Sterling Infrastructure, Inc. · NASDAQ:STRL
Sterling Infrastructure — William Blair 44th Annual Growth Stock Conference (June 2024)
23 slides from Sterling Infrastructure's conference presentation, Jun 5, 2024
Slide 1: William Blair 44th Annual Growth Stock Conference
William Blair 44th Annual Growth Stock Conference June 5, 2024 We build and service the infrastructure that enables our economy to run, our people to move, and our country to grow.
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: Sterling at a Glance
Sterling at a Glance NASDAQ: STRL Market Cap: $3.8 B (5/31/24) 1Q24 net 2023 cash $4.66 Revenue: per share $1.97 billion Strong, balance Leading 8-year revenue sheet, Cash flow Provider of CAGR of 20% Infrastructure Services in the U.S. 2023 Revenue by Segment Building Solutions 2023 EBITDA XXX 20%
Slide 4: Transformation Built the Foundation for Success
Transformation Built the Foundation for Success 2500 2015 – 2019: Strategic Transformation 2020 +: Leveraging the Platform 10.4% 11.0% 2000 Revenue CAGR Operating margin % 9.0% Revenue ($ millions) 9.0% 1500 7.5% 7.6% 2019-2023: +21% 7.0% 1000 4.0% 3.4% 5.0% 3.0% 500 2.2% 1.0% 0 2015 2016 2017 2018
Slide 5: Backlog Trends Support Continued Margin Expansion
Backlog (1,2) Trends Support Continued Margin Expansion Ending Total Backlog Ending Combined Backlog 2,500 16.0 % 2,500 16.0 % 15.0 % 15.0 % Combined Backlog ($ millions), blue 2,000 2,000 Combined Backlog margin, green Backlog ($ millions), blue 14.0 % 14.0 % Backlog margin, green 1,500 1,500 13.0
Slide 6: E-Infrastructure Solutions
E-Infrastructure Solutions Largest, highest-margin segment What We Do: Leading provider of large-scale specialty site infrastructure improvement contracting services, including site selection and preparation, in the Southeastern, Northeastern and Mid-Atlantic U.S. 2023 Financial Metrics Markets + Re
Slide 7: Transportation Solutions
Transportation Solutions Improved bid discipline and reduced risk What We Do: Infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, light rail and storm drainage systems in the Rocky Mountain states and Texas. 2023 Financial Metrics Markets + Revenue: $631 million
Slide 8: Building Solutions
Building Solutions Low Risk, Low CAPEX, Fast cash cycles What We Do: Residential and Commercial concrete slabs in the Dallas/ Fort Worth, Houston, and Phoenix markets. Plumbing capabilities (rough in, top outs, fixtures in DFW) 2023 Financial Metrics Markets + Revenue: $404 million + Dallas/ Fort Wo
Slide 9: Financial Overview
Financial Overview Sterling Infrastructure, Inc. | STRL: IR Presentation 9
Slide 10: Cash Flow
Cash Flow Strong cash flow profile provides flexibility and supports growth investments Operating Cash Flow Considerations: $600 • In recent quarters, cash flow has benefited from the timing of cash $500 $479 payments on large projects in E- Infrastructure and Transportation $400 Solutions. (in mill
Slide 11: Balance Sheet
Balance Sheet Significant firepower to support future growth Total Debt and Cash Positions(1) Considerations: $600 • We expect to pursue strategic uses of our liquidity, including acquisitions, investing $500 $472 $480 in capital equipment and managing $452 $433 $431 leverage. $400 $369 • Sterling i
Slide 12: Capital Allocation Priorities
Capital Allocation Priorities Support organic growth in existing and new markets + Capital expenditures support multi-year growth, weighted toward E- Infrastructure Solutions Strategic M&A – “Bolt on” and/ or 4th Leg Opportunities + “Bolt-ons”: Continue to evaluate small-to-mid sized acquisition opp
