)$— $(1,748)
Net income attributable to Sterling common stockholders$39,353 $29,523 $98,482 $74,736 
Net income per share from Continuing Operations:
Basic$1.28 $1.01 $3.20 $2.54 
Diluted$1.26 $1.01 $3.17 $2.52 
Net loss per share from Discontinued Operations:
Basic$— $(0.04)$— $(0.06)
Diluted$— $(0.04)$— $(0.06)
Net income per share attributable to Sterling common stockholders:
Basic$1.28 $0.98 $3.20 $2.48 
Diluted$1.26 $0.97 $3.17 $2.46 
Weighted average common shares outstanding:
Basic30,80030,27830,73330,156
Diluted31,21730,54031,04830,364



STERLING INFRASTRUCTURE, INC. & SUBSIDIARIES
SEGMENT INFORMATION
(In thousands)
(Unaudited)

Three Months Ended September 30,Nine Months Ended September 30,
Revenues2023% of Revenue2022% of Revenue2023% of Revenue2022% of Revenue
E-Infrastructure Solutions$253,948 45%$255,530 52%$719,936 48%$658,005 50%
Transportation Solutions192,996 35%157,224 32%455,223 31%416,005 31%
Building Solutions113,403 20%80,286 16%311,092 21%246,819 19%
Total Revenues$560,347 $493,040 $1,486,251 $1,320,829 
Operating Income
E-Infrastructure Solutions$35,945 14.2%$37,533 14.7%$103,381 14.4%$91,642 13.9%
Transportation Solutions14,487 7.5%9,700 6.2%29,649 6.5%21,553 5.2%
Building Solutions12,848 11.3%9,324 11.6%35,029 11.3%28,433 11.5%
Segment Operating Income63,280 11.3%56,557 11.5%168,059 11.3%141,628 10.7%
Corporate G&A Expense(6,040)(7,005)(17,680)(18,239)
Acquisition Related Costs(103)(77)(352)(562)
Total Operating Income$57,137 10.2%$49,475 10.0%$150,027 10.1%$122,827 9.3%


STERLING INFRASTRUCTURE, INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)

September 30,
2023		December 31,
2022
Assets
Current assets:
Cash and cash equivalents$409,398 $181,544 
Accounts receivable326,331 262,646 
Contract assets107,327 109,803 
Receivables from and equity in construction joint ventures14,593 14,122 
Other current assets 18,315 29,139 
Total current assets875,964 597,254 
Property and equipment, net231,058 215,482 
Operating lease right-of-use assets, net58,492 59,415 
Goodwill262,692 262,692 
Other intangibles, net287,914 299,123 
Other non-current assets, net7,685 7,654 
Total assets$1,723,805 $1,441,620 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$150,218 $121,887 
Contract liabilities432,213 239,297 
Current maturities of long-term debt 35,142 32,610 
Current portion of long-term lease obligations18,403 19,715 
Accrued compensation 35,506 24,136 
Other current liabilities14,355 8,966 
Total current liabilities685,837 446,611 
Long-term debt 321,589 398,735 
Long-term lease obligations40,204 40,103 
Members’ interest subject to mandatory redemption and undistributed earnings22,612 21,597 
Deferred tax liability, net61,847 51,659 
Other long-term liabilities6,242 5,116 
Total liabilities1,138,331 963,821 
Stockholders’ equity:
Common stock308 306 
Additional paid in capital295,178 287,914 
Retained earnings284,861 186,379 
Total Sterling stockholders’ equity580,347 474,599 
Noncontrolling interests5,127 3,200 
Total stockholders’ equity585,474 477,799 
Total liabilities and stockholders’ equity$1,723,805 $1,441,620 


STERLING INFRASTRUCTURE, INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

Nine Months Ended September 30,
20232022
Cash flows from operating activities:
Net income$100,409 $76,052 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization42,529 38,550 
Amortization of debt issuance costs and non-cash interest1,334 1,636 
Gain on disposal of property and equipment(4,102)(1,926)
Gain on debt extinguishment, net— (2,428)
Deferred taxes10,188 24,975 
Stock-based compensation10,975 7,971 
Change in fair value of interest rate swap— (320)
Changes in operating assets and liabilities169,882 (6,342)
Net cash provided by operating activities331,215 138,168 
Cash flows from investing activities:
Acquisitions, net of cash acquired— (3,033)
Disposition proceeds14,000 — 
Capital expenditures(49,244)(47,832)
Proceeds from sale of property and equipment9,607 3,043 
Net cash used in investing activities(25,637)(47,822)
Cash flows from financing activities:
Repayments of debt(76,850)(17,612)
Withholding taxes paid on net share settlement of equity awards(4,579)(7,521)
Other(16)— 
Net cash used in financing activities(81,445)(25,133)
Net change in cash, cash equivalents, and restricted cash224,133 65,213 
Cash, cash equivalents and restricted cash at beginning of period185,265 88,693 
Cash, cash equivalents and restricted cash at end of period409,398 153,906 
Less: restricted cash - Continuing Operations— (3,721)
Less: cash, cash equivalents and restricted cash - Discontinued Operations— (13,999)
Cash and cash equivalents at end of period - Continuing Operations$409,398 $136,186 


