FALSE000087423800008742382023-08-072023-08-07

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 7, 2023

Sterling Infra Inc Logo_4C.jpg
STERLING INFRASTRUCTURE, INC. 
(Exact name of registrant as specified in its charter)
Delaware001-3199325-1655321
(State or other jurisdiction of incorporation
or organization)		(Commission File Number)(I.R.S. Employer
Identification No.)
  
1800 Hughes Landing Blvd.
The Woodlands, Texas
 
77380
(Address of principal executive offices)(Zip Code)
  
Registrant’s telephone number, including area code:  (281) 214-0777
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, $0.01 par value per shareSTRLThe NASDAQ Stock Market LLC
(Title of Class)(Trading Symbol)(Name of each exchange on which registered)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR § 240.12b-2 of this chapter).
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐



Item 2.02
Results of Operations and Financial Condition.
On August 7, 2023, Sterling Infrastructure, Inc. (the “Company”) issued a press release announcing financial results for the three and six months ended June 30, 2023 and an update to the full year 2023 guidance. The copy of the press release is being furnished with this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
 
The information provided in this Item 2.02 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, unless the registrant specifically states that the information is to be considered “filed” under the Exchange Act, nor shall it be incorporated by reference in any filing made by the Company pursuant to the Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”), other than to the extent that such filing incorporates by reference any or all of such information by express reference thereto.
Item 7.01Regulation FD Disclosure.
On August 8, 2023, the Company will host a conference call to discuss the second quarter results as well as corporate developments. The slides to be used during the conference call are being furnished with this Current Report on Form 8-K as Exhibit 99.2 and are incorporated herein by reference.

The information provided in this Item 7.01 shall not be deemed to be “filed” for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, unless the registrant specifically states that the information is to be considered “filed” under the Exchange Act, nor shall it be incorporated by reference in any filing made by the Company pursuant to the Exchange Act or the Securities Act, other than to the extent that such filing incorporates by reference any or all of such information by express reference thereto.

Item 9.01     Financial Statements and Exhibits.

(d)    Exhibits
Exhibit Number Description
99.1
99.2
104Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 STERLING INFRASTRUCTURE, INC.
   
Date:August 7, 2023By:/s/ Ronald A. Ballschmiede
  Ronald A. Ballschmiede
  Chief Financial Officer





Exhibit 99.1

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NEWS RELEASE
For Immediate Release:
August 7, 2023
Sterling Reports Second Quarter 2023 Record Results
Increases 2023 Full Year Guidance
THE WOODLANDS, TX – August 7, 2023 – Sterling Infrastructure, Inc. (NasdaqGS: STRL) (“Sterling” or the “Company”) today announced financial results for the second quarter 2023.
The financial information herein is from continuing operations and comparisons are to the prior year quarter, unless otherwise noted.
Second Quarter 2023 Results
•Revenues of $522.3 million, an increase of 13.1%
•Gross margin of 17.7%, an increase from 15.4%
•Net Income of $39.5 million, or $1.27 per diluted share, an increase of 40% and 37%, respectively
•EBITDA(1) of $73.5 million, an increase of 29%
•Cash flows from operations totaled $181.1 million for the six months ended June 30, 2023
•Cash and Cash Equivalents totaled $278.1 million at June 30, 2023
•Backlog at June 30, 2023 was $1.74 billion, an increase of 23% over December 31, 2022
•Combined backlog(2) at June 30, 2023 was $2.39 billion, an increase of 42% over December 31, 2022
CEO Remarks and Outlook
“Our outstanding results in the second quarter reflect a combination of strong customer demand and excellent execution by our teams. While we are very pleased with our 13% revenue growth in the quarter, it is the 230 basis points of gross margin expansion and nearly 30% growth in EBITDA that reflect our successful strategic shift toward higher-margin, lower-risk opportunities. In addition to our record earnings, our generation of cash flow from operations of $181 million year to date is fantastic,” stated Joe Cutillo, Sterling’s Chief Executive Officer.
“Each of our segments saw revenue growth and operating margin expansion in the second quarter. E-Infrastructure Solutions grew revenue by 11% and operating margins increased 250 basis points as we executed on large, multi-phase next-generation manufacturing and data center projects. Demand for E-Infrastructure Solutions remains strong, reflected in record bookings of $424 million in the quarter. Our Transportation Solutions segment grew revenue by 6% and increased operating margin by 130 basis points, reflecting solid demand trends across our key geographies and a continued mix shift toward higher margin work. Building Solutions revenue increased nearly 30%, driven by a record number of residential slabs poured in the quarter and higher levels of commercial work. Operating income for the segment increased 38%, driven by margin expansion across both residential and commercial,” continued Mr. Cutillo.
“Our relentless focus on strategic execution is driving earnings growth and cash generation, which in turn strengthens our ability to pursue new opportunities for profitable, long-term growth. Our strong second quarter results, record backlog and favorable opportunities across our markets give us confidence in our ability to deliver revenue and profitability growth for the year. In light of our results to date, we are increasing our full year guidance. The mid-point of our guidance ranges would offer an improvement in revenue by 13% and net income by 32% over 2022,” Mr. Cutillo concluded.
(1) The Company defines EBITDA as GAAP net income from Continuing Operations, adjusted for depreciation and amortization, net interest expense and taxes. The Company defines Adjusted EBITDA as EBITDA excluding acquisition related costs. See the “Non-GAAP Measures” and “EBITDA Reconciliation” sections below for more information.
(2) Combined Backlog includes Unsigned Awards of $657.2 million and $275.0 million at June 30, 2023 and December 31, 2022, respectively.

