HOUSTON, May 11, 2009 (GLOBE NEWSWIRE) -- Sterling Construction Company, Inc. (Nasdaq:STRL) ("Sterling" or "the Company") today announced results for the first quarter ended March 31, 2009.
First Quarter 2009 Compared to First Quarter 2008
* Revenues rose 12% to $94.9 million in the first quarter of 2009 from $84.9 million in the first quarter of 2008; * Gross profit was $11.8 million in the current first quarter, up 46% compared to $8.1 million in the comparable period of 2008; * Gross margin improved to 12.5% of revenues for the 2009 first quarter compared with 9.5% for the first quarter of last year; * Operating income rose 87% to $8.7 million in the first quarter of 2009 from $4.6 million in the first quarter of last year; * Net income attributable to Sterling common stockholders rose 78% to a record $5.6 million in the first quarter of 2009, as compared with $3.1 million in the first quarter of 2008; and, * Diluted net income per share attributable to Sterling common stockholders rose to $0.41 in the first quarter of 2009 or 78% ahead of $0.23 per share in the first quarter of last year.
Commenting on the results, Joe Harper, Sterling's President and Chief Operating Officer, said, "2009 started on a strong note. The majority of the top line growth was due to our Nevada operations where projects in 2009 were concentrated in the warmer and dryer southern part of the state. In comparison, during last year's first quarter, projects were principally located in colder and wetter Northern Nevada."
He continued, "The 46% improvement in gross profit was due in part to the mix of the stage of completion and profitability of certain contracts at March 31, 2009 as well as to the revenue gains in our Nevada operations. The 12.5% gross margin in the current first quarter, while certainly welcome, may not be indicative of the margins achievable in subsequent quarters of 2009. This is in part due to increased competition which put downward pressure on bid prices in our markets during the latter half of 2008 and first quarter of 2009."
Pat Manning, the Company's Chairman and Chief Executive Officer, added, "We closed the first quarter with backlog of approximately $385 million as compared to $448 million at year-end 2008. In the first quarter of 2009, we were awarded or were the apparent low bidder on $32 million of new contracts. In April 2009, the staff of the City of San Antonio recommended to the City Council that a $25 million Construction Manager at Risk ("CMR") contract be awarded at its May 2009 meeting to our Texas Sterling subsidiary. We are pursuing more CMR work as it represents an attractive new dimension to our service portfolio."
Discussing the outlook for the remainder of the year, Mr. Manning stated, "While we have recently submitted bids at lower margins, we continue to believe that there are significant opportunities to make a reasonable profit based on the currently proposed budgets of Texas Department of Transportation, Nevada Department of Transportation, toll road authorities and municipalities. The timing of contract lettings, however, remains uncertain, making business visibility more difficult than in the past. Sterling continues to have the resources and experience to compete successfully for projects as they become available."
James Allen, Sterling's CFO noted, "Because we are being cautious about the volume and profitability of work which will be available this year, our capital expenditures are running well below last year's. In the current first quarter, only $1.6 million has been invested in the replacement of certain equipment and to expand our construction fleet and office and shop facilities. In the same period last year, capital expenditures totaled $4.5 million. Our financial position remains strong, with working capital of approximately $98.9 million, including $77.4 million in cash, cash equivalents and short-term investments, total assets of $296 million and Sterling common stockholders' equity of $165 million."
Annual Stockholders' Meeting
At the Company's Annual Meeting of Stockholders held on Wednesday, May 6th, stockholders re-elected three Class II directors: John D. Abernathy, Robert W. Frickel and Milton L. Scott, and one Class I director: David R.A. Steadman; adopted an Amended and Restated Certificate of Incorporation; and ratified the appointment of Grant Thornton LLP as the Company's independent registered public accounting firm for 2009.
Conference Call and Filings
Sterling's management will hold a conference call to discuss first quarter results and recent corporate developments, at 11:00 am EDT/ 10:00 am CDT today, May 11, 2009. The call will be hosted by Patrick Manning, Chairman and Chief Executive Officer, Joe Harper, President and Chief Operating Officer, and James H. Allen, Jr., Chief Financial Officer. Interested parties may participate in the call by dialing 706-679-0858 ten minutes before the conference is scheduled to begin, and asking for the Sterling Construction call.
