Sterling Infrastructure, Inc. · NASDAQ:STRL
Sterling Infrastructure — Sterling Construction — Investor Presentation (August 2018)
18 slides from Sterling Infrastructure's investor presentation, Aug 10, 2018
Slide 1: Investor Presentation August 2018
Investor PRESENTATION August 2018
Slide 2: Disclosure Regarding Forward-Looking Statements
Disclosure Regarding 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. Th
Slide 3: Company Summary
Company Summary At Sterling, we are committed to building and rebuilding the infrastructure that enables our economy to run, our people to move, and our country to grow. RESIDENTIAL HEAVY CIVIL CONSTRUCTION CONSTRUCTION Concrete Foundations for Highways, Roads, Bridges, Paving, Single Family Homes W
Slide 4: Performance Trends
Performance Trends REVENUE (IN MM) GROSS MARGIN $1,200 12.0% 10.0% $800 8.0% 6.0% $400 4.0% 2.0% $0 0.0% 2015 2016 2017 2018E (1) 2015 2016 2017 2018 YTD (2) NET INCOME (IN MM) EPS $30 $1.50 $20 $1.00 $10 $0.50 $0 $0.00 2015 2016 2017 2018E (1) 2015 2016 2017 2018E (1) ($10) -$0.50 ($20) -$1.00 ($30
Slide 5: Current Footprint
Current Footprint Sterling Office Locations Sterling Construction Company, Inc. | Investor Relations | 5
Slide 6: Elements of Strategy
Elements of Strategy PHASE 2 MARGIN Element 3 PHASE 1 Element 2 Expansion Into Adjacent Sectors Lever and Grow EXPANSIONS Element 1 High Margin Products ✓ Residential BECOME Industrial LEVER AND Solidify the Base Aviation Commercial GROW Commercial Port Bid Process OPPORTUNITIES Water/Storm Rail Pri
Slide 7: High Margin Growth Elements: Adjacent Market Expansion
High Margin Growth Elements Adjacent Market Expansion Add appropriate Picture here to fit RESIDENTIAL the square ✓ Low Risk ✓ Low Complexity ✓ High Margin Located in three of our largest customers top five markets Initial market expansion underway in Houston Annual growth rates in low double d
Slide 8: Top Residential Markets in US
Top 5 Residential Markets in US 4 3 5 Sterling Construction Company, Inc. | Investor Relations | 8
Slide 9: Residential Growth
Residential Growth Overall U.S. Market Expansion Housing Market We Cover Strategy 2018 forecasted starts to DFW market starts in 2017 Expand into high growth grow 5% in single-family of ~23,700 markets in our current housing 2017 growth rate was 10% footprint with existing Still below the
Slide 10: High Margin Growth Elements: Growth of High Margin Products
High Margin Growth Elements Growth of High Margin Products Add appropriate Picture here to fit OTHER CIVIL the square ✓ Aviation ✓ Commercial ✓ Rail Projects are more customer focused than Heavy Highway, creating opportunities for increased margins ✓ Port Margin ranges from 12% - 15% ✓ Industria
Slide 11: High Margin Growth – Other Civil
High Margin Growth – Other Civil Aviation Additional Sectors Total annual spend of $17.5 billion Commercial Growth rate expected to average Rail 8% Ports Our Markets cover 5 of the top 10 Industrial busiest airports Water Transmission ~12% of backlog at 12/31/2017 Wastewater LEVE
Slide 12: Base Business Growth Elements
Base Business Growth Elements Historical Base Business Add appropriate Picture here to fit HEAVY HIGHWAY CIVIL the square ✓ Continued Growth ✓ Margin Improvement Annual growth rates slightly above GDP ~ 3 - 5% Projects are typically low bid Customers are typically DOT State & Local governments
Slide 13: Impact of High Margin Growth
Impact of High Margin Growth MARGIN REVENUE GROWTH RATES Solidify the Base: • Residential – low double digits “Heavy Civil” • Other Civil – mid to high single digits • Heavy Civil – low to mid single digits EXPECTED GM 3-5 YEARS Higher Margin Products • Residential – 15 to 20% • Other Civil • Other
Slide 14: 2018 Outlook
2018 Outlook Revenues Net Income $1.030B - $1.045B $24M – $26.5M more than doubles EPS CAPEX, net $0.87 - $0.96 ~ $5M NOL Carryforward Expected Share Outstanding ~ $110M 27.5M Shares Sterling Construction Company, Inc. | Investor Relations | 14
Slide 15: Year over Year Comparison: Second Quarter Results
Year over year Comparison Second Quarter Results Q2 2018 Revenues Q2 2017 Revenues $268.7M $246.4M Q2 2018 Net Income VS. Q2 2017 Net Income $8.2M $3.7M Q2 2018 EPS Q2 2017 EPS $0.30 $0.13 Sterling Construction Company, Inc. | Investor Relations | 15
Slide 16: Investment Highlights
Investment Highlights ✓ Market remains robust ✓ Turnaround complete ✓ Significantly improved balance sheet provides greater liquidity to grow ✓ Focus shift to high margin growth opportunities ✓ Well positioned in attractive, project-rich geographies ✓ Segments growing at 1.5 – 4x GDP DIVERSIFIED POR
Slide 17: Questions and Answers
Questions and Answers Questions? #85 in Top 400 Contractors #17 in Top 50 Domestic Heavy Contractor #17 in Top 20 by Sector #90 in Top 100 by New Contracts Sterling Construction Company, Inc. | Investor Relations | 17
Slide 18: Contact Us
Contact Us Company Representative Investor Relations Advisors Sterling Construction Company, Inc. The Equity Group Inc. Jennifer Maxwell Fred Buonocore, CFA Director of Investor Relations Senior Vice President 281-951-3560 212-836-9607 Jennifer.Maxwell@strlco.com fbuonocore@equityny.com Kevin Towle
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