Full Year 2023 Guidance
•Revenue of $1.95 billion to $2.05 billion
•Net Income of $125 million to $131 million
•EPS of $4.00 to $4.20
•EBITDA(1) of $250 million to $260 million
Conference Call
Sterling’s management will hold a conference call to discuss these results and recent corporate developments on Tuesday, August 8, 2023 at 9:00 a.m. ET/8:00 a.m. CT. Interested parties may participate in the call by dialing (201) 493-6744 or (877) 445-9755. Please call in 10 minutes before the conference call is scheduled to begin and ask for the Sterling Infrastructure call. To coincide with the conference call, Sterling will post a slide presentation at www.strlco.com on the Events & Presentations section of the Investor Relations tab. Following management’s opening remarks, there will be a question and answer session.
To listen to a simultaneous webcast of the call, please go to the Company’s website at www.strlco.com at least 15 minutes early to download and install any necessary audio software. If you are unable to listen live, the conference call webcast will be archived on the Company’s website for 30 days.
About Sterling
Sterling operates through a variety of subsidiaries within three segments specializing in E-Infrastructure, Transportation and Building Solutions in the United States, primarily across the Southern, Northeastern, Mid-Atlantic and Rocky Mountain regions and Hawaii. E-Infrastructure Solutions provides advanced, large-scale site development services for manufacturing, data centers, e-commerce distribution centers, warehousing, energy and more. Transportation Solutions includes infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, rail and storm drainage systems. Building Solutions includes residential and commercial concrete foundations for single-family and multi-family homes, parking structures, elevated slabs and other concrete work. From strategy to operations, we are committed to sustainability by operating responsibly to safeguard and improve society’s quality of life. Caring for our people and our communities, our customers and our investors – that is The Sterling Way.
Joe Cutillo, CEO, “We build and service the infrastructure that enables our economy to run,
our people to move and our country to grow.”

(1) The Company defines EBITDA as GAAP net income attributable to Sterling’s common stockholders, adjusted for depreciation and amortization, net interest expense and taxes. See the “Non-GAAP Measures” and “EBITDA Reconciliation” sections below for more information.


