Sterling Infrastructure, Inc. · NASDAQ:STRL
Sterling Infrastructure — Sterling Construction — Q4 2020 Earnings Presentation
19 slides from Sterling Infrastructure's earnings presentation, Mar 2, 2021
Slide 1: Q4 2020 Earnings Call
Sterling Construction Company, Inc. Q4 2020 Earnings Call March 3, 2021
Slide 2: Disclosure: Forward-Looking Statements
Disclosure: Forward-Looking Statements ji i inti f whi control, whi y i i including the distribution, ifetiveness and acceptance of vaccines, and the potential ongoing or further negative impact of the COVID-19 pandemic on the glol my and financial markets; our business strategy; our financial strat
Slide 3: 2020 Highlights
2020 Highlights e Revenue from Plateau grew over 25% compared to pro forma 2019. e Residential slabs poured are up 14% over 2019, with 13% of the 2020 slabs coming from our expansion into Houston. e 79% of revenue came from work outside of low-bid heavy highway. ¢ Operating income and EBITDA are mor
Slide 4: Fourth Quarter and Full Year 2020 Results
Fourth Quarter and Full Year 2020 Results e Revenues increased 0.2% or $0.7 million from Q4 2019 and increased 27% or $301.1 million from full year 2019. e¢ Gross margin was 13.4% for both the fourth quarter and full year 2020, which was a 373 basis point increase from Q4 2019 and a 384 basis point
Slide 5: 2021 Guidance
2021 Guidance e We expect FY 2021 revenues of between $1.46 billion and $1.49 billion. e We expect a FY 2021 net income range of $52 million to $55 million. e We expect a FY 2021 EBITDA range of $134 million to $144 million. e Expected diluted EPS range of $1.78 to $1.88, based on an expected 29.2 m
Slide 6: Backlog Growth And Margin Improvement
Backlog Growth And Margin Improvement December 31, 2020 December 31, 2019 Book to Burn Amount Margin % Amount Margin% In 2020 Backlog $1,175 million 12.0% $1,068 million 11.5% 1.09X Combined Backlog $1,532 million 11.8% $1,342 million 11.0% 1.15X ¢ Backlog reaches $1.18 billion, up 10% from the end
Slide 7: Consolidated and Segment Results
Consolidated and Segment Results ($MM) Q42020 942019 Revenues $347.2 $346.5 Gross Margin 13.4% 9.7% Operating Income $20.9 $9.7 Adjusted Net Income to STRL ") $5.8 $6.3 Adjusted Diluted Eps” $0.20 $0.22 Adjusted EBITDA $28.9 $20.2 ($MM) FY 2020 FY 2019 Revenues $1,427.4 $1,126.3 Gross Margin 13.4% 9
Slide 8: Increased EBITDA and Cash Flow Drives De-levering Strategy
Increased EBITDA and Cash Flow Drives De-levering Strategy | ki Debt Coverage Ratio Five Year ¢ $400M Term Loan Facility 35 ° $75M Revolving Credit Facility i I le , 2019. . Fact structured to reduce total funded debt EBITDA coverage 27% 25X 25 . No penalty for ility prepay - 2 Key cash flow Conside
Slide 9: Forward Looking Business Fundamentals Remain Strong
Forward Looking Business Fundamentals Remain Strong ¢ Our Strategy continues to drive increased margins, reduce risk and diversify our end markets. e Elevated Combined Backlog and margin in Backlog at year end. e 2021 revenue mid-point guidance of $1.475 billion. e 2021 net income mid-point guidance
Slide 10: Contact Us
Contact Us Investor Relations Advisors Company Representative The Equity Group Inc. Sterling Construction Company, Inc. Ron Ballschmiede Fred Buonocore, CFA Chief Financial Officer Senior Vice President 281-214-0777 212-836-9607 fbuonocore@equityny.com Mike Gaudreau Associate 212-836-9620 mg@equityn
Slide 11: Appendix
Appendix
Slide 12: Strategy Driving Profitable Growth
Strategy Driving Profitable Growth Revenue (M) $1,600 400% $1,400 350% $1,200 300% $1,000 250% $800 a 150% $600 100% $400 50% $200 0% $0 2016 2017 2018 2019 2020 2021E 2016 2017 2018 2019 2020 2021E ——Gross Profit Growth ——=-Revenue Growth Record Combined Backlog with Improving Margins Adjusted EBIT
Slide 13: Modeling Considerations
Modeling Considerations* Gross Margin 13% to 14% Other Operating Expense Net $12 to $14 Specialty Services 5%-7% Effective Income Tax Rate 30% Diluted EPS $1.78 to $1.88 EBITDA $134 to $144 *In millions except for diluted EPS Sterling 13 Construction Company, Inc.
Slide 14: Modeling Considerations (Continued)
Modeling Considerations (Continued) (sum) NON-CASH ITEMS FY 2021 Expectations FY 2020 Depreciation $20 to $21 $21.3 Intangible Amortization $11 to $12 $11.4 $3 to $4 $3.2 Stock-based Compensation $7 to $9 $11.6 Income Tax Expense (Federal) 24% of Pretax Income $19.3 OTHER ITEMS FY 2021 Expectations
Slide 15: Sterling Construction Company, Inc. & Subsidiaries
STERLING CONSTRUCTION COMPANY, INC. & SUBSIDIARIES cose aes ATE MENTS OF OPERATIONS ciliation Supplemental Adjusted Financial Data” xcept per ta) ny reports its financial results in accordance with GAAP. This The, following ta Company GAAP nancial mensues ay dened under the SEC's Regulation, G. GAAP
Slide 16: Sterling Construction Company, Inc. & Subsidiaries
STERLING CONSTRUCTION COMPANY, INC. & SUBSIDIARIES soso rare TS i OPERATIONS liation of Non-GA. Eeppementst \justed Financial Data‘ (in thousands, hare da) ‘ompany reports its financial results in accordance with release also includes several Non- GAAP Tana! mesures te defined under the SECs Regulat
Slide 17: Sterling Construction Company, Inc. & Subsidiaries
STERLING CONSTRUCTION COMPANY, INC. & SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS, Reconciliation of Non-GAAP usted Financial Data” thousands, except per share data) (Unaudited) Company reports its m accordance wit lease also includes several Non- Ghar financial measures vretjelined under the
Slide 18: Sterling Construction Company, Inc. & Subsidiaries
STERLING CONSTRUCTION COMPANY, INC. & SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS n of Non-GAAP Supplemental Adjusted Financial Data” (in thousands, except per share data) (Unaudited) The Company reports its financial results, in accordance with GAAP. includes several Non- GAAP financial meas
Slide 19: EBITDA Reconciliation
STERLING CONSTRUCTION COMPANY, INC. & SUBSIDIARIES EBITDA Reconciliation (In thousands) (Unaudited) ‘Twelve Months Ended December 31, 2020 2019 i il i $ S$ 42,306 $ 39,901 Depreciation and amortization 32,785 20,740 Interest expense, net of interest income 29,216 15,544 Income tax expense (benefit)
Sterling Construction — Q4 2020 Earnings Presentation on 6ix