Slide 1: Company Update
Company Update Sterling Construction September 2016 Company, Inc.
Slide 2: Disclosure Regarding Forward-Looking Statements
ee 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.
Slide 3: Overview
SS OVERVIEW ¢ Turnaround Update ¢ Overall Market Dynamics ° Sterling Strategy Going Forward STERLING CONSTRUCTION COMPANY, INC. - COMPANY UPDATE 3
Slide 4: Turnaround Update
SS TURNAROUND UPDATE New leadership team in place + Paul Varello — CEO * Ron Ballschmeide - CFO * Con Wadsworth - COO * Joe Cutillo - EVP/BD . Other key leaders Major losses now fully accounted for and behind us * Qlloss + Positive earnings in Q2, Q3, Q4 and 2017 . All 5 subsidiaries now operating p
Slide 5: Progress Towards Profitability
PROGRESS TOWARDS PROFITABILITY room -Margitvin Backlog by Year > Disciplined bidding approach results in 8.0% greater win ratio and higher margins 6.0% 4.0% 2.0% ao 0.0% 2014 2015 Q2'2016 Gain/(Erosion) in Margin by Year") > Better project execution improves final 1.0% margin outcome -2.0% 5.0% 8.0%
Slide 6: Overall Market Dynamics
SS OVERALL MARKET DYNAMICS ° FAST Act * $305 billion over 5 years * 50-50 matching funds * Infrastructure Spending Patterns * Population growth biggest driver of infrastructure spending * Roads, bridges, highways * Water supply, storm water control, water treatment * Airports, rail and other related
Slide 7: Population growth, insufficient infrastructure and greater funding driving increased project activity
Population growth, insufficient infrastructure and greater funding driving increased project activity Texas +43% California +31% Utah +34% STERLING CONSTRUCTION COMPANY, INC. - COMPANY UPDATE
Slide 8: Favorable Funding Environment
FAVORABLE FUNDING ENVIRONMENT POSITIVE TRENDS IN STATE AND LOCAL INITIATVES FOR TRANSORTATION INFRASTRUCTURE > Proposition 7 provides TxDOT an extra $2.5 billion per year > Proposition 1 provides an extra $1.5 to $2 billion per year in $305 B 2016-2017 over next five years > Governor has proposed 10
Slide 9: Total Market Size
TOTAL MARKET SIZE FUNDING SOURCE ESTIMATES Federal Projects & ‘matching funds to others, Frederal Matching funds Stat@ Matching nds ~~ Other Sources) State Projects & matching) funds to others STERLING CONSTRUCTION COMPANY, INC. - COMPANY UPDATE 9
Slide 10: Strategy Going Forward
STRATEGY GOING FORWARD Near Term (next 12 to 18 months) Optimize business portfolio Create greater synergies between business units Balance risk/reward by business line Further optimize G&A Continue to strengthen Balance Sheet Reduce Debt Refinance Build cash Pro-actively grow strongest and most pro
Slide 11: Unique Capabilities
Se UNIQUE CAPABILITIES “ABC” (ACCELERATED BRIDGE CONSTRUCTION) > 3 million pound bridge on Self Propelled Modular Transporter (SPMT) moved 1 mile to final location > Installed in 24 hours with minimal traffic delays > Sterling subsidiaries have built 50+ ABC projects across several states STERLING C
Slide 12: Strategy Going Forward
a STRATEGY GOING FORWARD Longer Term (3 to 5 years) ¢ Revenue and Net Income Targets + $1 billion of Revenue in 3 years + $1/share Net Income in 3 years ¢ Expand into adjacent markets and capabilities + Target 50% of Revenue from non-public sector + Expandable capabilities across all geographic mark
Slide 13: Questions & Answers
Questions & Answers STERLING CONSTRUCTION COMPANY, INC. - COMPANY UPDATE 13