Sterling Infrastructure, Inc. · NASDAQ:STRL
Sterling Infrastructure — Sterling Construction — Q2 2020 Earnings Presentation
22 slides from Sterling Infrastructure's earnings presentation, Aug 4, 2020
Slide 1: Q2'20 Earnings Call
Sterling Construction Company, Inc. Q2'20 Earnings Call August 4, 2020
Slide 2: Disclosure: Forward-Looking Statements
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 forw
Slide 3: Second Quarter 2020 Highlights
Second Quarter 2020 Highlights e All of our businesses deemed “Essential Critical Infrastructure”. ¢Minimal impact from COVID-19 in Q2'20 across all three of our business segments. ¢ Our Strategy continues to produce results and reduce risk. ¢ We continue to serve all our customers. ¢ Record EBITDA
Slide 4: Second Quarter 2020 Results
Second Quarter 2020 Results ¢ Revenues increased to $400.0 million from $264.1 million in Q2'19, primarily attributable to the inclusion of three months of revenue from Plateau operations. ¢ Gross margin increased 524 basis points to 14.9% from 9.7% in Q2'19. ¢ EBITDA was $41.2 million in Q2'20, a 1
Slide 5: Backlog Growth And Margin Improvement
Backlog Growth And Margin Improvement June 30, 2020 December 31, 2019 Book to Burn Amount Margin % Amount Margin% In 2020 Backlog $1,134 million 12.9% $1,068 million 11.5% 1.11X Combined Backlog $1,571 million 11.7% $1,342 million 11.0% 1.37X ¢ Backlog reaches $1.13 billion, up 6% from the end of 20
Slide 6: Consolidated Results
Consolidated Results ($MM) Q2 2020 Q1 2020 Q2 2019 Revenues $400.0 $296.7 $264.1 e Overall variations from 2019 were driven by the October 2, 2019 Gia Prone 59.6 35.2 255 acquisition of Plateau and the related acquisition refinancing and . " " changes in the tax NOL accounting in Q4 2019. Gross Marg
Slide 7: Segment Results
Segment Results ($MM) Revenue Heavy Civil Specialty Services Residential Total Revenue Operating Income Heavy Civil Specialty Services Residential Subtotal Acquisition related costs Total Operating Income Q2 2020 $220.4 $135.7 $43.9 “$400.0, % of Revenue 55% 34% 11% 1.8% 17.1% 13.8% 8.3% 8.3% $200.2
Slide 8: Increased EBITDA and Cash Flow Drives De-levering Strategy
Increased EBITDA and Cash Flow Drives De-levering Strategy October 2019 Five Year Credit Facility (the "Facility") Forward Looking EBITDA Debt Coverage Ratio ¢ $400M Term Loan Facility 4 35x ¢ —$75M Revolving Credit Facility 35 3.2K 7 e — Facility proceeds of $400M to acquire Plateau on October 2, 2
Slide 9: Forward Looking Business Fundamentals Remain Strong
Forward Looking Business Fundamentals Remain Strong e Record Combined Backlog and margin in Backlog at quarter end, despite COVID related headwinds. ¢ Solid liquidity position that continues to strengthen throughout the remainder of the year with continued strong EBITDA and cash flow generation. e A
Slide 10: Reinstating 2020 Guidance
Reinstating 2020 Guidance e We now expect FY 2020 revenues of between $1.415 billion and $1.430 billion. ° This 26% projected revenue growth is a result of our year-to-date performance, the anticipated contribution from Plateau, and our record high Combined Backlog, along with our view on current bo
Slide 11: Contact Us
Contact Us Company Representative Sterling Construction Company, Inc. Investor Relations Advisors The Equity Group Inc. Ron Ballschmiede Chief Financial Officer 281-214-0777 11 Fred Buonocore, CFA Senior Vice President 212-836-9607 fbuonocore@equityny.com Mike Gaudreau Associate 212-836-9620 mg@equi
Slide 12: Appendix
Appendix Sterling 12 Construction Company, Inc.