STERLING INFRASTRUCTURE, INC. & SUBSIDIARIES
EBITDA FROM CONTINUING OPERATIONS RECONCILIATION
(In thousands)
(Unaudited)
 Three Months Ended September 30,Nine Months Ended September 30,
 2023202220232022
Net income from Continuing Operations$39,353 $30,698 $98,482 $76,484 
Depreciation and amortization14,857 12,728 42,529 37,322 
Interest expense, net of interest income3,107 4,970 14,189 14,061 
Income tax expense13,891 13,173 35,429 30,966 
EBITDA from Continuing Operations (1)
71,208 61,569 190,629 158,833 
Acquisition related costs103 77 352 562 
Adjusted EBITDA from Continuing Operations (2)
$71,311 $61,646 $190,981 $159,395 
(1) The Company defines EBITDA as GAAP net income from Continuing Operations, adjusted for depreciation and amortization, net interest expense and taxes.
(2) The Company defines Adjusted EBITDA as EBITDA excluding the impact of acquisition related costs.


STERLING INFRASTRUCTURE, INC. & SUBSIDIARIES
EBITDA GUIDANCE RECONCILIATION
(In millions)
(Unaudited)
 Full Year 2023 Guidance
 LowHigh
Net income attributable to Sterling common stockholders$128 $132 
Depreciation and amortization57 58 
Interest expense, net of interest income18 19 
Income tax expense49 51 
EBITDA (1)
$252 $260 
(1) The Company defines EBITDA as GAAP net income attributable to Sterling common stockholders, adjusted for depreciation and amortization, net interest expense, and taxes.

We build and service the infrastructure that enables our economy to run, our people to move, and our country to grow. Q3 2023 Earnings Call November 7, 2023

 
2Sterling | STRL: Third Quarter 2023 DISCLOSURE: Forward-Looking Statements This presentation contains, and the officers and directors of the Company may from time to time make, statements that are considered forward- looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which may include statements about: our business strategy; our financial strategy; our industry outlook; our guidance; our expected margin growth; and our plans, objectives, expectations, forecasts, outlook and intentions. All of these types of statements, other than statements of historical fact included in this presentation, are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “could,” “should,” “expect,” “plan,” “project,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “pursue,” “target,” "guidance," “continue,” the negative of such terms or other comparable terminology. The forward-looking statements contained in this presentation are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management’s assumptions about future events may prove to be inaccurate. Management cautions all readers that the forward-looking statements contained in this presentation are not guarantees of future performance, and we cannot assure any reader that such statements will be realized or the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to factors listed in the “Risk Factors” section in our filings with the U.S. Securities and Exchange Commission and elsewhere in those filings. Additional factors or risks that we currently deem immaterial, that are not presently known to us or that arise in the future could also cause our actual results to differ materially from our expected results. Given these uncertainties, investors are cautioned that many of the assumptions upon which our forward-looking statements are based are likely to change after the date the forward-looking statements are made. The forward- looking statements speak only as of the date made, and we undertake no obligation to publicly update or revise any forward-looking statements for any reason, whether as a result of new information, future events or developments, changed circumstances, or otherwise, notwithstanding any changes in our assumptions, changes in business plans, actual experience or other changes. These cautionary statements qualify all forward- looking statements attributable to us or persons acting on our behalf. This presentation may contain the financial measures: adjusted net income, EBITDA, adjusted EBITDA, and adjusted EPS, which are not calculated in accordance with U.S. GAAP. If presented, a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measure will be provided in the Appendix to this presentation.

