Exhibit 99.1
FOR IMMEDIATE RELEASE
STERLING CONSTRUCTION COMPANY, INC. REPORTS
2007 FIRST QUARTER OPERATING RESULTS
Reaffirms 2007 Guidance
HOUSTON, TX - May 9, 2007 - Sterling Construction Company, Inc. (NasdaqGS: STRL) (“Sterling” or “the Company”) today announced operating results for the first quarter ended March 31, 2007.
First Quarter 2007 Compared to First Quarter 2006 (Continuing Operations)
| § | Revenues rose 22% to a record $68.9 million from $56.5 million; |
| § | Operating income decreased to $3.4 million from $4.4 million last year, principally due to weather-related productivity issues; |
| § | Net income was $2.5 million, as compared with $3.0 million for the first quarter of 2006; |
| § | Diluted earnings per share were $0.21 compared with $0.27 in the first quarter last year. |
Commenting on the results, Joe Harper, Sterling’s President and Chief Operating Officer, said, “In the first quarter we saw the impact on revenues of our continuing investment in equipment, plants and manpower. Despite the very wet weather in January, we were able to produce record revenues for the quarter, reflecting a strong increase in state highway business, and a significant expansion of our activities in the Dallas/Fort Worth market. The revenue increase of 22% was especially impressive in light of the very strong first quarter last year, when revenues had increased by 43% year-on-year. In just two years, the level of our first-quarter revenues has risen by 75%. So we believe we’re on track to continue our historical annual revenue growth rate of about 20%.”
Outlook
Pat Manning, the Company’s Chairman and CEO, noted that approximately $68 million of construction contracts were added to backlog in the first quarter, with backlog at the end of the quarter of $394 million, comparable to the start of the year.
“In addition to our strong organic growth,” he said, “we continue to actively pursue potential acquisition opportunities, both within Texas and elsewhere across the southern tier of states.”
Maarten Hemsley, Sterling’s Chief Financial Officer, said that, in light of the Company’s first quarter performance, management is reaffirming its 2007 guidance first announced on January 16, 2007, for revenues of $285 million to $310 million, pre-tax income of $20.3 million to $22.8 million, and net income of $13.4 million to $15.0 million, representing earnings per share, on a diluted basis, of between $1.13 and $1.26. “Because of the variability of results in the construction industry from quarter-to-quarter, especially as the result of weather,” Hemsley said, “investors are reminded that the Company’s policy is to provide guidance only on annual results. We do not issue guidance about quarterly results, and readers of our financial information are encouraged to view quarterly results in the overall context of our annual results and guidance.”
(more)
Sterling Construction News Release Page 2
May 9, 2007
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. 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.
Annual Stockholders’ Meeting
At the Company’s Annual Stockholders’ Meeting held on Monday, May 7th, shareholders reelected for a three-year term the following directors: Donald P. Fusilli, Jr., Christopher H.B. Mills and Maarten D. Hemsley, and ratified the selection of Grant Thornton LLP as the Company's independent registered public accounting firm for 2007.
Conference Call
Sterling’s management will hold a conference call to discuss first quarter results and recent corporate developments, at 10:00 am EDT/ 9:00 am CDT today, May 9th. The call will be hosted by Patrick Manning, Chairman and Chief Executive Officer, Joe Harper, President and COO, and Maarten Hemsley, CFO. 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.
Contact:
Sterling Construction Company, Inc. Investor Relations Counsel
Maarten Hemsley, 781-934-2219 The Equity Group Inc.
