Sterling Infrastructure, Inc. · NASDAQ:STRL
Sterling Infrastructure — D. A. Davidson's 23rd Annual Diversified Industrials & Services Conference (September 2024)
26 slides from Sterling Infrastructure's conference presentation, Sep 19, 2024
Slide 1: D. A. Davidson's 23rd Annual Diversified Industrials & Services Conference
D. A. Davidson's 23rd Annual Diversified Industrials & Services Conference September 19, 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 Leading Provider of Infrastructure Services in the U.S. NASDAQ: Building STRL 2023 2023 EBITDA 2Q24 net cash Solutions 20% Revenue: Margin: $211 million E-Infrastructure Market Cap: $1.97 billion 13.1% Solutions 48% Strong, balance sheet, $3.9 billion Cash Flow Transportation 8-
Slide 4: Transformation Built the Foundation for Success
Transformation Built the Foundation for Success 2015 – 2019: Strategic Transformation 2020 +: Leveraging the Platform 2,500 12% 10.4% 9.0% 10% 2,000 7.6% Revenue CAGR 7.5% 8% 2019-2023: +21% 1,500 6% Operating margin %* Revenue ($ millions)* 1,000 4.0% 3.4% 4% 2.2% 500 2% 0 0% (2.0)% (2)% -500 (4.9)
Slide 5: Transformation Built the Foundation for Success
Transformation Built the Foundation for Success 2015 – 2019: Strategic Transformation 2020 +: Leveraging the Platform $5.00 $4.44 $4.00 EPS CAGR 2019-2023: +38% $3.16 $3.00 $2.11 $2.00 $1.53 Diluted EPS* $1.24 $1.00 $0.60 $0.10 $— $(1.00) $(0.66) $(2.00) $(2.40) $(3.00) 2015 2016 2017 2018 2019 2020
Slide 6: Backlog Trends
Backlog Trends Backlog and Unsigned Awards ($ millions)* $2,500 17% 16% $2,000 15% Backlog margin* $1,500 14% 13% $1,000 12% $500 11% $0 10% 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 Backlog Unsigned Awards Backlog margin *Backlog and Unsigned Awards from continuing operations Sterling
Slide 7: Strong Platform Serving Diverse End Markets
Strong Platform Serving Diverse End Markets Sterling is playing a critical role in building the data infrastructure that enables today's way of life, the manufacturing production coming back to the US, the highways, the bridges, and the airports that connect us and the homes we live in. Sterling Inf
Slide 8: 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 9: 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 10: Building Solutions
Building Solutions Improved bid discipline and reduced risk 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/ For
Slide 11: Financial Overview
Financial Overview Sterling Infrastructure, Inc. | STRL: IR Presentation 11
Slide 12: Second Quarter 2024 Results Highlights
Second Quarter 2024 Results Highlights +Revenues: $582.8 million +Net Income: $51.9 million +Diluted EPS: $1.67 +EBITDA(1): $87.0 million +Cash Flow from Operations(2): $170.6 million +Cash & Cash Equivalents(3): $540.0 million +Backlog(3): $2.10 billion with 16.0% margin +Combined Backlog(4): $2.45
Slide 13: Cash Flow
Cash Flow Strong cash flow profile provides flexibility and supports growth investments Operating Cash Flow Considerations: $500 $479 • In recent quarters, cash flow has benefited from the timing $400 of cash payments on large projects in E-Infrastructure and Transportation Solutions. $300 • Over th
Slide 14: Balance Sheet
Balance Sheet Significant firepower to support future growth Total Debt and Cash Positions (1) $600 Considerations: $540 • We expect to pursue strategic uses of our $500 liquidity, including acquisitions, investing $472 $452 in capital equipment and managing $433 $431 leverage. $400 $369 • Sterling
Slide 15: 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 16: Full Year 2024 Guidance
Full Year 2024 Guidance Revenue of $2.150 to $2.225 billion “We believe 2024 will be another excellent year for Sterling. Given our strong first half results and backlog Net Income of $175 to $180 million position, we are raising our full year guidance. The midpoint of our 2024 guidance would repres
Slide 17: Summary
Summary Sterling, A Leading Provider of Infrastructure Services in the U.S. Successful strategic Strong, Continued Strong foundation with multi-year, opportunity Robust balance historical stock strong, secular growth for margin sheet, FCF performance diversified drivers expansion platform Sterling I
Slide 18: Appendix
+ Appendix Sterling Infrastructure, Inc. | STRL: IR Presentation 18
Slide 19: 2024 Modeling Considerations
(1) 2024 Modeling Considerations Revenue $2,150 to $2,225 Gross Margin 18.5% to 19.0% G&A Expense as % of Revenue (Excluding ~5% Intangible Amortization) Intangible Amortization $17 Other Operating Expense Net $23 to $25 JV Non-Controlling Interest Expense ~$10 Effective Income Tax Rate ~25% Net Inc
Slide 20: 2024 Modeling Considerations Continued
2024 Modeling Considerations Continued* Non-Cash Items FY 2024 Expectations FY 2023 Depreciation $49 to $50 $42.2 Intangible Amortization $17 $15.2 Debt Issuance Cost Amortization $1 to $2 $1.7 Stock-based Compensation $18 to $20 $14.6 Deferred Taxes $6 to $8 $14.7 Other Cash Flow Items FY 2024 Expe
Slide 21: Quarterly Consolidated and Segment Results
Quarterly Consolidated and Segment Results ($ in millions) Q2 2024 Q2 2023 ($ in millions) Q2 2024 Q2 2023 Revenues $ 582.8 $ 522.3 E-Infrastructure Solutions Gross Profit 112.7 92.3 Revenue $ 241.3 $ 260.1 G&A Expense (27.9) (24.0) Operating Income $ 51.7 $ 43.2 Intangible Amortization (4.3) (3.7)
Slide 22: EBITDA Reconciliation
STERLING INFRASTRUCTURE, INC. & SUBSIDIARIES EBITDA RECONCILIATION (In thousands) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Net income attributable to Sterling common $ 51,879 $ 39,480 $ 82,927 $ 59,129 stockholders Depreciation and amortization 16,925 13,
Slide 23: 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 $ 175 $ 180 Depreciation and amortization 66 67 Interest expense, net of interest income 2 2 Income tax expen
Slide 24: STRL 3-Year Stock Price Performance
STRL 3-Year Stock Price Performance Source: FactSet Sterling Infrastructure, Inc. | STRL: IR Presentation 24
Slide 25: Sustainability
Sustainability Protecting Our Environment + Sound governance From strategy to operations, we are + Environmentally responsible construction services and committed to sustainability by solutions for today and tomorrow operating responsibly to safeguard and improve society’s quality of life. Taking Ca
Slide 26: 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 26