Slide 13: Full Year 2024 Guidance
Full Year 2024 Guidance Revenue of $2.125 to $2.215 billion “We believe we are tracking toward the high end of our guidance, which would represent 12% revenue growth, 23% net Net Income of $160 to $170 million income growth and 16% EBITDA growth” - Joe Cutillo, STRL 1Q24 Conference Call EPS of $5.00
Slide 14: Summary
Summary Successful strategic transformation Strong, multi-year, secular growth drivers Continued opportunity for margin expansion Robust balance sheet, FCF Strong historical stock performance Sterling Infrastructure, Inc. | STRL: IR Presentation 14
Slide 15: Appendix
+ Appendix Sterling Infrastructure, Inc. | STRL: IR Presentation 15
Slide 16: 2024 Modeling Considerations
2024 Modeling Considerations(1) Revenue $2,125 to $2,215 Gross Margin ~17.5% G&A Expense as % of Revenue (Excluding ~5% Intangible Amortization) Intangible Amortization $17 Other Operating Expense Net $17 to $19 JV Non-Controlling Interest Expense ~$10 Effective Income Tax Rate ~25% Net Income $160
Slide 17: 2024 Modeling Considerations Continued
2024 Modeling Considerations Continued* Non-Cash Items FY 2024 Expectations FY 2023 Depreciation $48 to $49 $42.2 Intangible Amortization $17 $15.2 Debt Issuance Cost Amortization $1 to $2 $2.0 Stock-based Compensation $14 to $16 $12.6 Deferred Taxes $15 to $17 $14.7 Other Cash Flow Items FY 2024 Ex
Slide 18: Quarterly Consolidated and Segment Results
Quarterly Consolidated and Segment Results ($ in millions) Q1 2024 Q1 2023 ($ in millions) Q1 2024 Q1 2023 Revenues $ 440.4 $ 403.6 E-Infrastructure Solutions Gross Profit 76.9 61.7 Revenue $ 184.5 $ 205.8 G&A Expense (27.3) (23.3) Operating Income $ 27.2 $ 24.3 Intangible Amortization (4.3) (3.7) O
Slide 19: EBITDA Reconciliation
STERLING INFRASTRUCTURE, INC. & SUBSIDIARIES EBITDA RECONCILIATION (In thousands) (Unaudited) Three Months Ended March 31, 2024 2023 Net income attributable to Sterling common $ 31,048 $ 19,649 stockholders Depreciation and amortization 16,258 13,692 Interest expense, net of interest income 762 5,55
Slide 20: EBITDA Guidance Reconciliation
STERLING INFRASTRUCTURE, INC. & SUBSIDIARIES EBITDA GUIDANCE RECONCILIATION (In millions) (Unaudited) Full Year 2024 Guidance Low High Net income attributable to Sterling common stockholders $ 160 $ 170 Depreciation and amortization 65 66 Interest expense, net of interest income 3 4 Income tax expen
Slide 21: STRL 3-Year Stock Price Performance
STRL 3-Year Stock Price Performance Closing Price 28-May-2021 to 28-May-2024 (Daily) Price (Local Currency) 160 Sterling Infrastructure, Inc. 140 120 100 80 60 40 20 0 7/21 10/21 1/22 4/22 7/22 10/22 1/23 4/23 7/23 10/23 1/24 4/24 Source: FactSet Prices Source: FactSet Sterling Infrastructure, Inc.
Slide 22: Sustainability
Sustainability Protecting Our Environment + Sound governance From strategy to operations, we are + Environmentally responsible construction services and committed to sustainability by operating responsibly to safeguard and improve solutions for today and tomorrow society’s quality of life. Taking Ca
Slide 23: Contact Us
Contact Us Sterling Infrastructure, Inc. Noelle Dilts, VP IR and Corporate Strategy Tel: (281) 214-0795 Cell (720) 270-6361 noelle.dilts@strlco.com Sterling Infrastructure, Inc. | STRL: IR Presentation 23
Sterling Infrastructure — William Blair 44th Annual Growth Stock Conference (June 2024) on 6ix