Important Information for Investors and Stockholders
Non-GAAP Measures
This press release contains “Non-GAAP” financial measures as defined under Regulation G of the amended U.S. Securities Exchange Act of 1934. The Company reports financial results in accordance with U.S. generally accepted accounting principles (“GAAP”), but the Company believes that certain Non-GAAP financial measures provide useful supplemental information to investors regarding the underlying business trends and performance of the Company’s ongoing operations and are useful for period-over-period comparisons of those operations.
Non-GAAP measures may include adjusted net income, adjusted EPS, EBITDA and adjusted EBITDA, in each case excluding the impacts of certain identified items. The excluded items represent items that the Company does not consider to be representative of its normal operations. The Company believes that these measures are useful for investors to review, because they provide a consistent measure of the underlying financial results of the Company’s ongoing business and, in the Company’s view, allow for a supplemental comparison against historical results and expectations for future performance. Furthermore, the Company uses each of these to measure the performance of the Company’s operations for budgeting and forecasting, as well as employee incentive compensation. However, Non-GAAP measures should not be considered as substitutes for net income, EPS, or other data prepared and reported in accordance with GAAP and should be viewed in addition to the Company’s reported results prepared in accordance with GAAP.
Reconciliations of Non-GAAP financial measures to the most comparable GAAP measures are provided in the tables included within this press release.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains statements that are considered forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which may include statements about: our business strategy; our financial strategy; our industry outlook; our guidance; and our plans, objectives, expectations, forecasts, outlook and intentions. All of these types of statements, other than statements of historical fact included in this press release, are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “project,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “pursue,” “target,” “guidance,” “continue,” the negative of such terms or other comparable terminology. The forward-looking statements contained in this press release are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management’s assumptions about future events may prove to be inaccurate. Management cautions all readers that the forward-looking statements contained in this press release are not guarantees of future performance, and we cannot assure any reader that such statements will be realized or the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to factors listed in the “Risk Factors” section in our filings with the U.S. Securities and Exchange Commission and elsewhere in those filings. Additional factors or risks that we currently deem immaterial, that are not presently known to us or that arise in the future could also cause our actual results to differ materially from our expected results. Given these uncertainties, investors are cautioned that many of the assumptions upon which our forward-looking statements are based are likely to change after the date the forward-looking statements are made. The forward-looking statements speak only as of the date made, and we undertake no obligation to publicly update or revise any forward-looking statements for any reason, whether as a result of new information, future events or developments, changed circumstances, or otherwise, notwithstanding any changes in our assumptions, changes in business plans, actual experience or other changes. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.
Company Contact:
Sterling Infrastructure, Inc.
Noelle Dilts, VP IR and Corporate Strategy
281-214-0795
Investor Relations Contact:
The Equity Group Inc.
Jeremy Hellman, CFA 
212-836-9626



STERLING INFRASTRUCTURE, INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Continuing Operations:
Revenues$522,325 $461,827 $925,904 $827,789 
Cost of revenues(430,051)(390,819)(771,888)(701,632)
Gross profit92,274 71,008 154,016 126,157 
General and administrative expense(24,034)(20,844)(47,355)(41,141)
Intangible asset amortization(3,737)(3,514)(7,473)(7,082)
Acquisition related costs(59)(230)(249)(485)
Other operating expense, net(4,181)(2,431)(6,049)(4,097)
Operating income60,263 43,989 92,890 73,352 
Interest income2,203 28 4,177 36 
Interest expense(7,731)(4,477)(15,259)(9,127)
Income before income taxes54,735 39,540 81,808 64,261 
Income tax expense(14,505)(11,015)(21,538)(17,793)
Net income, including noncontrolling interests40,230 28,525 60,270 46,468 
Less: Net income attributable to noncontrolling interests(750)(411)(1,141)(682)
Net income from Continuing Operations$39,480 $28,114 $59,129 $45,786 
Discontinued Operations:
Pretax loss— (2,900)$— $(1,501)
Income tax benefit— 747 — 928 
Net loss from Discontinued Operations$— $(2,153)$— $(573)
Net income attributable to Sterling common stockholders$39,480 $25,961 $59,129 $45,213 
Net income per share from Continuing Operations:
Basic$1.28 $0.93 $1.93 $1.52 
Diluted$1.27 $0.93 $1.91 $1.52 
Net loss per share from Discontinued Operations:
Basic$— $(0.07)$— $(0.02)
Diluted$— $(0.07)$— $(0.02)
Net income per share attributable to Sterling common stockholders:
Basic$1.28 $0.86 $1.93 $1.50 
Diluted$1.27 $0.86 $1.91 $1.50 
Weighted average common shares outstanding:
Basic30,78030,22530,69930,094
Diluted31,00030,36230,88630,229



STERLING INFRASTRUCTURE, INC. & SUBSIDIARIES
SEGMENT INFORMATION
(In thousands)
(Unaudited)