To listen to a simultaneous webcast of the call, please go to the Company's website at www.sterlingconstructionco.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. We suggest listeners use Microsoft Explorer as their web browser.
Sterling is a leading heavy civil construction company that specializes in the building and reconstruction of transportation and water infrastructure in large and growing markets in Texas and Nevada. Its transportation infrastructure projects include highways, roads, bridges and light rail and its water infrastructure projects include water, wastewater and storm drainage systems.
This press release includes certain statements that fall within the definition of "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. Any such statements are subject to risks and uncertainties, including overall economic and market conditions, competitors' and customers' actions, and weather conditions, which could cause actual results to differ materially from those anticipated, including those risks identified in the Company's filings with the Securities and Exchange Commission. Accordingly, such statements should be considered in light of these risks. Any prediction by the Company is only a statement of management's belief at the time the prediction is made. There can be no assurance that any prediction once made will continue thereafter to reflect management's belief, and the Company does not undertake to update publicly its predictions, whether as a result of new information, future events or otherwise.
The Company will file its 2009 First Quarter Report on Form 10-Q with the U.S. Securities and Exchange Commission on Monday, May 11, 2009.
STERLING CONSTRUCTION COMPANY, INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except share and per share data)
(Unaudited)
Three months ended
March 31,
2009 2008
---------- ----------
Revenues $94,866 $84,926
Cost of revenues 83,055 76,825
---------- ----------
Gross profit 11,811 8,101
General and administrative expenses (3,214) (3,447)
Other income (expense) 87 (11)
---------- ----------
Operating income 8,684 4,643
Interest income 159 287
Interest expense (58) (130)
---------- ----------
Income before income taxes and earnings
attributable to noncontrolling interest 8,785 4,800
Income tax expense (2,919) (1,591)
---------- ----------
Net income 5,866 3,209
Less: Net income attributable to the
noncontrolling interest in earnings of
subsidiary (301) (92)
---------- ----------
Net income attributable to Sterling common
stockholders $5,565 $3,117
========== ==========
Net income per share attributable to Sterling
common stockholders:
Basic $0.42 $0.24
Diluted $0.41 $0.23
Weighted average number of common shares
outstanding used in computing per share
amounts:
Basic 13,188,266 13,068,864
Diluted 13,715,629 13,684,249
STERLING CONSTRUCTION COMPANY, INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share data)
March 31, December 31,
2009 2008
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $57,712 $55,305
Short-term investments 19,724 24,379
Contracts receivable, including retainage 70,141 60,582
Costs and estimated earnings in excess of
billings on uncompleted contracts 9,128 7,508
Inventories 1,279 1,041
Deferred tax asset, net 177 1,203
Deposits and other current assets 2,996 2,704
----------- -----------
Total current assets 161,157 152,722
Property and equipment, net 76,015 77,993
Goodwill 57,232 57,232
Other assets, net 1,550 1,668
----------- -----------
Total assets $295,954 $289,615
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $26,047 $26,111
Billings in excess of costs and estimated
earnings on uncompleted Contracts 28,174 23,127
Current maturities of long term obligations 73 73
Income taxes payable 597 547
Other accrued expenses 7,342 7,741
----------- -----------
Total current liabilities 62,233 57,599
Long-term liabilities:
Long-term debt, net of current maturities 50,464 55,483
Deferred tax liability, net 12,249 11,117
Put liability related to and noncontrolling
owner's interest in subsidiary 6,244 6,300
----------- -----------
Total long-term liabilities 68,957 72,900
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $0.01 per share;
authorized 1,000,000 shares, none issued -- --
Common stock, par value $0.01 per share;
authorized 19,000,000 shares, 13,198,204
and 13,184,638 shares issued and
outstanding 131 131
Additional paid-in capital 150,373 150,223
Retained earnings including accumulated
other comprehensive loss of $67 in 2009 14,260 8,762
----------- -----------
Total Sterling common stockholders' equity 164,764 159,116
----------- -----------
Total liabilities and stockholders' equity $295,954 $289,615
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