 
E-Infrastructure Solutions + Fastest growing segment in revenue growth + Provides value-added solutions to blue-chip customers in all major East Coast markets + Develops advanced, large-scale site development services for manufacturing, data centers, e-commerce distribution centers, warehousing, power generation and more Building Solutions + Serves the Nation's Top Builders in the Nation's Top Housing Markets: Texas & Arizona + Residential and commercial concrete foundations for single-family and multi-family homes, parking structures, elevated slabs and other concrete work Transportation Solutions + Enhanced business mix + Provides infrastructure solutions in the Rocky Mountain States and Texas + Infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, rail and storm drainage systems and more Sterling | STRL: Third Quarter 2023 3 WHO is Sterling? NASDAQ STRL Shares outstanding(3) 30.8M HQ The Woodlands, TX Market cap(3) $2.34B Employees ~3,200(1) Revenue(4) $2.02B Segments E-Infrastructure Solutions Building Solutions Transportation Solutions EBITDA(4) $256M Projects underway ~230(2) Total Backlog(2) $2.01B A market-leading infrastructure service provider of e-infrastructure, building and transportation solutions. A story of successful execution of a multi-year strategic business transformation; born of a vision that levers our entrepreneurial spirit. We offer a customer-centric, market-focused portfolio of goods and services geographically positioned in the right markets. (1) At December 31, 2022. (2) At September 30, 2023. (3) Shares outstanding and Market Cap as of November 3, 2023 (4) Full Year 2023 Revenue and EBITDA Mid-Point Guidance. *See EBITDA Reconciliation in the Appendix page 15.

 
Sterling | STRL: Third Quarter 2023 4 Strategic Transformation at a Glance

 
+ Third Quarter 2023 Results Sterling | STRL: Third Quarter 2023 5

 
Third Quarter 2023 Results Highlights Continuing Operations + Revenues: $560.3 million + Net Income: $39.4 million + Diluted EPS: $1.26 + EBITDA(1): $71.2 million + Cash Flow from Operations(2): $331.2 million + Cash & Cash Equivalents(3): $409.4 million + Backlog(3): $2.01 billion with 15.2% margin + Combined Backlog(4): $2.39 billion with 14.9% margin Sterling | STRL: Third Quarter 2023 6 (1) The Company defines EBITDA as GAAP net income from Continuing Operations, adjusted for depreciation and amortization, net interest expense and taxes. See EBITDA reconciliation on page 14. (2) Cash flow from operations for the nine months ended September 30, 2023. (3) Cash & Cash Equivalents and Backlog at September 30, 2023. (4) Combined Backlog includes Unsigned Awards of $375.2 million at September 30, 2023.

 
Sterling | STRL: Third Quarter 2023 7 Quarterly Consolidated and Segment Results Continuing Operations ($ in millions) Q3 2023 Q3 2022 Revenues $ 560.3 $ 493.0 Gross Profit 91.9 79.4 G&A Expense (25.2) (22.2) Intangible Amortization (3.7) (3.5) Acquisition Related Costs (0.1) (0.1) Other Operating Expense, Net (5.7) (4.1) Operating Income 57.1 49.5 Interest, Net (3.1) (5.0) Income Tax Expense (13.9) (13.2) Less: Net Income Attributable to NCI (0.8) (0.6) Net income from Continuing Operations $ 39.4 $ 30.7 Diluted EPS $ 1.26 $ 1.01 EBITDA (1) $ 71.2 $ 61.6 ($ in millions) Q3 2023 Q3 2022 E-Infrastructure Solutions Revenue $ 253.9 $ 255.5 Operating Income $ 35.9 $ 37.5 Operating Margin 14.2 % 14.7 % Transportation Solutions Revenue $ 193.0 $ 157.2 Operating Income $ 14.5 $ 9.7 Operating Margin 7.5 % 6.2 % Building Solutions Revenue $ 113.4 $ 80.3 Operating Income $ 12.8 $ 9.3 Operating Margin 11.3 % 11.6 % (1) The Company defines EBITDA as GAAP net income from Continuing Operations, adjusted for depreciation and amortization, net interest expense and taxes. See EBITDA reconciliation on page 14.

 
Sterling | STRL: Third Quarter 2023 8 Remaining Performance Obligations (RPOs)(1) Continuing Operations ($ in millions) 9/30/2023 12/31/2022 9/30/2022 E-Infrastructure Solutions RPOs $ 891.4 $ 603.2 $ 584.3 Transportation Solutions RPOs 1,022.9 713.2 711.5 Building Solutions RPOs - Commercial 96.1 97.9 115.5 Total RPOs $ 2,010.4 $ 1,414.3 $ 1,411.3 (1) Our remaining performance obligations do not differ from what we refer to as “Backlog,” and represent the amount of revenues we expect to recognize in the future from our contract commitments on projects.