Three Months Ended June 30,Six Months Ended June 30,
Revenues2023% of Revenue2022% of Revenue2023% of Revenue2022% of Revenue
E-Infrastructure Solutions$260,148 50%$233,548 51%$465,988 50%$402,475 49%
Transportation Solutions151,088 29%142,640 30%262,227 29%258,781 31%
Building Solutions111,089 21%85,639 19%197,689 21%166,533 20%
Total Revenues$522,325 $461,827 $925,904 $827,789 
Operating Income
E-Infrastructure Solutions$43,167 16.6%$32,824 14.1%$67,436 14.5%$54,109 13.4%
Transportation Solutions9,856 6.5%7,410 5.2%15,162 5.8%11,853 4.6%
Building Solutions13,480 12.1%9,751 11.4%22,181 11.2%19,109 11.5%
Segment Operating Income66,503 12.7%49,985 10.8%104,779 11.3%85,071 10.3%
Corporate General and Administrative Expense(6,181)(5,766)(11,640)(11,234)
Acquisition Related Costs(59)(230)(249)(485)
Total Operating Income$60,263 11.5%$43,989 9.5%$92,890 10.0%$73,352 8.9%


STERLING INFRASTRUCTURE, INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)

June 30,
2023		December 31,
2022
Assets
Current assets:
Cash and cash equivalents$278,121 $181,544 
Accounts receivable296,496 262,646 
Contract assets115,011 109,803 
Receivables from and equity in construction joint ventures11,407 14,122 
Other current assets 14,765 29,139 
Total current assets715,800 597,254 
Property and equipment, net228,461 215,482 
Operating lease right-of-use assets, net61,106 59,415 
Goodwill262,692 262,692 
Other intangibles, net291,650 299,123 
Other non-current assets, net7,649 7,654 
Total assets$1,567,358 $1,441,620 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$140,620 $121,887 
Contract liabilities335,877 239,297 
Current maturities of long-term debt 35,062 32,610 
Current portion of long-term lease obligations18,129 19,715 
Accrued compensation 25,335 24,136 
Other current liabilities12,742 8,966 
Total current liabilities567,765 446,611 
Long-term debt 329,284 398,735 
Long-term lease obligations43,087 40,103 
Members’ interest subject to mandatory redemption and undistributed earnings21,296 21,597 
Deferred tax liability, net58,449 51,659 
Other long-term liabilities5,563 5,116 
Total liabilities1,025,444 963,821 
Stockholders’ equity:
Common stock308 306 
Additional paid in capital291,757 287,914 
Retained earnings245,508 186,379 
Total Sterling stockholders’ equity537,573 474,599 
Noncontrolling interests4,341 3,200 
Total stockholders’ equity541,914 477,799 
Total liabilities and stockholders’ equity$1,567,358 $1,441,620 


STERLING INFRASTRUCTURE, INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

Six Months Ended June 30,
20232022
Cash flows from operating activities:
Net income$60,270 $45,895 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization27,672 25,412 
Amortization of debt issuance costs and non-cash interest877 1,102 
Gain on disposal of property and equipment(2,631)(716)
Gain on debt extinguishment, net— (2,428)
Deferred taxes6,790 14,505 
Stock-based compensation7,003 5,238 
Change in fair value of interest rate swap— (173)
Changes in operating assets and liabilities81,126 (46,861)
Net cash provided by operating activities181,107 41,974 
Cash flows from investing activities:
Acquisitions, net of cash acquired— (3,033)
Disposition proceeds14,000 — 
Capital expenditures(38,859)(28,945)
Proceeds from sale of property and equipment8,525 951 
Net cash used in investing activities(16,334)(31,027)
Cash flows from financing activities:
Repayments of debt(67,589)(11,770)
Withholding taxes paid on net share settlement of equity awards(4,328)(7,385)
Net cash used in financing activities(71,917)(19,155)
Net change in cash, cash equivalents, and restricted cash92,856 (8,208)
Cash, cash equivalents and restricted cash at beginning of period185,265 88,693 
Cash, cash equivalents and restricted cash at end of period278,121 80,485 
Less: restricted cash - Continuing Operations— (3,721)
Less: cash, cash equivalents and restricted cash - Discontinued Operations— (14,687)
Cash and cash equivalents at end of period - Continuing Operations$278,121 $62,077 


STERLING INFRASTRUCTURE, INC. & SUBSIDIARIES
EBITDA FROM CONTINUING OPERATIONS RECONCILIATION
(In thousands)
(Unaudited)
 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
Net income from Continuing Operations$39,480 $28,114 $59,129 $45,786 
Depreciation and amortization13,980 13,231 27,672 24,594 
Interest expense, net of interest income5,528 4,449 11,082 9,091 
Income tax expense14,505 11,015 21,538 17,793 
EBITDA from Continuing Operations (1)
73,493 56,809 119,421 97,264 
Acquisition related costs59 230 249 485 
Adjusted EBITDA from Continuing Operations (2)
$73,552 $57,039 $119,670 $97,749 
(1) The Company defines EBITDA as GAAP net income from Continuing Operations, adjusted for depreciation and amortization, net interest expense and taxes.
(2) The Company defines Adjusted EBITDA as EBITDA excluding the impact of acquisition related costs.


