Slide 1: Sterling Q3 2021 Earnings Call
= STERLING OQ3 2021 Earnings Call INNOVATION IN INFRASTRUCTURE November 3, 2021 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 ek - from ti , \ ‘dered esti iti £1934. i bj number of ri lok ack H I shih ereeimalod ‘ fal doko aval ee relat ; ing COVID-19 pandemic; our busin i i i objectives, expectations, forecast: i i other than i In some 1-look “will” “could " “should, expect,” “plan,”
Slide 3: Why Sterling?
WHY STERLING? We build and service the infrastructure that enables our sconomy to run, our people to move >and our couniny to grow. DIVERSIFIED Diversified portfolio of service offerings and e et STRONG GROWTH cea for strong growth of higher- er-risk w es ‘growth oy resulting in 5- year Revenue CAGR
Slide 4: Who We Are
WHO WE ARE Sterling offers a customer-centric, market-focused portfolio of goods and services. d bili f strategy of solidifying the base, growing Cont and high- margin products and erpancina into adjacent m States, Nevada, California and tena os. the Rocky Mountain E-Infrastructure Solutions specia
Slide 5: Strategic Vision: Executing and Exceeding Peer Performance
r 2 . S ec d & Exe C uti Nn g Bottom Line Growth, Risk Reduction, Strategi IC Vi S On Exceed Peer Performance 2024-2026 Blended Margin Year strategy Detail Result 2015. |95% of business was Heavy Civil Continue Strategic Vision : eB. Executing ateg jargin Product: 2016 14. Focused on solidifying bas
Slide 6: We've Evolved and Are Growing Beyond Roads & Bridges
Sterling has the vision, insight and We've Evo | Wis. d B eyo N d growing roster of companies to meet the future demands of infrastructure head on Roads & Bridges _ Tomorrow's Solutions == E-Infrastructure + Building + Transportation Solutions Solutions Solutions INNOVATION IN INFRASTRUCTURE Today's
Slide 7: Strategy Focused
Strategy Focused We are levering the foundation we have built to take Sterling to a whole new level on Bottom Line By executing the strategy to meet the future demands of the changing infrastructure landscape, we will deliver an even stronger margin profile. © Customer-centri 2015 2016 2017 2018 201
Slide 8: Acquisitions are Aligned to our Strategic Vision
Acquisitions are Aligned to our Strategic Vision 3-Year Strategy: Solidify the Base, Grow High-Margin Products, Expansion into Adjacent Markets alw ways by tered ee specific Pa sratege financial and cultural higher-margin, lower-risk work, with increased emphasi e- infrastructure solutions, building
Slide 9: The Sterling Way
The Sterling Way At Sterling, we understand that what we do has an immediate and significant positive impact on improving human conditions. ¢ We build our businesses around | meeting the needs of the people we serve providing innovat and services for the betterment of our investors, customers, sonio
Slide 10: Third Quarter 2021 Results
Strong management and : effective execution of strategic Th | rd O Ua rte C ? O? 1 Res U Its focus delivered another solid quarter despite significant headwinds plaguing the market © Backlog: $1.41 billion with 12.3% margin at September 30, 2021 ¢ Combined Backlog: $1.53 billion with 12.1% margin at
Slide 11: Backlog Growth And Margin Improvement
Backlog Growth And Margin Improvement September 30, 2021 December 31, 2020 Book to Burn Amount Margin % Amount Margin% In Backlog $1,411 million 12.3% $1,175 million 12.0% 1.23X Combined Backlog $1,526 million 12.1% $1,532 million 11.8% 1.0X e Backlog reaches $1.41 billion, up 20% from the end of 20
Slide 12: Quarterly Consolidated and Segment Results
Quarterly Consolidated and Segment Results ($ in millions) Q3 2021 Q3 2020 ($ in millions) Q3 2021 Q3 2020 Revenues $ 463.4 $ 383.5 Heavy Civil Gross Profit 57.8 49.9 Revenue $ 249.9 $ 2011 G&A Expense (19.6) (15.2) Operating Income $ 7.2 $ 2.4 Intangible Amortization (2.9) (2.9) . . 5 5 Acquisition
Slide 13: Increased EBITDA and Cash Flow Drives Liquidity Strategy
Increased EBITDA and Cash Flow Drives Liquidity Strategy Pro Forma Q3 2019 9/30/2021 12/31/2021 We expect to pursue strategic uses of our liquidity, such as, i ing ii | equip d manag leverage. inves Capital allocation focus * Long-term shareholder value ing ne / EBITDA coverage projected to be appro
Slide 14: Contact Us
Contact Us Sterlin Ron Ballschmiede, Chief Financial Officer Mary Morley, Investor Relations Sterling Construction Company, Inc. Tel: (281) 214-0777 The Equity Group Inc. Jeremy Hellman Tel: (212) 836-9626 jhellman@equityny.com
Slide 15: Appendix
Appendix
Slide 16: Strategy Driving Profitable Growth
Strategy Driving Profitable Growth Revenue (M Cumulative Growth: Gross Profit vs. Revenue 2016 2017 2018 2019 2020 2021 Gross Profit Growth —=—=Revenue EBITDA (M)
Slide 17: 2021 Modeling Considerations
2021 Modeling Considerations* Revenue $1,510 to $1,520 Gross Margin ~13.5% G&A Expense as % of Revenue 4.8% Three Year Revenue Growth Other Operating Expense Net $13 to $15 Expectations: JV Non-Controlling Interest Expense $2 to $3 Heavy Civil 3% to 5% Effective Income Tax Rate 27.5% to 28% Specialt
Slide 18: 2021 Modeling Considerations Continued
2021 Modeling Considerations Continued* NON-CASH ITEMS FY 2021 Expectations FY 2020 Depreciation $21 to $23 $21.3 Intangible Amortization $11 to $12 $11.4 Debt Issuance Cost Amortization $2 to $3 $3.2 Stock-based Compensation $7 to $9 $11.6 Income Tax Expense (Federal) 25% of Pretax Income $19.3 OTH
Slide 19: EBITDA Reconciliation
EBITDA Reconciliation Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Net income attributable to Sterlin connmon stockholders g $ 21,126 $ 15,157 $ 51,737 $ 36,482 Dey iation and izati 8,629 8,098 25,336 24,639 Interest expense, net of interest income 3,906 7,154