 
Sterling | STRL: Third Quarter 2023 9 Increased EBITDA and Cash Flow Drives Liquidity Strategy Foward Looking EBITDA Debt Coverage Ratio 1.9X 1.3X 12/31/22 9/30/23 0.0X 0.5X 1.0X 1.5X 2.0X We expect to pursue strategic uses of our liquidity, such as strategic acquisitions, investing in capital equipment and managing leverage. Capital allocation focus • Long-term shareholder value • Complementing organic growth in existing and new markets • Strong cash flow profile provides flexibility and drives liquidity strategy Sterling is comfortable with a forward looking debt/ EBITDA coverage ratio of +/-2.5X. 5-Year Credit Facility $347M Term Loan Borrowings $75M Revolving Credit Facility (Undrawn) Key Cash Flow Considerations Q3 2023 Q3 2022 Cash flows from Operations $331.2M $138.2M Net CAPEX $39.6M $44.8M • Cash & Cash Equivalents at September 30, 2023 was $409.4 million • 2023 EBITDA guidance(1): $252M to $260M • Expected additional 2023 noncash expenses: $31M to $36M (Stock-based compensation, noncash interest expense, deferred taxes, etc.) • Scheduled term loan debt payments total $31.9M and $26.1M for 2023 and 2024, respectively (1) The Company defines EBITDA as GAAP net income attributable to Sterling common stockholders, adjusted for depreciation and amortization, net interest expense and taxes. See EBITDA guidance reconciliation on page 15.

 
Sterling | STRL: Third Quarter 2023 10 Contact Us Sterling Infrastructure, Inc. Noelle Dilts, VP IR and Corporate Strategy Tel: (281) 214-0795 noelle.dilts@strlco.com

 
+ Appendix Sterling | STRL: Third Quarter 2023 11

 
Sterling | STRL: Third Quarter 2023 12 2023 Modeling Considerations(1) (1) In millions except for EPS and percentages. (2) See EBITDA guidance reconciliation on page 15. Revenue $1,990 to $2,050 Gross Margin 16% to 17% G&A Expense as % of Revenue (Excluding Intangible Amortization) ~5% Intangible Amortization $15 Other Operating Expense Net $17 to $19 JV Non-Controlling Interest Expense $3 to $4 Effective Income Tax Rate ~27% Net Income $128 to $132 Diluted EPS $4.10 to $4.23 Expected Dilutive Shares Outstanding 31.2 EBITDA(2) $252 to $260

 
2023 Modeling Considerations Continued* Sterling | STRL: Third Quarter 2023 13 * In Millions. Non-Cash Items FY 2023 Expectations FY 2022 Depreciation $42 to $43 $38.0 Intangible Amortization $15 $14.1 Debt Issuance Cost Amortization $2 to $3 $2.2 Stock-based Compensation $14 to $16 $10.3 Deferred Taxes $15 to $17 $36.5 Other Cash Flow Items FY 2023 Expectations FY 2022 Interest expense, net of interest income $18 to $19 $19.7 CAPEX, net of disposals $50 to $55 $56.0

 
Sterling | STRL: Third Quarter 2023 14 (1) The Company defines EBITDA as GAAP net income from Continuing Operations, adjusted for depreciation and amortization, net interest expense and taxes. (2) The Company defines Adjusted EBITDA as EBITDA excluding the impact of acquisition related costs. Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net income from Continuing Operations $ 39,353 $ 30,698 $ 98,482 $ 76,484 Depreciation and amortization 14,857 12,728 42,529 37,322 Interest expense, net of interest income 3,107 4,970 14,189 14,061 Income tax expense 13,891 13,173 35,429 30,966 EBITDA from Continuing Operations(1) 71,208 61,569 190,629 158,833 Acquisition related costs 103 77 352 562 Adjusted EBITDA from Continuing Operations(2) $ 71,311 $ 61,646 $ 190,981 $ 159,395 STERLING INFRASTRUCTURE, INC. & SUBSIDIARIES EBITDA FROM CONTINUING OPERATIONS RECONCILIATION (In thousands) (Unaudited)

 
Sterling | STRL: Third Quarter 2023 15 (1) The Company defines EBITDA as GAAP net income attributable to Sterling common stockholders, adjusted for depreciation and amortization, net interest expense and taxes. Full Year 2023 Guidance Low High Net income attributable to Sterling common stockholders $ 128 $ 132 Depreciation and amortization 57 58 Interest expense, net of interest income 18 19 Income tax expense 49 51 EBITDA (1) $ 252 $ 260 STERLING INFRASTRUCTURE, INC. & SUBSIDIARIES EBITDA GUIDANCE RECONCILIATION (In millions) (Unaudited)

 
THANK YOU We build and service the infrastructure that enables our economy to run, our people to move, and our country to grow.

 
v3.23.3
Cover
Nov. 06, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Nov. 06, 2023
Entity Registrant Name STERLING INFRASTRUCTURE, INC.
Entity Incorporation, State or Country Code DE
Entity File Number 001-31993
Entity Tax Identification Number 25-1655321
Entity Address, Address Line One 1800 Hughes Landing Blvd.
Entity Address, City or Town The Woodlands
Entity Address, State or Province TX
Entity Address, Postal Zip Code 77380
City Area Code 281
Local Phone Number 214-0777
Title of 12(b) Security Common Stock, $0.01 par value per share
Trading Symbol STRL
Security Exchange Name NASDAQ
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0000874238
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