STERLING INFRASTRUCTURE, INC. & SUBSIDIARIES
EBITDA GUIDANCE RECONCILIATION
(In millions)
(Unaudited)
 Full Year 2023 Guidance
 LowHigh
Net income attributable to Sterling common stockholders$125 $131 
Depreciation and amortization56 57 
Interest expense, net of interest income22 23 
Income tax expense47 49 
EBITDA (1)
$250 $260 
(1) The Company defines EBITDA as GAAP net income attributable to Sterling common stockholders, adjusted for depreciation and amortization, net interest expense, and taxes.

We build and service the infrastructure that enables our economy to run, our people to move, and our country to grow. Q2 2023 Earnings Call August 8, 2023

 
2Sterling | STRL: Second Quarter 2023 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 forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which may include statements about: our business strategy; our financial strategy; our industry outlook; our guidance; our expected margin growth; and our plans, objectives, expectations, forecasts, outlook and intentions. All of these types of statements, other than statements of historical fact included in this presentation, are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “could,” “should,” “expect,” “plan,” “project,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “pursue,” “target,” "guidance," “continue,” the negative of such terms or other comparable terminology. The forward-looking statements contained in this presentation are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management’s assumptions about future events may prove to be inaccurate. Management cautions all readers that the forward-looking statements contained in this presentation are not guarantees of future performance, and we cannot assure any reader that such statements will be realized or the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to factors listed in the “Risk Factors” section in our filings with the U.S. Securities and Exchange Commission and elsewhere in those filings. Additional factors or risks that we currently deem immaterial, that are not presently known to us or that arise in the future could also cause our actual results to differ materially from our expected results. Given these uncertainties, investors are cautioned that many of the assumptions upon which our forward-looking statements are based are likely to change after the date the forward-looking statements are made. The forward- looking statements speak only as of the date made, and we undertake no obligation to publicly update or revise any forward-looking statements for any reason, whether as a result of new information, future events or developments, changed circumstances, or otherwise, notwithstanding any changes in our assumptions, changes in business plans, actual experience or other changes. These cautionary statements qualify all forward- looking statements attributable to us or persons acting on our behalf. This presentation may contain the financial measures: adjusted net income, EBITDA, adjusted EBITDA, and adjusted EPS, which are not calculated in accordance with U.S. GAAP. If presented, a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measure will be provided in the Appendix to this presentation.

 
E-Infrastructure Solutions + Fastest growing segment in revenue growth + Provides value-added solutions to blue-chip customers in all major East Coast markets + Develops advanced, large-scale site development services for manufacturing, data centers, e-commerce distribution centers, warehousing, energy and more Building Solutions + Serves the Nation's Top Builders in the Nation's Top Housing Markets: Texas & Arizona + Residential and commercial concrete foundations for single-family and multi-family homes, parking structures, elevated slabs and other concrete work Transportation Solutions + Enhanced business mix + Provides infrastructure solutions in the Rocky Mountain States and Texas + Infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, rail and storm drainage systems and more Sterling | STRL: Second Quarter 2023 3 WHO is Sterling? NASDAQ STRL Shares outstanding(3) 30.8M HQ The Woodlands, TX Market cap(3) $1.88B Employees ~3,200(1) Revenue(4) $2.00B Segments E-Infrastructure Solutions Building Solutions Transportation Solutions EBITDA(4) $255M Projects underway ~220(2) Total Backlog(2) $1.74B A market-leading infrastructure service provider of e-infrastructure, building and transportation solutions. A story of successful execution of multi-year strategic business transformation; born of a vision that levers our entrepreneurial spirit. We offer a customer-centric, market-focused portfolio of goods and services geographically positioned in the right markets. (1) At December 31, 2022. (2) At June 30, 2023. (3) Shares outstanding and Market Cap as of August 4, 2023 (4) Full Year 2023 Revenue and EBITDA Mid-Point Guidance. *See EBITDA Reconciliation in the Appendix page 15.