or Linda Latman, 212-836-9609
Joseph Harper, 281-821-9091 Lena Cati, 212-836-9611
www.sterlingconstructionco.com www.theequitygroup.com
(See Accompanying Tables)
Sterling Construction News Release Page 3
May 9, 2007
STERLING CONSTRUCTION COMPANY, INC. & SUBSIDIARIES
(Amounts in thousands, except share and per share data)
(Unaudited)
| | | Three months ended March 31, | |
| | | 2007 | | 2006 | |
| | | | | | |
| Revenues | | $ | 68,888 | | $ | 56,480 | |
| Cost of revenues | | | 63,256 | | | 49,794 | |
| Gross profit | | | 5,632 | | | 6,686 | |
| General and administrative expenses | | | 2,575 | | | 2,427 | |
| Other income | | | 308 | | | 118 | |
| Operating income | | | 3,365 | | | 4,377 | |
| Interest income | | | 466 | | | 281 | |
| Interest expense | | | -- | | | 95 | |
| Income from continuing operations before income taxes | | | 3,831 | | | 4,563 | |
| Income taxes | | | 1,295 | | | 1,541 | |
| Net income from continuing operations | | | 2,536 | | | 3,022 | |
| | | | | | | | |
| Net (loss) income from discontinued operations, net of income taxes of $0 and $102 | | | (25 | ) | | 171 | |
| Net income | | $ | 2,511 | | $ | 3,193 | |
| | | | | | | | |
| Basic net income per share: | | | | | | | |
| Net income from continuing operations | | $ | 0.23 | | $ | 0.30 | |
| Net (loss) income from discontinued operations | | $ | 0.00 | | $ | 0.02 | |
| Net income per share | | $ | 0.23 | | $ | 0.32 | |
| Weighted average number of shares outstanding used | | | | | | | |
| in computing basic per share amounts | | | 10,919,145 | | | 10,002,088 | |
| | | | | | | | |
| Diluted net income per share: | | | | | | | |
| Net income from continuing operations | | $ | 0.21 | | $ | 0.27 | |
| Net (loss) income from discontinued operations | | $ | 0.00 | | $ | 0.01 | |
| Diluted net income per share | | $ | 0.21 | | $ | 0.28 | |
| Weighted average number of shares outstanding used | | | | | | | |
| in computing diluted per share amounts | | | 11,774,690 | | | 11,266,294 | |
| | | | | | | | |
Sterling Construction News Release Page 4
May 9, 2007
STERLING CONSTRUCTION COMPANY, INC. & SUBSIDIARIES
(Amounts in thousands, except share and per share data) (Unaudited)
| | | | | March 31, | | December 31, | |
| ASSETS | | | | 2007 | | 2006 | |
| Current assets: | | | | | |
| Cash and cash equivalents | | | | | $ | 15,153 | | $ | 28,466 | |
| Short-term investments | | | | | | 27,822 | | | 26,169 | |
| Contracts receivable | | | | | | 50,317 | | | 42,805 | |
| Costs and estimated earnings in excess of billings on uncompleted contracts | | | | | | 4,441 | | | 3,157 | |
| Inventories | | | | | | 1,024 | | | 965 | |
| Deferred tax asset | | | | | | 3,002 | | | 4,297 | |
| Other | | | | | | 2,208 | | | 1,549 | |
| Total current assets | | | | | | 103,967 | | | 107,408 | |
| Property and equipment, net | | 50,782 | | | 46,617 | |
| Goodwill | | 12,735 | | | 12,735 | |
| Note receivable, long-term | | 201 | | | 325 | |
| Other assets | | 676 | | | 687 | |
| | | | | | | 13,612 | | | 13,747 | |
| Total assets | | | | | $ | 168,361 | | $ | 167,772 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | | | |
| Current liabilities: | | | | | | |
| Accounts payable | | | | | $ | 23,177 | | $ | 17,373 | |
| Billings in excess of cost and estimated earnings on uncompleted contracts | | | | | | 24,314 | | | 21,536 | |
| Current maturities of long term obligations | | | | | | 123 | | | 123 | |
| Other accrued expenses | | | | | | 4,516 | | | 5,502 | |
| Total current liabilities | | | | | | 52,130 | | | 44,534 | |
| Long-term obligations: | | | | | | |
| Long-term debt, net of current maturities | | | | | | 20,628 | | | 30,659 | |
| Deferred tax liability, net | | | | | | 1,615 | | | 1,588 | |
| | | | | | | 22,243 | | | 32,247 | |
| 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 14,000,000 shares, | | | | | | | | | | |
| 10,937,268 and 10,875,438 shares issued | | | | | | 109 | | | 109 | |
| Additional paid-in capital | | | | | | 115,116 | | | 114,630 | |
| Accumulated deficit | | | | | | (21,237 | ) | | (23,748 | ) |
| Total stockholders' equity | | | | | | 93,988 | | | 90,991 | |
| Total liabilities and stockholders’ equity | | | | | $ | 168,361 | | $ | 167,772 | |
| | | | | | | | | | | |