Slide 13: Strategy Driving Profitable Growth
Strategy Driving Profitable Growth Revenue $1,600 $1,400 $1,200 9% $1,000 cased $800 $600 $400 $200 $0 2015 2016 2017 2018 2019 2020E Record Combined Backlog with Improving Margins $1,700 13% $1,500 10.4% $1,300 caer — $1,100 9% $900 a) $700 $500 5% 2015 2016 2017 2018 2019 6/30/2020 mmm Combined Ba
Slide 14: Modeling Considerations
Modeling Considerations* Revenue Gross Margin G&A Expense as % of Revenue Other Expense Net JV Non-Controlling Interest Expense Adjusted Net Income** Adjusted Diluted EPS** Expected Dilutive Shares Outstanding *Dollars in millions except for dilutive EPS **Excludes $1-$2 million of non-recurring acq
Slide 15: Modeling Considerations (Continued)
Modeling Considerations* (Continued) Depreciation and Amortization $34 - $36 CAPEX (net of disposals) $25 - $30 Adjusted EBITDA $140 $130.0 Adjusted EBITDA** $125-$135 $120 Effective Income Tax Rate*** 28% $100 $80 Three Year Revenue Growth Expectations: ; $62.0 60 Heavy Civil — Hard Bid 2%-3% Sa He
Slide 16: Modeling Considerations - Cash Flow
Modeling Considerations - Cash Flow (SMM) NON-CASH ITEMS Q2 2020 YTD Q2 2019 YTD Depreciation $10.8 $7.3 $23 to $24 $15.9 Intangible Amortization $5.7 $1.2 $11 to $12 $4.8 Debt Issuance Cost Amortization $1.8 $1.6 $3-$4 $3.4 Stock-based Compensation $6.2 $1.7 $10 to $12 $3.8 Federal Income Taxes $6.
Slide 17: Sterling Construction Company, Inc. & Subsidiaries
STERLING CONSTRUCTION COMPANY, INC. & SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Reconciliation of Non-GAAP Supplemental Adjusted Financial Data du thousands, except per share data) (Unaudited) The Company reports its financial results in accordance with GAAP. This press release al
Slide 18: Sterling Construction Company, Inc. & Subsidiaries
STERLING CONSTRUCTION COMPANY, INC. & SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Reconciliation of Non-GAAP Supplemental Adjusted Financial Data® n thousands, except per share data) (Unaudited) The Company reports its financial results in accordance with GAAP. This press release al
Slide 19: Sterling Construction Company, Inc. & Subsidiaries
STERLING CONSTRUCTION COMPANY, INC. & SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Reconciliation of Non-GAAP Supplemental Adjusted Financial Data” (In thousands, except per share data) The Company reports its financial results in accordance with GAAP. This press release also include
Slide 20: Sterling Construction Company, Inc. & Subsidiaries
STERLING CONSTRUCTION COMPANY, INC. & SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Reconciliation of Non-GAAP Supplemental Adjusted Financial Data® (in thousands, except per share data) (Unaudited) The Company reports its financial results in accordance with GAAP. This press release
Slide 21: Sterling Construction Company, Inc. & Subsidiaries
STERLING CONSTRUCTION COMPANY, INC. & SUBSIDIARIES (CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Reconciliation of Non-GAAP Supplemental Adjusted Financial Data” (in thousands, except per share data) (Unaudited) The Company reports its financial results in accordance with GAAP. This press release
Slide 22: EBITDA Reconciliation
STERLING CONSTRUCTION COMPANY, INC. & SUBSIDIARIES EBITDA Reconciliation in thousands) (Unaudited) Three Months Ended June 30, _Six Months Ended June 30, 2020 2019 2020 2019 Net income attributable to Sterling common stockholders S$ 18.210 $ 7828 $ 21,325 $ 9.643 Depreciation and amortization 8.256
Sterling Construction — Q2 2020 Earnings Presentation on 6ix