 
Sterling | STRL: Second Quarter 2023 4 Strategic Transformation at a Glance

 
+ Second Quarter 2023 Results Sterling | STRL: Second Quarter 2023 5

 
Second Quarter 2023 Results Highlights Continuing Operations + Revenues: $522.3 million + Net Income: $39.5 million + Diluted EPS: $1.27 + EBITDA(1): $73.5 million + Cash Flow from Operations(2): $181.1 million + Cash & Cash Equivalents(3): $278.1 million + Backlog(3): $1.74 billion with 15.5% margin + Combined Backlog(4): $2.39 billion with 14.7% margin Sterling | STRL: Second Quarter 2023 6 (1) The Company defines EBITDA as GAAP net income from Continuing Operations, adjusted for depreciation and amortization, net interest expense and taxes. See EBITDA reconciliation on page 14. (2) Cash flow from operations for the six months ended June 30, 2023. (3) Cash & Cash Equivalents and Backlog at June 30, 2023. (4) Combined Backlog includes Unsigned Awards of $657.2 million at June 30, 2023.

 
Sterling | STRL: Second Quarter 2023 7 Quarterly Consolidated and Segment Results Continuing Operations ($ in millions) Q2 2023 Q2 2022 Revenues $ 522.3 $ 461.8 Gross Profit 92.3 71.0 G&A Expense (24.0) (20.8) Intangible Amortization (3.7) (3.5) Acquisition Related Costs (0.1) (0.2) Other Operating Expense, Net (4.2) (2.4) Operating Income 60.3 44.0 Interest, Net (5.5) (4.4) Income Tax Expense (14.5) (11.0) Less: Net Income Attributable to NCI (0.8) (0.4) Net income from Continuing Operations $ 39.5 $ 28.1 Diluted EPS $ 1.27 $ 0.93 EBITDA (1) $ 73.5 $ 56.8 ($ in millions) Q2 2023 Q2 2022 E-Infrastructure Solutions Revenue $ 260.1 $ 233.5 Operating Income $ 43.2 $ 32.8 Operating Margin 16.6 % 14.1 % Transportation Solutions Revenue $ 151.1 $ 142.6 Operating Income $ 9.9 $ 7.4 Operating Margin 6.5 % 5.2 % Building Solutions Revenue $ 111.1 $ 85.6 Operating Income $ 13.5 $ 9.8 Operating Margin 12.1 % 11.4 % (1) The Company defines EBITDA as GAAP net income from Continuing Operations, adjusted for depreciation and amortization, net interest expense and taxes. See EBITDA reconciliation on page 14.

 
Sterling | STRL: Second Quarter 2023 8 Remaining Performance Obligations (RPOs)(1) Continuing Operations ($ in millions) 6/30/2023 12/31/2022 6/30/2022 E-Infrastructure Solutions RPOs $ 886.6 $ 603.2 $ 523.7 Transportation Solutions RPOs 743.6 713.2 722.9 Building Solutions RPOs - Commercial 105.4 97.9 80.6 Total RPOs $ 1,735.7 $ 1,414.3 $ 1,327.2 (1) Our remaining performance obligations do not differ from what we refer to as “Backlog,” and represent the amount of revenues we expect to recognize in the future from our contract commitments on projects.

 
Sterling | STRL: Second Quarter 2023 9 Increased EBITDA and Cash Flow Drives Liquidity Strategy Foward Looking EBITDA Debt Coverage Ratio 1.9X 1.4X 12/31/22 6/30/23 0.0X 0.5X 1.0X 1.5X 2.0X We expect to pursue strategic uses of our liquidity, such as, strategic acquisitions, investing in capital equipment and managing leverage. Capital allocation focus • Long-term shareholder value • Complementing organic growth in existing and new markets • Strong cash flow profile provides flexibility and drives liquidity strategy Sterling is comfortable with a forward looking debt/ EBITDA coverage ratio of +/-2.5X. 5-Year Credit Facility $356M Term Loan Borrowings $75M Revolving Credit Facility (Undrawn) Key Cash Flow Considerations Q2 2023 Q2 2022 Cash flows from Operations $181.1M $42.0M Net CAPEX $30.3M $28.0M • Cash & Cash Equivalents at June 30, 2023 was $278.1 million • 2023 EBITDA guidance(1): $250M to $260M • Expected additional 2023 noncash expenses: $31M to $35M (Stock-based compensation, noncash interest expense, deferred taxes, etc.) • Scheduled term loan debt payments total $31.9M and $26.1M for 2023 and 2024, respectively (1) The Company defines EBITDA as GAAP net income attributable to Sterling common stockholders, adjusted for depreciation and amortization, net interest expense and taxes. See EBITDA guidance reconciliation on page 15.

 
Sterling | STRL: Second Quarter 2023 10 Contact Us Sterling Infrastructure, Inc. Noelle Dilts, VP IR and Corporate Strategy Tel: (281) 214-0795 noelle.dilts@strlco.com The Equity Group Inc. Jeremy Hellman Tel: (212) 836-9626 jhellman@equityny.com

 
+ Appendix Sterling | STRL: Second Quarter 2023 11

 
Sterling | STRL: Second Quarter 2023 12 2023 Modeling Considerations(1) (1) In millions except for EPS and percentages. (2) See EBITDA guidance reconciliation on page 15. Revenue $1,950 to $2,050 Gross Margin 16% to 17% G&A Expense as % of Revenue (Excluding Intangible Amortization) ~5% Intangible Amortization $15 Other Operating Expense Net $15 to $17 JV Non-Controlling Interest Expense $2 to $3 Effective Income Tax Rate ~27% Net Income $125 to $131 Diluted EPS $4.00 to $4.20 Expected Dilutive Shares Outstanding 31.2 EBITDA(2) $250 to $260

 
2023 Modeling Considerations Continued* Sterling | STRL: Second Quarter 2023 13 * In Millions. Non-Cash Items FY 2023 Expectations FY 2022 Depreciation $41 to $42 $38.0 Intangible Amortization $15 $14.1 Debt Issuance Cost Amortization $2 to $3 $2.2 Stock-based Compensation $14 to $16 $10.3 Deferred Taxes $15 to $16 $36.5 Other Cash Flow Items FY 2023 Expectations FY 2022 Interest expense, net of interest income $22 to $23 $19.7 CAPEX, net of disposals $55 to $60 $56.0

 
Sterling | STRL: Second Quarter 2023 14 (1) The Company defines EBITDA as GAAP net income from Continuing Operations, adjusted for depreciation and amortization, net interest expense and taxes. (2) The Company defines Adjusted EBITDA as EBITDA excluding the impact of acquisition related costs. Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net income from Continuing Operations $ 39,480 $ 28,114 $ 59,129 $ 45,786 Depreciation and amortization 13,980 13,231 27,672 24,594 Interest expense, net of interest income 5,528 4,449 11,082 9,091 Income tax expense 14,505 11,015 21,538 17,793 EBITDA from Continuing Operations(1) 73,493 56,809 119,421 97,264 Acquisition related costs 59 230 249 485 Adjusted EBITDA from Continuing Operations(2) $ 73,552 $ 57,039 $ 119,670 $ 97,749 STERLING INFRASTRUCTURE, INC. & SUBSIDIARIES EBITDA FROM CONTINUING OPERATIONS RECONCILIATION (In thousands) (Unaudited)

 
Sterling | STRL: Second Quarter 2023 15 (1) The Company defines EBITDA as GAAP net income attributable to Sterling common stockholders, adjusted for depreciation and amortization, net interest expense and taxes. Full Year 2023 Guidance Low High Net income attributable to Sterling common stockholders $ 125 $ 131 Depreciation and amortization 56 57 Interest expense, net of interest income 22 23 Income tax expense 47 49 EBITDA (1) $ 250 $ 260 STERLING INFRASTRUCTURE, INC. & SUBSIDIARIES EBITDA GUIDANCE RECONCILIATION (In millions) (Unaudited)

 
THANK YOU We build and service the infrastructure that enables our economy to run, our people to move, and our country to grow.

 
v3.23.2
Cover
Aug. 07, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Aug. 07, 2023
Entity Registrant Name STERLING INFRASTRUCTURE, INC.
Entity Incorporation, State or Country Code DE
Entity File Number 001-31993
Entity Tax Identification Number 25-1655321
Entity Address, Address Line One 1800 Hughes Landing Blvd.
Entity Address, City or Town The Woodlands
Entity Address, State or Province TX
Entity Address, Postal Zip Code 77380
City Area Code 281
Local Phone Number 214-0777
Title of 12(b) Security Common Stock, $0.01 par value per share
Trading Symbol STRL
Security Exchange Name NASDAQ
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0000874238
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